Despite lower year-to-year revenues, Costa Mesa-based ICN Pharmaceuticals Inc. said Friday that net earnings for its fiscal first quarter, ended Feb. 28, more than tripled to $6.6 million from $2 million a year earlier.
ICN said revenues for the three-month period fell 11% to $22.5 million from $25.2 million a year earlier. The year-ago sales, officials said, were boosted by strong sales of Virazole as a treatment for respiratory syncytial virus, a sometimes-serious infant respiratory disease. Sales of the company's other products, including research chemicals and laboratory test equipment, helped ICN to post the higher earnings, said Richard Keatinge, an ICN spokesman.
Viratek Reports Loss
Viratek Inc. the ICN subsidiary that developed Virazole, considered a potential AIDS medication, reported a $1.9-million net loss for the quarter, contrasted with a $2-million profit a year earlier.
Revenues for the quarter dropped to $183,000 from $3.4 million during the year-earlier quarter.
During a sometimes-spirited question-and-answer session at Friday's meeting, ICN said that the Securities and Exchange Commission has been asked to furnish a report on trading of ICN and Viratek stock to the House Energy and Commerce Committee.
Birch Bayh, a former U.S. senator and a Viratek director, said that Rep. John D. Dingell (D-Mich.), who chairs the committee, asked the SEC for an accounting into possible illegal manipulation of ICN and Viratek shares by short-sellers.
However, a spokeswoman for the committee downplayed the request Friday, saying the SEC was not asked for any specific information but was instead asked to furnish the committee with "general information."
Because Virazole, which is also known generically as ribavirin, is considered a potential AIDS medication, ICN and Viratek shares have gyrated madly on the stock market during the last year.
Range in Price
ICN has ranged from a 12-month high on the New York Stock Exchange of $34 a share to a low of $10.25 a share. It closed Friday at $19.75, up 25 cents for the day. Viratek, which is traded over the counter, closed Friday at $43 a share, off $2 for the day. During the last year, Viratek has traded for as high as $98.50 a share.
Bayh also said ICN is conducting its own investigation into reports by Viratek and ICN shareholders that they have been contacted by representatives of Gilford Securities, a Chicago-based brokerage, recommending sale of their shares.
Robert Holmes, Gilford's president, acknowledged in an interview that his firm--which is best known for its short-sell recommendations--has been contacting Viratek's institutional holders and telling them to sell the stock.
"We feel that the stock was rather dramatically overpriced relative to its earnings outlook," Holmes said. The stock, he said has run up "on a lot of hype as a treatment for AIDS" and on ICN's "penchant for telling an overly optimistic story."