Profit Report Sends ICN Stock Down 16%

ICN Pharmaceuticals Inc.’s shares tumbled Friday after the Costa Mesa drug company said 2000 earnings would be less than expected because of increased costs and slowing sales of its biggest product, the ribavirin hepatitis treatment.

The company’s stock fell $4.44, or 16%, to $23.44 on the New York Stock Exchange. Earlier in the session, the shares traded as low as $20.69.

ICN said it expects earnings per share in 2000 to range from $1.25 to $1.30. Analysts had estimated earnings of $1.68 a share for the year, according to a survey by First Call/Thomson Financial.

The company said royalties it earned during the year from its partner, Schering-Plough Corp., on sales of ribavirin are expected to range from $150 million to $155 million, an increase of more than 40% from 1999 royalties. Analysts, though, had expected $175 million.

ICN said it expects 2001 royalties of $180 million to $190 million.

Schering-Plough sells a combination of ribavirin and Intron A called Rebetron in the U.S. It is now seeking U.S. regulatory approval of a new combination using improved versions of the two drugs.

ICN has attributed the decline in ribavirin sales to doctors’ reluctance to prescribe Rebetron as they await approval of the improved version.

Although analysts were aware of this reluctance to prescribe the drug, “it appears to be more serious than I thought,” Sutro & Co. analyst Larry Smith said.

ICN said its spending on research and development increased 55% to $17 million in 2000 from $11 million a year earlier. The company said it expects R&D; spending to more than double to $45 million this year as it expands its scientific staff and research facilities.

The company expects to release full financial results the first week of March.