Galen to be North's first £1bn firm

Northern Ireland's first £1 billion sterling (€1

Northern Ireland's first £1 billion sterling (€1.6 billion) company is expected to be created early next month when shareholders at Warner Chilcott in the US approve a takeover by Galen Holdings, based in Craigavon, Co Armagh.

The newly formed company begins trading on September 4th and will conduct research into new drugs, as well as manufacturing, testing and packaging medicines for world markets.

Galen is already at the forefront of product development. An intra-vaginal ring, which can deliver a range of drugs including hormone replacement treatment and contraceptives, has been undergoing trials in Northern Ireland and is expected to receive approval in the UK later this year.

Other bestsellers include the painkiller Kapake and the laxative Capusac. The company, which also produces medication for respiratory and allergy problems, is on target to make a profit of around £20 million this year, up from £18 million last year. When Galen made its stock market debut in 1997, its shares were worth 150p; today they are worth 780p. Under the terms of the deal, Galen is swapping 2.5 of its own shares for each Warner Chilcott share. Three-quarters of the shares in the enlarged company will be owned by Galen shareholders. The balance of the shares will be held by Warner Chilcott shareholders who include Microsoft's chairman, Mr Bill Gates, pharmaceutical group Elan, US institutions and Warner Chilcott management.

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The companies are seen as a good fit. Each specialises in women's healthcare products and the merger will give Galen access to Warner Chilcott's extensive sales network in the US. On completion Warner Chilcott chief executive Mr Roger Boisseneault will become chief executive of the merged company.

Mr John King, who owns about 17 per cent of Galen, will be chairman of the enlarged operation. The takeover means Galen will be quoted on the London, Dublin and New York stock exchanges, and will become one of the leading players in the £17 billion Irish pharmaceuticals industry.

It will employ more than 1,300 people in Britain, Ireland and the US, where it has facilities in Pennsylvania, San Francisco and New Jersey. Revenues from US operations already account for around 20 per cent of the group's income, which rose 37 per cent to £42.4 million in the six months to March and contributed to an operating profit of £12 million (up from £9.4 million the previous year).

The Galen family of companies includes QuChem, which conducts research and produces small quantities of new drugs for the industry, also providing analysis, technical support and consultancy. It employs a team of chemistry experts at Queen's University in Belfast and ranks many of the world's leading drug companies among its customers.

Galen was founded by its current chairman, Dr Allen McClay, in 1968. His share of the business is worth around £300 million. The company's manufacturing base is in the Seagoe Industrial Estate in Craigavon, where the company invested £40 million last year in a project which is expected to result in 300 jobs. It has also acquired a 55-acre site at Ardee in Co Louth, where it is expected to set up a manufacturing operation.

The company also operates from the US, and has marketing operations in the Republic and in Britain. It recently acquired Applied Clinical Concepts (ACC) and the pharmacy division of Duke Clinical Research in the US in a deal worth around $13 million (€14.44 million).

The company operates across four divisions: Ivex in Larne manufactures sterile solutions, Galen produces medicines, CTS packages and supplies new drugs in quantities required to conduct full-scale clinical trials, while Syngal is the group's specialist chemicals division.

Dr McClay has also helped to establish a £3.5 million research centre at Queen's University Belfast. The centre, which will be located on a site within the university campus at Belfast City Hospital, is being funded by the McClay Trust, a charitable body set up by Dr McClay to support research in the university's schools of chemistry and pharmacy.

The new 2,000 sq m building, to be known as the McClay Research Centre, should open in September 2001.

Ireland is already one of the largest exporters of pharmaceuticals in the world. There are now around 50 plants for the production of pharmaceutical products on both sides of the Border, and 25 have federal approval to manufacture drugs for the US market. Northern Ireland has attracted no major pharmaceuticals players from overseas, but around £50 million was invested in the health technologies sector last year, and the Industrial Development Board says the high quality of its university graduates makes the region attractive.

The biggest company in the pharmaceuticals business north of the Border is Norbrook Laboratories, which has become one of Europe's leading producers of veterinary products. Based in Newry, it employs 750 people on both sides of the Border and exports to well over 100 countries. Its chairman, Dr Edward Haughey, is one of the North's richest men and is understood to earn around £1 million a year.