ICN to Meet With Investors Amid Talk of Sale
ICN Pharmaceuticals Inc. will meet with analysts and investors Thursday as speculation the company will sell or spin off some units has boosted its share price about 35% in six weeks.
ICN in February said it hired investment banker UBS Warburg to explore options to boost its stock price, including the sale of some units. ICN, which is run by former Yugoslavian Prime Minister Milan Panic, has said it’s looking at “all options” for two businesses: its Eastern European drug unit and its biomedicals group, which sells radiation badges, diagnostic products and chemicals.
While ICN executives have declined to comment on the status of their review of those businesses, the Costa Mesa-based company’s shares have soared since last month amid hopes ICN will sell or spin off at least part of its Eastern European operations.
“Eastern Europe has certainly been a major distraction. They have to deal with that,” said Viren Mehta, a drug-industry analyst with Mehta Partners who’s advised clients to buy ICN shares in the last few months.
Shares rose 38 cents to close at $33.88 on the New York Stock Exchange.
ICN is under pressure to either announce a transaction at the meeting or provide proof that it’s making progress in doing something about its Eastern European operations, analysts and investors said.
“The market will be disappointed if they don’t have some tangible evidence of their recent efforts,” Mehta said.
Company officials declined to comment on whether they’re about to deliver on such expectations.
An announcement is possible only “if something happens to work out. If the timing is right,” said ICN spokesman Peter Murphy. He declined to elaborate.
Still, company executives have long said they know that they must do something with the Eastern European operations in order to boost ICN’s share price, which lags rival drug companies.
Mehta Partners estimates that ICN’s shares are trading for about 13 times the company’s estimated earnings for 2002. A group of 11 mid-size drug companies are trading for an average of about 32 times 2002 earnings, Mehta said.
