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ICN in Marketing Deal for Roche Drugs

Pharmaceuticals: Costa Mesa-based company receives global rights for seven products in exchange for 10% stake.

June 24, 1997|BARBARA MARSH | TIMES STAFF WRITER

ICN Pharmaceuticals Inc. said Monday that it has received global marketing rights to seven products of Swiss drug giant F. Hoffman-La Roche in exchange for a 10% stake in ICN.

The Costa Mesa-based drug company said it will also buy Roche's factory in Humacao, Puerto Rico, for $15 million in cash and assumption of $40 million in debt. Roche's equity stake--including 1.6 million shares of ICN's common stock and 2 million shares of preferred stock, each valued at a slight premium of $25 a share--is worth $90 million, ICN said.

Standard & Poor's Corp. upgraded ICN's debt for the first time since 1994, in part on news of Monday's $145-million deal. In New York Stock Exchange trading Monday, ICN shares closed at $24, up $1.

Assuming the deal closes in August as expected, Roche will wind up with the second-largest holding in ICN, after Milwaukee-based Heartland Advisors, which owns nearly 15%.

Neither company would disclose the specific names of the drugs. Herb Lightstone, an ICN spokesman, said the seven products treat a variety of central nervous system ailments, skin cancer and a condition of the joints called myasthenia gravis.

The Puerto Rican plant, which makes an anti-inflammatory drug, will remain under Roche's management for two years, then ICN will step in and manufacture the anti-inflammatory drug for Roche, Lightstone said.

The deal also includes two additional drugs that ICN can market outside the United States, with the option to sell them domestically in three years.

Based on 1996 sales, the product rights being transferred are expected to boost ICN's North American sales by $52 million, the company said.

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