Ribavirin Fight Puts ICN on Ropes : Pharmaceuticals: Company founder Milan Panic said he decided to give up the battle with the FDA because he felt that there was no way he could win.
Milan Panic, the volatile founder and chief executive of ICN Pharmaceuticals, isn’t a man who gives up easily.
For more than four years, he has been unbending in his determination to win approval from the U.S. Food and Drug Administration to sell the anti-viral drug ribavirin as a treatment for the AIDS virus.
Even after the FDA said in 1987 that it could find no evidence of ribavirin’s effectiveness in combatting the acquired immune deficiency syndrome, Panic kept a stiff upper lip. “If as strong a person as I quits, then others will, too,” he said then.
But Wednesday, ICN and its leader put out the white flag of surrender by announcing that the company had dropped tests and other efforts to win approval to use ribavirin as an AIDS treatment in the United States.
The decision was costly for ICN, which reported an $82-million loss for fiscal 1989, largely due to a write-down related to its ribavirin operations. But it does not end the controversy surrounding the company that over the years has prompted investigations by the FDA, Securities and Exchange Commission, a federal grand jury and Congress.
Panic said Thursday that he gave up the battle with the FDA because he believed that there was no way for him to win.
“While clinical results and the needs of AIDS patients warrant further clinical studies of ribavirin, ICN itself will not at the present time pursue marketing authorization in the U.S. as long as regulatory attitudes and policies remain the same,” he declared.
ICN officials say the company still believes in ribavirin and will focus on getting it accepted by other countries as an anti-AIDS drug. They say the company also will try to persuade the FDA to allow ribavirin to be sold in the United States as a therapy for various other maladies, including influenza.
The company, which has invested $20 million to develop ribavirin as an FDA-approved drug for fighting early-stage AIDS, was discouraged by the high cost and complexity of the task, company spokesman Jack Sholl said.
That does not mean, he added, that other organizations could not continue studying ribavirin as an anti-AIDS drug for possible use in the United States.
A first-phase study of ribavirin as an AIDS drug recently was completed by the National Institutes of Health. An analysis of the initial tests--which were designed to determine patients’ tolerance of the drug rather than the drug’s effectiveness--will be submitted this summer to the NIH, according to Dr. Clyde Crumpacker, a professor of medicine at Harvard Medical School who is coordinating the study. The NIH, he said, will then decide if it will sponsor further human trials.
The FDA has denied two applications by ICN for approval to market ribavirin for use in life-threatening cases based on data from clinical studies that the company has sponsored. A third application was voluntarily withdrawn by the company in November.
Even some staunch supporters of ribavirin and ICN say that the company created its difficulties with the FDA through its own behavior.
“If they had followed the normal scientific peer-review process and played ball with the FDA, the drug would be on the market already (for AIDS),” said Eugene Melnitchenko, director of research and health-care analyst for Guerin & Turner Inc., a Dallas brokerage.
The FDA denies Melnitchenko’s contention that the FDA’s rejection to date of ribavirin as an AIDS drug has been in any way “political.”
“We review drugs on the basis of their safety and efficacy and we don’t allow political consideration to interfere with those decisions,” FDA spokesman Brad Stone said. He pointed out that the FDA in 1985 approved the marketing of ribavirin for the treatment of respiratory syncytial virus, the most prevalent cause of lung infections in infants.
Nonetheless, ICN has become the target of criticism and numerous investigations related to ribavirin.
In 1988, a Los Angeles grand jury at the behest of the FDA launched an investigation into allegations that ICN illegally offered to sell the drug for treatment of AIDS patients without government approval. No charges resulted.
Panic himself has drawn fire for his optimistic--some say “promotional”--comments about the drug’s powers.
The FDA’s wrangling with ICN dates to 1987 when company officials announced in a Washington news conference that recent tests showed that ribavirin delayed the development of AIDS in patients. But a few months later, the FDA disputed the test results.
The company’s stock performance has been a barometer of investors’ confidence in ribavirin’s potential as an AIDS drug. ICN stock tripled in price to a peak of $34 a share in August, 1986, then fell, declining to $3.625 a share at the close of trading Thursday, having slipped $1.125 since Wednesday’s news.
In 1987, the SEC began a two-pronged investigation of trading in the stock of ICN and its research subsidiary, Viratek Inc. One part of the SEC investigation was an allegation that Gilford Securities Inc., a Chicago-based broker, had attempted to drive down the price of ICN and Viratek stock in which it had taken a short position.
In turn, ICN filed suit against Gilford, alleging that the firm carried out a fraudulent scheme causing stock to drop by spreading “false and disparaging” information about the prospects of ribavirin.
The SEC also investigated allegations that ICN and Viratek had spread false information about the efficacy and safety of ribavirin. ICN spokesman Sholl said Thursday that the SEC has completed that investigation and that the commission and the company have begun discussing a potential settlement.
“The company is cooperating fully with the FDA, SEC, the Justice Department and any other investigations,” Sholl said.
Alan B. Lancz, president of a money-management firm in Toledo, Ohio, said the ribavirin controversy “has tarnished the image” of ICN, its management, and its subsidiaries, including those that have no relationship to ribavirin.
Lancz noted that ICN Biomedicals, an ICN subsidiary that makes biotechnology-research products, on Monday reported net earnings of $6.1 million for the 1989 fiscal year, up 69% from $3.6 million in fiscal 1988. Nonetheless, he noted, Biomedical’s stock has fallen since last Friday from $11.75 a share to $10.50.
“The company (ICN) Biomedicals is doing sensationally but getting smeared with the same brush as the parent company,” he said.
