Controversial ICN Chief Panic May Step Down After 41 Years

Controversial ICN Pharmaceuticals Inc. Chairman Milan Panic said he could step down as chief executive as early as the company’s annual shareholder meeting in mid-December, a development Wall Street would likely greet with enthusiasm.

Panic, 70, who has repeatedly dismissed suggestions that he relinquish his 41-year control of the company, said business is on the upswing, the Costa Mesa drug maker’s stock is near its 52-week high and that he is weary from working long hours.

Just seven weeks ago, he was talking about remaining on the job for another year or two.

But in an interview Tuesday, he said, “The time is coming for me to lower my load and [transfer] some of my responsibilities to somebody else.”

His comments came just days after a whirlwind trip to Yugoslavia, where he moved to reclaim a Belgrade pharmaceutical plant that was seized by the state early last year. He basked in the cheers of 1,000 workers.

Others note that Panic is facing intense pressures from dissident shareholder groups that are threatening to nominate their own slates of directors. Panic is one of the directors up for reelection at the Dec. 18 meeting.

It was unclear Wednesday whether Panic would resolve dissidents’ concerns if he surrenders his CEO position. Leaders of the dissident investor groups would not comment.

Panic himself left the door open, saying only that he is considering stepping down within six months, possibly as early as the annual meeting.

He also said he plans to remain chairman to mentor his probable successor, longtime protege Adam Jerney, ICN’s president and chief operating officer. Jerney handled the company’s chief executive duties in 1992 and 1993 when Panic took a leave to serve as Yugoslavia’s prime minister. Jerney could not be reached for comment.

Dissident shareholders for years have been pushing for Panic to give up control, making unsuccessful attempts in previous annual meetings to impose a mandatory retirement age that would have forced him out.

One group, Special Situations Partners Inc., last December called for ICN to split its Eastern European operations into a separate publicly traded company to boost shareholder value.

Eventually, Panic proposed a corporate restructuring that would create two spinoff companies 80% controlled by ICN. Some investors balked when Panic indicated he would be chairman of the two units and remain head of ICN.

In August, Panic said he would not serve as chairman of one of the units and was “unlikely” to become chairman of the other spinoff.

He said he had discussions with dissident shareholders but does not plan any changes. He also said Tuesday he is confident about surviving any proxy battle.

Michael Tong, an analyst at First Union Securities in New York, said it was unlikely Panic would quietly fade away, regardless of his title. “It’s his baby,” he said.

Even so, analysts said Panic’s departure as chief executive could boost ICN’s stock.

Larry D. Smith, an analyst at Sutro & Co. in New York, said ICN stock has failed to reach its potential partly because some investors view Panic as a liability.

The company’s stock, which hit a 52-week high of $38 on Tuesday, closed Wednesday at $36.81, down 50 cents a share, on the New York Stock Exchange. ICN shares have gained more than 45% since the beginning of the year.