Founder of Galen buys another part of business

The founder of pharmaceuticals group Galen, Dr Allen McClay, has bought another part of the business he retired from in 2001. Dr McClay has acquired Galen's UK-based drug sales and marketing business for £40 million in cash.

The Northern Ireland-based group has also sold its Ivex sterile fluids solutions business to US group Gambro BCT for £2.5 million.

Galen chief executive Mr Roger Boissonneault said the company was focusing its business on the US market.

"We no longer see the UK and Irish markets as core and are pleased to sell these businesses to new owners who intend to develop them," he said.

Chairman Dr John King said: "We can get a far larger return on our investments in the United States. As a result, we do not see ourselves investing in Europe."

Galen retains an R&D operation in Northern Ireland along with facilities for the manufacture of its intravaginal ring, activities that Dr King said were related to its US businesses which focus on women's healthcare and dermatology products.

But he said the company had no plans to relocate to the US despite the focus on that market. "We remain a UK company with a strong base of UK shareholders," he said.

The drug sales and marketing business bought by Dr McClay through his Almac Sciences company had sales in the year to the end of September 2003 of $32.9 million, up 5.8 per cent on 2002.

It sells a range of drugs in Britain and Ireland, including painkillers, a treatment for incontinence and an oral contraceptive.

Dr McClay beat five other bidders for the business in an auction.

He has now spent £225 million in two-and-a-half years acquiring five separate parts of his former business.

These include its entire clinical trials operations.

When Dr McClay floated the company in 1997, it was to raise funds to grow this part of the business.

He has funded much of his purchases through the sale of his 20.5 per cent holding of Galen stock for around £240 million.

At the time of its flotation, Galen had no sales in the US. However, the acquisition of Warner Chilcott in 2000 led to a change in strategic focus towards speciality pharmaceuticals for the female market.

The two businesses sold yesterday employ about 100 staff each.

Gambro BCT is the Colorado-based subsidiary of Swedish group Gambro. It is a leading player in blood bank technologies and blood products.

Almac Sciences, based in Northern Ireland, is the vehicle used by Dr McClay (71) to reassemble the clinical trials businesses he has acquired from Galen.