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News > International
Baycol pulled in Japan
August 23, 2001: 10:22 a.m. ET

Withdrawal of cholesterol drug deals new blow to Germany's Bayer
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LONDON (CNN) - Bayer is pulling its Baycol anti-cholesterol drug from Japan two weeks after safety fears forced it to halt sales in the rest of the world.

The German company withdrew Baycol in all other markets after reports of the death of over 50 Baycol users. Since then, Bayer stock has fallen by a quarter, slicing some graphic8 billion ($7.3 billion) off the company's value.

And in an attack on Bayer's handling of the withdrawal, Germany's health minister on Thursday criticised the firm for waiting too long before telling patients about the dangers of Baycol, which was also sold as Lipobay.

Health Minister Ulla Schmidt Bayer for having informed investors about

the withdrawal of the drug before telling either the patients

using it or the German government.

Her intervention may be seen as lending support to lawyers in the United States who are trying to build a case on behalf of plaintiffs they say suffered side effects while taking Baycol.

Bayer has insisted that it acted to withdraw the drug and informed doctors and pharmacists as early as possible, subject to its legal obligation to inform financial markets immediately of any developments that could affect the company's share price.

How to break the news

Schmidt said the government would examine ways to ensure that companies in future inform patients at the same time as they tell investors about problems with drugs they make.

"The Lipobay case shows that we must examine this issue," Schmidt told reporters.

The worst side effects occurred when the drug was taken along with another cholesterol-lowering product called gemfibrozil.

Baycol continued to be sold in Japan because gemfibrozil was not on sale in the country. Now, however, Bayer said Japanese health authorities have informed it that gemfibrozil will soon be registered for use in the country.

The latest withdrawal will lower operating profit by graphic150 million ($138 million) this year, the company warned.

The total impact of withdrawing the drug is expected to be a reduction in  operating profit by between graphic750 million and graphic800 million in 2001, said Bayer.

"It had been a surprise that the company kept the drug on sale in Japan," Themis Themistocleous, a drug industry analyst at UBS Warburg, told CNN.

"But this is a reasonably minor issue. Baycol sales in Japan were expected to be around graphic120 million this year and graphic200 million next year. That's small compared to the graphic1 billion it expected from the rest of the world."

Severe damage to share price

Bayer shares fell 2.2 percent to graphic34.12 by mid-afternoon in Frankfurt on Thursday.

The company, one of the last so-called 'hybrid' companies to combine drugs and chemicals, also said a German government report had linked 1,100 cases of muscle weakness to use of Baycol, or Lipobay as the drug is called in some markets.

Bayer, which makes products ranging from Aspirin to chemicals for industry and fragrances for perfume, expects the number of reported deaths among Baycol users to rise.

The recall has led to a spate of lawsuits against Bayer. The U.S. law firm Kenneth B. Moll & Associates has said its class-action suit could cost the company $3 billion.

"Will they succeed, is the billion-dollar question," Themistocleous said. "They would have to prove that Bayer had not given clear warnings that Baycol could not be used with gemfibrozil. They would have to go further and prove the company was negligent in its clinical trails." 

Bayer has maintained it gave clear warnings to physicians to avoid prescribing Baycol to patients who were also taking gemfibrozil.

Speculation over Bayer's future strategy has centred on the possibility that it will sell its drug business to a larger rival. The company has said it is conducting a review of the future of the unit, and hasn't entirely ruled out a sale or joint venture.

The company has admitted it has been approached by two large pharmaceutical groups.

Media reports have cited companies including U.S.-based Bristol-Myers (BMY: Research, Estimates) and Eli Lilly (LLY: Research, Estimates), Franco-German Aventis (PAVE) Switzerland's Roche and Novartis as possible partners.

Themistocleous said he didn't believe Europe's biggest drug company GlaxoSmithKline (GSK) was an "appropriate" buyer, despite a newspaper report last weekend that it is poised to bid up to $15 billion for the drugs unit. graphic





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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.