By Matthew Willett

ICN Pharmaceuticals intends to offer $250 million in convertible subordinated notes to fund debt refinancing and redemption, a move necessary for ICN¿s proposed restructuring.

ICN, of Costa Mesa, Calif., disclosed its intent last year to split into three units: Ribapharm, a biotechnology company; a European and Pacific Basin company; and the existing ICN, which has operations in the Western Hemisphere, in an effort to enhance shareholder value. (See BioWorld Today, June 16, 2000.)

In May, ICN announced its intention to make Ribapharm public through an offering of 18 million shares at $13 to $18 per share. That offering would bring proceeds of about $250 million to the company. (See BioWorld Today, May 16, 2001.)

The convertible notes offering to fund the reorganization will include an overallotment option of $50 million in notes. The notes, due 2008, would be convertible into ICN common shares, and upon spin-off of Ribapharm Inc. converting noteholders would receive ICN Pharmaceuticals common stock and the number of shares of Ribapharm common stock the noteholders would have received had the notes been converted.

The spun off Ribapharm would still be majority owned by ICN, as would the European and Pacific Basin companies, but Ribapharm will keep ICN¿s product revenues from Rebotron/Rebetol (ribavirin/Virazole), which is marketed in the U.S. and Europe by Schering-Plough Corp., of Madison, N.J., for treatment of hepatitis C in combination with interferon alfa-2b.

Ribapharm also will keep ICN¿s research and development projects, including ICN¿s library of more than 3,500 nucleoside analogue compounds, laboratories, equipment, intellectual property, research and development personnel and the company¿s facilities in Costa Mesa.

Ribapharm will have two products in clinical testing, Tiazole and Adenazole. Tiazole has completed Phase I/II trials in chronic myelogenous leukemia. The company is considering testing the compound in ovarian cancer and multiple myeloma. Adenazole began Phase I trials in colon cancer earlier this year.

The company also has two product candidates in preclinical studies, Levovirin and Viramide. Levovirin may stimulate an immune response to certain viruses without the anemia associated with ribavirin, and the company filed an investigational new drug application for it in February.

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