ICN Obtains Court Order Restricting Ribapharm

ICN Pharmaceuticals Inc., escalating its battle with a rebel spinoff company, said Tuesday that it obtained a court order preventing Ribapharm Inc. from making any major business decisions while ICN seeks to shake up Ribapharm’s board.

ICN, which owns 80% of Ribapharm, said it obtained the temporary restraining order from a Delaware Chancery Court. Under the order, Ribapharm cannot issue new shares, take on debt or acquire or sell businesses without giving 10 days’ written notice, according to ICN.

Both companies are based in Costa Mesa.

In April, ICN spun off about 20% of Ribapharm in an initial public offering, under pressure from shareholders who said a separate company would unleash greater potential for ICN’s hepatitis C drug, known as ribavirin. Since then, Ribapharm executives had been pressuring ICN to complete the spinoff of the company to ICN shareholders.

ICN’s chief executive, Robert W. O’Leary, said his company had not decided whether to proceed with a full spinoff of Ribapharm. In the third quarter, ICN’s royalties from ribavirin more than doubled from a year earlier to $63.4 million.

On Monday, ICN announced that it was removing five of the six members of Ribapharm’s board, including its chief executive, Dr. Johnson Y. N. Lau. ICN alleged that Ribapharm’s board acted inappropriately in awarding significant cash bonuses and stock options to senior management just seven months after Ribapharm’s initial public offering and before the company’s 2002 results were final.

Ribapharm executives could not be reached for comment Tuesday.

Shares of ICN fell 25 cents to $11.03 and Ribapharm rose 6 cents to $5.82. Both trade on the New York Stock Exchange.