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ICN Posts Record Earnings in Dramatic Turnaround


In a dramatic turnaround after Yugoslavia seized its main European plant, drug maker ICN Pharmaceuticals Inc. reported record quarterly sales and earnings Thursday and vowed to press efforts to regain its lost operation.

The Costa Mesa company, which Wall Street has long viewed with caution, earned $38.4 million, or 47 cents a share, for the fourth quarter, a long way from the huge $223.3-million loss, or $2.85 a share, it took in the prior year's final three months, when the company wrote off its plant in Galenika, Yugoslavia.

Quarterly sales rose nearly 6% to $212.5 million.

The results show a company surprisingly resilient in rebounding from the financially devastating seizure of the Galenika plant by Yugoslav President Slobodan Milosevic. ICN's chairman, Milan Panic, is a former Yugoslav prime minister and now a leader in the Serb opposition Alliance for Change.

"The company has completed a major, major event which is getting out of crisis and getting into record sales and earnings," Panic said. "I think the storm is over, and that we can look at additional sales and earnings."

With two lawsuits pending to recover the Galenika plant, the company worked to revive its remaining Eastern European operations, primarily in Russia. It also was buoyed by sales of its main product, the antiviral ribavirin drug.

The company's stock, often seesawing on the New York Stock Exchange, has lost 14% of its value this year. It gained 94 cents on Thursday to close at $21.88 a share.

For the year, ICN earned $118.6 million, or $1.45 a share; it lost $352.1 million, or $4.71 a share, the prior year. Annual sales fell 11% to $747.4 million.

"These numbers are good," analyst Eugene Melnitchenko of Sutro & Co. said. "I think it will change some of the skepticism on Wall Street because, until the numbers were reported, there was concern that ICN has disappointed before and might disappoint again."

ICN sales of ribavirin soared last year. The drug is used by Schering-Plough Corp., along with its interferon drug, as a combination treatment for the often fatal liver disease hepatitis C.

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