ICN to More Than Triple Stake 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 there.
ICN, which draws more than half its revenue from Eastern European operations, invested $120 million in Russia over the last three years to operate five pharmaceutical businesses, 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, already has proclaimed Russia as the most promising market for medicines on the planet. He is moving his European headquarters and the focus of the company’s operations there.
Nearly $600 million of ICN’s $700 million in sales last year were in Eastern Europe and the former Soviet Union. ICN is one of Russia’s largest drug makers, with sales of $150 million last year and expected sales this year of $300 million. Its Oktyabr unit alone had $50 million in sales last year.
In the last year, ICN bought plants and distributors throughout Eastern Europe. It has long had a major plant, for instance, in Panic’s native Belgrade, Yugoslavia, which had served as his European headquarters.
ICN also operates in Poland, Hungary and Macedonia as well as North and Latin America, Western Europe and the Pacific Rim. It makes and sells a wide range of prescription and over-the-counter drugs, diagnostic products and research chemicals. It markets its products in more than 60 countries.
The focus on Russia and Eastern Europe comes at a time when the Securities and Exchange Commission may try to oust the controversial Panic from the drug company over alleged trading violations involving ICN stock in late 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 who accused him of exaggerating the medical capabilities of ribavirin as a possible treatment for AIDS.
In addition, four sexual harassment lawsuits were filed against Panic over the last four years by current or former female employees.
On Thursday, the company’s stock gained $2.31 a share to close at $57.56 on the New York Stock Exchange.
