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Allergan shares jump 13% on takeover speculation

Drug firm GlaxoSmithKline is interested in buying the maker of Botox and weight-loss device Lap-Band.

March 25, 2009|Bloomberg News

Shares of Allergan Inc. rose 13% on Tuesday on speculation that the maker of Botox might be bought.

Allergan surged $5.78 to $48.95 for its biggest one-day percentage gain since June 21, 1989.

A report on the website DealReporter.com said London-based GlaxoSmithKline might be interested in acquiring Allergan, citing a person familiar with Glaxo's policy. Irvine-based Allergan agreed in 2005 to share promotion of Botox with Glaxo and jointly market two Glaxo migraine medicines.

Allergan fired 5% of its workers last month after announcing that sales fell in the fourth quarter as the recession reduced demand for cosmetic procedures.

"Allergan is having more earnings pressure than I have ever seen them face, and they are having to cut spending just to have any growth," said Corey Davis, an analyst at Natixis Bleichroeder Inc. in New York. "Any buyer for Allergan would be champing at the bit these days."

Allergan and Glaxo declined to comment.

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