Panic Abandons Plan to Sell 50,000 ICN Shares

ICN Pharmaceuticals Inc. Chairman Milan Panic dropped plans to sell 50,000 shares of the Costa Mesa drug manufacturer’s stock, which has lost more than a third of its value in recent weeks, the company said Wednesday.

The move comes ahead of ICN’s annual meeting next week, when the company is expected to discuss its plan to split into three companies.

Panic, along with several other ICN executives, registered last week with the Securities and Exchange Commission to sell shares. That move may have led some investors to speculate that the company would release bad news at the meeting Monday, analysts said.

“Even though [Panic] was going to sell only 50,000 shares, in the past he has sold ahead of bad news,” said Sutro & Co. analyst Larry Smith. Smith added that he doesn’t anticipate any specific bad news at the meeting.

ICN spokesman Peter Murphy said Smith’s speculation was unfounded.

Shares of ICN, the maker of the blockbuster hepatitis C drug ribavirin, fell $2.50, or 8.8%, to $25.94 Wednesday on the New York Stock Exchange. The stock has been retreating since hitting a 52-week high of $41.75 a share Oct. 20.

Panic acquired the 50,000 shares from exercising options, open market purchases and ICN’s incentive plan. He holds options to buy 2.3 million ICN shares.

Other executives also filed to sell a total of about 95,000 shares in the last month. They include vice presidents Benjamin Lap, John Giordani, David Watt and Bill MacDonald and Chief Financial Officer Richard Meier.

ICN’s stock has fallen through a key support level of $29, said analyst John Roque of Arnhold & S. Bleichroeder.

If the stock holds at $25, it probably will rally, he said. “If not, there’s risk it could go to $19.”

Panic announced the restructuring plan two months ago as he faced pressure from shareholders to relinquish some control of the company and boost its stock. Some investors say they’re waiting to see if Panic follows through with the plan and how quickly he will do so.

“Is he really going to do it?” said Morton Cohen, chairman of Clarion Capital, which owns ICN shares. “Maybe there’s concern or apprehension that he may not go ahead with the restructuring.”

ICN’s Murphy said the company remains “completely committed” to the restructuring.

Panic was in London and unavailable for comment, ICN said.

Other factors also could have been weighing on ICN’s stock the last couple of months, said Smith, the Sutro analyst.

One issue is a study released in late October showing that Schering-Plough Corp.’s experimental hepatitis drug Peg-Intron is more effective than the standard treatment for hepatitis C when the drug is combined with ICN’s ribavirin.

The study compared the combination to the standard therapy of ribavirin and Intron A, a combination sold by Schering-Plough as Rebetron.

The study results “have led to some speculation that doctors may be warehousing their patients instead of giving them Rebetron now as they wait for approval of Peg-Intron and ribavirin,” Smith said.

If that’s true, that could lead to a temporary weakness in ribavirin sales, Smith said.

Schering-Plough has already filed for U.S. regulatory approval for Peg-Intron and the company has said it would likely seek approval to package the drug with ribavirin early next year.