Schering AG yesterday pulled its X-ray contrast agent Ultravist (iopromide injection) from most global markets after a potential safety issue was uncovered and delivered poor Phase III data for its Crohn's disease product Leukine (sargramostim), but the firm was quick to point out that the double blow will not affect its forthcoming nuptials to Bayer at a cost to the German giant of 89 euros per share. The latter informed Schering yesterday that the recall would leave its offer unchanged, and Schering has gladly accepted the terms.

Schering says the withdrawal of Ultravist is likely to depress its share price by 0.74 euros, but believes the impact on its stock of the mixed results for Leukine in Crohn's disease is harder to assess. Bayer already owns more than 90% of Schering after making its moves earlier this year, capturing the smaller pharmaceutical company from rival Merck KGaA - although the latter did not come off too badly having made 400 million euros by buying up Schering's shares on the open market and selling them back to Bayer at an inflated price.

Schering says the Ultravist recall stems from having found particulate matter and crystallisation in some products; although no patients have been injured, the potential for thromboembolism has triggered Ultravist's withdrawal in all global markets with the exception of China and South Korea, where domestic supply will continue. “Hospitals, imaging centres and other healthcare facilities should not use any Ultravist Injection 370mgl/ml for patient care and should immediately quarantine any product for return,” the firm said in a statement.

It is big news for Schering as Ultravist is its fifth top-selling product, with sales up 10% during the first half of this year to 143 million euros. And yesterday's blow also affects another upcoming offering, Leukine, which is already marketed as a cancer therapy, but has demonstrated potential in Crohn's, leading Schering to invest heavily in this growth arena.

But it perhaps is less of a surprise to Schering than might have been anticipated: trial data from a Phase II study in 2003 showed a high placebo response rate that skewed the results and meant it failed to achieve one of the clinical endpoints. However, more recent data from the NOVEL 1 trial revealed Leukine to be associated with improved and maintained quality-of-life in patients with moderately to severely active Crohn's disease.

Schering believes Leukine may act by a different mechanism to the anti-TNF agents in Crohn's - by boosting rather than suppressing the immune system within the intestinal barrier. But this failed to come to fruition in its Phase III study, NOVEL 4, which recruited 288 patients to receive Leukine or placebo over eight weeks. The active therapy failed to demonstrate superiority on two primary endpoints of response and/or remission, although the data did suggest a treatment benefit. On the plus side, however, another study dubbed NOVEL 2 did achieve both its primary and secondary endpoints, leading to steroid-free clinical remission in steroid-dependent patients given Leukine.

Schering had originally expected to file for US and European approval of Leukine in the last quarter of 2006, but these timelines will likely now be pushed back.