Zeneca price tumbles as takeover attractions fade

Shares in Zeneca tumbled 30p to 886p yesterday, more than wiping out Monday's gains as the market realised that Glaxo's bid for Wellcome had made the former ICI drugs and agrochemicals division a less likely bid target.

The fall came despite a year-end trading statement bang in line with expectations.

Pharmaceutical sales in the second half grew at about the 6 per cent recorded in the first six months, despite deteriorating conditions in the United States and Italy.

Tenormin, the heart drug that lost its patent protection, continued to decline but no faster than in the first half. Zoladex, the cancer treatment, continued to grow strongly.

Six months ago Zeneca was being widely tipped as a stronger bid target than Wellcome because of the added bonus to a predator of selling off its agrochemical and speciality chemicals arm for up to £2bn.

Drought in South Africa and Australia, and the withdrawal of the East European seeds operation, held sales back in the seasonally less important second half, but profits for the full year are expected to be substantially ahead of 1993.

Despite tough trading for the colours operation, sales of Resins and Quorn showed strong growth.

Zeneca also said yesterday that its proposed acquisition of 50 per cent of Salick Health Care, the American cancer drug business, had been cleared by US anti-trust authorities.

Completion of the deal is now expected by the end of March.

Analysts expect Zeneca to make pre-tax profits in the year to December 1994 of £760m and £850m in the current year.