ICN Awaits Judge’s Ruling on Fight for Proxies : Investing: Officials of the Costa Mesa pharmaceuticals firm said they won’t reschedule the annual meeting until decision is delivered.
Officials of ICN Pharmaceuticals Inc. said Tuesday that they are awaiting a ruling by a federal judge in New York on whether to quash a pending proxy fight to oust Chairman Milan Panic before they reschedule the company’s annual meeting.
That announcement was made as two of ICN’s subsidiaries--Viratek Inc. and ICN Biomedicals Inc.--held their own annual meetings at ICN’s expansive headquarters in Costa Mesa.
Viratek, with 1992 profit of $1.8 million on revenue of $5.4 million, develops and distributes pharmaceutical compounds derived from nucleic acids. ICN Biomedicals, with a 1992 loss of $87.4 million on sales of $75.6 million, manufactures and sells a wide range of biomedical research products used in laboratories.
During Tuesday’s annual meetings, there was no mention of the controversy surrounding control of ICN, a multimillion-dollar international drug conglomerate. But in an hourlong interview, Panic and other ICN officials said a decision on a new date could come as early as Thursday.
Beverly Hills stockbroker Rafi Khan, who is heading the fight to replace Panic, is under a temporary restraining order by U.S. District Judge John Sprizzo to stop soliciting proxies in anticipation of ICN’s annual meeting, which was initially set for today. The company, giving no reason for its action, announced on May 4 that it was postponing the meeting indefinitely.
ICN accuses Khan of using inside information to build a substantial bloc of disgruntled shareholders. Khan, in turn, accuses Panic of drawing extravagant salaries and secretly running his business last year while serving as premier of Yugoslavia.
Panic is also chairman of Viratek, ICN Biomedicals and SPI Pharmaceuticals Inc., which holds its annual meeting today.
In a ruling expected on Thursday, Judge Sprizzo could either reverse the temporary restraining order--thus allowing Khan to continue his efforts to stage a proxy battle--or reinforce it through a preliminary injunction. An injunction would prevent further solicitations by Khan, therefore foiling his proxy fight.
The judge has also issued a gag order preventing Khan and ICN from discussing the issue.
Panic on Tuesday also expressed disappointment that ICN’s newest director, Charles D. Miller, quit his post three days after being elected. In his first public comments about Miller’s resignation, Panic suggested that Miller accepted the post before realizing how time-consuming it would be.
“Mr. Miller is my friend,” Panic said. “He instantly agreed” to serve on the board of directors,” Panic said. “Then he found out he is too busy.”
Miller indicated Monday that he had left the board on April 29 because of “time constraints.” He maintained that the decision had nothing to do with either ICN’s financial performance or the debate over control of the firm.
Meanwhile, Panic announced Tuesday that Viratek is undergoing the third phase of human clinical trials to test the effectiveness of its trademark drug, Virazole, on hepatitis C, a virus that causes inflammation of the liver.
The company estimated that 1.8 million Americans are infected with the disease, which can lead to deadly cirrhosis of the liver and liver cancer.
If the clinical trials prove successful, the company expects to file a New Drug Application with the U.S. Food and Drug Administration early next year. Federal regulators would then review the application, including the clinical trials, before issuing an approval for it to be sold.
Panic also acknowledged that ICN Biomedicals’ acquisition of Flow Laboratories almost four years ago has hurt its balance sheet. The subsidiary’s 1992 loss, which equaled $4.80 a share, reflected a major restructuring of the company.
ICN Biomedicals wrote off $73 million for the restructuring and paid off $30 million in debt relating to the acquisition. The company was forced to retire old equipment and slow-moving inventory and to write off goodwill.
The combination of ICN Biomedicals and Flow Laboratories “on paper was beautiful,” Panic said. “But when we got into it, it was a bucket of worms.”
