Galen shares hit by HRT cancer scare
The shares fell to €8.13 as the Northern drugs group got caught up in the cancer scare findings disclosed in a major new study yesterday.
The Lancet research found that combined hormone replacement treatment containing oestrogen and progesterone caused four times as many breast cancers.
A spokesman for Galen said all of its therapies bar one were oestrogen only.
Galen makes hormone replacement tablets and contraceptives.
Galen’s shares were also hit last year by an earlier study carried out by the American Medical Association, which came up with similar findings.
The slump in the shares comes just days after the group reported a doubling of its operating profits to $61.7m in the third quarter to end June 2003.
Sales of $135.7m were boosted by the purchase of Sarafem and three products acquired from Pfizer earlier in the year.
The underlying revenue growth was a more modest 19%.
In July, Galen made international headlines when it was disclosed that its founder Dr Allen McClay raised €7m by selling 700,000 shares, as the share price surged on takeover speculation.
That speculation has since ended, and within days of McClay selling his shares the group issued a statement saying the takeover talks with US group Barr Laboratories had come to nothing.
Dr McClay still owns over 16 million shares, or 8.85% of the group, worth roughly €130m.
Despite the recent setbacks, the group is to press ahead with drug applications for Femtrace and Doryx by the end of next month.
Given the uncertainty generated by Elan and the drugs sector generally over the past few years, investing in such stocks can be high-risk.
In its most recent review of the company, Goodbody Stockbrokers has retained its ‘buy’ recommendation on the stock, which has seen volatile trading in recent months.
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