ICN Looks to Boost Shareholder Value

Drug maker ICN Pharmaceuticals Inc., badgered by big shareholders upset with an 18% slide in its stock price so far this year, said Thursday that it has hired an investment banker to help it find ways to boost the value--including the sale of some units.

The Costa Mesa-based company said it will consider “all options” for its Eastern European drug unit and its biomedicals group, which sells radiation badges, diagnostic products and chemicals.

Ironically, the company’s Wall Street woes come at a time when its key drug, the antiviral ribavirin, finally is being used with another company’s product to help treat a major ailment, the highly contagious and potentially fatal hepatitis C liver disease.

The price of ICN shares has been seesawing in the last year on the New York Stock Exchange. It hit a high of $35 in May, dropped to a low of $16.75 in October, rose again to nearly $30 last month and closed Thursday at $21 a share, up 6 cents on the day.

Shareholders have called on Milan Panic, the company’s controversial chairman and chief executive, to resolve problems with its business in Eastern Europe, where economic and political turmoil have hurt profit during the last few years.

“The company needs to address the causes of the undervaluation in the marketplace,” said board member David Batchelder, whose Relational Investors last year bought 1.6 million ICN shares. “Relational does believe that the Eastern European operations are one of those causes. So we look forward to the company addressing that.”

The company named Batchelder to the ICN board in August and Relational signed an agreement not to increase its 2% stake in ICN to more than 10%. Relational is an activist investment company that buys stakes in companies it believes are undervalued and then works to help management boost the stock price.

Panic said in an interview that ICN will examine all possibilities for the two units, including their sale. He declined to say how long it will take for the investment banker, Warburg Dillon Read, to conduct its review.

The company has taken hundreds of millions of dollars in charges to account for setbacks in Eastern Europe, including the seizure of a plant in Belgrade and economic problems elsewhere.

ICN said last month that it will refrain from new Eastern Europe investment this year until it sees more political stability and economic growth.