ICN Stock Recovers Some From Earlier Loss of 23%
After plunging more than 23% in value Friday, shares of ICN Pharmaceuticals Inc. rebounded modestly in active trading Monday after the Costa Mesa-based company lashed out at what it called “irresponsible and insensitive” speculation concerning its potential AIDS drug.
The run on ICN stock apparently was triggered by a New York investment analyst’s statement that clinical trials of ICN’s proprietary drug Virazole appear to have shown the drug to be ineffective in the dosages tested.
Richard Schneider, director of research for Eberstadt Fleming Inc., said Monday that the statement was not meant to be a negative comment about Virazole but had been made in connection with his firm’s investment research into the Burroughs Wellcome Co., which makes the drug AZT. Virazole was discussed because, like ATZ, it is considered a potential AIDS treatment, he said.
“We made no comment on ICN stock, although some people undoubtedly would take it in that context,” Schneider said. “We were not saying that ICN’s product is no good but that in the lower dosages (being tested) it might not work.”
In a statement released Monday, ICN did not make any claims for its drug--also called ribavarin--and said it would be impossible to draw “any conclusions” about its “efficacy” until test results can be fully analyzed. Such speculation, the company said, is “insensitive” to the patients involved in testing the drug.
Because the trials are being conducted under double-blind conditions--neither the patients nor the researchers involved know who is receiving the drug and who is receiving a placebo--the test results are not yet known, said Lawrence Panitz, ICN’s chief operating officer.
Panitz denied that any of the personnel involved in the clinical trials, the last of which is expected to end next month, disclosed any information concerning the results. “None of our clinicians have talked to anyone,” he said.
The original tests on patients with AIDS and on those diagnosed as having AIDS-related complex, or pre-AIDS, were to have ended Nov. 28. The pre-AIDS tests, however, have been continued through late January.
Liz Greetham, the analyst who questioned Virazole’s effectiveness on Friday, could not be reached for comment Monday. Schneider said that he did not know Greetham’s source of information but said she “somehow got word or something.”
In fact, it is sometimes easy for personnel involved in double-blind studies to informally evaluate a drug’s performance, said Eugene Melnitchenko, who follows the pharmaceuticals industry for the Dallas investment firm of Rauscher Pierce Refsnes Inc.
Even though they do not know which patients in a trial are receiving placebos, clinicians often say that they can tell when individual patients appear to benefit from an experimental drug, Melnitchenko said. “But they don’t have any quantitative numbers.”
ICN stock has risen sharply this year on speculation that Virazole will be approved for use as a treatment for AIDS. It plummeted $5.625 per share Friday to close at $18.75 as the New York Stock Exchange’s third most active issue.
On Monday, ICN gained $1.25 to close at $20 a share on volume of 853,800 shares.
Analysts attributed much of Friday’s selling to jittery speculators who were disappointed because the pre-AIDS portion of the clinical trials was to have ended last month but now is scheduled to continue into January.
Pre-AIDS describes a series of AIDS-like symptoms that often precede the full onset of the disease.
ICN’s statement that the trials would continue into January was “a major disappointment,” Lynn Pauls of E.F. Hutton & Co. said Friday. “To me, this is saying that what they have is inconclusive.”
Panitz refused Monday to elaborate on why the trials have been delayed. However, Melnitchenko said some patients reportedly dropped out after concluding that they were receiving only placebos. Melnitchenko said he believes information about problems with the tests came from people working in the clinics where the tests are being conducted.
