Bayer to lose £95m profit after pulling drug in Japan

Bayer, the embattled German chemicals giant, last night dampened growing alarm over its withdrawn cholesterol drug, Lipobay, which has been linked with the deaths of at least 52 people and caused serious muscle-wasting problems in more than 1,000 others.

The company stopped selling the drug in Japan, the one market where it was not withdrawn when the extent of the dangers were made public a fortnight ago.

Bayer said the move in Japan would cost it 150m euros (£95m) of operating profit this year. In total, 800m euros (£500m) of 2001 earnings will be wiped out by the drug's withdrawal.

Lipobay has proved particularly dangerous in combination with gemfibrozil, another cholesterol-lowering drug, which is not yet on sale in Japan. Bayer said yesterday that it had learned gemfibrozil is now close to being approved by Japanese regulators.

Lipobay ­ known as Baycol in some markets ­ has been linked to the deaths of at least 52 people since its launch in 1997. A Bayer spokesman saidit would be some time before a definitive death toll is collated from reports around the world.

German newspapers reported yesterday that 1,100 Lipobay patients have suffered a debilitating muscle-wasting condition known as rhabdomyolysis, which can lead to organ failure.

Bayer last night issued a statement saying that the figure of 1,100 had been known by the German regulatory authorities, and that the side effects had been well flagged in literature accompanying the drug.

It said: "The 1,100 cases mentioned cover symptoms of all degrees of severity, ranging from mild muscle pain ... to cases of rhabdomyolysis, which may prove fatal under certain circumstances."

Bayer said it would defend the growing legal action in the US, where patients are claiming Bayer misled consumers over the likelihood of serious side effects. A spokesman said the class action had no merit.

The affair has blown a hole in Bayer's growth strategy and led analysts to demand it break itself up. Bayer shares have lost 25 per cent of their value.

Bayer's chief executive Manfred Schneider has signalled his willingness to put the drugs business into a joint venture, and several international pharmaceuticals giants ­ including GlaxoSmithKline of the UK ­ are believed to have expressed an interest in buying the unit outright.