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Monday, 13 August, 2001, 09:27 GMT 10:27 UK
Bayer drug linked to more deaths
Bayer's Baycol/Lipobay anti-cholesterol drug
Bayer faces criticism that it notified investors before patients
German chemical and pharmaceutical firm Bayer admitted that Baycol/Lipobay, its anti-cholesterol drug, could be linked to 52 deaths.

Bayer withdrew the drug last week after authorities in the United States said it could be the cause of 31 deaths there.

Baycol was previously linked with six deaths in Germany, three in Spain and one in France.

Although Bayer stressed that there is no proof as yet, the drug has been reported to have serious side effects, including fatal muscle weakness and severe rhabdomyolysis, a condition that can lead to kidney and other organ failure.

The news about Baycol, which was previously one of the firm's top-selling products, has battered Bayer's fortunes at a time when the firm was already suffering the effects of the global slowdown.

Bayer's shares fell by 16% last Wednesday alone, after the firm said the Baycol withdrawal would knock up to 650m euros (408m; $581m) off its 2001 profits - over and above an earlier profit warning.

French anger

Bayer also faces increasing anger among health authorities over the nature of the withdrawal.

Bayer's headquarters in Leverkusen, Germany
Bayer is reviewing its pharmaceuticals business

According to German weekend newspaper reports, there were warnings about the drug as early as 1998.

In France, health minister Bernard Kouchner questioned why Bayer notified the Frankfurt stock exchange of Baycol's withdrawal before informing doctors or patients.

He warned that the decision would have unspecified "consequences".

In a statement on Monday morning, Bayer admitted that it may never be able to market Baycol again.

Shares stabilise

After suffering heavy falls last week, Bayer's shares took the latest news calmly, falling only slightly in early trade on Monday.

The firm has taken dramatic steps to turn its business around, including the shedding of 4,000 jobs.

Some have speculated that Bayer could be forced to sell its pharmaceutical business, which is in any case thought to be too small to compete in a rapidly globalising drugs market.

Bayer's pharmaceutical arm has also been hit by production problems involving Kogenate, a promising haemophilia remedy.

Kogenate output hiccups could knock another 350m euros off this year's profits.

Pharmaceuticals review

But Bayer chief executive Manfred Schneider stressed that "Bayer is not a company in need of rescue".

He pointed out that the firm's so-called "four-pillar" strategy - under which its revenues are diversified between drugs, chemicals, plastics and agriculture - shielded the company from the effects of a downturn in one area.

The company did concede, however, that it has launched a review of its pharmaceuticals business, which should be completed within the next few weeks.

The BBC's Manisha Tank
"Lipobay may be linked to 52 deaths"
See also:

10 Aug 01 | Business
Bayer to cut more than 4,000 jobs
09 Aug 01 | Business
Bayer confirms profits slump
08 Aug 01 | Business
Bayer shares plunge
27 Jun 01 | Business
Bayer warns on 2001 profits
22 Jun 01 | Business
Drug giant warns of lower profits
21 Jun 01 | Business
BASF shuts plants
21 Nov 00 | Business
Drugs - a high-risk business
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