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.
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