ICN Won’t Seek OK for AIDS Drug, Posts Big Loss
ICN Pharmaceuticals said Wednesday that it has ceased efforts to obtain approval to market ribavirin in the United States as a remedy against the AIDS virus and took a $71-million writedown in the fourth quarter to reflect much of the impact of that decision.
The Costa Mesa-based drug company reported a loss of $82 million for fiscal 1989 ended Nov. 30, on sales of $185.5 million, compared to earnings of $17.8 million on sales of $166.3 million in fiscal 1988.
In the fourth quarter, the company posted a loss of $85.7 million on sales of $55.88 million, contrasted with earnings of $554,000 on sales of $49 million for the same period a year earlier.
The quarterly loss included a $56.6-million writeoff related to the company’s 74% ownership interest in Viratek Inc., its research subsidiary involved in development of ribavirin. The company also took additional one-time charges of $14.4 million related to Canadian tests of ribavirin, litigation and restructuring costs.
“Given the complexity of the U.S. regulatory process and the time and considerable cost of doing additional trial work, it is difficult to predict when, if at all, an approved use of ribavirin against HIV (the AIDS virus) could be achieved in the United States,” said ICN spokesman Jack Sholl in explaining the company’s action.
But he said the decision not to go forward with studies did not mean that the company has lost confidence in the drug’s potential in thwarting AIDS.
Less than four years ago, there was widespread speculation that ribavirin--marketed under the trade name Virazole--had potential for fighting AIDS in its early stages. That belief fired up Wall Street, causing the price of ICN’s stock in 1986 to soar to $34 a share from $10. It closed Wednesday at $4.75 a share.
ICN drew criticism from the Food and Drug Administration for making false claims about the drug, and in 1987 the company was scolded before a House subcommittee for providing allegedly misleading information to federal officials about ribavirin’s effectiveness as an AIDS treatment.