ICN Pins $2.34-Million Loss on Foreign Money : Finance: The pharmaceutical firm, locked in a proxy fight over poor earnings, notes subsidiaries were profitable for the quarter.

COSTA MESA — ICN Pharmaceuticals Inc., under siege by a dissident shareholder who wants to oust current management, on Tuesday reported a third-quarter loss but said its three subsidiaries were profitable for the period.

ICN attributed its $2.34-million loss to international currency fluctuations.

The company, which is locked in a proxy fight with stockbroker Rafi M. Khan, has come under fire, in part, because of recent quarterly losses.

Some health care analysts watching Khan’s effort to unseat ICN Chairman Milan Panic and the rest of the nine-member board of directors have also criticized the company’s ongoing financial condition.

But ICN spokesman Jack Sholl said that the loss on the latest financial statement was a so-called paper loss reflecting differences between the changing value of the dollar and the values of bonds that were priced in Swiss francs and Dutch guilders.

ICN’s loss, equal to 11 cents a share, compared to a loss of $9.65 million, or 69 cents a share, for the same period a year ago.

The 1992 third-quarter loss was attributed to the impact on the company’s venture in Yugoslavia of hyper inflation and currency devaluation in that country. ICN Galenika, a drug manufacturer based in Belgrade, is operating at a break-even level despite the impact of the Balkan civil war.

ICN Pharmaceuticals posted third-quarter revenue of $15.8 million, an 86% drop from $113 million for 1992’s third quarter. ICN owns substantial stakes in SPI Pharmaceuticals Inc., ICN Biomedicals Inc. and Viratek Inc., all based in Costa Mesa.

The steep drop, Sholl said, was due to an accounting change earlier this year that removed SPI revenue from ICN’s net sales. Without the accounting change, ICN would have reported $85 million in revenue for a 25% decline, he said.

For the first nine months, ICN lost $4.2 million, or 22 cents a share, compared to earnings of $144,000 for the first nine months of 1992.

Wall Street had a lackluster reaction to the announcement. ICN stock closed Tuesday at $10.125 a share on the New York Stock Exchange, down 12.5 cents a share from Monday.

Reporting on its subsidiaries, the company said that ICN Biomedicals is completing a turnaround after a recent restructuring. The smaller company posted modest earnings for the third straight quarter despite a $73-million charge for its 1989 soured acquisition of Flow Laboratories. ICN Biomedicals now is concentrating on reducing liabilities and has paid off $3 million of its $18-million debt load since December.

A second company, Viratek, is awaiting word on whether its key drug will receive U.S. Food and Drug Administration approval for marketing as a treatment of debilitating hepatitis C virus, which attacks the liver and eventually leads to death. The drug, Virazole, is nearly through the necessary clinical trials and Viratek said it could submit its application to the FDA early next year.

SPI Pharmaceuticals continues to be profitable, ICN said, despite a significant drop in revenue from ICN Galenika. The company has made up for the Yugoslav subsidiary’s sagging sales in other areas of the world, including Latin America, Mexico and Western Europe.

Losses and Profits

ICN Pharmaceuticals posted a third-quarter loss despite profitable quarters in each of its three publicly traded subsidiaries. Dollar amounts in millions, except per share data:

PARENT COMPANY

ICN Pharmaceuticals Third quarter Three quarters 1992 1993 1992 1993 Revenue $113.0 $16.0 $425.5 $48.1 Net income (loss) (9.7) (2.3) 0.1 (4.2)* Per share (loss) ($0.7) ($0.1) ($0.03) ($0.2)*

* Includes extraordinary income of $627,000, or $0.03 per share. * SUBSIDIARIES

ICN Biomedicals Third quarter Three quarters 1992 1993 1992 1993 Revenue $18.4 $14.6 $58.8 $45.8 Net income (loss) (7.6) 0.9 (9.0) 5.3* Per share (loss) ($0.4) $0.05 ($0.5) $0.3*

* Includes extraordinary income of $627,000, or $0.03 per share. *

Viratek Third quarter Three quarters 1992 1993 1992 1993 Revenue $1.9 $2.0 $4.2 $4.0 Net income (loss) 0.7 0.3 2.2 (0.6) Per share (loss) $0.05 $0.02 $0.15 ($0.04)

*

SPI Pharmaceuticals** Third quarter Three quarters 1992 1993 1992 1993 Revenue $94.6 $70.2 366.6 256.3 Net income (loss) 9.7 6.9 25.6 13.7 Per share (loss) 0.5 0.4 1.4 0.7

** Carried as equity investment and therefore not part of ICN overall earnings. Source: ICN Pharmaceuticals Inc.; Researched by JANICE L. JONES / Los Angeles Times