German chemicals and drugmaker Bayer AG (G.BAY) said Tuesday it's in talks to agree an out-of-court settlement for 500 cases relating to the use of its anti-cholesterol drug Baycol.

To date, Bayer has settled about 450 cases involving Baycol at a cost of around $125 million. The drug, which is also known as Lipobay, was withdrawn from the market in 2001 after being linked to around 100 deaths worldwide.

It comes just a week after a trial began in Corpus Christi, Texas, involving a retired engineer who claims to suffer from a muscle weakening condition called rhabdomyolysis as a result of taking the drug.

Bayer still has 7,800 claims against it relating to Baycol, but the 500 cases it's now in talks over are particularly significant as they involve patients who suffered rhabdomyolysis. In thousands of other cases, the plaintiffs didn't suffer any side effects.

Analysts think, in total, about 1,600 Baycol cases are from plaintiffs who developed rhabdomyolysis. Bayer declined Tuesday to confirm this figure.

"Every out of court settlement means one risk less for Bayer," said Merck Finck analyst Alexander Kachler.

At 1751 GMT, Bayer shares were down almost 14% at EUR12.30. Its share price has fallen over 20% since a weekend press report in the U.S. said Bayer knew Baycol caused illness and death long before its withdrawal.

Its shares were also hit Tuesday by concerns its credit rating might soon be cut by Standard & Poor's. S&P declined to comment.

Bayer's lawyer Philip Beck said a decision in the Corpus Christi trial is expected in around 2 weeks. Beck is also lead lawyer in a class certification case in Minneapolis, where Judge Michael Davis has yet to decide whether the Baycol case will proceed as a class action in the U.S. federal system.

Bayer opposes class certification in Baycol's case, saying it's not appropriate due to the differing circumstances in each case.

People familiar with the situation said Bayer's settlement costs to date have been covered by insurance.