By Mary Welch
Schering-Plough Corp. invested $27 million in ICN Pharmaceuticals Inc., buying the stock as part of a 1995 agreement that called for the equity investment upon FDA approval of Rebetron therapy for chronic hepatitis C virus (HCV).
Rebetron, which combines ICN¿s antiviral Rebetol (ribavirin) with Schering-Plough¿s Intron A (interferon alfa-2b), received FDA approval last June.
Schering-Plough, of Madison, N.J., purchased 1.1 million ICN shares directly from the company on Feb. 23, and will purchase another $15 million worth of ICN stock upon European approval.
The therapy is for the treatment of patients with compensated liver disease who have relapsed following alpha interferon therapy. Rebetron will consist of three-times-weekly Intron A injections, packaged with twice-daily Rebetol capsules. Ribavirin is a synthetic nucleoside analog with antiviral activity.
Intron A already was FDA-approved for HCV, but only about 20 percent of those treated responded.
About 30 percent of the 4 million Americans infected with HCV will develop a chronic form of the infection that leaves them susceptible to cirrhosis of the liver and liver cancer. HCV, the leading reason for liver transplants in the U.S., is the most pervasive hepatitis virus. About 2 percent of the world¿s population is affected.
Originally Made In Aerosol Form
ICN, based in Costa Mesa, Calif., originally created ribavirin in an aerosol form, named Virazole, for the treatment of infants hospitalized with severe lower respiratory tract infection, caused by respiratory syncytial virus. The company tried to get approval for Virazole as a monotherapy for HCV, but the FDA issued a non-approvable letter in 1994.
Schering-Plough picked up the program and, in 1995, paid a $23 million licensing fee for the rights to test ribavirin in combination with its alpha interferon product for HCV. The company soon started Phase III trials and handled the governmental filings.
As part of the agreement, Schering consented to pay up to $42 million in milestone payments, taken in the form of equity purchases. Three milestone targets were identified: approval in one of an undisclosed group of countries; approval in Europe; and FDA approval. It was the latter approval that sparked the $27 million equity purchase. (See BioWorld Today, July 1, 1995, p. 1.)
While awaiting European approval, ICN is caught up in the political turmoil in the Balkans. Its manufacturing plant in Yugoslavia was seized by the Serbian police and paramilitary troops, acting on the government¿s orders. ICN¿s chairman and CEO, Milan Panic, is a former premier of Yugoslavia and was ousted in 1992 by the current president of the Federal Republic of Yugoslavia, Slobodan Milosevic. Some State Department officials regard Panic as a viable alternative to Milosevic. (See BioWorld Today, Feb. 18, 1999, p. 1.)