4 ICN Officials Signal Plans to Sell Shares

Several officers and directors of ICN Pharmaceuticals Inc. have filed notices that they intend to sell thousands of shares of the drug maker’s stock, which is trading at near-record prices amid controversy over insider trading allegations against ICN’s chairman.

Two officers and two directors notified regulators that they intend to sell a total of 56,915 shares. The filings come as the company faces a Securities and Exchange Commission investigation, questions from a federal grand jury and shareholder lawsuits over Chairman Milan Panic’s sale of $1.2 million worth of ICN stock in 1994 before the company released negative news that triggered a 23% drop in price.

But the new SEC notices don’t necessarily mean insiders expect more bad news to depress prices, which have been rising in recent months on news of expanding business and higher earnings for ICN.

All four sellers, in fact, would be getting rid of only part of their total ICN holdings. Most of the shares they want to sell were granted as options at lower prices in previous years’ compensation packages.

Insiders exercise options and sell stock to raise cash for a variety of reasons, said ICN spokeswoman Jennifer Openshaw. “The company is not in a position to comment” on the particulars of the SEC filings. Regulators control the timing for insiders to cash in their options, she said, “and this is one of those times that they are permitted to sell.”

Any sales, she said, “are not an indication that they lack confidence in the company.” ICN will file a report with the SEC on Monday listing any sales that the four officials made. Until then, she said, the company will not comment further.

Robert Back, an analyst with SNC Capital Management Corp. in Chicago, said the high price of ICN stock is the principal reason for the sale.

“There’s no rocket science here,” he said. “You buy low and sell high, and that’s what’s happening here.”

The two officers who filed intent-to-sell reports with the SEC are John Giordani, ICN chief financial officer, and Bill MacDonald, executive vice president for corporate development. MacDonald filed May 22 to sell 12,300 shares while Giordani filed May 17 to sell 21,858 shares.

Director Alan Charles filed May 18 to sell 6,757 shares while Director Weldon Jolley filed May 22 to sell 4,000 shares and May 23 to sell 12,000 additional shares.

None of the four could be reached for comment.

ICN’s common stock climbed from $17.125 at the beginning of the year to a record $28 per share on May 22. It has slipped a bit since then, closing Thursday on the New York Stock Exchange at $25.375, down 25 cents for the day.