ICN's Hepatitis Drug Recommended to FDA

By BARBARA MARSH

May 5, 1998 12 AM PT

TIMES STAFF WRITER

A key government panel recommended Monday that ICN Pharmaceuticals Inc.’s drug ribavirin be approved in combination with another drug for treating patients who suffer relapses of the severe liver ailment hepatitis C.

If the U.S. Food and Drug Administration accepts the recommendation--as it usually does--ICN will clear a major hurdle in its lengthy effort to persuade regulators to approve the drug for multiple uses.

FDA approval also could spell hope in battling a sometimes fatal disease that has afflicted an estimated 4 million Americans, most of whom haven’t been diagnosed.

Analysts expect that within two months the agency will approve ribavirin as a therapy in combination with Schering-Plough Corp.’s drug Intron A as a treatment for patients suffering relapses. The move would give ICN a powerful financial boost, they say.

The panel Monday voted 8 to 0 to recommend that the application be approved, triggering gains in both companies’ stocks. ICN’s shares moved up $2 to $51.13, while Schering-Plough rose $1.69 to $81.81 a share.

Schering-Plough’s drug already has been approved as a treatment for hepatitis. ICN’s product is sold under the brand name Virazole to treat severe respiratory infections in hospitalized children.

Together, the two drugs provide a significant benefit for hepatitis patients who have few successful treatment options after suffering relapses, panel members said.

In tests on hundreds of patients, there was a tenfold increase in those who showed no viral levels after taking the drugs alpha interferon and ribavirin, they added.

“This is a great breakthrough,” said Willis Crocker Maddrey, a liver specialist at the University of Texas Southwestern Medical Center at Dallas, and an independent safety consultant for the drug studies. Maddrey said about a quarter of all patients respond to Intron-A alone, but about half of them experience relapses over time.

What’s more, analysts say ribavirin has far more potential as part of a combined therapy to treat new patients--and point to promising tests in that area. If the FDA approves the combined therapy, however, analysts say the drug initially will probably be limited to treating patients experiencing relapses.

Hepatitis C, identified as a virus for the first time nine years ago, develops into a persistent infection in most patients. While it often progresses in patients for 20 years without symptoms, chronic infection can lead to liver cirrhosis and cancer and death.

Now the leading reason for liver transplants, hepatitis C causes 8,000 deaths a year in the U.S. alone--and experts have predicted that number will double in 10 or 20 years. Health authorities have estimated the disease afflicts 170 million globally.

Analysts say the panel’s vote Monday is a move in the right direction for ICN, a company that has struggled to persuade regulators to approve wider uses for ribavirin beyond treating severe respiratory infection in hospitalized infants.

Analyst Eugene Melnitchenko says the recommendation by the federal panel helps “legitimize” the company as a solid investment.

In the early 1970s, Milan Panic, ICN’s chairman and chief executive, tried unsuccessfully to persuade regulators that ribavirin could treat influenza and herpes.

In 1985, the FDA approved ribavirin to treat severe respiratory infection in hospitalized infants--a limited use that is still its only approved application in this country.

Over the next decade, Panic and the company repeatedly ran afoul of drug and securities regulators in efforts to have the drug approved, first, as an AIDS drug, and second, as a stand-alone treatment for hepatitis C.

In 1991, Panic and ICN entered into a consent decrees with the Securities and Exchange Commission following the agency’s investigation into the company’s disclosures about the safety and effectiveness of the drug as an AIDS treatment.

The company later paid $14.5 million to settle a shareholder lawsuit that alleged company insiders, including Panic, made millions of dollars from sales of ICN stock before acknowledging that the drug’s prospects weren’t as rosy as they had claimed.

Currently, Panic is the target of a federal criminal investigation over his 1994 sale of 5,500 shares of stock, shortly after learning that the government wouldn’t permit ribavirin as a stand-alone treatment for hepatitis C. SEC staff have recommended he be banned from serving as a company executive and director, and be fined as much as $1 million.

In all settlements with the government and shareholders, Panic and the company have admitted no wrongdoing. The company is cooperating with the government investigation, and Panic denies he did anything wrong.

A couple of years ago, in hopes of riding the coattails of a company with better success with regulators, ICN licensed the use of ribavirin as a combination therapy to Schering-Plough.

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Road to Approval

An advisory committee to the U.S. Food and Drug Administration has recommended the approval of ICN Pharmaceuticals’ ribavirin to treat people who’ve had a relapse of the severe liver disease hepatitis C. If approved, the drug would be used in combination with Schering-Plough Corp.’s alpha interferon. The long and sometimes controversial road so far toward FDA approval:

* 1985: 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: ICN reports tests indicate ribavirin may delay AIDS onset in people infected with HIV. Later that year, shareholders file suit alleging ICN overstated ribavirin’s effectiveness as an AIDS treatment. FDA gives company approval to begin clinical tests.

* 1990: ICN drops effort to win FDA approval to market ribavirin as an AIDS treatment in U.S.; stock price plummets. Company also settles civil charges it violated federal law by promoting the drug as an AIDS treatment. FDA also sues ICN and subsidiary Viratek for securities fraud; companies settle.

* 1995: ICN stock drops on news FDA will not approve ribavirin for use against hepatitis C. In August, ICN joins Schering-Plough Corp. to test ribavirin as an effective hepatitis C treatment when used with Schering-Plough’s drug alpha interferon.

* 1997: Schering-Plough reports combination of ribavirin and alpha interferon as effective. Schering-Plough seeks FDA approval to market drug combination in U.S.

* 1998: Key government panel recommends ribavirin be approved in combination with alpha interferon for treating patients who suffer relapses of hepatitis C.

Source: Times reports

Drug Team’s Target

ICN’s ribavirin will be used in combination with Schering-Plough’s Intron-A to treat those who have had hepatitis C relapses. Regarding hepatitis C:

* It was first identified in 1989.

* An estimated 4 million Americans are infected.

* Last year, there were 921 cases in Orange County.

* Transmission most often is via sexual contact or contaminated needles.

* The virus may cause severe liver damage.

Side Effects of the Drug Combination:

* Anemia

* Reduced levels of certain blood cells

* Nausea