The Baycol / Lipobay - Scandal

Bayer Shares Fall as Baycol Woes Mount

FRANKFURG (Reuters / February 24, 2003) - Shares in Bayer AG fell nearly 10 percent on Monday after a U.S. newspaper report that senior company executives knew of the risks associated with its Baycol cholesterol drug long before the medicine was recalled.

The report deepened investor concerns about liabilities surrounding the drug, once the mainstay of a pharmaceuticals business that the German chemicals and drugs group is now trying to spin off.

Bayer (BAYG.DE) stock, a constituent of the blue-chip DAX index (.GDAXI), closed down 9.73 percent at 14.29 euros, its lowest level since July 1993. The DAX fell 2.93 percent.

The New York Times reported on Saturday that newly disclosed company documents indicated Bayer executives knew of problems with Baycol, an anti-cholesterol drug, long before it was pulled from the market in August 2001. Baycol was sold under the name Lipobay outside the United States.

The newspaper said documents made public by lawyers suing Bayer, including memos, e-mail messages and sworn depositions, suggest the company promoted Baycol even as its own analysis found patients on it were contracting a rare muscle disorder at a higher rate than patients on similar drugs.

The newspaper also said more than 10,000 patients who took Baycol or the families of those who died had filed lawsuits against Bayer and its marketing partner, GlaxoSmithKline (GSK.L) (GSK.N).

A lawyer for Bayer told Reuters the U.S. Food and Drug Administration had been kept informed at every turn.

" Throughout the period of marketing the drug, Bayer kept the FDA informed about its safety and efficacy," Philip Beck, a lawyer with Bartlit Beck Herman Palenchar & Scott, a law firm representing Bayer, said by telephone from Corpus Christi, Texas.

" Every time Bayer did a clinical trial, the information was shared with the FDA. When Bayer received adverse event reports, all of those reports were received by the FDA and analyzed by the FDA," he said.

Of 7,800 suits that have been filed against Bayer, about 450 have been settled out of court, the law firm said.