Bayer AG won a legal fight that brings the company a step closer to getting Missouri state court approval for a proposed $7.25 billion settlement of thousands of U.S. cancer lawsuits alleging Roundup weedkiller caused cancer.

The shares jumped Wednesday after a federal judge in St. Louis rejected a bid by opponents to derail the settlement by transferring the case to a federal judge in San Francisco who has expressed skepticism of the deal, sending it back to state court for approval.

At stake is a settlement proposal in Missouri state court that involves the bulk of the Roundup claims against the German conglomerate, with an approval hearing set for July 9 in St. Louis. The deal doesn’t affect dozens of suits filed in federal courts across the country that are being overseen by U.S. District Judge Vince Chhabria in San Francisco.

“This decision brings much needed clarity to all parties and will enable the class-approval process to continue to move forward,” Bayer said in a statement. Last month, company officials said they believe the settlement has the backing of enough plaintiffs’ that it will be approved by Missouri Judge Tim Boyer after he holds a hearing next month.

Concern about the mounting liability from Roundup lawsuits has weighed on the Bayer shares, which are down more than 60% since the company completed the $63 billion acquisition of Roundup maker Monsanto in 2018. After the news of the ruling, the stock closed 4.8% higher in Frankfurt, the biggest one-day gain since March 10.

“We see this as a best-case outcome for Bayer,” Barclays Plc analyst Charles Pitman-King said in a note. “We now see limited risk of delays to final decision.”

Plaintiffs contend Roundup’s active ingredient, glyphosate, causes cancer. In some of the cases that have gone to trial, juries have awarded big-dollar verdicts to users of the weedkiller who sued.

The company has insisted the weedkiller is safe and doesn’t cause cancer. The U.S. Environmental Protection Agency has found glyphosate “unlikely to be a human carcinogen” and hasn’t required a cancer warning be added to the product label. Still, Bayer removed its glyphosate-based version from the U.S. residential market in 2023.

Bayer has proposed the more than $7 billion class-action settlement through cases filed in state court in Missouri. The offer is designed to resolve Roundup suits that already have been filed and potential claims that could be filed over a 21-year period, according to court filings.

Chief Executive Officer Bill Anderson is weighing whether the company should stop making glyphosate and has vowed to get a handle on the litigation by the end of this year.

But objectors questioned the process of putting the settlement together. They also point to what they claim are unfair opt-out provisions that require ex-Roundup users who haven’t yet developed cancer to make a decision on whether to accept the settlement. They sought to have the case send to Chhabria, who is assigned as the judge overseeing federal-court Roundup litigation.

Chhabria has publicly said the accord’s opt-out provisions for future claimants are unworkable. He turned down a similar proposal by Bayer and some plaintiffs’ lawyers in 2021 because the deal didn’t properly address future suits.

But in a three-page order issued Wednesday, U.S. District Judge Edward Autrey in St. Louis found objectors didn’t have the right to remove the case from state court in Missouri. He noted federal law only allows defendants to remove cases, not settlement opponents.

“Removal of an action by people who are not defendants in the action is not authorized” under federal law, Autrey said in the ruling. “Objectors are not defendants in the action and have no basis upon which to remove it.”

The case is Randal King v Monsanto, No. 2622-CC00325, Missouri 22nd Judicial Circuit Court (St. Louis)

—With assistance from Sonja Wind.

(Updates with Bayer statement, analyst comment, background on case, details from ruling.)

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