A special committee of ICN Pharmaceuticals Inc.'s board of directorscleared the company and its chairman and CEO, Milan Panic, of anyinappropriate or misleading actions related to the FDA's rejectionlast November of a new drug application (NDA) for Virazole, anantiviral agent for hepatitis C.
The Costa Mesa, Calif. company said, in a prepared statement, thethree-member committee's probe was sparked by shareholderconcerns about the timing of ICN stock sales by Panic and thecompany's delay in disclosing specifics of the FDA's Nov. 25, 1994,letter stating the Virazole NDA was not approvable.
Company official did not return calls placed by BioWorld Today.
Those shareholder concerns also are included in a lawsuit filedagainst ICN Pharmaceuticals in late February. The shareholder suitwas a response to revelations that Panic had sold 55,000 shares for$1.24 million in late November after the company received the FDAletter and three months before ICN disclosed the details.
On Dec. 5, 1994, ICN said the FDA asked the company to amend itsNDA for Virazole, but ICN did not provide specifics. Companyofficials only hinted an amended NDA may include use of Virazolecapsules in combination with alpha interferon.
Panic sold his shares prior to the company's Dec. 5 press release,which sent ICN's stock (NYSE:ICN) down 13 percent, from $22 to$19.12.
On Feb. 17, in an update of the status of the Virazole NDA, ICNdisclosed that in November the FDA had told the company theapplication was not approvable. The stock, after that announcement,dropped 23 percent.
In the special committee's report to the board of directors, released toBioWorld Today Wednesday, the three-member panel concluded"the chairman's intention to sell stock was formulated and expressedto others . . . long before the FDA's Nov. 25 letter was received. Inaddition, the contents of the press releases [on the Virazole NDA]were not intended to mislead investors, but rather to inform them."
The committee said "no action by the board is appropriate." ICN'sstock dropped again Wednesday, closing down $1.12 to $15, a 7percent decrease.
Attached to the committee's report was a statement by Panic, whichsaid, in part, "The board and I recognize that recent events havetaken an unacceptable toll on ICN's valuation in the financialmarkets. As stewards of our shareholders' investment, we believe thatwe must continue to instill at our company an appreciation for theimportance not only of what we communicate but also when, in whatmanner, and with what specific words and deeds."
Virazole was being developed by ICN subsidiary, Viratek Inc. Lastsummer Viratek and two other companies agreed to merge. Virazoleis approved in 47 countries for several indications, includinghepatitis. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.