ICN Reports Record Revenue Thanks to Hepatitis Drug

With royalty payments flowing in from its hepatitis treatment, Costa Mesa drug maker ICN Pharmaceuticals Inc. posted record earnings and revenue for the first three months this year.

The multinational company earned $27.4 million, or 34 cents a share, a 21% increase over the $22.6 million, or 28 cents a share, it earned in last year’s first quarter. Revenue jumped 9% to $192.3 million from $176.1 million.

The record pace follows ICN’s strong rebound last year from its crushing 1998 loss in Eastern Europe, where Yugoslav strongman Slobodan Milosevic seized the company’s major production plant in Galenika.

“We expect to sustain the record performance exhibited in the first quarter throughout the remainder of the year,” enthused Milan Panic, the company’s chairman.

ICN drew $33 million in royalties in the first quarter from Schering-Plough Corp.’s sales of Rebetron, a treatment for the highly contagious, potentially fatal hepatitis C liver disease. Schering-Plough uses ICN’s ribavirin anti-viral drug in conjunction with its own.

ICN also is working to come up with new antiviral and anticancer drugs. It spent $11 million on research and development last year and plans to spend $50 million this year.

Shareholders have long been upset with ICN’s inability to enhance the value of its stock, and some have proposed spinning off the Eastern European operations.

But the Eastern Europe business sparkled during the first quarter as revenue rose 15% to $27 million from $23 million in last year’s first quarter. The region recorded quarterly operating income of $2 million compared to an operating loss of $2 million last year.

The company’s stock, which hit a 52-week high of $35 a share last May, fell to $16.75 by October. It gained about half the loss back by the start of the year, but again fell 24% before starting to rise again.

The stock gained 31 cents a share Thursday to close at $26.13 in New York Stock Exchange trading.