Bayer on Monday lost an appeal challenging the outcome of the first case to go to trial in the US over the company's weedkiller Roundup, though the court reduced the punitive damages awarded to the plaintiff.

The case before the California Court of Appeals concerned Dewayne "Lee" Johnson, a school groundskeeper and heavy user of Roundup who sued Monsanto -- a subsidiary of Bayer -- in a landmark case after contracting terminal non-Hodgkin's lymphoma.

A jury in 2018 found that the herbicide substantially contributed to Johnson's illness and awarded him nearly $40 million in compensatory damages and $250 million in punitive damages that were later reduced to $78.5 million.

The ruling sent Bayer share prices tumbling at the time and was followed by a wave of lawsuits that have weighed on the company since it bought the US firm Monsanto in 2018.

Under Monday's ruling, the court denied Monsanto's motion for a new trial on condition that Johnson accept a settlement of $10.2 million in compensatory damages and the same amount in punitive damages.

"Although we have concluded that a reduction in the damages awarded is appropriate, we do not otherwise reverse the judgement," the three-judge panel said, affirming Monsanto's liability in the case.

"In our view, Johnson presented abundant -- and certainly substantial -- evidence that glyphosate, together with the other ingredients in Roundup products, caused his cancer," the judges said in their ruling. "Expert after expert provided evidence both that Roundup products are capable of causing non-Hodgkin's lymphoma and caused Johnson's cancer in particular."

Bayer said in a statement that the ruling is a "step in the right direction."

"We nevertheless still believe that the jury ruling and the indemnity payments are not compatible with the presented evidence and the existing laws," the company said.

"Monsanto will examine its legal options, including an appeal to the Supreme Court of California," Bayer added in the statement.

The company last month said it would pay more than $10 billion to end a wave of lawsuits related to Roundup that have sent jitters among shareholders.

Bayer, which is not admitting any wrongdoing as part of the $10 billion-plus settlement package, maintains that scientific studies and regulatory approvals show Roundup's main ingredient glyphosate is safe.

But other research has found that glyphosate can cause cancer.

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