Drug Maker ICN Plans Major Push in Russia
ICN Pharmaceuticals Inc. said it will invest $300 million in Russia over the next five years, more than tripling its already sizable presence in that country.
ICN, which draws more than half its revenue from East European operations, has invested $120 million in Russia in the last three years to operate five pharmaceutical businesses there, including ICN Oktyabr in St. Petersburg.
The additional investment includes $47 million to build a pharmaceutical plant as part of an ongoing modernization of the St. Petersburg division, which should be completed in 2000.
Milan Panic, chairman of the Costa Mesa pharmaceutical maker, has proclaimed Russia the most promising market for medicines and is moving his European headquarters to Russia.
Nearly $600 million of ICN’s $700 million in sales last year were in Eastern Europe and the former Soviet Union. It is one of Russia’s largest drug makers, with sales of $150 million last year.
In the last year, ICN bought plants and distributors throughout Eastern Europe as it expanded throughout the region. It has long had a major plant, for instance, in Panic’s native Belgrade, Yugoslavia, which had served as European headquarters.
ICN also operates in Poland, Hungary and Macedonia as well as North and Latin America, Western Europe and Pacific Rim countries. It makes and sells a range of prescription and over-the-counter drugs, diagnostic products and research chemicals.
The focus on Russia and Eastern Europe comes at a time when the U.S. Securities and Exchange Commission may try to oust the controversial Panic from the company over alleged trading violations involving ICN stock in 1994.
Panic sold stock after learning that the U.S. Food and Drug Administration would not approve the company’s drug ribavirin as a stand-alone treatment for hepatitis C. The company did not disclose the FDA’s decision until three months later, and the stock plummeted on the news.
Last year, Panic agreed to pay $15 million to settle a lawsuit alleging insider stock trading, and an additional $14.5 million to ICN shareholders.
On Thursday, ICN’s stock gained $2.31 a share to close at $57.56 on the New York Stock Exchange.
