Shares of ICN Pharmaceuticals Inc. fell 16% Thursday after the Costa Mesa-based company posted second-quarter earnings that fell below analysts' estimates.
The drug maker said it had boosted spending to expand its European business.
Shares fell $4.06 to $20.75 in trading of 4.7 million, almost 10 times the three-month daily average volume. It was the biggest one-day percentage decline in more than four years. The stock has lost nearly 43% of its value since hitting a 52-week high of $36.38 on May 20.
ICN reported net income of $25.8 million, or 32 cents a share, compared with a loss of $97.5 million, or $1.34, in the year-earlier period. ICN was expected to earn 39 cents, according to a survey of analysts by First Call Corp.
The company said it spent about $12 million, or 10 cents a share, to help its Hungarian unit get ready to sell drugs in Western European markets after Hungary is admitted to the European Union. The shares tumbled because ICN hadn't warned investors about its plans to boost spending, analysts said.
"They're definitely not up to what people were expecting," said Mehta Partners analyst Sena Lund, who has a "hold" rating on the stock. "But they are not as bad as they look."
ICN shares fell 12% Wednesday amid concerns that the company's hepatitis treatment may face competition from a drug being developed by another company, Enzon Inc.
ICN said it received $26 million in second-quarter royalties on sales of ribavirin, a hepatitis C drug that's marketed in combination with Intron A by Schering-Plough Corp. under the name Rebetron.
The company also said that sales of its new anti-aging skin cream totaled $6 million since its introduction in March. It said results of its U.S. drug business were affected by spending to introduce the product.
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ICN Pharmaceuticals' shares fell 16% Thursday, when second-quarter earnings failed to meet analysts' expectations. The Costa Mesa firm's stock traded as high as $36.38 in May. Weekly closing prices:
Thursday close $20.75
Source: Bloomberg News