Shares soar after takeover talks

Shares in a Craigavon-based company have risen sharply after an announcement that it is in talks with an unnamed firm about a possible takeover bid for the group.

Most of Galen's revenue is earned in the United States

Galen Pharmaceuticals' top selling products are its contraceptive pills, hormone replacement cream and a treatment for acne.

Stock market analyst Peter Frawley from Dublin firm Merrion Capital said this was not the first time that Galen had been targeted for a takeover.

"It was rumoured roughly this time last year that the German company Schering AG was looking at them," he said.

"It could be Schering again, or it could be a women's healthcare company such as the American firm Barr Labs or even Johnson and Johnson.

"They are the firms which would get most of the synergy from any takeover."

Most of Galen's revenue is earned in the United States, and the company recently strengthened its presence in the US market with the launch of the HRT product Femring, which is expected to generate annual revenues of about $50 million for Galen from 2007 onwards.

Femring's commercial launch represents an important milestone for the company.

It is the first product developed by Galen which the company has then taken through by approval process of the US regulator, the Food and Drug Administration (FDA).

Menopause

The US market for menopausal products is worth more than $1 billion each year, partly due to the high incidence of hysterectomies among American women.

It is estimated that as many as 52 million women will be of menopausal age or over in the US within the next decade.

Galen claims that Femring is particularly well positioned to take advantage of this market because it treats both hot flushes and vaginal symptoms simultaneously.

Earlier this year, the company had to postpone plans for a new 50m euro plant in County Louth.

This followed objections by residents in Ardee, who were worried about the possibility of hazardous waste being discharged on to horticultural land.

Galen received planning permission for the plant in November 2001, and had hoped to start building work last May.