ICN Pharmaceuticals Inc. will pay $1 million

Paul Clinton

Troubled drug maker ICN Pharmaceuticals Inc. is taking its

medicine.

The Costa Mesa company on Monday agreed to pay $1 million and

implement new disclosure procedures as part of a settlement with the

Securities and Exchange Commission, Wall Street’s top regulator.

ICN’s former Chief Executive Milan Panic, a former Yugoslavian

leader, has also agreed to pay an additional $500,000, regulators

said.

“The company has agreed to implement significant procedures,” said

Merri Jo Gillette, the SEC attorney who handled the case. “To their

credit, they wanted to put this behind them.”

With the settlement, ICN executives said they are closing the book

on a four-year ordeal stemming from charges first filed against the

company by the SEC in 1999.

Earlier this month, the company announced a new slate of officers

and a restructuring plan.

“ICN now has virtually a completely new board and management team

in place that remains committed to providing accurate information in

the most timely manner to the investment community,” company Chairman

and Chief Executive Robert O’Leary said in a statement.

Regulators charged the company in 1999 with violating securities

laws in late 1994 and 1995. Former executives misrepresented the

regulatory status of hot-selling hepatitis drug Ribavirin, Gillette

said.

In December, the company pleaded guilty to criminal fraud charges

and agreed to pay $5.6 million. ICN had failed to disclose a letter

sent to the company in December of 1994 from the Food and Drug

Administration.

In the letter, the FDA informed the company it had rejected

Ribavirin. However, on Dec. 9, the drug regulator approved Ribavirin

as a treatment method for hepatitis C, as long as it was used in

combination with an interferon drug.

The SEC charged that ICN failed to disclose the FDA’s rejection of

Ribavirin for three months.

As part of the civil settlement announced Monday, the company

agreed to set up an independent committee to write all FDA-related

press releases and have the federal agency review all those releases

prior to publication, Gillette said.

ICN also agreed to appoint an attorney to conduct yearly reviews

of the firm’s disclosure procedures.

Panic, who founded the company in 1960, left his post in June. He

will remain on the board at least until his term expires in May.

Gillette praised the company’s “change of corporate culture.”

ICN has a record of run-ins with the SEC.

In 1991, ICN settled an SEC complaint that it failed to disclose

information about the status of its application to the FDA for

approval of Ribavirin to treat AIDS.

Also, in 1977, the SEC issued an injunction against ICN for

failing to disclose financial information in a quarterly report.