Heartland Advisors Boosts ICN Holdings : Investment: Milwaukee-based fund manager now owns 10.6% of the Costa Mesa pharmaceutical maker.
A major shareholder in ICN Pharmaceuticals Inc. boosted its stake in the drug company to 10.6% last month, according to a government filing.
The investor, Heartland Advisors Inc., a Milwaukee-based fund manager, controlled 2.9 million common shares of ICN’s 29 million shares outstanding on July 31, according to separate filings by the adviser and ICN. An ICN spokesman said Heartland is believed to be the company’s largest shareholder.
Investors are required to disclose holdings of more than 10% in a company. But Heartland officials wouldn’t comment on how much stock the firm bought last month or why.
Despite lawsuits that might cloud ICN’s future, analysts said they believe Heartland increased its holdings last month because the company’s prospects appear to be brightening. Robert Back, an analyst at SNC Capital Management Corp., in Chicago, said ICN stock looks like a good buy because it’s cheaper than comparable drug stocks. SNC handles stock trades for Heartland, Back said.
He noted that ICN, which closed Tuesday at $20.375 a share in New York Stock Exchange trading, is priced at 9.3 times his $2.20-a-share earnings estimate for the company this year. Comparable drug stocks are trading at prices around 16 times earnings estimates, he added.
Back also said investors applaud ICN’s recently announced agreement for drug industry giant Schering-Plough Corp. to develop and market ICN’s star drug Virazole as a combined treatment with Schering-Plough’s own interferon drug for the liver ailment hepatitis C.
Renewed investor interest in ICN comes despite unresolved litigation and a federal investigation involving alleged insider stock trading by its controversial chairman Milan Panic. Last November, Panic sold shares worth $1.24 million after ICN received a letter from the Food and Drug Administration indicating that Virazole wouldn’t be approved as a sole treatment for hepatitis C.
The company didn’t disclose the FDA’s decision until mid-February. Once it did, the stock lost 42% of its value in six days of trading, tumbling to $13.25 a share.
