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ICN Posts Record Results for 3rd Quarter

Earnings: The pharmaceutical company expects strong performance to continue, thanks to its hepatitis C drug.


ICN Pharmaceuticals Inc. on Monday posted record profit and revenue for the third quarter, powered by the strong performance of its drug that helps treat the liver virus hepatitis C.

The Costa Mesa drug maker, which is planning to split into three companies, also should set records in the fourth quarter, Chief Executive Milan Panic said. He said he expects all sectors to perform well the last three months of the year. Net income for the third quarter totaled $36.6 million, or 45 cents a share, up 15% from $31.8 million, or 39 cents, a year earlier. The results matched Wall Street's expectations. Revenue rose 14% to $207.3 million.

ICN's stock, which has moved up 41% this year, closed Monday at $35.63, up $1.25 a share, on the New York Stock Exchange.

ICN's record performance was fueled partly by royalty revenues from ribavirin, which Schering-Plough Corp. combines with another drug to treat hepatitis C. Ribavirin royalties jumped 48% to $49 million from $33 million a year ago.

Ribavirin received another boost last week when a study found Schering-Plough's experimental hepatitis drug, Peg-Intron, is more effective than the standard treatment for chronic hepatitis C when the drug is used with ribavirin. Schering-Plough said it is likely to seek Food and Drug Administration approval early next year to package Peg-Intron with ribavirin.

Hepatitis C, a virus that can lead to cirrhosis and liver cancer, affects 4 million people in the U.S. and 170 million worldwide. The virus is contracted mainly through infected blood and contaminated needles.

Despite a weakened euro, ICN sales in Western Europe reached $49 million, up more than 4%. The company also logged higher sales in Latin America, Eastern Europe and Asia.

Panic said ICN operations in Eastern Europe could make a healthy contribution to ICN's bottom line in the future.

The company has tripled its sales force in Russia to 300 and expects to regain legal control of its huge Yugoslavian factory in the near future, he said.

Panic, the former prime minister of Yugoslavia, said Yugoslavian operations could add as much as 10 cents per share to the company's 2001 results.

Under the restructuring plan, ICN will split into a unit that owns rights to ribavirin, a company that will run the international operations and a unit to oversee its North and South American businesses. Panic will remain head of ICN's international business, to be based in Moscow.

ICN's North American operations cast the only cloud over the quarterly results, as operating profits tumbled 42% while sales fell 26%. ICN cited problems with certain product lines but refused to elaborate. The company said it believes the difficulties have been resolved in this segment, which accounts for 17% of the company's total revenue.


Bloomberg News was used in compiling this report.


ICN Edges Up

Investors had pressured ICN Pharmaceuticals Chief Executive Milan Panic to split the company, whose stock has gained 41% this year. But it still lags the 76% return of the S&P midcap health-care index.

ICN monthly closes and latest on Nasdaq

Monday: $35.63, up $1.25

Source: Bloomberg News

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