Subject: ICN Pharmaceuticals Expects to Post An Increase in First-Quarter Earnings 
Date: Published: 4/24/92 (80 lines)
Source: Wall Street Journal. Copyright Dow Jones & Co. Inc.

    ICN Pharmaceuticals Expects to Post
    An Increase in First-Quarter Earnings
    ----
    By Sonia L. Nazario
    Staff Reporter of The Wall Street Journal

    COSTA MESA, Calif.  -- ICN Pharmaceuticals Inc. expects to
 report that first-quarter earnings rose about 32% to at least
 $6 million, or 45 cents a share, Milan Panic, founder and
 longtime chairman, told shareholders at the annual meeting.
    Still, the rosy outlook didn't prevent the executive from
 having to field questions about the large bonus and salary
 increase he received last year.  And the pharmaceutical
 company's proxy statement for the meeting raised questions
 about some transactions among ICN and three publicly traded,
 majority-owned subsidiaries.
    In the year-earlier first quarter, ICN reported net income
 of $4.6 million, or 37 cents a share.  Mr. Panic said the
 company expects to report that latest first-quarter sales
 more than doubled to $140 million from last year's $63.2
 million.
    The surge was a result of the company's aggressive
 expansion into Eastern Europe, starting with the acquisition
 by its SPI Pharmaceuticals Inc. subsidiary of what is now
 called ICN Galenika, a Yugoslav pharmaceuticals concern, and
 increased sales of the company's controversial anti-viral
 drug, Virazole.
    While ICN has failed to get Virazole approved in the U. S. 
 for treatment of the human immunodeficiency virus that causes
 AIDS, it is selling the drug for such purposes in Ireland and
 Hungary.  Last year, the company settled a Securities and
 Exchange Commission lawsuit over Virazole without admitting
 or denying guilt.  The suit charged the company with making
 false or misleading disclosures about Virazole's
 effectiveness against AIDS, which in turn inflated ths stock
 price.
    Mr. Panic also said that the company's ICN Biomedicals
 Inc. subsidiary, which is undergoing a restructuring, will be
 profitable this year.  In 1991, that subsidiary reported a net
 loss of $12.9 million, or $1.09 a share, on sales of $96.5
 million.  The company's third subsidiary is Viratek Inc. 
    Despite the generally upbeat mood, there was some sharp
 questions from shareholders about Mr. Panic's compensation,
 which rose to $6.1 million in 1991 from $657,729.  He received
 200,000 common shares of SPI Pharmaceuticals, valued at about
 $5.4 million, as a bonus in addition to a 34% increase in
 cash compensation.
    The company has described the stock grant as a bonus for
 Mr. Panic's negotiating the ICN Galenika acquisition.  The
 executive, who was born in Yugoslavia, defended his
 compensation, saying it confirmed his faith in the capitalist
 system.  "You should never be ashamed of making a lot of
 money.  It's nice to know that people appreciate what you do."
    A. Robert Abboud, a former bank and oil company executive
 who's now on ICN Pharmaceutical's compensation committee,
 also defended the compensation, refering to Mr. Panic as "the
 Michael Jordan of our team.  It's our job to keep him
 motivated.  We have to keep him on that court working for us."
 Mr. Abboud, the proxy statement shows, received $100,000 from
 the company last year in consulting fees.
    The proxy statement for the ICN annual meeting shows
 several transactions involving ICN and its subsidiaries
 involving an exchange of shares at a discount of up to 22%
 from the "fair value" of the stock.
    A year ago, for example, ICN Pharmaceuticals cancelled
 some $3.8 million in ICN Biomedicals debt owed to the parent
 company in exchange for 538,000 common shares of ICN
 Biomedicals stock.  The stock was exchanged at a 22% discount
 from the "fair value" of the stock.
    David Watt, ICN Pharmaceutical's general counsel, said
 stock is typically discounted when it's sold without being
 registered.

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