Subject: ICN Pharmaceuticals, Viratek Consent To SEC Charges About Ribavirin Drug 
Date: Published: 10/8/91 (72 lines)
Source:  Wall Street Journal.  Copyright Dow Jones & Co. Inc. 

    ICN Pharmaceuticals, Viratek Consent
    To SEC Charges About Ribavirin Drug
    ----
    By Rhonda L. Rundle
    Staff Reporter of The Wall Street Journal

    ICN Pharmaceuticals Inc., its Viratek Inc. subsidiary and
 the chairman of both companies, Milan Panic, consented to
 Securities and Exchange Commission charges that they made
 false statements about the effectiveness of the companies'
 drug ribavirin in treating conditions related to acquired
 immune deficiency syndrome.
    Among the charges in the complaint, filed in federal court
 in Washington, was that the defendants failed in 1987 to
 disclose information indicating that there were "serious
 flaws" in certain human tests of ribavirin.  In addition to
 the Costa Mesa, Calif., companies and Mr. Panic, the
 complaint named ICN director Weldon B. Jolley.
    The SEC complaint, to which the defendants consented
 without admitting or denying guilt, alleged that the
 defendants misled investors about the effectiveness of
 ribavirin in slowing the progression of the HIV virus to
 full-blown cases of AIDS.  In one test, the defendants failed
 to disclose that patients who weren't receiving ribavirin
 were, as a group, more seriously ill at the outset of the
 trial than the group of patients that received the drug, the
 complaint said.
    The defendants said publicly that there were no data
 available regarding the success of a second trial, when they
 were aware that study participants receiving the highest
 dosage of ribavirin were dying at a much higher rate than
 other participants, the SEC said.
    The consent decree enjoined the defendants from future
 violations of anti-fraud and reporting provisions of
 securities laws, the SEC said.  ICN owns 83% of Viratek.
    "This is a bare-bones consent decree," said David Watt,
 ICN general counsel.  "There were no fines, no penalties and
 no affirmative duties on the part of the companies in the
 future except to abide by the law."  The settlement and the
 complaint were filed together, ending a four-year SEC
 investigation that raised questions about the integrity of
 the company and its management.
    "Beginning with the initiation of the SEC investigation,
 many wide-ranging charges were leveled against our companies
 and some of its management that led to substantial adverse
 publicity, including charges of stock manipulation and
 insider trading," Mr. Panic said in a statement.  "We have
 always operated our business with integrity, and as good
 citizens we will continue to do so."
    ICN and Viratek said the focus of the investigation and
 complaint were "the disclosure and interpretation of
 scientific data which were and remain matters of legitimate
 debate in the scientific community."  Two studies criticized
 by the SEC were the basis for the approval of ribavirin last
 year for use in treating HIV-infected patients in Ireland, an
 ICN spokesman said.
    ICN said the settlement ends the government's last
 investigation of the company.  Still pending is a class-action
 suit in New York that makes allegations against ICN, Viratek
 and another subsidiary similar to those in the SEC complaint.
    ICN shares ended yesterday at $5.875, up 12.5 cents, in
 composite trading on the New York Stock Exchange.  Viratek
 rose 12.5 cents to $5.125 in national over-the-counter
 trading.

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