Biotech Values

[ilpapa]

Shares in Shire SHPG -0.57% PLC plummeted to the bottom of London’s FTSE 100 index Wednesday, after the U.S.’s AbbVie Inc. ABBV +0.95% said it was having second thoughts about buying the company, in light of new rules discouraging firms from relocating overseas to gain favorable tax treatment.

Shares in the pharmaceuticals company, which had risen by almost 90% in value between the start of the year and Tuesday’s close, mostly buoyed by takeover talk, slumped to just £38.04 ($60.50) apiece on Wednesday—a level last seen in mid-June—on the strongest sign yet that the U.S. Treasury Department’s measures are having their intended effect of discouraging companies from relocating overseas for tax purposes. The new rules were announced by the Obama administration last month.