PHARMACEUTICALS: Galen Holdings, the Northern Ireland specialist pharmaceutical company, will sell one of its divisions to founder and former president Dr Allen McClay for £25 million sterling (€40 million).
Dr McClay, who recently retired from the £2 billion public company, which he set up in 1968, is leading the management team acquiring Galen's Chemical Synthesis Services (CSS) division.
CSS comprises research division Quchem and Syngal, which provides a chemical development service for the pharmaceutical- and chemical-related industry. It is based at two sites - in Belfast and Craigavon, Co Armagh - and employs 110 people. Last year, the division reported sales of £5.2 million.
Mr Geoffrey Elliot, Galen's chief financial officer, told The Irish Times the decision to divest CSS had been taken because it was non-core. Mr Elliot said: "CSS is a totally different type of business compared to Galen and we had indicated that we were reviewing the future for CSS because it was a standalone business and it was taking up valuable group management time and effort.
"The management of CSS took the initiative and secured the support of Dr McClay for their plans. Galen will now reinvest the proceeds of the sale to further strengthen our group business." He said the sale did not undermine Galen's commitment to Northern Ireland as an investment location.
"We have a significant manufacturing base and a clinical trials operation, which still employs more than 800 people in Northern Ireland," Mr Elliot added.
Analysts at Goodbody Stockbrokers in Dublin have welcomed the move, which they said would enable the group to focus on its core pharmaceutical business.
"We believe that the sale of the CCS business will lead to some improvement in margins going forward. The margins from the services business had been holding back the overall group margin in the past," analysts said yesterday.
Dr McClay remains a significant Galen shareholder; he retained his 20.57 per cent stake in the group when he retired last September. The 69-year old was born in Northern Ireland and is estimated to have made a personal fortune of over £380 million from Galen.
