Sector movers: Pharma stocks fall as tax-inversion hopes dissipate
Pharmaceutical and healthcare stocks were once again among the worst performers on London's stock market on Thursday after the future of potential multibillion-pound 'tax-inversion' deals was thrown into doubt.
AbbVie Inc
$167.80
11:05 24/04/24
Consort Medical
1,010.00p
16:35 05/03/20
FTSE 100
8,040.38
16:34 24/04/24
GSK
1,636.00p
16:40 24/04/24
GW Pharmaceuticals
735.00p
16:34 02/12/16
Hikma Pharmaceuticals
1,813.00p
16:40 24/04/24
Shire Plc
4,690.00p
16:39 08/01/19
Skyepharma
443.00p
16:40 09/06/16
Vernalis plc
6.17p
12:19 09/10/18
A day after seeing its market value slump 22%, Shire's share price dropped a further 9.7% after US pharmaceutical giant Abbvie recommended shareholders to vote against its planned $54bn takeover of the UK drugmaker.
Abbvie had said the previous day that it was reconsidering its offer in light of changes to US tax laws. However, it announced overnight that its board had decided that new rules clamping down on tax inversions made the deal much less attractive. These changes introduced "an unacceptable level of uncertainty" to the deal.
Companies such as Astrazeneca and Smith & Nephew, which had both attracted interest from two American blue chips earlier this year, were unwanted in afternoon trade on negative readacross.
Policymakers in the States have attempted to dissuade US companies from pursuing buyouts of foreign businesses in an attempt to shift their tax bases overseas.
"The issue of tax inversions has been a prominent political sticking point in the States recently, and this is certainly the highest profile deal to be affected," said Will Hedden from IG.
The worry now for UK investors, however, is that the new rules will put off industry heavyweights in the US from considering major acquisitions.
Glaxosmithkline, Skyepharma, Hikma Pharmaceuticals, Vernalis, Consort Medical and GW Pharmaceuticals were all trading in negative territory on Thursday.
Top performing sectors so far today
General Retailers 2,521.65 +0.29%
Technology Hardware & Equipment 1,022.79 +0.16%
Bottom performing sectors so far today
Pharmaceuticals & Biotechnology 11,467.85 -3.83%
Mobile Telecommunications 4,060.87 -3.47%
Construction & Materials 3,337.94 -3.03%
Industrial Metals & Mining 1,250.35 -2.88%
Life Insurance 6,623.63 -2.70%