Pharmaceutical group PowderJect saw £85 million sterling (€133 million) wiped from its market value today as investors reacted to the firm's recall of its tuberculosis vaccine in Britain.

The group, which caused controversy when it was awarded the British government contract to supply smallpox vaccine, said it was recalling the BCG vaccine following the temporary suspension of its licence for the vaccine in Ireland.

Costs of the recall will knock £5 million off profits this year.

PowderJect, based in Oxford, had been expected to make profits of more than £25 million.

Shares slumped in reaction to the announcement, which was made after stock market trading hours on Friday.

By lunchtime yesterday, shares dived by nearly a quarter, down 22 per cent to 330p. The fall means £85 million has been wiped from the group's market price, giving it a value of just under £300 million.

The group, the sole licensed supplier of the BCG vaccine in the UK, said it was being "extra cautious" in withdrawing the BCG vaccine, manufactured at its Liverpool factory, although it was assured that it was not unsafe.

The problem was initially identified in Ireland when a "small number" of batches approaching the end of their normal three-year shelf life were found to be below the normal required standards of potency.

Further testing identified a similar problem in a number of other batches at which point it was decided to order the recall.

- (PA)