The reason: they’re viewed as less likely takeover targets after a U.S. official disclosed plans to crack down on overseas deals that enable American companies to cut their tax rates.

AstraZeneca, the London-based drugmaker that was the target of a failed bid by U.S. rival Pfizer Inc., declined as much as 5.7 percent to 4,316 pence. Shire Plc, which agreed in July to be bought by AbbVie Inc., dropped as much as 6.6 percent. Smith & Nephew Plc, a British maker of artificial hips and knees that had been a potential target for Stryker Corp. of Kalamazoo, Michigan, fell as much as 3.8 percent.

The wave of so-called inversions caught U.S. lawmakers’ attention this year. Treasury Secretary Jacob J. Lew made clear on Monday that the Obama administration was prepared to use rule-making authority to try to stop some deals, even at the risk of a backlash from the companies and from Republicans, who already complained that Lew’s moves went too far.

“Washington is playing for time,” said Michael Leuchten, an analyst at Barclays Plc, in a phone interview. “It makes them look good and it allows Congress to maybe get its act together and maybe do something on the legislative side.”

Shire Doubts

The threat of government action is enough for some investors to doubt whether certain deals will happen, according to Leuchten.

The risk of a deal falling apart on Shire has gone up by about 20 percent, based on the spread between the deal price and the current trading price, he estimates. He still expects the transaction to go through. A spokesman for U.K.-based Shire said he had no immediate comment.

“That seems excessive,” Leuchten said. “I don’t think the inversion is important enough for the deal to break down.”

The risks to other takeovers are harder to gauge, he said. Pfizer Chief Executive Officer Ian Read had cited the tax benefits as a reason to buy AstraZeneca and move Pfizer’s tax base to the U.K. from New York.

“As a percentage of deal rationale, how big is that?” Leuchten said. “I really don’t know. It’s not as easy to work out as we’ve done with AbbVie-Shire.”

Cosmo Unfazed

Cosmo Pharmaceuticals declined as much as 9.9 percent on reports that Allergan Inc. was in advanced talks on an all-cash deal for Salix Pharmaceuticals Ltd., which is merging with Cosmo. Salix had planned to move its tax address to Ireland after the transaction with Cosmo. An Allergan deal would end Salix’s planned merger with Cosmo, according to the Wall Street Journal.

Cosmo isn’t party to any talks between Allergan and Salix, said Chris Tanner, the Lainate, Italy-based company’s chief financial officer.

“In principle we continue working as if nothing ever happened,” Tanner said by phone. “It would be a nice opportunity if it happens, if it doesn’t then we’re certainly unfazed.”

Actelion, a Swiss drugmaker that has been considered a possible takeover candidate, fell as much as 3.2 percent.

“The reason why Actelion is trading where it’s trading is clearly on an inflated multiple where people think it’s an inversion candidate,” Leuchten said. “In spirit, it’s down with the rest. The rationale for that one is the weakest. I can’t think of anybody that has the appropriate size to do an inversion.”

Medtronic Inc., the Minnesota-based medical device maker, may become one of the biggest losers under the rules announced by the Obama administration, because it’s in the process of switching nationalities by buying Covidien Plc, which is incorporated in Ireland and trades in the U.S. A likely winner is Horizon Pharma Plc, which just last week completed an address change, known as an inversion, from Illinois to low-tax Ireland.