Milan Panic Says He Is Grooming Successor at ICN : Manufacturing: The Costa Mesa prescription drug maker was weighed down by troubles in February. Now it reports record first-quarter earnings of $17 million, or 59 cents a share.
Milan Panic, the embattled chairman of ICN Pharmaceuticals Inc., denied rumors that he might step down, but acknowledged Thursday that, at 65, he’s grooming a successor.
The flamboyant and controversial Panic, who founded the company 35 years ago, said in an interview that he hopes his replacement will emerge from the ranks of the prescription drug maker’s top executives.
He said he favored Adam Jerney, the company’s chief operating officer, but pointed out that other executives “of equal capability,” including recent hires John Julian and Kobi Sethna, could rise.
Panic gave no timetable, though, for when any changes might occur.
His comments came as the company reported record earnings of $17 million, or 59 cents a share, for the first quarter. The earnings were more than double a profit of $8.4 million, or 39 cents a share, for the first three months last year. Quarterly revenue at the Costa Mesa company jumped 83% to $132 million this year from $72.2 million for last year’s first quarter.
ICN’s consolidation of four operating companies last fall and its increased sales efforts overseas, particularly at its ICN Galenika plant in Yugoslavia, boosted the company’s results this year.
The good news for ICN is a bit of relief from the troubles weighing on the company since mid-February, when a series of revelations caused its stock to lose 42% of its value in six days of trading as it fell to $13.25 a share.
The company’s stock closed at $16 a share Thursday, a gain of 87.5 cents a share in the New York Stock Exchange.
The downward spiral was caused by revelations that federal regulators refused to approve the company’s key drug, Virazole, as a treatment for the contagious liver disease hepatitis C and that Panic sold $1.24 million worth of stock at the end of November--after learning of the disapproval but nearly three months before making the news public.
Some shareholders called for Panic’s ouster and others sued for unspecified damages, alleging that the company issued deceptive statements and that Panic and other officers had traded on inside information. The suits are pending. ICN directors cleared Panic earlier this month of any wrongdoing. Their action prompted howls of protest from investors, who termed the internal investigation a “whitewash.”
On Thursday, though, Panic appeared cool and confident as he discussed the company’s record results for the first quarter.
He said that ICN continues to pursue efforts, both in the United States and Europe, to win regulatory approvals to market Virazole as a treatment for hepatitis C. He said it expects to be cleared to conduct human trials of the drug in some European countries this year.
ICN’s first-quarter growth was propelled largely by improving business conditions and stepped-up marketing efforts that prompted a sales boost for the company’s ICN Galenika operations in Yugoslavia.
The foreign company, 75% owned by ICN, had suffered from unfavorable exchange rates, the Yugoslav government’s efforts to hold down price increases and international sanctions--particularly bans on imports and exports--during the war in Bosnia-Herzegovina.
Galenika’s first-quarter sales nearly tripled to $71 million, as business conditions in Yugoslavia improved. That’s a reversal from last year, when unfavorable exchange rates and the Yugoslav government’s limits on price increases caused Galenika’s sales to drop 28% to $172.1 million for the entire year.
Elsewhere, sales in ICN’s Western European markets doubled during the quarter and were up 55% in North America. And sales of ICN’s star product, Virazole, which is already marketed in more than 40 countries as a treatment for a variety of viral infections, increased 20%.
Panic said first-quarter results also benefited substantially from savings after the company consolidated three affiliated entities--SPI Pharmaceuticals Inc., ICN Biomedicals Inc., Viratek Inc.--with the parent company. Panic said the consolidations eliminated duplicated efforts and helped to boost first-quarter earnings by about $2 million.
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ICN Reports Big Gains
ICN Pharmaceuticals reported record earnings and net income for the first quarter, ended March 31. Figures in thousands of dollars, except per-share data:
1994 1995 % Change Total revenue $72,167 $132,243 83% Net earnings 8,364 17,034 104% Earnings per share 0.39 0.59 51%
Source: J. M. Peters Co.
