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Minoxidil Study Hurt Upjohn Stock

February 10, 1988

KALAMAZOO, Mich. (AP) _ Federal officials have been provided with results of a Canadian study questioning the safety of the hair-growth drug minoxidil, an Upjohn Co. spokeswoman said Tuesday.

Upjohn stock dropped $1.75 a share on the New York Stock Exchange Monday, after news that the study concluded the drug, sold in Canada as Rogaine, could speed the heart rate of healthy young men.

The stock closed Monday at $30.38. On Tuesday, it closed down another 38 cents to $30.

Barbara Ryan, analyst for Bear Stearns & Co. Inc., cut her estimate of Upjohn earnings based on fears the U.S. Food and Drug Administration might delay approval of the drug until reviewing the Canadian study.

Upjohn has applied to the FDA to sell minoxidil as a baldness treatment in the United States. Ryan said if the agency orders a new study it could delay a decision until next year.

Dr. Franz Leenen, associate professor of medicine and pharmacology at the University of Toronto, concluded after studying 20 men who used minoxidil and 16 who used a placebo that minoxidil could speed the users’ heart rate.

Asked if the drug could be dangerous, Leenen said, ″If you have coronary disease, I would say yes. For young people, it is probably not a problem.″

Upjohn spokeswoman Kaye Bennett said Upjohn was aware of the Canadian study in December and the FDA was provided with a copy. The company has heard nothing from the FDA concerning the study, she said.

Upjohn’s own clinical trials with 2,000 people showed no negative health effects, she said. ″You just don’t get enough minoxidil in the blood to cause a cardiac effect.″

She said Upjohn had the Canadian study evaluated by cardiologists outside the company. ″The consensus was that the conclusions he drew are not justified by his data,″ she said.

Some Wall Street analysts were also skeptical.

Paul Brook, analyst with Morgan Stanley, said the prestigious New England Journal of Medicine refused to publish the Canadian findings. ″The study’s data does not support the conclusions,″ Brook said.

″It’s a nervous market,″ said Richard Stover, analyst with Smith Barney. ″Investors are shooting first and asking questions later.″

Rogaine, sold in 19 countries, has been shown to grow hair for 75 percent of balding men who use it. In pill form, minoxidil is prescribed as a potent drug to combat hypertension.

The FDA had no comment on the study or the status of minoxidil.

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