ICN resolves family feud

Paul Clinton

After quashing a boardroom rebellion by its rogue subsidiary,

leaders of ICN Pharmaceuticals appointed new management and ended a

legal war with Ribapharm late last week.

The North Costa Mesa companies made peace, ending a feud that

started back in May when ICN spun off 20% of Ribapharm Inc. to the

public, but aborted the offering after a dissenting group won a

majority on the board.

On Thursday, ICN appointed Kim D. Lamon to replace Johnson Y.N.

Lau on the Ribapharm board. Lamon will take over as president and

chief executive. Lau and a group of other Ribapharm managers quit

late Wednesday after a months-long feud with ICN, which still owns

the remaining 80% of Ribapharm.

The companies are battling over the rights to the proceeds of

ribivirin, a hot-selling drug used to treat patients suffering from

hepatitis C. Ribivirin is rolled into a drug cocktail with an

interferon drug and sold by a marketing partnership with

Schering-Plough.

Daniel Paracka, on Thursday, was also elected to the Ribapharm

board, taking over as chairman.

In December, Lau criticized the company for halting the spinoff.

“ICN committed publicly to spin off Ribapharm and, on behalf of

all our stockholders, we need to determine if ICN has now changed

that position,” Lau wrote in an open letter to ICN at the time.

Lau and the board had given Ribapharm’s highest officers bonuses

in early December.

ICN responded to Lau’s letter by announcing it would remove five

of the six Ribapharm board members, including Lau. On Wednesday, the

members saved their bosses the heavy lifting.

In addition to Lau, four other directors walked out the door,

including Kim Campbell, Arnold Kroll, Hans Thierstein and John

Vierling. Ribapharm Chief Financial Officer Thomas Stankovich and

General Counsel Roger Loomis also left.

“We recognize and appreciate the valuable contributions made by

the management and board during this critical period in the company’s

history,” said Robert O’Leary, ICN’s chairman and chief executive.

In addition to Lamon, a 20-year veteran of pharmaceutical

companies, and Paracka, ICN named three other directors. Former

industry executives Santo Costa, Gregory Boron and accountant James

Pieczynski joined the Ribapharm board.

The companies also settled on Wednesday a round of lawsuits that

had been filed in December.

Shares of both companies’ stock, which trade on the New York Stock

Exchange, closed flat after Friday trading. ICN fell 0.27% to $11.20,

while RNA rose 3.57% to $6.68.