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Johannesburg - Shares of Adcock Ingram Holdings [JSE:AIP] tumbled as much as 4.1% in early trade on Friday, after the drugmaker said South Africa would ban three drugs that contributed $29m to its sales due to safety concerns.
Adcock, South Africa's second-biggest drug maker, said South African health regulators have decided to withdraw all drugs that contain the pain-killer dextropropoxyphene, or DPP.
The Midrand-based company sells three drugs that contain DPP - Synap Forte, Lentogesic and Doxyfene - which together contributed about R200m of its R4.5bn revenue for the year to end-September.
"Adcock has a broad spectrum of leading drugs covering most therapeutic ranges, hence despite the potential loss of these high-margin drugs, we don't believe that it's a complete disaster for Adcock," Nino Frodema, a portfolio manager at Metropolitan Asset Managers.
Another analyst, Methew Menezes at Avior Research, said the move could trim Adcock's earnings by 5%.
Adcock said it has has suspended promotion and sales of its DPP-containing medicines while it awaited a formal notification from the Medicines Controls Council of the Department of Health.
Shares in Adcock were down 2.83% to R64.62 by 09:43am, having previously fallen as much as 4% on the Johannesburg All-share index.
Adcock, South Africa's second-biggest drug maker, said South African health regulators have decided to withdraw all drugs that contain the pain-killer dextropropoxyphene, or DPP.
The Midrand-based company sells three drugs that contain DPP - Synap Forte, Lentogesic and Doxyfene - which together contributed about R200m of its R4.5bn revenue for the year to end-September.
"Adcock has a broad spectrum of leading drugs covering most therapeutic ranges, hence despite the potential loss of these high-margin drugs, we don't believe that it's a complete disaster for Adcock," Nino Frodema, a portfolio manager at Metropolitan Asset Managers.
Another analyst, Methew Menezes at Avior Research, said the move could trim Adcock's earnings by 5%.
Adcock said it has has suspended promotion and sales of its DPP-containing medicines while it awaited a formal notification from the Medicines Controls Council of the Department of Health.
Shares in Adcock were down 2.83% to R64.62 by 09:43am, having previously fallen as much as 4% on the Johannesburg All-share index.
