The Hindu Business Line : Shasun Chem dips on Vioxx development

SHASUN Chemicals and Drugs on Friday announced that its operational performance remained unaffected by Merck's decision to withdraw its drug, Vioxx, from the market even as its share price dropped. Shasun planned to export the drug to US once Vioxx lost its patent.

Shasun's notice to the stock exchanges said Merck's action would not have a "material impact on the operational performance." The company's share price, however, fell by 4 per cent to close the day at Rs 475.30. Share prices of a few other middle rung pharmaceutical companies also fell on a day when the indices increased.

Shasun targetted Vioxx's chemical ingredient, Rofecoxib, for export. In May 2003, Shasun became the first company to register its production details of Rofecoxib with the US regulator for approval. The rule-of-thumb is that returns are highest for companies that are first to enter a market once a drug's patent ends.

Industry sources said even if the development would not affect the current year's performance, there is uncertainty about opportunities surrounding Rofecoxib.

The chain of events here was set in motion when Merck withdrew Vioxx from the market because it increases the risk of heart attack and stroke. The US regulator approved Vioxx, which is used to relieve pain and inflammation, in 1999. Vioxx had worldwide sales of $ 2.55 billion last year.

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