ICN Shores Up Ribapharm’s Management
Acting quickly, ICN Pharmaceuticals Inc. on Thursday named one of its board members chief executive of its affiliate Ribapharm Inc., ending a bitter power struggle for the biotechnology concern.
ICN appointed Kim D. Lamon, a 20-year veteran of pharmaceutical companies, to replace Johnson Y.N. Lau in Ribapharm’s top post. Lau and Ribapharm’s other top managers quit late Wednesday after a bitter feud with ICN, which owns 80% of Ribapharm.
Lamon, 50, who also was named president of Ribapharm, resigned from ICN’s board. Daniel J. Paracka, who has served on the board of several pharmaceutical companies, was named Ribapharm’s chairman.
The dispute between the two Costa Mesa companies dates back to April, when ICN sold 20% of Ribapharm to the public and planned to spin off the remaining stake.
But dissident ICN shareholders won a battle last summer to wrest control of the company from founder Milan Panic.
After Robert W. O’Leary became ICN’s chief executive in November, the Ribapharm spinoff plans were placed on hold.
Lau and Ribapharm’s management protested the delay. ICN countered that Lau and Ribapharm’s board was mismanaging the company. In December, ICN took legal action to oust Lau and most of Ribapharm’s other directors. Then Ribapharm countersued.
At stake is control of Ribapharm’s sole product, the lucrative drug ribavirin, used to treat patients suffering liver disease from hepatitis C.
Some analysts have speculated that ICN might buy back the 20% stake in Ribapharm now held by the public.
However, ICN spokesman Jeff Misakian said the company had “made no decision yet” about Ribapharm.
Although the legal fight ended with the Ribapharm resignations, some Wall Street analysts say ICN’s moves have been difficult to understand.
Some analysts say ICN has no choice but to regain 100% control of Ribapharm because royalties from ribavirin are allowing ICN to pay down its debt. “I believe they will move to reacquire the minority interest in Ribapharm. It’s a tremendous cash cow and the crown jewel of the company,” said Larry Smith of Gerard Klauer Mattison.
But other analysts disagreed.
“If Ribapharm shares dribble down lower they might make an offer, but I don’t see that. ICN management has a full plate on working on what they have got now,” said analyst Herman Saftlas with Standard & Poor’s.
Ribapharm shares were unchanged Thursday at $6.45. The stock has fallen 45% since its 52-week high in April. ICN closed up 22 cents at $11.23. Both trade on the New York Stock Exchange.
Also named to Ribapharm’s board were Santo J. Costa, Gregory F. Boron and James J. Pieczynski.
