Court Refuses to Dismiss ICN Allegations

A federal court in Los Angeles denied motions by ICN Pharmaceuticals Inc. and several of its executives seeking dismissal of fraud allegations filed against them in August by the Securities and Exchange Commission.

The SEC accuses the defendants of making misleading public statements and failing to disclose publicly that, in November 1994, the Food and Drug Administration rejected ICN’s application for approval of its ribavirin drug to treat hepatitis C liver disease.

The court earlier this week also let stand the SEC’s request for an order barring Chairman Milan Panic from acting as an officer or director of any public company.

The court granted the motion of one ICN official, David C. Watt, to dismiss the allegations against him. The court gave the SEC up to 20 days to amend its complaint to support accusations against Watt, who was ICN’s general counsel at the time.

ICN has said that it didn’t immediately disclose the FDA rejection because the company was focused on obtaining approval for ribavirin in combination with another company’s drug.

Last year, the FDA approved the use of ribavirin in combination with another drug for the treatment of hepatitis C. No trial date has been set.