Takeover Speculation Lifts Price of Allergan Shares 7%

Allergan Inc. shares rose more than 7% Thursday on speculation the company may be acquired and optimism about new products in development, analysts said.

Allergan shares rose $2.375 to close at $35.50 in heavy trading on the New York Stock Exchange. A total of 906,100 shares changed hands, more than triple the average daily volume for the last three months.

Analysts said speculation that Allergan could be acquired was renewed after Germany’s Hoechst AG said it will pay $3.5 billion to buy shares of French drug maker Roussel Uclaf that it doesn’t already own. Allergan, a medium-sized pharmaceutical company, is often the subject of takeover speculation.

In addition, Allergan said its new treatment for psoriasis and acne, Zorac, was approved for sale in Germany. That spurred some investors to look forward to the expected U.S. approval of Zorac in 1997, analysts said. “That’s what has gotten people fired up about the stock,” said UBS Securities analyst Ken Kulju.

Zorac is widely expected to be a major product for Allergan, with yearly sales of about $100 million.