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ICN Pharmaceuticals, Inc.
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Following is the text of a press release issued by ICN Pharmaceuticals, Inc.
on May 3, 2001:
ICN PHARMACEUTICALS REPORTS RECORD FIRST QUARTER REVENUES
--Record First Quarter Revenues $199 million--
--Pharmaceuticals Business up 8%--
--North America Revenues up 42%--
--EPS Above Analyst Consensus Expectations--
NEW YORK, May 3, 2001-- ICN Pharmaceuticals, Inc. (NYSE: ICN), today
reported record revenues for the first quarter of 2001. Operating income
was in line with expectations, reflecting a temporary slowdown in royalties
as physicians await regulatory clearance of an improved combination
hepatitis C therapy. Earnings per diluted share for the first quarter were
$0.26 compared to $0.34 in the same period of 2000, above analyst consensus
expectations.
For the first quarter, total revenues, led by strong growth in the
Americas, were $199 million, an increase of 3 percent over the $192 million
reported in the same period of 2000. Excluding royalties and the
biomedicals business, revenues from the company's underlying
pharmaceuticals business increased to $156 million from $144 million, an
increase of 8 percent in the quarter.
Operating income was $41 million compared to $53 million in the first
quarter of last year. Net income in the first quarter was $21 million
compared to $27 million in the first quarter of 2000.
The first quarter effective tax rate increased to 31 percent from 29
percent in the same quarter of last year due to greater income in the U.S.
Research and development expense increased to $6 million, up 59 percent
from the same period last year. Earnings before interest, taxes,
depreciation and amortization (EBITDA) were $59 million.
Ribavirin Royalties
Royalties from Schering-Plough's sales of REBETRON combination therapy for
chronic hepatitis C were $28 million in the quarter, compared to $33
million in last year's first quarter. As previously announced, a temporary
slowdown in ribavirin royalties exists as physicians await marketing
authorization, pending FDA review and clearance, for the use of pegylated
interferon with ribavirin. ICN's ribavirin is sold in capsule form as
REBETOL, a component of REBETRON.
Schering-Plough announced in February 2001 that it had filed an application
with the U.S. FDA for approval to market PEGINTRON (an improved interferon)
in combination with ribavirin for the treatment of chronic hepatitis C in
patients not previously treated with interferon alpha who have compensated
liver disease and are at least 18 years of age. The application has been
granted Priority Review Status by the FDA. In March 2001, Schering-Plough
announced that it had received centralized marketing authorization for
PEGINTRON and REBETOL combination therapy for the treatment of both
relapsed and naive hepatitis C patients in the European Union.
First quarter revenues for the Americas Group (North and Latin America
operations) increased to $68 million from $59 million, an increase of 16
percent. Revenues for the company's International Group (Western, Eastern
Europe, and Asia, Africa, Australia operations) increased to $88 million
from $85 million, up 3 percent. The Biomedicals Group's revenues remained
unchanged at $15 million.
Americas Group
North America 2001 first quarter revenues increased to $42 million from $30
million in the first quarter of 2000, an increase of 42 percent. Operating
income increased to $18 million from $15 million in 2000, an increase of 26
percent.
North American sales benefited from strong gains in sales of skin care
products, which includes Efudex, used to treat actinic keratosis, a
pre-cancerous skin condition. Sales of lasers, used for anti-aging, and the
acquisition of a laser marketing and sales operation, contributed to the
U.S. performance.
In the Latin America region, revenues were $26 million in the first
quarter, compared to $29 million in the first quarter of 2000. The decline
in revenues reflected a change in distributor inventory levels and a change
in the value added tax in Mexico, which affected health care expenditures
in the country. Somewhat offsetting the decline was a 46 percent increase
in sales, to $4 million, in Argentina.
International Group
Revenues in Western Europe increased to $53 million from $47 million in
last year's first quarter, an increase of 12 percent. Operating profit of
$4 million for the quarter included a charge of approximately $2 million
for the reduction of 589 manufacturing and administrative positions in
Hungary and Poland. Absent this charge, operating income would have been
comparable to last year.
Spain, where sales were 10 percent ahead of last year's first quarter, saw
continued sales growth of the anti-osteoporotic Calcitonina (calcitonin)
and the anti-ulcer product Nuclosina (omeprazole). Sales in Germany
benefited from higher sales of the gastro-intestinal Tepilta and the sleep
hypnotic Remestan, as well as the hypnotic Dalmadorm. Sales of the
antifungal Ancotil and the antiviral Virazole were higher in the United
Kingdom.
Sales in Poland were 34 percent ahead of last year's first quarter, the
result of product sales increases across the board. Sales in the Czech
Republic were higher, resulting from the launch of the antidepressant
Anxiron, and expanded sales of Kalnormin (potassium) mineral supplement.
First quarter revenues in Eastern Europe were $24 million versus $27
million a year earlier. Sales of Russia's 10 leading products rose
substantially in the quarter, with gains recorded for the analgesic
Pentalgin, the multivitamin Oligovit, and Nitrocor nitroglycerin.
Russian sales of products from Swiss-pharmaceutical company Solco
contributed $1.4 million in the quarter. Representatives sales offices in
Belorussia and Ukraine opened. During the quarter, the company continued to
reinvest in marketing and direct retail selling to expand its retail
business and over-the-counter brands.
The Asia, Africa and Australia region revenues of $11 million were
unchanged for the quarter. Operations were affected by the pharmaceutical
industry-mandated withdrawal from the market of Eskornade, a cough and cold
product, which contains the active ingredient PPA (phenylpropanolamin).
Operating profit of $1 million was also unchanged for the quarter. Sales of
Nyal, cough and cold medicine, in Australia, increased 18 percent.
Research and development
In the quarter, research and development spending increased to $6 million
from $4 million. Total research and development spending in the quarter was
$13 million, which included capital expenditures.
The company continued to accelerate its research and development program.
Phase I clinical studies of Levovirin, a potential successor to ribavirin,
were started in February in the treatment of hepatitis C.
The anticancer drug Tiazofurin intravenous was granted Orphan Drug Status
Designation by the U.S. FDA for the indication of chronic myelogenous
leukemia with blast crisis. In addition, ribavirin (Virazole) intravenous
was granted Orphan Drug Status Designation in the European Union for the
indication of hemorrhagic fever with renal syndrome.
Post-marketing clinical studies in hematology and oncology wards in
Germany, UK, Holland and France were started with Ancotil (fluconazole) in
the treatment of secondary fungal infection in bone marrow transplant
patients.
Restructuring
The company reported progress in its plan to enhance shareholder value by
splitting into three separate entities, subject to market conditions: a
biotechnology company, Ribapharm; ICN International, to be comprised of the
Western and Eastern Europe, and Asia, Africa and Australia businesses; and
ICN Americas, to be comprised of the North and Latin American businesses.
In the quarter, draft circulars were filed for listing up to 40 percent of
ICN International on the Budapest and London Stock Exchanges.
ICN is an innovative, research-based, global pharmaceutical company that
manufactures markets and distributes a broad range of prescription and non-
prescription pharmaceuticals under the ICN brand name. Its therapeutic
focus is on anti-infectives, including anti-virals, dermatology and
oncology. Additional information is also available on the company's website
at http://www.icnpharm.com.
THE 'SAFE HARBOR' STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995. This press release contains forward-looking statements that
involve risks and uncertainties including, but not limited to, projections
of future sales, operating income, subsidiary reorganization, regulatory
approval processes, operations in countries with unstable economies, the
progress of FDA reviews, and other risks detailed from time to time in the
Company's Securities and Exchange Commission filings.
ICN stockholders are strongly advised to read the definitive proxy
statement filed by ICN on May 1, 2001 relating to ICN's 2001 annual meeting
of stockholders as it contains important information. Stockholders will be
able to obtain this proxy statement, any amendments to the proxy statement
and other documents filed by ICN with the Securities and Exchange
Commission without charge at the Internet website maintained by the
Securities and Exchange Commission at www.sec.gov. In addition, ICN is in
the process of mailing the proxy statement to each stockholder of record on
the record date established for the stockholders meeting. ICN will also
make additional copies of the proxy statement and any amendments to the
proxy statement available without charge to ICN's stockholders. Please
direct your request for the proxy statement to Investor Relations, ICN
Pharmaceuticals, Inc., 3300 Hyland Avenue, Costa Mesa, California 92626,
telephone (714) 545-0100, extension 3104 or Georgeson & Company, Inc. at
(800) 223-2064 (toll-free).
ICN, its executive officers and directors may be deemed to be participants
in the solicitation of proxies for ICN's 2001 annual meeting of
stockholders. Information regarding these participants is contained in the
definitive proxy statement filed by ICN with the Securities and Exchange
Commission on May 1, 2001.
Any securities of ICN International offered will not be and have not been
registered under the U.S. Securities Act of 1933, as amended, and may not
be offered or sold in the United States, absent registration or an
applicable exemption from registration requirements.
When available, copies of the preliminary prospectus relating to the
offering of shares of Class A Common Stock of Ribapharm Inc. may be
obtained from the offices of UBS Warburg LLC, 299 Park Avenue, New York,
New York 10171 (212) 821-4011.
A registration statement relating to the shares of Class A common stock of
Ribapharm Inc. has been filed with the U.S. Securities and Exchange
Commission but has not yet become effective. These securities may not be
sold nor may offers to buy be accepted prior to the time the registration
statement becomes effective. This communication shall not constitute an
offer to sell or the solicitation of an offer to buy, nor shall there be
any sale of these securities in any state in which such offer, solicitation
or sale would be unlawful prior to registration or qualification under the
securities laws of any such state.
Consolidated Condensed Statement of Income for the First Quarter Ended
March 31, 2001 and 2000
Quarter Ended
March 31,
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In thousands, except per share data 2001 2000
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Total revenues: $198,969 $192,340
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Product sales 171,419 159,340
Royalties 27,550 33,000
Cost of product sales 69,774 60,766
Selling, general and administrative expenses 73,419 67,435
Research and development costs 6,372 4,001
Amortization of goodwill and intangibles 8,206 7,573
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157,771 139,775
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Income from operations 41,198 52,565
Interest, net 10,777 12,526
Translation and exchange losses, net 400 1,591
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Income before provision for income taxes
and minority interest 30,021 38,448
Provision for income taxes 9,263 11,111
Minority interest (264) (62)
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Net income $ 21,022 $ 27,399
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BASIC EARNINGS PER COMMON SHARE
Net income $ 0.26 $ 0.35
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Shares used in per share computation 80,392 78,975
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DILUTED EARNINGS PER COMMON SHARE
Net income $ 0.26 $ 0.34
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Shares used in per share computation 82,304 81,622
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