Medical devices maker Smith & Nephew has dropped its skin product Dermagraft as it revealed weaker revenues and profits growth.
The decision to ditch Dermagraft came after S&N failed to win US approval to use it for treating chronic leg ulcers.
The company, which has a Bromsgrove operation specialising in orthopaedic products, said further clinical work would be needed before it got the go-ahead but the delays this would cause were " commercially unacceptable".
S&N said this year's revenues and profits "will be largely unaffected" by the decision, but forecast it would lead to a £14 million drop in revenues and £7 million rise in profitability next year. The company will pay a £40.5 million exceptional charge.
The announcement came as S&N yesterday posted a ten per cent rise in revenues and an 11 per cent increase in trading profits for the third quarter driven by its orthopaedics business.
Revenues were up from £307.1 million to £341 million, while trading profits were £65.4 million compared with £59 million.
The year-on-year growth for the third quarter was not as strong as in the previous two quarters, but it was in line with City expectations.
Sales in orthopaedics were up 15 per cent to £168 million and ahead of the market in all areas except knees, where business slowed in the face of heavy competition.
In endoscopy - the use of tubes to look inside the body - sales were up eight per cent to £ 79 million thanks to increased work in shoulder and knee repair.
But sales grew by only three per cent in the Hull-based wound management division to £94 million as revenues in the US declined. Sales in Allevyn and Acticoat, which are used to dress wounds, were up 12 per cent.
Trading profits for the year to date were £201 million, with the City forecasting fullyear profits to reach £290.3 million compared with £251.7 million last year.
Investec Securities said the results for the third quarter were "weak" but forecast a stronger performance in the final four months of the year.