ICN Stock Buoyed by Drug Studies’ Results
ICN Pharmaceuticals Inc.’s stock shot up Monday on news that tests showed its drug ribavirin may be effective in treating hepatitis when combined with a drug manufactured by giant Schering-Plough Corp.
ICN stock climbed $6.06 a share to $49.88 in heavy trading on the New York Stock Exchange after hitting a 52-week high of $52.88 earlier in the session. Nearly 2.7 million shares changed hands, 10 times the stock’s recent average daily volume.
New Jersey-based Schering-Plough reported Monday that tests of the combined drugs ribavirin and alpha interferon in hundreds of hepatitis patients who had experienced relapses showed a tenfold increase in the number with undetectable levels of hepatitis C virus.
Schering, which makes alpha interferon, plans to seek approval from federal regulators before the end of the year to market the combined therapy. Its stock advanced 56 cents to $51.56.
Hepatitis C, a liver ailment that often produces no symptoms in its early stages but can be deadly eventually, afflicts about 4 million Americans, according to the Centers for Disease Control and Prevention. The government estimates that of 10 chronically infected patients, two to five develop liver cirrhosis. Of those, 20% to 30% develop liver cancer or some other liver failure requiring a transplant.
Schering said trials were conducted in the United States and internationally, but it wouldn’t elaborate further.
A spokesman said the company will give detailed findings from the two trials at a medical society meeting in Chicago on Nov. 10.
In 1995, ICN licensed Schering to help develop use of ribavirin with alpha interferon as a treatment for hepatitis C after ICN failed to persuade U.S. regulators that it could be used as a stand-alone treatment for the disease.
The company’s controversial chairman, Milan Panic, and the company itself remain the target of a Securities and Exchange Commission investigation into potential insider trading of company stock when the drug’s prospects as a stand-alone treatment waned in late 1994.
Schering’s announcement Monday helped renew ICN investors’ faith in ribavirin. The drug is sold internationally to treat various ailments but is permitted in the United States only as a therapy for hospitalized infants with severe respiratory infections.
ICN’s worldwide sales of ribavirin--marketed under the trade name Virazole--dropped to $30.5 million last year from peak sales of $51.7 million the year before. Sales in the United States and Canada were off 50% to $22.4 million from $44.8 million--a decline that the company attributes to fluctuations in children’s illnesses.
Noting the favorable test results, ICN spokesman Benjamin Lap said the “mood is good” at the company, though employees await the drug’s final approval.
ICN’s licensing agreement gives Schering rights to market ribavirin worldwide for treatment of hepatitis C and reserves co-marketing rights for ICN in Europe. Schering paid ICN $23 million in cash when the deal was signed two years ago and agreed to invest $60 million in the treatment’s development.
The New Jersey company may invest an additional $42 million in ICN stock if the therapy meets certain regulatory milestones.
Overall, ICN hopes to reap the biggest benefit from royalties on worldwide sales. The company would not disclose royalty terms.
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Ribavirin’s Rough Road
ICN Pharmaceuticals has been trying for more than a decade to gain wider approval in the United States for its antiviral drug, ribavirin. Details:
1985
* December: FDA approves ribavirin for treatment of respiratory syncytial virus, the most prevalent cause of infant lung infections.
1986
* Investor confidence in ribavirin triples ICN’s share price to $34.
1987
* January: ICN says tests indicate ribavirin may delay AIDS onset in people infected with HIV.
* February: Securities and Exchange Commission begins investigation of unusual trading activity in stock of ICN and subsidiary, Viratek.
* May: Shareholders group files class-action suit contending that ICN and Viratek overstated value of ribavirin and that ICN officers made millions on insider trading. House subcommittee scolds ICN for providing allegedly misleading information to federal officials about ribavirin’s effectiveness as AIDS treatment.
* October: FDA says it can find no evidence ribavirin is effective against AIDS but gives company permission to begin clinical tests.
1990
* March: After investing $20 million, ICN drops effort to win FDA approval to market ribavirin as AIDS treatment in U.S.; stock price drops to $3.625.
1991
* May: ICN agrees to pay $600,000 to settle civil charges that it violated federal law by promoting ribavirin as an AIDS treatment.
* October: SEC sues ICN and Viratek for alleged securities fraud, saying they knowingly misled public about ribavirin’s effectiveness against AIDS. Without admitting or denying wrongdoing, companies immediately settle suit by consent decree.
1995
* February: ICN stock drops 23% after it announces FDA will not approve ribavirin for use against hepatitis C.
* August: ICN reaches a $23-million licensing agreement with Schering--Plough Corp. to direct clinical efforts testing ribavirin as an effective treatment against hepatitis C when used in combination with Schering’s drug alpha interferon.
1997
* September: Schering-Plough says human trials show ribavirin-alpha interferon combination is effective against hepatitis C. Schering says it will seek FDA approval to market the drug combination in the U.S.
Source: Times reports; Researched by JANICE L. JONES / Los Angeles Times
ICN Gets a Boost
A potential new use for ICN’s drug ribavirin boosted the company’s stock by more than $6 per share Monday. Sales, fueled by a surge in overseas markets, also are climbing:
Closing Stock Price
Monday’s close: $49.88
Net Sales (millions)
1997: 2nd qtr. 160.2
Net Income (millions)
1996: 2nd qtr. 21.3
Source: Bloomberg News; Researched by JANICE L. JONES / Los Angeles Times
