The share price of Sigma Pharmaceuticals Ltd. reduced significantly after it revealed its decision to offload its medical unit to South Africa's Aspen Pharmacare. The share declined by 7.7% to reach 48 Australian cents and this is the maximum it has declined since July 16.

Meanwhile, the Australian S&P/ASX 200 Index increased by 0.9% during the day.

After offering to work with Aspen Pharmacare Holding of South Africa to improve the offer for Sigma shareholders, Sigma Pharmaceuticals rejected Aspen’s offer due to the offer being “highly conditional”.

On account of the skepticism over the takeover of the struggling Australian drugs group, South Africa's largest drug Company Aspen Pharma has scratched its offer for Sigma Pharmaceuticals by 8% to $648 million. The share of Aspen has been reduced to $0.55 from $0.60, after scrutinizing the books of accounts and profit statements of Sigma last week, according to which Sigma will be facing hard times till 2012.

A Macquarie analyst says that Aspen Pharmacare might walk out from its $700 million acquisition bid for distressed Sigma Pharmaceuticals.

This morning, Analyst Steve Wheen demoted Sigma to not perform satisfactorily from neutral after yesterday's news reports that its generics business has not performed well and EBIT was now anticipated to be $6.4 million under budget.

In the wake of the year's poor results, John Stocker, Sigma Pharmaceuticals Chairman just resigned from the Company.

When the Company posted a full-year loss of $A389 million, Sigma's stock was decimated and CEO, Elmo de Alwis and CFO, Mark Smith, also fell on their swords.

Brian Jamieson who has been on the Board since 2003 is supposed to replace Dr. Stocker.

SOUTH Africa's Aspen Pharma has forwarded an opportunistic proposal for the distressed Sigma Pharmaceuticals, which has experienced a 60 per cent fall in the cost of its shares ever since reporting a $389 million loss.

Aspen is Africa's biggest pharmaceutical producer and a major provider of branded and general pharmaceuticals and has existence in Australia's general drugs marketplace.