Galen founder gets timing right

DRUGS group Galen's shares crashed after £1.6bn bid talks unexpectedly collapsed, wiping millions off the wealth of directors.

But it emerged that founder and major shareholder Dr Allen McClay, a former Glaxo drug salesman, made £5m on Friday selling shares that had soared on the bid approach.

McClay - who has no management role at Galen - sold 700,000 at 7101 /2p. The shares had jumped 109p that day. He said he wished he had sold more.

McClay said: 'I actually wondered if I sold out too cheaply. I sold because I needed the money. I am opening new laboratories costing £25m. I thought the bidders might have gone to about £8. My stomach sank when I heard the bid was off. At this price I am sure the shares look a good buy.'

News that talks with Barr Laboratories of the US were off sent Galen plummeting 110p to 595p.

McClay's remaining 8.8% stake in Northern Ireland-based Galen is now worth £97m. Chairman John King's holding has fallen in value to £85m, finance director Geoffrey Elliott's to £31m.

McClay, 70, has raised £140m from selling shares in Galen, which he started in 1968 and floated in 1997. He is pumping his wealth into state- of-the-art laboratories in Northern Ireland, which will employ 200 chemists.

The market was stunned by the collapse of merger talks after dealers had piled in anticipating a bid of £8-plus.

Galen's women's healthcare products and hormone therapy treatments looked a good fit with Barr. But the US firm's shares came under severe pressure as the deal leaked, scuppering its plan to use its own paper as part of the financing.

One analyst said: 'Barr felt it was losing control of its share price.'

Galen's willingness to do a deal has put it in play. It could tempt Dutch group Akzo Nobel, or Germany's Schering.