ICN Pharmaceuticals Shares Rise 9%
ICN Pharmaceuticals Inc.’s stock moved up 9% Monday, apparently buoyed by the prospect that political tensions in Yugoslavia will ease, as well as an uptick in the pharmaceutical sector.
The Costa Mesa company’s shares closed at $21.94, up $1.94, on trading of 1.2 million shares, more than double the daily average over the last three months.
Recent rallies against the regime of Yugoslav President Slobodan Milosevic bode well for ICN, which owns a plant in the war-ravaged country, said analyst Robert Wasserman of Ryan Beck Southeast Research. The Milosevic regime took over the plant last year.
“If Milosevic has to step down, the company has a better chance of getting its plants and assets back” and pleasing investors, Wasserman said. He added that the Yugoslav government defaulted on $150 million to $250 million in receivables.
While the company is considered risky because of its ties in countries such as the Czech Republic, Poland and Yugoslavia, analyst Sena Lund of Mehta Partners agreed that “if Milosevic comes down, and if some other feasible government comes in, they will get their plant back.”
In addition, Lund cited the strengthening pharmaceutical sector as another factor for the gain in ICN’s shares.
“The growth of companies after the second quarter looks better than most had expected,” he said, adding that the industry’s financial performance has improved from earlier in the year, “when the pharmaceutical industry suffered a sell-off prompted by doubts about companies’ growth potential.”
Indeed, ICN shares are trading higher than earlier in the month, when federal regulators filed a lawsuit seeking to oust controversial ICN Chairman Milan Panic. The suit accused Panic, the company and two other executives of misleading investors in 1994 about ICN’s progress in winning federal approval for a new hepatitis drug. ICN has vowed to fight the effort.
