Frankfurt (Reuters) - Bayer shares fell by as much as 5 percent on Tuesday after a California couple were awarded more than $2 billion in the largest U.S. jury penalty over allegations its Roundup weed killer causes cancer.

The stock closed at its lowest level in almost seven years, even though the punitive damages award is likely to be reduced due to U.S. Supreme Court rulings that limit the ratio of punitive to compensatory damages to 9:1.

The jury set the total punitive damages at $2 billion and added $55 million in compensatory pay, concluding that Roundup - based on herbicide glyphosate - had been defectively designed, and that the company failed to warn of the herbicide’s alleged cancer risk.

The shares closed about 2 percent lower at 55.33 euros.

Bayer said in a statement on Monday it was disappointed with the verdict and would appeal. A spokesman called the jury’s decision “excessive and unjustifiable”.

It was the third consecutive U.S. jury verdict against the company in litigation over the chemical, which Bayer acquired as part of its $63 billion purchase of Monsanto last year.

“Clearly we anticipate that much of the punitive damages of $2 billion would likely be significantly reduced on appeal,” JP Morgan analysts said in a note.

“However, the level of compensatory damages is still likely to be somewhat of a concern to the market given the level is above the Hardeman case,” they added, referring to $5 million in compensatory damages awarded to a plaintiff in a previous case.

The brokerage said the litigation slashed its valuation of the company by 5 billion euros ($5.6 billion) but it would take until mid-2020 for more cases and a couple of appeal decisions to provide greater clarity.

Monsanto Co's Roundup is shown for sale in Encinitas, California, U.S., June 26, 2017. REUTERS/Mike Blake

Bayer, inventor of Aspirin and maker of stroke prevention drug Xarelto and Yasmin birth control pills, faces U.S. lawsuits from more than 13,400 plaintiffs over the herbicide’s alleged cancer risk.

The group’s market value has fallen below what Bayer paid for Monsanto after shedding about 40 billion euros since the first jury verdict last August.

In further fallout from the takeover, Bayer said on Monday that Monsanto, which is being investigated by French prosecutors for compiling files of influential people such as journalists and scientists in France, likely did the same across Europe, suggesting a potentially wider problem.

(For a graphic on 'Bayer Stock Performance' click tmsnrt.rs/2E7QGF7)

The U.S. Environmental Protection Agency this month reaffirmed that glyphosate was safe to use. The European Chemicals Agency and other regulators around the globe have also found glyphosate not likely to be carcinogenic to humans.

The World Health Organization’s International Agency for Research on Cancer, however, concluded in 2015 that the chemical probably causes cancer.

Bayer, which was chided by investors for the stock rout at the annual general meeting this month, has said the litigation has had no effect on strong demand from U.S. lawn and garden owners for its glyphosate-based herbicides, adding that demand from U.S. farmers continued to be driven by the weather.

Under a push to divest assets including its animal health division, Bayer late on Monday said it had agreed to sell U.S. sun care brand Coppertone to Nivea owner Beiersdorf, for $550 million.