By Randall Osborne

West Coast Editor

Aiming to spin off its biotechnology efforts, ICN Pharmaceuticals Inc. said it has entered into an agreement to sell $400 million worth of 6.5 percent convertible subordinated notes, due 2008, with an overallotment option.

Costa Mesa, Calif.-based ICN said less than a month ago it was aiming to offer $250 million in notes, but came out ahead in the plan to pay off debt and go ahead with restructuring, with includes the establishment of Ribapharm Inc., the biotechnology company. The offering is expected to close Wednesday. (See BioWorld Today, July 5, 2001.)

Peter Murphy, director of media relations for ICN, said the company is in a quiet period as required by the SEC and therefore is limited in what it can say. He said the spin-off of Ribapharm is ¿subject to market conditions. I would imagine the bonds have some bearing on that.¿

Generally, the spin-off is part of ICN¿s plan to ¿move more into the biotechnology world,¿ Murphy told BioWorld Today.

ICN previously disclosed its plan to split into three units: Ribapharm, for which an initial public offering has been filed; a European and Pacific Basin company; and the existing ICN, which has operations in the Western Hemisphere. (See BioWorld Today, June 16, 2000.)

Once Ribapharm is spun off, holders of the notes ¿ convertible to ICN stock at a price of $34.25 per share, which is a 23 percent premium to the closing price Thursday ¿ who convert will get ICN stock plus the number of Ribapharm shares they would have received if they hadn¿t converted the notes.

Ribapharm, still majority owned by ICN, will keep product revenues from the hepatitis C treatment Rebetron/Rebetol (ribavarin/Virazole), marketed by Schering-Plough Corp., of Madison, N.J., for use in combination with interferon alfa-2b. (See BioWorld Today, May 16, 2001.)

Ribapharm also will take over the research and development projects, using ICN¿s library of more than 3,500 nucleoside analogue compounds, laboratories, equipment, intellectual property and personnel.

Two products are in clinical testing. Tiazole, an enzyme inhibitor, has completed Phase I/II trials in chronic myelogenous leukemia. Adenazole, a treatment for colon cancer, is in Phase I trials.

ICN¿s stock (NYSE:ICN) closed Friday at $27.34, down 51 cents.