SYDNEY (Reuters) - A Californian court finding that a Monsanto weedkiller caused cancer in a school groundskeeper sent shares in an Australian maker of a similar product, Nufarm Ltd, tumbling almost 17 percent to a more than two-year low on Monday.
A California jury on Friday found Monsanto liable in a lawsuit filed by a man who alleged the company’s glyphosate-based weed-killers caused his cancer and ordered the firm to pay $289 million in damages.
Macquarie Bank analysts estimate Nufarm earns about a fifth of its revenue from products containing glyphosate, the world’s most widely-used herbicide.
“There is longer term regulatory risk (regarding) this, if (we) do see a change of regulatory stance over time,” Macquarie analysts wrote in a note published on Monday.
Concerns about glyphosate drove down Nufarm shares almost 17 percent in early trade to their lowest since February 2016.
The stock has already been battered after the company issued a profit warning in July citing lower demand for its crop-protection products after dry weather in Australia.
The firm, however, sought to allay investor worries, saying it does not expect glyphosate-related issues that have arisen over the past week to “have any impact on Nufarm’s business”.
“The product has a 40-year history of safe use and continues to be an important tool for farmers. Nufarm will continue to work with regulatory authorities around the globe to maintain its glyphosate registrations,” it added in a statement.
Monsanto, owned by Germany’s Bayer AG, also denies that glyphosate causes cancer and says decades of scientific studies have shown the chemical to be safe for human use. It is appealing the California jury’s verdict.
The U.S. Environmental Protection Agency in September 2017 concluded a decades-long assessment of glyphosate risks and found the chemical not likely carcinogenic to humans.
But the World Health Organization’s cancer arm had in 2015 classified glyphosate as “probably carcinogenic to humans” and earlier this month Brazil suspended the use of the chemical for 30 days while it weighs health concerns.
In 2016, The Weekly Times quoted Nufarm Managing Director Greg Hunt saying the firm had “worked very hard to reduce its reliance on glyphosate” to 20 percent from 50 percent.
Nufarm shares were down 12 percent at A$6.66 ($4.84) by 0325 GMT, off the day’s low of A$6.27, in a broader marker that was 0.5 percent lower.
(This story has been refiled to correct typo in headline)
Reporting by Tom Westbrook; Editing by Edwina Gibbs and Himani Sarkar