ICN Stock Drops 13% After Action by FDA : Biotechnology: Agency orders O.C. company to resubmit application for its drug Virazole as treatment for hepatitis C.

By GREG JOHNSON

Dec. 6, 1994 12 AM PT

TIMES STAFF WRITER

COSTA MESA —

ICN Pharmaceuticals Inc.’s stock tumbled 13% Monday after the U.S. Food and Drug Administration ordered the company to resubmit an application for a key antiviral drug it has developed.

ICN, based in Costa Mesa, sought regulatory approval in June to use its drug Virazole as a stand-alone treatment for hepatitis C. On Monday, however, the company said it will probably seek approval for use of Virazole in combination with other drugs.

In Monday’s trading on the New York Stock Exchange, ICN’s stock fell $2.875 a share to close at $19.125, although a company official portrayed the FDA action as “just another step in the approval process.”

“When we started out, we said the usual timetable was from six to 24 months,” ICN spokesman David Calef said. “We’re right at the front door of that process now. The FDA responded very quickly, and the file remains open.”

Analysts agreed that even a minor delay can send biomedical stocks sharply lower.

“Unless there’s something that doesn’t meet the eye, this appears to be perfectly normal,” said David Anast, publisher of the Costa Mesa-based Biomedical Market Newsletter. “Practically no application sails through FDA approval without some type of question-and-response activity.”

But other analysts took another view of what the FDA action means for ICN and its antiviral drug.

“The FDA had a problem with ICN in the past, and the FDA does carry grudges,” said Jim McCamant, publisher of Medical Technology Stock Letter, a Bay Area publication. “One could expect ICN to have problems again.”

In the late 1980s, ICN was at odds with the FDA and the Securities and Exchange Commission over the use of the company’s drug ribavirin as a treatment for people with AIDS. ICN eventually agreed to cease efforts to win FDA approval to market ribavirin as an AIDS treatment in the United States.

On Monday, ICN reaffirmed its high hopes for Virazole. The drug “has an important therapeutic role to play in the treatment of chronic hepatitis,” said Nils O. Johannesson, ICN vice president.

“To expedite the review process . . . our amended application probably will include a request for approval of Virazole as a treatment of hepatitis C in combination with other drug therapies.”