Jurors Reject 7 of 13 Actions Against ICN

A U.S. District Court jury on Wednesday presented ICN Pharmaceuticals Inc. with a partial victory in a complex and long-running lawsuit brought by disgruntled shareholders who were demanding $300 million in damages.

Attorneys representing plaintiffs in the suit were not available to comment, but lawyers for the Costa Mesa-based company said they were “elated and gratified” by the New York jury’s decision to throw out seven of 13 actions.

Jurors, who had been deliberating for about five weeks on the complex case that was filed nearly a decade ago, reported that they were deadlocked on the remaining six allegations.

“The jury concluded that a majority of the plaintiffs’ case was baseless,” said Arnold I. Burns, lead counsel for ICN. “They said that the company’s actions were not false and misleading. I’d say that, at most, only about 40% of their case is left.”

The suit revolved around allegations made by shareholders who purchased ICN stock from mid-1986 through 1987. ICN at the time was touting the drug Virazole as a possible treatment for AIDS and the highly contagious hepatitis C liver ailment.

Shareholders alleged that company insiders pocketed $18 million generated by stock sales before acknowledging that Virazole’s sales prospects were not as healthy as initially believed. While the drug has been approved in a limited number of countries as an AIDS treatment, the FDA never approved if for use in the U.S.

Two years ago, PaineWebber Inc., ICN’s former underwriter, paid $6.5 million to settle the suit but did not acknowledge any wrongdoing. Similarly, remaining defendants--including two ICN subsidiaries, ICN Chairman Milan Panic and several ICN executives--have denied any illegal activities.

Shareholders who filed the lawsuit have the right to seek a new trial on the remaining six claims, but Burns on Wednesday suggested that plaintiffs have had their day in court.

“Our position was that all of our representations [during the 1980s] were true and that we made full and public disclosure about Virazole,” Burns said. “Today, the jury came in without one decision against us and without one penny of damages against us.”

The case was heard by U.S. District Judge Kimba Wood, who would preside over any subsequent trial on the remaining claims.