ICN Posts $1.67-Million Loss for 2nd Quarter

ICN Pharmaceuticals Inc., hit by continuing operational losses and “paper losses” from bond investments, posted a $1.67-million loss for its fiscal 1987 second quarter, compared with net earnings of $1.56 million for the year-earlier period. Sales for the quarter ended May 31 were up 29%, to $29.2 million from $22.7 million a year earlier.

Meanwhile, SPI Pharmaceuticals, ICN’s 90%-owned subsidiary, posted second quarter net earnings of $2.6 million, up 18% from $2.2 million for the second quarter of fiscal 1986. Sales for the second quarter increased 56%, to $19.1 million from $12.2 million a year earlier.

And Viratek, a 56%-owned subsidiary, reported a second quarter net loss of $2.7 million, compared with a loss of $567,000 a year earlier. Revenue of $202,000 for the quarter was down 69% from the year-earlier $647,000. The company said its second quarter results were affected by increased research and development expenses and a decline in royalty income.

All three companies’ stock has been volatile in recent months, largely because of Costa Mesa-based ICN’s well-publicized attempts to win Food and Drug Administration approval of its proprietary drug, ribivirin, as a treatment for patients with acquired immune deficiency syndrome and the FDA’s repeated criticism of the company’s attempts to win publicity for the drug. The financial reports were not reflected in Thursday’s trading because the companies released the news after the markets had closed for the July 4 weekend.

For the first half of its current fiscal year, ICN reported net income of $4.9 million, up 36% from $3.6 million in the first half of its fiscal 1986. The gains were attributed entirely to profits from securities trading. Sales for the period were $51.7 million, an 8% increase from the year-earlier $47.9 million.

SPI’s first-half net income rose 32% to $5.8 million from $4.4 million, while its sales jumped 15%, to $32.1 million from $27.8 million.

At Viratek, the first-half loss was $4.6 million, down from net income of $1.5 million a year ago. Revenue for the six months of $385,000 was down 90% from $4 million.

Both ICN and SPI said their results included gains from the sale of securities, and ICN said its second quarter also included a $2.9-million loss to account for the decline in the value of some investment securities the company still holds. Such a loss is called an “unrealized” loss.

Additionally, both companies’ 1987 figures include the effect of their February acquisition of a Spanish pharmaceuticals company.

ICN said that for the second quarter, it had gains of $1.2 million and unrealized losses of $2.9 million from its securities investments.

For the first half, the company said, its securities transaction gains totaled $12.5 million, while its unrealized losses totaled $3 million.

SPI said its securities gain was $91,000, for both the second quarter and the first half.

ICN additionally reported that it re-purchased 2.7 million shares of its common stock at a cost of $38.8 million in recent months.

The company said it has also purchased 813,738 shares of SPI common stock for a cost of $18 million and 1.18 million shares of the common stock of its Viratek subsidiary for a cost of $40.1 million. ICN now owns 90% of SPI’s common stock and 56% of Viratek’s common shares.

ICN also said that during the second quarter, it re-purchased $21.6 million of debt securities issued during the last year for a cost of $17.8 million.