European Pharma Stocks Slide Amid Trump Tariff Threats and Bayer’s Legal Woes
European pharmaceutical stocks took a hit on Wednesday after former U.S. President Donald Trump threatened tariffs of up to 250% on the pharmaceutical sector within the next 18 months. The Stoxx Europe Pharmaceuticals and Biotechnology Index fell by 0.8% early in the trading session, sparking concern across the market. Notable losses were recorded by Swedish biotech firm Oncopeptides, which dropped 7%, and Belgium’s Galapagos, down 5.3%, as investors reacted swiftly to the geopolitical uncertainty.
German pharmaceutical and chemical giant Bayer also saw its shares fall by 4.5%, despite reporting slightly better-than-expected earnings for the second quarter. The company announced a 0.9% increase in adjusted sales to €10.7 billion and an EBITDA of €2.1 billion, beating analyst forecasts. However, it still recorded a net loss of €199 million due to ongoing litigation related to its controversial Roundup weedkiller product, which continues to face health-related lawsuits.
Bayer’s CEO, Bill Anderson, expressed optimism, noting improved performance in the pharmaceuticals division and raising the company’s 2025 guidance for both sales and earnings. Nonetheless, the legal troubles and related charges overshadowed the otherwise encouraging financial update. As part of a broader restructuring effort, Bayer revealed it has already slashed 12,000 jobs, indicating ongoing efforts to streamline operations amid market and legal pressures.
Elsewhere in the European markets, shares of Beiersdorf, the maker of Nivea, plummeted 9% after it downgraded its full-year organic sales growth forecast from 4-6% to just 3%, citing difficult market conditions in the first half of the year. Meanwhile, mining giant Glencore posted a 14% drop in first-half profits, affected by declining coal prices and operational issues in its copper business. Despite this, European markets opened broadly higher, with the Stoxx 600 up 0.3%, led by gains in construction and industrial sectors.
Amid the market turbulence, Deutsche Bank analysts highlighted stronger-than-expected corporate earnings across Europe, with 74% of STOXX 600 companies beating earnings forecasts by an average of 8%. Yet, they cautioned that rising tariffs could erode earnings growth by 4% this year. Commerzbank’s CEO added that while the EU-U.S. trade deal brought some clarity, businesses must remain flexible due to persistent uncertainty and geopolitical risk — a sentiment likely to dominate investor sentiment in the coming quarters
Source: Cnbc