Life sciences company Bayer (BAYRY, BAYN.DE) isn't breaking itself up right now. Bayer CEO Bill Anderson says, "This is not a good time to be... breaking up the firm," given the company's need to rebuild its pharmaceutical pipeline and battle the ongoing litigation stemming from the weedkiller Roundup.

When it comes to the Roundup lawsuits, Bayer has "adequately provisioned" for the costs of those suits, Anderson says. Overall, "the fundamental fact is, that glyphosate, Roundup, is safe," Anderson states, adding that Bayer is "a scientifically-driven company and we have this litigation thing that's not scientific."

On the pharmaceutical business, Anderson says the group is "in a bit of a transition phase." "We got a couple of major medicines that are losing patent protection over the next few years. So we are busy rebuilding the pipeline right now," he tells Yahoo Finance.

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Editor's note: This article was written by Stephanie Mikulich.

Video Transcript

JULIE HYMAN: Chairs of the German conglomerate Bayer or Bayer have tumbled by more than 50% over the past year. That's in part because of thousands of lawsuits claiming cancer risk tied to roundup weedkiller. It's a product that Bayer acquired as part of its purchase of Monsanto back in 2016. And Bayer has been taking steps to streamline the business and try to look beyond that litigation.

CEO Bill Anderson recently said that now is not the time to break up the company that's something some investors have been calling for and Bill Anderson, the Bayer CEO is joining us now to discuss as we talked about it's Bayer here in the US. It's Bayer in Europe. Same company. Just so folks know what we're talking about. Bill, thank you so much for being here.

BILL ANDERSON: Yeah, great great to be here.

JULIE HYMAN: So for investors who are looking at the company. And looking at the long term that you've talked about where is the growth going to come from. You have three main business lines, in terms of crop sciences, pharmaceuticals consumer, where should they be looking for growth?

BILL ANDERSON: Yeah. There's two really obvious places. One is our crop science business where the world leader in agricultural inputs. So we sell our inputs to the farmers, they grow the food and we all get to eat it. So yeah, we're the world leader in R&D, in agriculture as well. And we're growing above the core rate of growth there.

Last year, our core business in agriculture grew 7% and we expect to keep growing faster than the market based on well 10 new blockbusters that we're launching over the next decade, including right now, we're launching short stature corn, which is going to change the look of corn fields forever. That's the most obvious thing you see. But having shorter corn allows you basically to grow more corn on the land and to avoid that the corn gets blown over by heavy winds.

And so it's great for farmers. It's great for food prices. Also consumer products, our consumer products division has had very steady growth continues to grow faster than that market and that looks to continue as well. In pharmaceuticals, we're in a bit of a transition phase. We've got a couple major medicines that are losing patent protection over the next few years. And so we're busy rebuilding the pipeline right now.

So that's not so much a growth story today. But we look to return to growth in the second part of the decade. And as you're kind of rebuilding that pharma pipeline bill is that, any more clarity there or is that R&D is it acquisitions both. It's going to be some selective acquisitions. But more on the earlier end, the simple fact of the matter and you see every day, large pharma companies trying to buy late stage or in market products.

The challenge with that is you generally have to pay more than they're worth. And call me old fashioned, but I don't like to pay more than something's worth. We do deals typically in phase 0 phase 1. And then we have a very effective development engine and we can accelerate development. It means you have to be a little more patient. So we're definitely more for the patient investor.

JULIE HYMAN: And that's because in the meantime, you are dealing with this litigation risk. And I wonder if you can talk investors through whether you feel you've adequately provisioned for the eventual costs of that litigation?

BILL ANDERSON: Yeah. I mean, it's a complicated topic because you can only provision for things that are relatively certain to occur. Given that, we think we've adequately provisioned and we test that every quarter with our auditors. The key thing on litigation is we've been fighting it out in the courts. And we win more than we lose but the losses at least the headline figures can be quite large.

I mean we generally get damages reduced more than 90% on appeal. But the fundamental fact is that glyphosate roundup is safe. Every regulatory agency in the world has concluded that, including the US EPA including the European Food Safety Authority. And we're also pursuing-- beyond the courts, we're pursuing legislation to clarify that because it just doesn't make sense.

In our country and this is really a uniquely American problem that manufacturers can be sued when we have a safe product. And it's clear in our label. So this is something that we're definitely escalating the work in this area from a litigation standpoint, but also from a legislation and Public Affairs standpoint. This is bad for American consumers. I know you've been talking about inflation today.

So 30 years ago, Americans paid 11% of their paycheck for food every month. OK. Up until about five years ago, that had dropped from 11 down to 7% today it's 11 again. So smurfomatic food inflation and everyone sees it when they go to the grocery store. And our products keep food inflation in check. But the litigation is driving costs up for farmers. And this shows up in the food prices.

JOSH LIPTON: And Bill if you had more clarity though on the litigation. If you got that clarity would those strategic options perhaps be back on the table selling or spinning off businesses.

BILL ANDERSON: Yeah. The way we look at it is right now we have some challenges. We mentioned, we've got to rebuild our pharma pipeline. We need to deal with litigation. This is not a good time to be breaking up the firm. There's a compelling argument for pure play companies and we have three divisions. We're implementing a new system for running the company that puts decision making in the hands of the people doing the work.

It's a radical thing. I mean, we're taking out-- not taking out a layer of management. We're cutting layers of management in half in many places. Span of control goes from five or seven to 20. It's a very different model. This is something I've been doing for about seven years. It can lead to dramatically improved results. We're going to do this and focus really hard on it for the next two to three years.

And then we're going to come back to that subject and say, hey, have we earned the right to claim our own destiny by creating a highly efficient and effective economic machine.

JULIE HYMAN: Bill, when you look at those changes you've been making internally in the company that's something you guys call dynamic shared ownership, combine that with the glyphosate overhang. What's the vibe like inside the company? How hard is it to change the culture? How are people feeling with, that's a lot of change in a short period of time.

BILL ANDERSON: Yeah. Well, obviously the litigation is very frustrating to everyone because people just feel like it's not fair. It doesn't make sense. We're a scientifically driven company and we have this litigation thing that's not scientific. That being said, people have I would say a spirit of wanting to serve the mission. And our mission is health for all hunger for none because we're in health care and agriculture.

And the morale inside the company is remarkably strong. It amazes me. I think it's a testament to the human spirit. But it's also because as I mentioned, we're putting decision making with the people doing the work.

JULIE HYMAN: So that's been well received.

BILL ANDERSON: That's very well received. In fact, most employees are saying, hey, how fast can we do this. I want this and I experienced this in my previous jobs. When you put decision making in the hands of the people that are doing the work, that's a novel phenomenon in a big corporation. And they like it because they're responsible people.

They want to have a bigger impact. They don't want to be stuck in a hierarchy with the boss having to approve everything.

JULIE HYMAN: Bill, thanks so much. Bill Anderson of Bayer, thank you so much, I appreciate it.