Rumours over antidepressant pill hit Warner Chilcott shares

Shares in Warner Chilcott fell sharply yesterday, hit by rumours that its antidepressant treatment, Sarafem, could have unwanted side effects.

The Northern Irish pharmaceutical company, formerly known as Galen, touched a year low of £5.73 in London before recovering some ground to close 4 per cent lower on the day at £5.89.

In Dublin, the shares lost 57 cents, or nearly 6 per cent, to €8.96 amid rumours that Sarafem, which is used in the treatment of premenstrual disorder, had the unwanted effect of enhancing fertility.

The company, which is due to release third-quarter results in early August, said it knew of no links between Sarafem and fertility.

"There's nothing new out on Sarafem. It's a product for premenstrual disorder. The company is not aware of any links with fertility. At this stage, we're not aware of any reason for the share price decrease," a company spokeswoman said.

Analysts said the share price fall may have been exacerbated by nervousness about the outcome of a patent challenge to Sarafem from generic drugmaker Teva.

The results of the court hearing into the challenge were due in the early summer but the company is still awaiting the judge's response.

While Warner Chilcott is generally expected to win the case, the delay has prompted some unease. Were Warner Chilcott to lose, it could remove 10-15 per cent from earnings per share in 2005 and beyond, investment bank UBS said in a recent research note.

Market sources said Warner Chilcott has also been suffering from general malaise toward the sector in recent times, while thin summer trading conditions also tended to exaggerate any share price movement.

Analysts are set to pay close attention to the next set of quarterly results, due for release on August 10th, following concern about recent prescription trends for certain products. - (Additional reporting, Reuters)