The United Nations may have just delivered a hard right hook to Monsanto’s (NYSE: MON ) business. The International Agency for Research on Cancer, the U.N.’s cancer research center at the World Health Organization, declared the main ingredient in Monsanto’s leading weed-killer Roundup a probable cancer-causing product.
Because the glyphosate-based herbicide is primarily responsible for almost half of all Monsanto’s revenues, or $5.1 billion in 2014, the declaration could have far-reaching implications for the biotech.
Worse, because the herbicide platform is used to strategically support Monsanto’s Roundup Ready crops — which comprise the vast bulk of the balance of its revenue stream — the health organization’s determination stretches across the whole breadth and depth of Monsanto’s operations potentially affecting all $16 billion of its revenues.
Although staggered — the biotech’s stock is down 10% over the past month — don’t expect the ruling to be a knockout blow.
Growing like a weed