It's been the darling of investors and a Wall Street outcast, and now it's back on top again after a deep depression in the early 1970s, when prospects dimmed amid a rising tide of red ink.
ICN Pharmaceuticals of Costa Mesa, whose stock traded for more than $36 a share during the early '70s before the drug maker fell from grace, has been on the New York Stock Exchange's most active list for more than a week. Closing Thursday at $30.75 a share, down $2.62 1/2 on the day, the stock price has been heading toward an all-time high after dropping to as low as $1.25 a share in 1974.
And ICN's Viratek Inc. and SPI Inc. subsidiaries have racked up impressive gains on Wall Street as well.
ICN stock has soared more than 60% in price since Paine Webber last week issued a report saying the company's drug Virazole has "the potential to become one of the world's largest-selling drugs." The report is believed to be the first research report on the company to be prepared by a major brokerage firm in at least a dozen years.
Despite the new-found attention, however, surprisingly little has changed at ICN: Virazole is still the drug upon which the company banks its future, and the genial Yugoslav immigrant who founded the company in 1959 is still at the helm.
It's just that, after 16 years of research, a handful of favorable write-ups in medical journals, federal approval of the drug for use as a treatment of one disease and the recent signing of a research deal with the Army, the world may finally be ready for Virazole, says ICN's founder and chairman, Milan Panic (pronounced Pan-isch).
"Being ahead of everyone doesn't always give you much of an advantage," Panic said in his thickly accented English. "We had this drug, but my God, nobody believed us. You'd go home and search your soul and think that maybe they're right."
Although ICN has always envisioned Virazole as a treatment for influenza, the deadly acquired immune deficiency syndrome seems to be the biggest reason for the company's new popularity among investors. And while ICN hasn't been shy about the AIDS connection--last year, for example, it sponsored an AIDS conference at its headquarters--Panic himself sounds like a skeptic.
"I think AIDS gets more attention than it deserves," he said. "We have no proof that our drug is effective against AIDS in humans, or else we would have filed a new drug application."
Impact of Federal Report
The whole thing got started when the federal Centers for Disease Control in Atlanta released a report in late 1984 that indicated that, at least in the test tube, Virazole may be effective against AIDS. "Under pressure of that report," said Panic, the company began testing the drug, partially with money supplied by Eastman Kodak Co., which owns 5% of ICN and 10% of Viratek.
Clinical trials of Virazole's effect on about 350 pre-AIDS patients are nearing completion at several medical centers, and the Public Health Service soon will begin independent testing of the drug in a five-year study of AIDS patients' response to Virazole and several other drugs.
But Panic insists that despite what Wall Street may be expecting, ICN won't seek FDA approval of Virazole as an AIDS drug if there isn't enough evidence to support it.
Besides, he said, the market for an influenza drug is much bigger.
Millions of Americans come down with the flu each year, creating a potentially huge market for the drug. With clinical trials of Virazole as a flu medication concluded, Panic said ICN should be able to submit a application for a new drug to the Food and Drug Administration by the end of 1986.
"If you talk to people in the influenza community, you won't find them falling over backwards with joy at the prospects of using ribavirin (Virazole) to treat influenza," said Alan Kendal, chief of the influenza section at the Centers for Disease Control.
Although studies among college students have indicated that Virazole can lead to "a small statistical reduction" in flu symptoms when inhaled, Kendal said he would "find it difficult to believe that very many people would want to use it that way."
The drug is considered most effective when administered in a mist that must be inhaled over a period of several hours so the microscopic particles coat a patient's lungs--a process that requires a lot of equipment as well as fairly long treatment periods. Using Virazole that way to treat flu would be "impractical for most people," Kendal said.
Despite Virazole's long history and its wide availability overseas, where it is used against herpes simplex, viral hepatitis, influenza, measles and chicken pox, it was only last December that the drug became available in the United States when the FDA approved it, but only as a therapy for respiratory syncytial virus, or RSV, a sometimes fatal infant disease.