As filed with the Securities and Exchange Commission on October 4, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
ICN PHARMACEUTICALS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 33-0628076
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
3300 Hyland Avenue
Costa Mesa, California 92626
(714) 545-0100
(Address, Including Zip Code, and Telephone Number, Including
Area Code,
of Registrant's Principal Executive Offices)
Copies To:
David C. Watt
Executive Vice President, General Counsel and Corporate Secretary
ICN Pharmaceuticals, Inc.
3300 Hyland Avenue
Costa Mesa, California 92626
(714) 545-0100
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code,
of Agent For Service)
Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes
effective.
If the only securities being registered on this form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box. [ ]
If any of the securities being registered on this form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment
plans, check the following box. [X]
If this Form is filed to register additional securities for
an offering pursuant to Rule 462 (b) under the Securities Act,
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box: [ ]
CALCULATION OF REGISTRATION FEE
Title of Proposed Proposed
Each Class Amount to Maximum Maximum Amount of
of be Offering Aggregate Registration
Securities Registered Price Per Offering Fee (2)
to be (1) Share (2) Price (2)
Registered
(1)
Common 400,000 $20.1875 $8,075,000 $2446.97
Stock,
$.01 par
value
(1) Also includes associated Preferred Stock Purchase Rights.
(2) The offering price per share is estimated pursuant to Rule
457(c) solely for the purpose of calculating the
registration fee and is based upon the average of the high
and low price of shares of Common Stock as reported on the
New York Stock Exchange on October 1, 1996 (which date is
within five business days prior to the date of the filing of
this Registration Statement).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE
DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND
EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
Information contained herein is subject to completion or amendment. A
Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission. These Securities may not be sold nor may
offers to buy be accepted prior to the time the Registration Statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such
jurisdiction .
SUBJECT TO COMPLETION, DATED OCTOBER 4, 1996 PROSPECTUS
ICN PHARMACEUTICALS, INC.
400,000 SHARES OF COMMON STOCK
This Prospectus relates to 400,000 shares (the "Shares") of
Common Stock, $ .01 par value, including associated Preferred
Stock Purchase Rights (the "Common Stock), of ICN
Pharmaceuticals, Inc., a Delaware corporation (the "Company" or
"ICN"), that may from time to time be sold by Siemens Medical
Systems, Inc. ("Siemens Medical" or the "Selling Stockholder").
Although this Prospectus relates to the offering of Shares by the
Selling Stockholder, upon the satisfaction of the Company's
obligations under the terms of a Common Stock Undertaking
Agreement, as amended (the "Undertaking Agreement") between the
Company and the Selling Stockholder, the Selling Stockholder is
required to return to the Company any Shares not previously sold
by it and to remit to the Company the net proceeds from the sale
of any Shares. Any net proceeds received by the Selling
Stockholder upon the sale of any Shares may, at the Company's
option, be credited against payments required to be made by the
Company to the Selling Stockholder under the Undertaking
Agreement. The Company has agreed to bear all expenses
(including, under certain circumstances, the Selling
Stockholder's sales commissions, underwriting discounts, transfer
fees and out-of-pocket expenses) in connection with the
registration and sale of the Shares being offered by the Selling
Stockholder. See "Selling Stockholder" and "Plan of
Distribution."
The Shares may be sold from time to time by the Selling
Stockholder, including sales that may be arranged by the Company.
Such sales may be made in the over - the - counter market, on the
New York Stock Exchange or other exchanges (if the Common Stock
is listed for trading thereon), or otherwise at prices and at
terms then prevailing, at prices related to the then current
market price or at negotiated prices. The Shares may be sold by
any one or more of the following methods: (a) a block trade in
which the broker or dealer so engaged will attempt to sell the
securities as agent but may position and resell a portion of the
block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or
dealer for its account; (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; and (d)
privately negotiated transactions. In addition, any Shares that
qualify for sale pursuant to Rule 144 may be sold under Rule 144
rather than pursuant to this Prospectus.
The Shares covered by this Prospectus were originally
issued, or may hereafter be issued pursuant to the terms of the
Undertaking Agreement, to the Selling Stockholder in a private
placement made by the Company under Rule 4(2) of the Securities
Act of 1933, as amended (the "Securities Act"), in connection
with an amendment (the "Amendment"), dated as of September 27,
1996, to the Undertaking Agreement. The Undertaking Agreement
was initially entered into in connection with the acquisition
(the "Dosimetry Acquisition") by the Company of the Dosimetry
Service Business from Siemens Medical in July 1996. The
Dosimetry Acquisition, together with other acquisitions
consummated by the Company in 1996 and presently proposed
acquisitions which may be consummated by the Company during 1996,
do not in the aggregate constitute the acquisition of a
significant business as defined by Regulation S-X promulgated by
the Securities and Exchange Commission (the "Commission").
The Selling Stockholder and any broker-dealers, agents or
underwriters that participate with the Selling Stockholder in the
distribution of the Shares may be deemed to be "underwriters"
within the meaning of the Securities Act and any commissions
received by such broker-dealers, agents or underwriters and any
profit on the resale of the Shares purchased by them may be
deemed to be underwriting commissions or discounts under the
Securities Act.
The Common Stock is traded on the New York Stock Exchange
("NYSE") under the symbol "ICN." On October 3, 1996, the closing
sale price per share, as reported by the NYSE, was $20.50.
AN INVESTMENT IN THE SHARES OFFERED HEREBY INVOLVES A HIGH
DEGREE OF RISK. SEE "RISK FACTORS."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The Date of this Prospectus is October ____, 1996.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements
and other information filed by the Company may be inspected and
copies obtained (at prescribed rates) at the public reference
facilities maintained by the Commission in Washington, D.C. at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the Commission's Regional Offices in New York at 7 World
Trade Center 13th Floor, New York, New York 10048 and in Chicago
at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material may be obtained (at
prescribed rates), by writing to the Public Reference Section of
the Commission, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such material is also available through
the Commission's Web site (http://www.sec.gov). In addition,
such material may also be inspected at the NYSE, 20 Broad Street,
New York, New York 10005, on which the Common Stock is listed.
This Prospectus is part of a Registration Statement on Form
S-3 (together with all amendments and exhibits thereto, the
"Registration Statement") filed by the Company with the
Commission under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the Shares. This Prospectus
does not contain all the information set forth or incorporated by
reference in the Registration Statement and the exhibits and
schedules relating thereto, certain portions of which have been
omitted as permitted by the Commission's rules and regulations.
For further information with respect to the Company and the
Shares offered hereby, reference is made to the Registration
Statement and the exhibits thereto which are on file at the
offices of the Commission and may be obtained upon payment of the
fee prescribed by the Commission as described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following reports and documents filed by the Company
with the Commission pursuant to the Exchange Act are incorporated
into this Prospectus by reference as of their respective dates:
1. Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 as amended by Form 10-K/A-
1, dated April 29, 1996.
2. Quarterly Report on Form 10-Q for the three months
ended March 31, 1996.
3. Quarterly Report on Form 10-Q for the six months
ended June 30, 1996.
4. The description of the Common Stock and associated
Preferred Stock Purchase Rights contained in the
Registration Statement on Form 8-A, dated November
10, 1994.
All reports and other documents filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the effective date of this Registration Statement
and prior to the termination of the offering of the Shares
pursuant to this Prospectus (this "Offering") shall be deemed to
be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such reports and documents.
Any statement contained herein or in a report or document
incorporated or deemed to be incorporated herein by reference
shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in
any subsequently filed report or document that is or is deemed to
be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The making of a modifying or superseding statement shall not
be deemed an admission for any purpose that the modified or
superseded statement, when made, constituted a misrepresentation,
an untrue statement of a material fact or an omission to state a
material fact that is required to be stated or that is necessary
to make a statement not misleading in light of the circumstances
in which it was made.
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO EACH PERSON TO
WHOM A COPY OF THIS PROSPECTUS IS DELIVERED, ON THE REQUEST OF
SUCH PERSON, A COPY OF ANY OR ALL OF THE REPORTS AND DOCUMENTS
INCORPORATED HEREIN BY REFERENCE (OTHER THAN EXHIBITS THERETO,
UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE
INTO SUCH REPORTS OR DOCUMENTS). WRITTEN REQUESTS FOR SUCH
COPIES SHOULD BE DIRECTED TO DAVID C. WATT, EXECUTIVE VICE
PRESIDENT, GENERAL COUNSEL AND CORPORATE SECRETARY, ICN
PHARMACEUTICALS, INC., 3300 HYLAND AVENUE, COSTA MESA, CALIFORNIA
92626. TELEPHONE INQUIRIES MAY BE DIRECTED TO DAVID C. WATT AT
(714) 545-0100.
THE COMPANY
On November 1, 1994, the stockholders of ICN
Pharmaceuticals, Inc. ("Old ICN"), SPI Pharmaceuticals, Inc.
("SPI"), Viratek, Inc. ("Viratek"), and ICN Biomedicals, Inc.
("Biomedicals") (collectively, the "Predecessor Companies")
approved the combination of the Predecessor Companies ("the
Merger"). On November 10, 1994, SPI, Old ICN and Viratek merged
into ICN Merger Corp., and Biomedicals merged into ICN Subsidiary
Corp., a wholly-owned subsidiary of ICN Merger Corp. In
conjunction with the Merger, ICN Merger Corp. was renamed ICN
Pharmaceuticals, Inc. For accounting purposes, SPI is the
acquiring company and as a result, the Company reports the
historical financial data of SPI in its financial results.
Subsequent to the Merger, the results of the Company include the
combined operations of all Predecessor Companies.
ICN is a multinational research-based pharmaceutical company
that develops, manufactures, distributes and sells
pharmaceutical, nutrition, research and diagnostic products. The
Company pursues a strategy of international expansion which
includes (i) research and development of proprietary products
with the potential to be significant contributors to the
Company's global operations; (ii) penetration of major
pharmaceutical markets by means of targeted acquisitions; and
(iii) expansion in these major markets through the development or
acquisition of pharmaceutical products that meet the particular
needs of each market.
The Company distributes and sells a broad range of
prescription and over-the-counter pharmaceutical and nutritional
products in over 60 countries worldwide, primarily in North
America, Latin America, Western Europe and Eastern Europe. These
pharmaceutical products treat viral and bacterial infections,
diseases of the skin, myasthenia gravis, cancer, cardiovascular
disease, diabetes and psychiatric disorders. The Company's
leading product is the broad spectrum antiviral agent ribavirin,
which is marketed in the United States, Canada and most of Europe
under the trade name Virazole[registered]. Virazole[registered]
is currently approved for commercial sale in over 40 countries
for one or more of a variety of viral infections, including
respiratory syncytial virus ("RSV"), herpes simplex, influenza,
chicken pox, hepatitis and HIV. In the United States,
Virazole[registered] is approved only for use in hospitalized
infants and young children with severe lower respiratory
infections due to RSV.
The Company believes it has substantial opportunities to
realize growth from its internally developed compounds. These
compounds are the result of significant investments in its
research and development activities related to nucleic acids
conducted over three decades. The Company believes that the
approval of Virazole[registered] for the treatment of chronic
hepatitis C would be important to the Company because of the
potential size of the chronic hepatitis C market both in the
United States and abroad. On June 1, 1994, a New Drug
Application ("NDA") was filed with the United States Food and
Drug Administration (the "FDA") for the use of
Virazole[registered] for the treatment of chronic hepatitis C in
the United States. Similar applications for approval to market
Virazole[registered] for chronic hepatitis C were filed in the
European Union, Canada, Sweden, Norway, Finland, Australia and
New Zealand. Following the submission of the NDA, the FDA raised
serious questions regarding the safety and efficacy of
Virazole[registered]. Similar questions were raised by foreign
reviewers. Subsequently, the Company withdrew its NDA for
Virazole[registered] and the applications for
Virazole[registered] submitted in other world markets. On July
28, 1995, the Company entered into an agreement (described below)
with a subsidiary of Schering-Plough Corporation (collectively
with such subsidiary, "Schering") to license ribavirin
(Virazole[registered]) as a treatment for chronic hepatitis C in
combination with Schering's alpha interferon (the "Combination
Therapy"). The FDA subsequently approved a protocol for the
testing of the Combination Therapy, and Schering is currently
conducting Phase III clinical trials of the Combination Therapy.
To obtain FDA approval of Virazole[registered] for use in
Combination Therapy, the Company and Schering must demonstrate
that Combination Therapy is safer and more effective in treating
chronic hepatitis C than alpha interferon alone. Schering is
also testing the Combination Therapy pursuant to protocols
approved by the European Union. The Company continues to believe
that Virazole[registered] has potential in the treatment of
hepatitis C in Combination Therapy and is taking all steps
necessary to capitalize on its full potential.
Pursuant to an Exclusive License and Supply Agreement (the
"License Agreement") with Schering, the Company licensed
ribavirin to Schering for use in Combination Therapy. The
License Agreement provided the Company an initial non-refundable
payment by Schering of $23,000,000, and future royalty payments
to the Company for marketing of ribavirin, including certain
minimum royalty rates. Schering will have exclusive marketing
rights for ribavirin for hepatitis C worldwide, except that the
Company will retain the right to co-market the drug in the
countries of the European Union. In addition, Schering will
purchase up to $42,000,000 in Common Stock upon the achievement
of certain regulatory milestones. Under the License Agreement,
Schering will be responsible for all clinical developments
worldwide.
The Company believes it is positioned to expand its presence
in the pharmaceutical markets in Eastern Europe. In 1991, a 75%
interest was acquired in Galenika Pharmaceuticals, a large drug
manufacturer and distributor in Yugoslavia. Galenika
Pharmaceuticals was subsequently renamed ICN Galenika
("Galenika"). This acquisition added new products and
significantly expanded the sales volume of the Company. With the
investment in Galenika Pharmaceuticals, the Company became one of
the first Western pharmaceutical companies to establish a direct
investment in Eastern Europe. Galenika continues to be a
significant part of the Company's operations although its sales
and profitability have, at times, been substantially diminished
owing principally to the imposition of sanctions on Yugoslavia by
the United Nations. However, in December 1995, the United
Nations Security Council adopted a resolution that suspended
economic sanctions imposed on the Federal Republic of Yugoslavia
since May of 1992. The suspension of economic sanctions has
enabled Galenika to resume exporting certain of its product lines
to Russia, other Eastern Europe Markets, Africa, the Middle East
and the Far East. Additionally, during 1995, in pursuing its
Eastern Europe expansion strategy, the Company acquired a 75%
interest in Oktyabr, a pharmaceutical company in the Russian
Republic. The Company subsequently acquired an additional 15%
interest in Oktyabr, increasing its interest in Oktyabr to 90%.
In addition to its pharmaceutical operations, the Company
also develops, manufacturers and sells a broad range of research
chemical products, diagnostic reagents and radiation monitoring
services. The Company markets these products internationally to
major scientific, academic, health care and governmental
institutions through catalog and direct mail marketing programs.
The principal executive offices of the Company are located
at 3300 Hyland Avenue, Costa Mesa, California 92626. The
telephone number at such address is (714) 545-0100.
RISK FACTORS
An investment in the Shares involves a high degree of risk
and may not be appropriate for investors who cannot afford to
lose their entire investment. Prospective purchasers of the
Shares should be fully aware of the risk factors set forth
herein. This Prospectus contains or incorporates statements that
constitute forward looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Those
statements appear in a number of places in this Prospectus and in
the documents incorporated by reference and include statements
regarding, among other matters, the Company's growth
opportunities, the Company's acquisition strategy, regulatory
matters pertaining to governmental approval of the marketing or
manufacturing of certain of the Company's products and other
factors affecting the Company's financial condition or results of
operations. Prospective investors are cautioned that any such
forward looking statements are not guarantees of future
performance and involve risks, uncertainties and other factors
which may cause actual results, performance or achievements to
differ materially from the future results, performance or
achievements expressed or implied in such forward looking known
and unknown statements. Such factors include the various risk
factors described below.
DEPENDENCE ON FOREIGN OPERATIONS
Approximately 75% and 79% of the Company's net sales for
1995 and the six months ended June 30, 1996, respectively, were
generated from operations outside the United States. The Company
operates directly and through distributors in North America,
Latin America (principally Mexico), Western Europe and Eastern
Europe and through distributors elsewhere in the world. Foreign
operations are subject to certain risks inherent in conducting
business abroad, including possible nationalization or
expropriation, price and exchange controls, limitations on
foreign participation in local enterprises, health-care
regulation and other restrictive governmental actions. Changes
in the relative values of currencies take place from time to time
and may materially affect the Company's results of operations.
Their effects on the Company's future operations are not
predictable.
RISK OF OPERATIONS IN YUGOSLAVIA
Galenika represents a material part of the Company's
business. Approximately 46% and 46% of the Company's net sales
for 1995 and the six months ended June 30, 1996, respectively,
were from Galenika. In addition, approximately 39% and 51% of
the Company's operating income for 1995 and the six months ended
June 30, 1996, respectively, were from Galenika. The current
political and economic circumstances in Yugoslavia create certain
business risks particular to that country. Between May 1992 and
December 1995, Yugoslavia had been operating under sanctions
imposed by the United Nations which had severely limited the
ability to import raw materials for manufacturing and had
prohibited all exports. While the sanctions were suspended in
December 1995, certain risks such as hyperinflation, currency
devaluations, wage and price controls and potential government
action could continue to have a material adverse effect on the
Company's results of operations.
Galenika is subject to price controls in Yugoslavia. The
size and frequency of government-approved price increases are
influenced by local inflation, devaluations, cost of imported raw
materials and demand for Galenika products. During 1995 and
through June 30, 1996, Galenika received fewer price increases
than in the past due to lower relative levels of inflation. As
inflation increases, the size and frequency of price increases
are expected to increase. Price increases obtained by Galenika
are based on economic events preceding such an increase and not
on expectations of ongoing inflation. A lag in approved price
increases could reduce the gross margins that Galenika receives
on its products. Although the Company expects that Galenika will
limit sales of products that have poor margins until an
acceptable price increase is received, the impact of an inability
to obtain adequate price increases in the future could have an
adverse impact on the Company as a result of declining gross
profit margins or declining sales in an effort to maintain
existing gross margin levels.
RISK OF OPERATIONS IN EASTERN EUROPE AND RUSSIA
The Company has an investment in Russia through its 90%
interest in the Russian pharmaceutical company Oktyabr. In May
1996, the Company purchased a 40% investment in a U.S. company
which has a 51% interest in a joint venture with a joint stock
company in Kazakhstan to convert a former Soviet scientific
production complex in Kazakhstan into a pharmaceutical
manufacturing and distribution plant. It is anticipated that the
Company's investment in the joint venture, including its
investment in the U.S. company, will be approximately $3 million.
In June 1996, the Company acquired an approximately 88% interest
in Lekstredstva, a Russian pharmaceutical company, and intends to
make additional purchases from existing Lekstredstva stockholders
to increase its interest to 95%. It is estimated that the
aggregate investment in Lekstredstva will cost approximately $6.3
million. In September 1996, the Company signed a definitive
agreement to purchase up to a 59% interest in Alkaloida Chemical
Co. ("Alkaloida"), a Hungarian state-owned pharmaceutical
company, for approximately $21.9 million. As required under the
terms of the definitive agreement, on September 27, 1996, the
Company made a payment of approximately $8.95 million for an
initial 50.02% interest in Alkaloida, with the shares
representing such interest to be issued to the Company on
October 10, 1996. The remaining 8.98% interest in Alkaloida is
anticipated to be acquired in January 1997. See "Recent
Developments." From July 1996 through the date of this
Prospectus, the Company acquired a 65% interest in Polypharm, a
Russian pharmaceutical company, for approximately $1.3 million.
The Company is also considering several other strategic
acquisitions and investments in Eastern Europe. Although the
Company believes that investment in Russia and Eastern Europe
offers access to growing world markets, the economic and
political conditions in such countries are unstable.
NO ASSURANCE OF SUCCESSFUL DEVELOPMENT AND COMMERCIALIZATION
OF FUTURE PRODUCTS
The Company's future growth will depend, in large part, upon
its ability to develop or obtain and commercialize new products
and new formulations of or indications for current products. The
Company is engaged in an active research and development program
involving compounds owned by the Company or licensed from others
which the Company may, in the future, desire to develop
commercially. There can be no assurance that the Company will be
able to develop or acquire new products, obtain regulatory
approvals to use such products for proposed or new clinical
indications in a timely manner, manufacture its potential
products in commercial volumes or gain market acceptance for such
products. In addition, the Company may require financing over
the next several years to fund costs of development and
acquisitions of new products and, if Virazole[registered] is
approved for treatment of chronic hepatitis C in Combination
Therapy (for which there can be no assurance), to expand the
production and marketing of Virazole[registered] in the countries
of the European Union where the Company has retained marketing
rights under the License Agreement. It may be desirable that the
Company enter into licensing arrangements with other
pharmaceutical companies in order to market effectively any new
products or new indications for existing products such as the
License Agreement with Schering for the marketing of
Virazole[registered] for Combination Therapy (if approved).
There can be no assurance that the Company will be successful in
raising such additional capital or entering into such marketing
arrangements, if required, or that such capital will be raised,
or such marketing arrangements will be, on terms favorable to the
Company.
LIMITED PATENT PROTECTION
The Company may be dependent on the protection afforded by
its patents relating to Virazole[registered] and no assurance can
be given as to the breadth or degree of protection which these
patents will afford the Company. The Company has patent rights
in the United States expiring in 1999 relating to the use of
Virazole[registered] to treat specified human viral diseases. If
future development of Virazole[registered] in Combination Therapy
is successful and approval is granted in the United States, an
additional award of exclusivity will be granted of up to three
years from date of approval (Waxman-Hatch Act); however, there
can be no assurance that such development will be successful or
that such approval will be obtained. While the Company has
patents in certain foreign countries covering use of
Virazole[registered] in the treatment of certain diseases, which
coverage and expiration varies and which patents expire at
various times through 2006, the Company has no, or limited,
patent rights with respect to Virazole[registered] and/or its use
in certain foreign countries where Virazole[registered] is
currently, or in the future may be, approved for commercial sale,
including France, Germany and Great Britain. However, the
Company and Schering intend to file applications for approval of
Combination Therapy through a centralized procedure in the
European Union (which includes France, Germany and Great
Britain). If such approval is granted, the Company and Schering
would be afforded either six or ten years (depending upon the
particular country) of protection for the Combination Therapy
against competition . There can be no assurance that the loss of
the Company's patent rights with respect to Virazole[registered]
upon expiration of the Company's patent rights in the United
States, Europe and elsewhere will not result in competition from
other drug manufacturers or will not otherwise have a significant
adverse effect upon the business and operations of the Company.
As a general policy, the Company expects to seek patents,
where available, on inventions concerning novel drugs,
techniques, processes or other products which it may develop or
acquire in the future. However, there can be no assurance that
any patents applied for will be granted, or that, if granted,
they will have commercial value or as to the breadth or the
degree of protection which these patents, if issued, will afford
the Company. The Company intends to rely substantially on its
unpatented proprietary know-how, but there can be no assurance
that others will not develop substantially equivalent proprietary
information or otherwise obtain access to the Company's know-how.
Patents for pharmaceutical compounds are not available in certain
countries in which the Company markets its products.
Marketing approvals in certain foreign countries provide an
additional level of protection for products approved for sale in
such countries.
UNCERTAIN IMPACT OF ACQUISITION PLANS
The Company intends aggressively to continue its strategy of
targeted expansion through the acquisition of compatible
businesses and product lines and the formation of strategic
alliances, joint ventures and other business combinations.
Should the Company complete any material acquisition, the
Company's success or failure in integrating the operations of the
acquired company may have a material impact on the future growth
or success of the Company. Since some or all of these potential
acquisitions may be affected with the issuance of Common Stock by
the Company to the sellers of the businesses being acquired, the
interest of existing stockholders in the Company may be diluted
(which dilution may be material depending on the size and the
number of acquisitions consummated). Subject to sufficient
authorized and unissued shares of Common Stock being available,
no stockholder approval of any acquisition transaction would be
required unless the number of shares of Common Stock issued by
the Company in connection with the transaction (or series of
related transactions) were to exceed 20% of the then outstanding
shares of Common Stock.
POTENTIAL LITIGATION EXPOSURE
ICN is a defendant in various lawsuits including certain
consolidated class action lawsuits alleging, among other things,
violations of federal securities laws. The plaintiffs in these
lawsuits allege that ICN made, or aided and abetted other
defendants in making, misrepresentations of material facts and
omitted to state material facts concerning the business,
financial condition and future prospects of the Company,
primarily concerning developments regarding Virazole[registered],
including statements made in the 1980's concerning the efficacy
and safety of the drug and the market for the drug in the
treatment of AIDS and AIDS related diseases, and statements made
in 1994 and 1995 concerning the Company's NDA for the use of
Virazole[registered] for the treatment of chronic hepatitis C
(the "Hepatitis C NDA"). See "Recent Developments."
The Commission is conducting a private investigation (the
"Commission Investigation") with respect to certain matters
pertaining to the status and disposition of the Hepatitis C NDA,
including whether, during the period June 1994 through
February 1995, the Company, persons or entities associated with
it and others (including Mr. Milan Panic, Chairman, President and
Chief Executive Officer of the Company), in the offer and sale or
in connection with the purchase and sale of Common Stock, engaged
in possible violations of federal securities laws, by having
possibly: (i) made false or misleading statements or omitted
material facts with respect to the status and disposition of the
Hepatitis C NDA; (ii) purchased or sold Common Stock while in
possession of material, non-public information concerning the
status and disposition of the Hepatitis C NDA; or (iii) conveyed
material, non-public information concerning the status and
disposition of the Hepatitis C NDA, to other persons who may have
purchased or sold Common Stock. The Company is cooperating with
the Commission in its investigation.
The Company has received a Subpoena (the "Subpoena") from a
Grand Jury in the United States District Court, Central District
of California requesting the production of documents covering a
broad range of matters over various time periods. The Company
and Milan Panic are subjects of the investigation and are
cooperating with the production of documents pursuant to the
Subpoena.
DEPENDENCE ON KEY PERSONNEL
The Company believes that its continued success will depend
to a significant extent upon the efforts and abilities of its
management, including Milan Panic, its Chairman, President and
Chief Executive Officer. The loss of their services could have a
material adverse effect on the Company. The Company cannot
predict what effect, if any, the Commission's Investigation and
the Subpoena may have on Mr. Panic's ability to continue to
devote services on a full time basis to the Company. See " --
Potential Litigation Exposure," above.
POTENTIAL PRODUCT LIABILITY EXPOSURE AND LACK OF INSURANCE
The Company could be exposed to possible claims for personal
injury resulting from allegedly defective products. Even if a
drug were approved for commercial use by an appropriate
governmental agency, there can be no assurance that users will
not claim that effects other than those intended may result from
the Company's products. The Company generally self-insures
against potential product liability exposure with respect to its
marketed products, including Virazole[registered]. While to date
no material adverse claim for personal injury resulting from
allegedly defective products, including Virazole[registered], has
been successfully maintained against the Company or any of its
predecessors, a substantial claim, if successful, could have a
material adverse effect on the Company.
GOVERNMENT REGULATION
FDA approval must be obtained in the United States and
approval must be obtained from comparable agencies in other
countries prior to marketing or manufacturing new pharmaceutical
products for use by humans in such respective jurisdictions.
Obtaining FDA approval for new products and manufacturing
processes can take a number of years and involves the expenditure
of substantial resources. Numerous requirements must be
satisfied, including preliminary testing programs on animals and
subsequent clinical testing programs on humans, to establish
product safety and efficacy. No assurance can be given that
authorization of the commercial sale of any new drugs or
compounds by the Company for any application will be secured in
the United States or any other country, or that, if such
authorization is secured, those drugs or compounds will be
commercially successful.
The FDA in the United States and other regulatory agencies
in other countries also periodically inspect manufacturing
facilities. Failure to comply with applicable regulatory
requirements can result in, among other things, sanctions, fines,
delays or suspensions of approvals, seizures or recalls of
products, operating restrictions and criminal prosecutions.
Furthermore, changes in existing regulations or adoption of new
regulations could prevent or delay the Company from obtaining
future regulatory approvals.
The Company is subject to price control restrictions on its
pharmaceutical products in the majority of countries in which it
operates. To date, the Company has been affected by pricing
adjustments in Spain and by the lag in allowed price increases in
Yugoslavia and Mexico, which have created lower sales in U.S.
dollars and reductions in gross profit. Future sales and gross
profit could be materially affected if the Company is unable to
obtain price increases commensurate with the levels of inflation.
COMPETITION
The Company operates in a highly competitive environment.
The Company's competitors, many of whom have substantially
greater capital resources and marketing capabilities and larger
research and development staffs and facilities than the Company,
are actively engaged in marketing products similar to those of
the Company and in developing new products similar to those
proposed to be developed and sold by the Company. Others may
succeed in developing products that are more effective than those
marketed or proposed for development by the Company. Progress by
other researchers in areas similar to those being explored by the
Company may result in further competitive challenges. In early
1996, MedImmune, Inc. began marketing in the United States
RespiGam, a prophylactic drug for the treatment of RSV. The
Company is aware of several other ongoing research and
development programs which are attempting to develop new
prophylactic and therapeutic products for treatment of RSV.
Although the Company will follow publicly disclosed developments
in this field, on the basis of currently available data, it is
unable to evaluate whether RespiGam or the other technology being
developed in these programs poses a threat to the Company's
current market position in the treatment of RSV or its revenue
streams. The Company may also face increased competition from
manufacturers of generic pharmaceutical products when certain of
the patents covering certain of its currently marketed products
expire.
RECENT DEVELOPMENTS
ICN has been a defendant in certain consolidated class
action lawsuits pending in the United States District Court for
the Southern District of New York entitled In re PaineWebber
Securities Litigation (Case No. 86 Civ. 6776 {BMW}) and In re
ICN/Viratek Securities Litigation (Case No. 87 Civ. 4296 {BMW}).
The plaintiffs in these lawsuits have alleged that ICN made, or
aided and abetted other defendants in making, misrepresentations
of material facts and omitted to state material facts concerning
the business, financial condition and future prospects of the
Company, primarily concerning developments regarding
Virazole[registered], including statements made in 1986 and 1987
concerning the efficacy and safety of the drug and the market for
the drug in the treatment of AIDS related conditions. On August
22, 1996, following a trial on the merits, the jury sitting for
such trial rejected a number of the securities fraud claims
brought against ICN. The jury was unable to reach a verdict on
the remaining claims and accordingly, a mistrial was declared on
those claims. There were no findings of violations of securities
laws and no damages were awarded. With respect to the claims
rejected by the jury, the plaintiffs have a right to appeal, and
with respect to the claims for which the jury was unable to reach
a verdict, the plaintiffs have a right to a retrial.
On September 18, 1996, the Company acquired the Cappel
division ("Cappel") of Organon Tekniks Corporation ("OTC"), a
Delaware corporation, from OTC and its affiliate, Akzo Nobel
Pharma International, B.V. ("Akzo Nobel Pharma"), a Dutch
corporation, in consideration for the issuance of 213,385 Shares.
Cappel manufactures and sells immunochemical reagents used in
biotechnology and biomedical laboratories around the world. The
acquisition of Cappel, together with other acquisitions
consummated by the Company in 1996 and presently proposed
acquisitions which may be consummated by the Company in 1996, do
not in the aggregate constitute the acquisition of a significant
business as defined by Regulation S-X promulgated by the
Commission.
On September 25, 1996, ICN China, Inc. ("ICN China"), a
wholly-owned subsidiary of the Company, entered into a joint
venture agreement with Jiangsu Wuxi Pharmaceutical Corporation
("Wuxi"), a Chinese state-owned company, to establish a limited
liability company (the "Chinese Joint Venture Entity") for the
production and sale of pharmaceutical products. The Chinese
Joint Venture Entity will be owned 75% by ICN China and 25% by
Wuxi. Wuxi will contribute its existing operation to the Chinese
Joint Venture Entity, and ICN China will contribute to the
Chinese Joint Venture Entity a total of $24 million in cash over
three years, primarily for the construction of a new
pharmaceutical production plant and the purchase of related
machinery and equipment. Of the amount to be contributed by ICN
China, $3.6 million is required to be paid in January 1997, an
additional $4.4 million is required to be paid during 1997, and
an additional $8 million is required to be paid during each of
1998 and 1999. The Company has not determined the source of the
financing for this obligation.
On September 27, 1996, the Company borrowed approximately
$8.95 million from Union Bank of Switzerland ("UBS") to finance
the initial purchase of its interest in Alkaloida. See "Risk
Factors - Risk of Operations in Eastern Europe and Russia." This
loan, which bears an initial annual interest rate equal to UBS's
one month LIBOR rate plus 0.75%, is repayable on October 27,
1996, with the Company having the option to extend the term by an
additional 30 days. The Company is presently reviewing
alternative arrangements to refinance the loan upon maturity.
On September 30, 1996, the Company issued 195,122 Shares to
Siemens Medical in connection with the Amendment to the
Undertaking Agreement. See "Selling Stockholder."
USE OF PROCEEDS
Since this Prospectus relates to the offering of Shares by
the Selling Stockholder, any Net Proceeds received by the Selling
Stockholder will be credited to the Company for amounts payable
by the Company to the Selling Stockholder pursuant to the terms
of this Undertaking Agreement, upon the satisfaction of the
Company's obligations thereunder. See "Selling Stockholder."
SELLING STOCKHOLDER
All of the Shares are being offered for the account of
Siemens Medical, although some or all of the sales may be
Arranged Sales. However, upon the satisfaction of the Company's
obligation under the Undertaking Agreement, Siemens Medical is
required to return to the Company any Shares not previously sold
by it and to remit to the Company the net proceeds from the sale
of any Shares. Any net proceeds received by Siemens Medical upon
the sale of any Shares may, at the Company's option, be credited
against any payments required to be made by the Company to
Siemens Medical under the terms of the Undertaking Agreement. No
estimate can be given as to the amount of Shares that will be
held by the Selling Stockholder upon termination of this
Offering. Because the Selling Stockholder may sell all or part
of the Shares which they hold pursuant to this Prospectus, this
Offering is not being underwritten on a firm commitment basis and
some or all of these Shares may be returned to the Company upon
the satisfaction of the Company's obligations under the
Undertaking Agreement.
As of September 19, 1996, the Company had outstanding
approximately 33,366,000 shares of Common Stock (as adjusted to
give effect to the issuance of 213,385 shares of Common Stock to
OTC and Akzo Nobel Pharma in connection with the Company's
Acquisition of Cappel, as described under "Recent Developments",
and the 195,122 Shares issued to Siemens Medical pursuant to the
Amendment).
The Selling Stockholder acquired the Shares presently owned
by it, and may acquire additional Shares from time to time, in
accordance with the terms of the Amendment. In connection with
the Amendment, Siemens Medical withdrew its previously exercised
put (the "Put Option") to require the Company to repurchase at
$23.512493872 per share (the "Guaranteed Share Price") the
964,833 shares of Common Stock (the "Acquisition Shares") which
had been issued to Siemens Medical in connection with the
Dosimetry Acquisition (and which have been registered under the
Securities Act for resale by Siemens Medical under a separate
registration statement). The Put Option had been exercised
pursuant to the terms of the Undertaking Agreement as initially
executed. The Amendment contains terms which, among other
things, (i) extend the date by which Siemens Medical has the
right to exercise the Put Option to December 16, 1996,
(ii) require the Company to pay interest on the amount paid upon
exercise of the Put Option at an annual interest rate (the
"Interest Rate") equal to one percent plus the prime or reference
rate of Bank of America, N.T. & S.A. for the period from
September 28, 1996 through (and including) December 23, 1996,
(iii) require the Company to pay interest at the Interest Rate to
Siemens Medical on the Guaranteed Share Price with respect to
each Acquisition Share sold from September 28, 1996 until the
receipt of the proceeds from such sale, (iv) permit the Company
to require Siemens Medical to sell any or all of the Acquisition
Shares for cash pursuant to transactions arranged by the Company
(the "Arranged Sales") provided that the Company pays Siemens
Medical for each share sold pursuant to an Arranged Sale the
positive difference, if any, between the Guaranteed Share Price
and the proceeds, less Siemens Medical's sales commissions,
underwriting discounts, transfer fees and out-of-pocket expenses
(the "Net Proceeds"), received by Siemens Medical from the sale
of such shares, (v) for each share of Common Stock sold pursuant
to an Arranged Sale or repurchased by the Company pursuant to the
Put Option, require the Company to pay Siemens Medical the
positive difference between (A) the lesser of (x) the highest
closing price of a share of Common Stock on the NYSE between
September 28, 1996 and the December 23, 1996 and (y) $28.21 and
(B) the Guaranteed Share Price, and (vi) to the extent the then
market value (based upon average of the closing prices of the
Common Stock over specified three week periods) of the Shares
(or, to the extent Shares have previously been sold, the Net
Proceeds from such sales) is less than the amount that the
Company would have been seen required to pay if the Put Option
was then exercised, obligate the Company to issue Shares to
Siemens Medical valued at said market value (which shares shall
be deemed thereafter to constitute Shares). Upon satisfaction of
all of its obligations under the Amendment, Siemens Medical is
required to return to the Company any Shares not previously sold
by it and to remit to the Company the Net Proceeds from the sale
of any Shares. Any Net Proceeds received by Siemens Medical upon
a sale of Shares may, at the Company's option, be credited
against any payments required to be made by the Company to
Siemens Medical under the terms of the Underwriting Agreement.
The description set forth above of the Undertaking Agreement
and the Amendment are summaries and as such are subject to and
qualified in their entirety by reference to the text of these
agreements, copies of which are attached to the Registration
Statement of which this Prospectus is a part and incorporated
herein by reference.
The registration effected hereby is being effected pursuant
to certain registration rights granted by the Company under the
terms of the Undertaking Agreement.
PLAN OF DISTRIBUTION
The Selling Stockholder is offering the Shares for its own
account, and not for the account of the Company (although some or
all of the sales may be Arranged Sales). However, upon the
satisfaction of the Company's obligations under the Undertaking
Agreement, the Selling Stockholder is required to return to the
Company any Shares not previously sold by it and to remit to the
Company the Net Proceeds from the sale of any Shares. Any Net
Proceeds received by the Selling Stockholder may, at the
Company's option, be credited against any payments required to be
made by the Company to the Selling Stockholder under to the terms
of the Undertaking Agreement. See "Selling Stockholder."
The Shares may be sold from time to time by the Selling
Stockholder. Such sales may be made in the over-the-counter
market, on the New York Stock Exchange or other exchanges (if the
Common Stock is listed for trading thereon), or otherwise at
prices and at terms then prevailing, at prices related to the
then current market price or at negotiated prices. The Shares
may be sold by any one or more of the following methods: (a) a
block trade in which the broker or dealer so engaged will attempt
to sell the securities as agent but may position and resell a
portion of the block as principal to facilitate the transaction;
(b) purchases by a broker as principal and resale by such broker
or dealer for its account; (c) ordinary brokerage transactions
and transactions in which the broker solicits purchasers; and
(d) privately negotiated transactions. The Shares may be sold at
the discretion of the Selling Stockholder or pursuant to Arranged
Sales as specified by the Company. In addition, any Shares that
qualify for sale pursuant to Rule 144 may be sold under Rule 144
rather than pursuant to this Prospectus.
The Selling Stockholder and any broker-dealers, agents or
underwriters that participate with the Selling Stockholder in the
distribution of the Shares may be deemed to be "underwriters"
within the meaning of the Securities Act and any commissions
received by such broker-dealer, agent or underwriter and any
profit on the resale of the Shares purchased by them may be
deemed to be underwriting commissions or discounts under the
Securities Act.
Under the Exchange Act and the regulations thereunder, any
person engaged in a distribution of the Shares offered by this
Prospectus may not simultaneously engage in market making
activities with respect to the Common Stock during any applicable
"cooling off" periods prior to the commencement of such
distribution. In addition, and without limiting the foregoing,
the Selling Stockholder will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder
including, without limitation, Rules 10b-6 and 10b-7, which
provisions may limit the timing of purchases and sales of Common
Stock by the Selling Stockholder.
In the Undertaking Agreement, the Company has agreed to
indemnify the Selling Stockholder and each person controlling a
Selling Stockholder against all claims, losses, damages and
liabilities (or actions in respect thereof), including any legal
and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage,
liability or action, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact
contained in the Registration Statement, or based on any omission
(or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements therein
not misleading, or any violation by the Company of the Securities
Act or any rule or regulation thereunder applicable to the
Company and relating to action or inaction required of the
Company in connection with the Registration Statement; provided
that the Company will not be liable in any such case to the
extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission
based upon written information furnished to the Company by the
Selling Stockholder and stated to be specifically for use in the
Registration Statement. The Selling Stockholder has agreed to
indemnify the Company, each of its directors and officers and
each person who controls the Company within the meaning of the
Securities Act and the rules and regulations thereunder, against
all claims, losses, damages and liabilities (or actions in
respect thereof), including any legal or any other expenses
reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability or action, arising out of
or based on any untrue statement (or alleged untrue statement) of
a material fact contained in the Registration Statement or any
omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in the
Registration Statement in reliance upon and in conformity with
written information furnished to the Company by the Selling
Stockholder and stated to be specifically for use in the
Registration Statement; provided, however, that the obligations
of the Selling Stockholder is limited to an amount equal to the
proceeds to the Selling Stockholder of shares sold pursuant to
the Registration Statement or otherwise as contemplated by the
Undertaking Agreement. In addition, the Company has agreed to
indemnify the Selling Stockholder and any other person that
directly or indirectly through one or more intermediaries
controls, is controlled by, or is under common control with
Selling Stockholder with respect to any liability, claim, or
damage arising out of the sale of Shares through an Arranged Sale
and has agreed to reimburse the Selling Stockholder and any other
person that directly or indirectly through one or more
intermediaries controls, is controlled by, or is under common
control with the Selling Stockholder for any legal and other
expenses reasonably incurred in connection with investigating and
defending any such liability, claim, or damage; provided that the
Company shall not be liable in any such case to the extent any
liability, claim, damage, or expenses arises out of or is based
on any act or omission of the Selling Stockholder (or such other
person). If for any reason the foregoing indemnity is
unavailable, or is insufficient to hold harmless the the Selling
Stockholder in respect of the foregoing, then the Company shall
contribute to the amount paid or payable by Selling Stockholder
as a result thereof in such proportion as is appropriate to
reflect the relative benefits received by, and the relative fault
of, the Selling Stockholder, on the one hand, and the Company, on
the other, and as further provided in and in accordance with the
Undertaking Agreement.
There can be no assurance that the Selling Stockholder will
sell any or all of the Shares offered by it hereunder. To the
extent required, the Company will use its best efforts to file,
during any period in which offers or sales are being made, one or
more supplements to this Prospectus to describe any material
information with respect to the plan of distribution not
previously disclosed in this Prospectus or any material change to
such information in this Prospectus.
The registration effected hereby is being effected pursuant
to certain registration rights previously granted by the Company
to the Selling Stockholder in the Undertaking Agreement. The
Company will bear the expense of such registration (including,
under certain circumstances, the Selling Stockholder's sales
commissions, underwriting discounts, transfer fees and out-of-
pocket expenses).
LEGAL MATTERS
The legality of the Shares offered hereby will be passed
upon for the Company by David C. Watt, Executive Vice President,
General Counsel and Corporate Secretary of the Company. As of
October 3, 1996, Mr. Watt beneficially owned 100,332 shares of
Common Stock, including 98,337 shares which he has the right to
acquire upon the exercise of currently exercisable stock options.
INDEPENDENT PUBLIC ACCOUNTANTS
The consolidated balance sheets as of December 31, 1995 and
1994, and the consolidated statements of income, retained
earnings and cash flows for each of the three years in the period
ended December 31, 1995, incorporated by reference in this
Prospectus, have been included herein in reliance on the report,
which includes, as it relates to 1994 and 1993, an emphasis of
matter paragraph related to certain transactions between
affiliates, of Coopers & Lybrand L.L.P., independent public
accountants, given on the authority of that firm as experts in
auditing and accounting. With respect to the unaudited interim
financial information for the periods ended June 30, 1996 and
1995 and March 31, 1996 and 1995, incorporated by reference in
this Prospectus, the independent accountants have reported that
they have applied limited procedures in accordance with
professional standards for a review of such information.
However, their separate reports included in the Company's
quarterly reports on Form 10-Q for the quarters ended June 30,
1996 and March 31, 1996, and incorporated by reference herein,
state that they did not audit and they do not express an opinion
on that interim financial information. Accordingly, the degree
of reliance on their report on such information should be
restricted in light of the limited nature of the review
procedures applied. The accountants are not subject to the
liability provisions of Section 11 of the Securities Act for
their report on the unaudited interim financial information
because that report is not a "report" or a "part" of the
Registration Statement prepared or certified by the accountants
within the meaning of Sections 7 and 11 of the Securities Act.
Any financial statements and schedules hereafter
incorporated by reference in the Registration Statement of which
this Prospectus is a part, that have been audited and are the
subject of a report by independent accountants will be so
incorporated by reference in reliance upon such reports and upon
the authority of such firms as experts in accounting and auditing
to the extent covered by consents filed with the Commission.
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS,
IN CONNECTION WITH THIS OFFERING, AND, IF GIVEN OR MADE, SUCH
OTHER INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE OF THIS
PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses of the
Registrant in connection with the distribution of the securities
being registered hereunder.
SEC Filing Fee $ 2446.97
Legal Fees and Expenses $ 20,000.00
Accounting Fees and Expenses $ 15,000.00
Miscellaneous $ 2,500.00
__________
Total $ 39,946.97
__________
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of Delaware
empowers a corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact
that he or she is or was a director, officer, employee or agent
of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation or enterprise. Depending on the character of the
proceeding, a corporation may indemnify against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with
such action, suit or proceeding if the person indemnified acted
in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the corporation, and
with respect to any criminal action or proceeding, had no cause
to believe his or her conduct was unlawful. In the case of an
action by or in the right of the corporation, no indemnification
may be made in respect to any claim, issue or matter as to which
such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought
shall determine that despite the adjudication of liability such
person is fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper.
Section 145 further provides that to the extent a director
or officer of a corporation has been successful in the defense of
any action, suit or proceeding referred to above or in the
defense of any claim, issue or matter therein, he or she shall be
indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him or her in connection therewith.
However, if the director or officer is not successful in the
defense of any action, suit or proceeding as referred to above or
in the defense of any claim, issue or matter therein, he shall
only be indemnified by the corporation as authorized in the
specific case upon a determination that indemnification is proper
because he or she met the applicable standard set forth above as
determined by a majority of the disinterested Board of Directors
or by the stockholders.
The Registrant's bylaws provide indemnification to its
officers and directors against liability they may incur in their
capacity as such, which indemnification is similar to that
provided by Section 145, unless a determination is reasonably and
promptly made by a majority of the disinterested Board of
Directors that the indemnitee acted in bad faith and in a manner
that the indemnitee did not believe to be in or not opposed to
the best interests of the Registrant, or, with respect to any
criminal proceeding, that the indemnitee believed or had
reasonable cause to believe that his or her conduct was unlawful.
The Registrant carries directors' and officers' liability
insurance, covering losses up to $5,000,000 (subject to a
$500,000 deductible).
The Registrant, as a matter of policy, enters into
indemnification agreements with its directors and officers
indemnifying them against liability they may incur in their
capacity as such. The indemnification agreements require no
specific standard of conduct for indemnification and make no
distinction between civil and criminal proceedings, except in
proceedings where the dishonesty of an indemnitee is alleged.
Such indemnification is not available if an indemnitee is
adjudicated to have acted in a deliberately dishonest manner with
actual dishonest purpose and intent where such acts were material
to the adjudicated proceeding. Additionally, the indemnity
agreements provide indemnification for any claim against an
indemnitee where the claim is based upon the indemnitee obtaining
personal advantage or profit to which he or she was not legally
entitled, the claim is for an accounting of profits made in
connection with a violation of Section 16(b) of the Securities
Exchange Act of 1934, or similar state law provision, or the
claim was brought about or contributed to by the dishonesty of
the indemnitee.
Section 102(b) (7) of the Delaware General Corporation Law,
as amended, permits a corporation to include in its certificate
of incorporation a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director,
provided that such provision shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174
of the Delaware General Corporation Law (relating to unlawful
payment of dividend and unlawful stock purchase and redemption),
or (iv) for any transaction from which the director derived an
improper personal benefit. The Registrant has provided in its
certificate of incorporation, as amended, that its directors
shall be exculpated from liability as provided under Section
102(b) (7).
The foregoing summaries are necessarily subject to the
complete text of the Delaware General Corporation Law, the
Registrant's Certificate of Incorporation and the agreements
referred to above and are qualified in their entirety by
reference thereto.
ITEM 16. EXHIBITS
4.1 Amended and Restated Certificate of Incorporation of
Registrant, previously filed as Exhibit 3.1 to Registration
Statement No. 33-83952 on Form S-1, which is incorporated
herein by reference, as amended by the Certificate of
Merger, dated November 10, 1994, of ICN Pharmaceuticals,
Inc., SPI Pharmaceuticals, Inc., and Viratek, Inc. with and
into ICN Merger Corp., previously filed as Exhibit 4.1 to
Registration Statement No. 333-08179 on Form S-3, which is
incorporated herein by reference.
4.2 Bylaws of the Registrant, previously filed as Exhibit 3.2 to
Registration Statement No. 33-83952 on Form S-1, which is
incorporated herein by reference.
4.3 Form of Rights Agreement, dated as of November 2, 1994
between the Registrant and American Stock Transfer & Trust
Company as Trustee, previously filed as Exhibit 4.3 to
Registration Statement on Form 8-A, dated November 10, 1994.
4.4 Common Stock Undertaking Agreement, dated July 18, 1996, by
and among Siemens Medical Systems, Inc. and the Registrant,
previously filed as Exhibit 4.6 to the Registration
Statement No. 333-08179 on Form S-3, which is incorporated
herein by reference, as amended by Amendment No. 1, dated as
of September 10, 1996, and Amendment No. 2, dated as of
September 27, 1996.
5. Opinion of David C. Watt, Executive Vice President, General
Counsel and Corporate Secretary of the Registrant, regarding
the legality of the securities being registered.
15.1 Awareness Letter of Independent Public Accountants regarding
Unaudited Interim Financial Information.
15.2 Review Report of Independent Public Accountants for the
period ended March 31, 1996, previously filed as Exhibit 15
to Quarterly Report on Form 10-Q for the quarter ended March
31, 1996, and incorporated herein by reference.
15.3 Review Report of Independent Public Accountants for the
period ended June 30, 1996, previously filed as Exhibit 15
to Quarterly Report on Form 10-Q for the quarter ended June
30, 1996, and incorporated herein by reference.
23.1 Consent of Coopers & Lybrand L.L.P., Independent Public
Accountants.
23.2 Consent of David C. Watt (contained in his opinion filed as
Exhibit 5).
24. Power of Attorney (included elsewhere in this Registration
Statement).
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement; provided, however, that paragraphs (i)
and (ii) do not apply if the information required to be included
in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to section 13
or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual
report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be
deemed to be a new registration relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to that
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in that Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, the Registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Costa Mesa and State of
California on October 3, 1996.
ICN PHARMACEUTICALS, INC.
/s/ Milan Panic
________________________________
By: Milan Panic
Chairman, President and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Milan Panic and David C.
Watt his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments and
amendments pursuant to Rule 462(b) under the Securities Act of
1933, as amended) to this Registration Statement, and to file the
same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully
to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Milan Panic
Milan Panic Chairman and Chief Executive October 3,
Officer 1996
(Principal Executive Officer)
/s/ John E.
Giordani Executive Vice President, Chief October 3,
John E. Giordani Financial Officer 1996
(Principal Financial and Accounting
Officer)
/s/ Norman Barker,
Jr. Director October 3,
Norman Barker, Jr. 1996
/s/ Birch E. Bayh,
Jr. Director October 3,
Senator Birch E. 1996
Bayh, Jr.
/s/ Alan F. Charles
Alan F. Charles Director October 3,
1996
/s/ Roger Guillemin
Roger Guillemin, Director October 3,
M.D., Ph.D. 1996
/s/ Adam Jerney
Adam Jerney Director, Executive Vice President, October 3,
Chief Operating Officer 1996
/s/ Dale M. Hanson
Dale M. Hanson Director October 3,
1996
/s/ Weldon B.
Jolley Director October 3,
Weldon B. Jolley, 1996
Ph.D.
/s/ Jean-Francois
Kurz Director October 3,
Jean-Francois Kurz 1996
/s/ Thomas H.
Lenaugh Director October 3,
Thomas H. Lenagh 1996
/s/ Charles T.
Manatt Director October 3,
Charles T. Manatt 1996
/s/ Stephen D.
Moses Director October 3,
Stephen D. Moses 1996
/s/ Michael Smith
Michael Smith, Director October 3,
Ph.D. 1996
Roberts A. Smith
Roberts A. Smith, Director October 3,
Ph.D. 1996
/s/ Richard W.
Starr Director October 3,
Richard W. Starr 1996
INDEX TO EXHIBITS
4.1 Amended and Restated Certificate of Incorporation of
Registrant, previously filed as Exhibit 3.1 to Registration
Statement No. 33-83952 on Form S-1, which is incorporated herein
by reference, as amended by the Certificate of Merger, dated
November 10, 1994, of ICN Pharmaceuticals, Inc., SPI
Pharmaceuticals, Inc., and Viratek, Inc. with and into ICN Merger
Corp., previously filed as Exhibit 4.1 to Registration Statement
No. 333-08179 on Form S-3, which is incorporated herein by
reference.
4.2 Bylaws of the Registrant, previously filed as Exhibit 3.2 to
Registration Statement No. 33-83952 on Form S-1, which is
incorporated herein by reference.
4.3 Form of Rights Agreement, dated as of November 2, 1994
between the Registrant and American Stock Transfer & Trust
Company as Trustee, previously filed as Exhibit 4.3 to
Registration Statement on Form 8-A, dated November 10, 1994.
4.4 Common Stock Undertaking Agreement, dated July 18, 1996, by
and among Siemens Medical Systems, Inc. and the Registrant,
previously filed as Exhibit 4.6 to the Registration
Statement No. 333-08179 on Form S-3, which is incorporated
herein by reference, as amended by Amendment No. 1, dated as
of September 10, 1996, and Amendment No. 2, dated as of
September 27, 1996.
5. Opinion of David C. Watt, Executive Vice President, General
Counsel and Corporate Secretary of the Registrant, regarding
the legality of the securities being registered.
15.1 Awareness Letter of Independent Public Accountants regarding
Unaudited Interim Financial Information.
15.2 Review Report of Independent Public Accountants for the
period ended March 31, 1996, previously filed as Exhibit 15
to Quarterly Report on Form 10-Q for the quarter ended March 31,
1996, and incorporated herein by reference.
15.3 Review Report of Independent Public Accountants for the
period ended June 30, 1996, previously filed as Exhibit 15 to
Quarterly Report on Form 10-Q for the quarter ended June 30,
1996, and incorporated herein by reference.
23.1 Consent of Coopers & Lybrand L.L.P., Independent Public
Accountants.
23.2 Consent of David C. Watt (contained in his opinion filed as
Exhibit 5).
24. Power of Attorney (included elsewhere in the Registration
Statement).
Exhibit 4.4
AMENDMENT NO. 1
TO
COMMON STOCK UNDERTAKING
THIS AMENDMENT NO. 1 TO COMMON STOCK UNDERTAKING
("Amendment") dated as of September 10, 1996, is entered into by
and among Siemens Medical Systems, Inc. ("Seller"), a Delaware
corporation, and ICN Pharmaceuticals, Inc. ("ICN"), a Delaware
corporation.
W I T N E S S E T H:
WHEREAS, ICN and Seller entered into that certain Asset
Purchase Agreement dated as of June 13, 1996 (the "Purchase
Agreement") pursuant to which, at the Closing thereunder on
July 18, 1996, ICN purchased from Seller certain of the assets,
properties and rights comprising Siemens' Dosimetry Service
Business (the "Business") and ICN assumed from Seller certain
liabilities related to the Business; and
WHEREAS, in connection with the Purchase Agreement, ICN
and Seller entered into a Common Stock Undertaking dated as of
July 18, 1996 ("Common Stock Undertaking") with respect to the
issuance of Common Stock of ICN, $.01 par value per share,
("Common Stock") in payment of the Purchase Price (as defined in
the Purchase Agreement).
A M E N D M E N T:
NOW THEREFORE, the parties hereby agree to amend the
Common Stock Undertaking as follows:
1. All capitalized terms used in this Amendment shall
have the meanings given to them in the Common Stock Undertaking
unless otherwise specifically defined herein.
2. The following new Section 2.4 is added to the end
of Section 2 of the Common Stock Undertaking and shall read as
follows:
"2.4 Arranged Sale. (a) Notwithstanding the exercise
at any time of Seller's Put Option, ICN shall have the
absolute right, exercisable by delivery of an Arranged
Sale Notice (defined below), to arrange the sale for
cash of some or all ICN Shares then owned by Seller
pursuant to the Plan of Distribution (and the
transactions contemplated therein) set forth in ICN's
Prospectus, dated July 22, 1996 ("Arranged Sale").
Each and every Arranged Sale must close and result in
payment of the proceeds thereof to Seller in the
ordinary course of such transactions but in no event
later than the Put Closing Date (each such closing
being an "Arranged Sale Closing"). If some number of
ICN Shares is the subject of a Put Notice and is also
the subject of one or more Arranged Sale Notices, and
if any of such shares remain unsold on the Put Closing
Date, then the provisions of Sections 2.1 and 2.2 shall
apply with respect to such unsold shares, as well as to
such ICN Shares as may be subject of only a Put Notice.
For purposes of this Section 2.4, an "Arranged Sale
Notice" means a written notice given by ICN to Seller
at any time and from time to time between September 10,
1996 and 11:59 p.m. (New York time) on September 24,
1996 advising Seller of ICN's intention to arrange one
or more Arranged Sales and the number of ICN Shares to
be sold pursuant thereto. Seller shall cooperate with
ICN in effecting each Arranged Sale by providing timely
instructions to its brokers, investment bankers, and
other representatives involved in such sale and by
making certificates representing the ICN Shares subject
to such sale and other customary documents available
for timely closing. All proceeds of an Arranged Sale
shall be Seller's proceeds.
(b) Not later than the Put Closing Date, ICN
shall pay to Seller in cash the positive difference, if
any, between (i) the product of $23.512493872 and the
number of ICN Shares sold in all Arranged Sales and
(ii) the proceeds of the sales of such number of ICN
Shares actually received by Seller, less Seller's sales
commissions, underwriting discounts, transfer fees and
out-of-pocket expenses.
(c) On the Put Closing Date, ICN shall also pay
to Seller in cash the positive difference, if any,
between (i) the product of the highest closing price of
a share of ICN's Common Stock on the New York Stock
Exchange during the period commencing on September 10,
1996 and ending at the close of business on
September 24, 1996 and the number of ICN Shares sold as
a result of Arranged Sales occurring on or before
September 24, 1996 and (ii) the product of
$23.512493872 and the number of ICN Shares sold as a
result of Arranged Sales occurring on or before
September 24, 1996.
(d) ICN confirms that it shall receive no payment
or other compensation for its involvement in any
Arranged Sale and ICN shall pay all of its expenses and
the fees and expenses of the brokers, bankers and
advisors that sell the ICN shares.
(e) ICN shall indemnify Seller and any other
person that directly or indirectly through one or more
intermediaries controls, is controlled by, or is under
common control with Seller with respect to any
liability, claim, or damage arising out of the sale of
ICN Shares through an Arranged Sale and shall reimburse
Seller and any other person that directly or indirectly
through one or more intermediaries controls, is
controlled by, or is under common control with Seller
for any legal and other expenses reasonably incurred in
connection with investigating and defending any such
liability, claim, or damage; provided that ICN shall
not be liable in any such case to the extent any
liability, claim, damage, or expense arises out of or
is based on any act or omission of Seller (or such
other person). If for any reason the foregoing
indemnity is unavailable, or is insufficient to hold
harmless Seller in respect of the foregoing, then ICN
shall contribute to the amount paid or payable by
Seller as a result thereof in such proportion as is
appropriate to reflect the relative benefits received
by, and the relative fault of, Seller, on the one hand,
and ICN, on the other, and as further provided in and
in accordance with Section 5.9(d) of the Common Stock
Undertaking."
3. Except as specifically amended herein, the parties
hereby agree that all other terms and provisions of the Common
Stock Undertaking shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 1 to Common Stock Undertaking to be executed as of
the date first above written.
"ICN"
ICN PHARMACEUTICALS, INC.,
a Delaware corporation
By:__________________________
Name:_____________________
Title:____________________
"SIEMENS"
SIEMENS MEDICAL SYSTEMS, INC.,
a Delaware corporation
By:__________________________
Name:_____________________
Title:____________________
By:__________________________
Name:_____________________
Title:____________________
DRAFT: 9/30/96
AMENDMENT NO. 2
TO
COMMON STOCK UNDERTAKING
THIS AMENDMENT NO. 2 TO COMMON STOCK UNDERTAKING
("Amendment") dated as of September 27, 1996, is entered into by
and among Siemens Medical Systems, Inc. ("Seller"), a Delaware
corporation, and ICN Pharmaceuticals, Inc. ("ICN"), a Delaware
corporation.
W I T N E S S E T H:
WHEREAS, ICN and Seller entered into that certain Asset
Purchase Agreement dated as of June 13, 1996 (the "Purchase
Agreement") pursuant to which, at the Closing thereunder on
July 18, 1996, ICN purchased from Seller certain of the assets,
properties and rights comprising Siemens' Dosimetry Service
Business (the "Business") and ICN assumed from Seller certain
liabilities related to the Business;
WHEREAS, in connection with the Purchase Agreement, ICN
and Seller entered into a Common Stock Undertaking dated as of
July 18, 1996 ("Original Common Stock Undertaking") with respect
to the issuance of Common Stock of ICN, $.01 par value per share
("Common Stock") in payment of the Purchase Price (as defined in
the Purchase Agreement);
WHEREAS, ICN and Seller entered into an Amendment No. 1
to Common Stock Undertaking dated as of September 10, 1996
("Amendment No. 1");
WHEREAS, on September 13, 1996 Seller issued to ICN a
Put Notice (within the meaning of Section 2.1 of the Original
Common Stock Undertaking as amended by Amendment No. 1
(collectively, the "Common Stock Undertaking")) ("9/13 Put
Notice"); and
WHEREAS, ICN and Seller desire to further amend the
Common Stock Undertaking.
A M E N D M E N T:
NOW THEREFORE, the parties hereby agree to amend the
Common Stock Undertaking as follows:
1. All capitalized terms used in this Amendment shall
have the meanings given to them in the Common Stock Undertaking
unless otherwise specifically defined herein.
2. Notwithstanding the provisions of Section 2.1 of
the Common Stock Undertaking providing that the 9/13 Put Notice
is irrevocable, Seller and ICN hereby agree that the 9/13 Put
Notice shall be revocable and is hereby revoked by Seller and of
no further force or effect.
3. Section 2.1 of the Common Stock Undertaking is
amended and restated in its entirety as follows:
"2.1 Seller's Put. (a) Notwithstanding any provision
to the contrary herein, at any time after the Closing
Date, and on or before December 16, 1996, the Seller
shall have the absolute right, at its sole option, by
irrevocable written notice to ICN (the "Put Notice"),
to require ICN to purchase, for cash at a closing (the
"Put Closing"), to be held on December 23, 1996 (the
"Put Closing Date") all the ICN Shares then owned by
the Seller for a price per share equal to the
Guaranteed Share Price. The foregoing right in the
Seller to cause the repurchase of its ICN Shares is
referred to herein as the "Seller's Put Option."
(b) In addition to the cash payment referred to in
Section 2.1(a) above, not later than the Put Closing
Date, ICN shall pay to Seller in cash an amount equal
to the interest which would accrue on the sum of the
following amounts: (A) the aggregate amount payable by
ICN to Seller under Section 2.1(a) for the period
beginning on September 28, 1996 through (and including)
December 23, 1996, plus (B) the amount equal to the
product of the number of shares sold in any and all
Arranged Sales times the Guaranteed Share Price, for
the period beginning on September 28, 1996 through (and
including) the date of receipt of the sales proceeds
with respect to all Arranged Sales, plus (C) the amount
equal to the product of the number of shares sold in
any and all Siemens Voluntary Sales times the
Guaranteed Share Price, for the period beginning on
September 28, 1996 through (and including) the date of
receipt of the sales proceeds with respect to all
Siemens Voluntary Sales, at an annual interest rate
equal to one percent (1%) plus that rate from time to
time announced by Bank of America, N.T.&S.A. by its San
Francisco headquarters office as its prime or reference
rate. The term "Siemens Voluntary Sales" shall mean
any sale by Siemens of any of the ICN Shares other than
in an Arranged Sale or upon exercise of the Seller's
Put Option.
4. Section 2.4 of the Common Stock Undertaking is
amended and restated in its entirety as follows:
"2.4 Arranged Sale. (a) Notwithstanding the exercise
at any time of Seller's Put Option, ICN shall have the
absolute right, exercisable by delivery of an Arranged
Sale Notice (defined below), to arrange the sale for
cash of some or all ICN Shares then owned by Seller
pursuant to the Plan of Distribution (and the
transactions contemplated therein) set forth in ICN's
Prospectus, dated July 22, 1996 ("Arranged Sale").
Each and every Arranged Sale must close and result in
payment of the proceeds thereof to Seller in the
ordinary course of such transactions but in no event
later than the Put Closing Date (each such closing
being an "Arranged Sale Closing"). If some number of
ICN Shares is the subject of a Put Notice and is also
the subject of one or more Arranged Sale Notices, and
if any of such shares remain unsold on the Put Closing
Date, then the provisions of Sections 2.1 and 2.2 shall
apply with respect to such unsold shares, as well as to
such ICN Shares as may be subject of only a Put Notice.
For purposes of this Section 2.4, an "Arranged Sale
Notice" means a written notice given by ICN to Seller
at any time and from time to time between September 28,
1996 and 11:59 p.m. (New York time) on December 19,
1996 advising Seller of ICN's intention to arrange one
or more Arranged Sales and the number of ICN Shares to
be sold pursuant thereto. Seller shall cooperate with
ICN in effecting each Arranged Sale by providing timely
instructions to its brokers, investment bankers, and
other representatives involved in such sale and by
making certificates representing the ICN Shares subject
to such sale and other customary documents available
for timely closing. All proceeds of an Arranged Sale
shall be Seller's proceeds.
(b) Not later than the Put Closing Date, ICN
shall pay to Seller in cash the positive difference, if
any, between (i) the product of $23.512493872 and the
number of ICN Shares sold in all Arranged Sales minus
(ii) the proceeds of the sales of such number of ICN
Shares actually received by Seller, less Seller's sales
commissions, underwriting discounts, transfer fees and
out-of-pocket expenses. Interest shall be payable by
ICN to Seller on any amounts payable by ICN to Seller
pursuant to this Section 2.4(b) in accordance with
Section 2.1(b), above.
(c) On the Put Closing Date, ICN shall also pay
to Seller in cash the positive difference, if any (the
"Upside Potential Payment"), between (i) the product of
the highest closing price (the "Highest Closing Price")
of a share of ICN's Common Stock on the New York Stock
Exchange during the period commencing on September 28,
1996 and ending at the close of business on
December 23, 1996 times the sum of (A) the number of
ICN Shares sold as a result of Arranged Sales occurring
on or before December 23, 1996, plus (B) the number of
ICN Shares which ICN shall be required to purchase
pursuant to a Put Notice on the Put Closing Date, minus
(ii) the product of $23.512493872 times the sum of
(A) and (B) in clause (i), above. Notwithstanding the
foregoing provisions of this Section 2.4(c), for
purposes of calculating the Upside Potential Payment,
the Highest Closing Price shall in no event exceed a
maximum amount equal to $28.21 per share irrespective
of the actual highest closing price during the period.
(d) ICN confirms that it shall receive no payment
or other compensation for its involvement in any
Arranged Sale and ICN shall pay all of its expenses and
the fees and expenses of the brokers, bankers and
advisors that sell the ICN shares.
(e) ICN shall indemnify Seller and any other
person that directly or indirectly through one or more
intermediaries controls, is controlled by, or is under
common control with Seller with respect to any
liability, claim, or damage arising out of the sale of
ICN Shares through an Arranged Sale and shall reimburse
Seller and any other person that directly or indirectly
through one or more intermediaries controls, is
controlled by, or is under common control with Seller
for any legal and other expenses reasonably incurred in
connection with investigating and defending any such
liability, claim, or damage; provided that ICN shall
not be liable in any such case to the extent any
liability, claim, damage, or expense arises out of or
is based on any act or omission of Seller (or such
other person). If for any reason the foregoing
indemnity is unavailable, or is insufficient to hold
harmless Seller in respect of the foregoing, then ICN
shall contribute to the amount paid or payable by
Seller as a result thereof in such proportion as is
appropriate to reflect the relative benefits received
by, and the relative fault of, Seller, on the one hand,
and ICN, on the other, and as further provided in and
in accordance with Section 5.9(d) of the Common Stock
Undertaking.
5. Section 2 of the Common Stock Undertaking is
amended to add a new Section 2.5 which shall read as follows:
"2.5 Issuance of Additional ICN Shares as Prepayment.
(a) As a partial prepayment of any and all of its
obligations under the Common Stock Undertaking,
including, without limitation, ICN's obligations to
make the cash payments referred to in Sections 2.1,
2.4(b) and 2.4(c) hereof, ICN hereby agrees to issue to
Seller concurrently with the execution and delivery of
this Amendment, a total of 195,122 additional shares of
ICN Common Stock (the "Additional ICN Shares") having a
fair market value, as of September 27, 1996, equal to
$4,000,000. The value of the Additional ICN Shares
from time to time shall be referred to herein as the
"Prepaid Value." Such Prepaid Value shall also include
the proceeds of any sale by Seller, actually received
by Seller, less Seller's sales commissions,
underwriting discounts, transfer fees and out-of-pocket
expenses, of any of such Additional ICN Shares, and
such sold shares shall no longer be deemed Additional
ICN Shares (and Seller shall elect whether a sale of
Common Stock is a sale of ICN Shares or Additional ICN
Shares and shall give ICN notice, no later than ten
days after any such sale, of the sale of any Additional
ICN Shares). The Additional ICN Shares shall be
registered by ICN's transfer agent in Seller's name
and, upon issuance, shall be validly issued, fully paid
and non-assessable shares of Common Stock of ICN, and
ICN shall cause the delivery to Seller of the legal
opinion referred to in Section 5.8(i) of the Common
Stock Undertaking.
(b) The Additional ICN Shares shall be deemed
"Registrable Securities" for purposes of Section 5 of
the Common Stock Undertaking and entitled to all
registration and related rights pursuant thereto. In
furtherance thereof, in accordance with Section 5.5 of
the Common Stock Undertaking, ICN agrees to file with
the Commission a registration statement on Form S-3 (or
post-effective amendment to registration statement) as
soon as practicable (in any event no later than October
4, 1996) to effect the registration under the Act of
all the Additional ICN Shares and shall use its best
efforts to have the registration statement (or post
effective amendment) declared effective as soon as
practicable.
(c) ICN agrees that, between September 28, 1996
and the Put Closing Date, at the end of each three week
interval during such period, in the event that the
Prepaid Value shall be less than the "Minimum Prepaid
Value" (as defined below), based upon the average of
the closing sale prices of Common Stock on the New York
Stock Exchange during the relevant three-week period,
it will issue (within five business days) to Seller
that number of additional shares of Common Stock,
valued based upon such average of the closing sale
prices, as shall be necessary to cause the Prepaid
Value to equal or exceed the Minimum Prepaid Value.
Such additional shares of Common Stock shall be deemed
for all purposes "Additional ICN Shares" entitled to
all rights accorded "Additional ICN Shares" hereunder,
including, without limitation, all registration rights
of Registrable Securities set forth in Section 5 of the
Common Stock Undertaking; and, for purposes of such
Section, such Section shall be deemed amended to
provide that Seller shall be entitled to demand as many
registrations, including in any one-year period, as
necessary to effect the registration of all such
additional shares. Such additional shares of Common
Stock shall be registered by ICN's transfer agent in
Seller's name and, upon issuance, shall be validly
issued, fully paid and nonassessable, and ICN shall
cause the delivery to Seller of the legal opinion
referred to in Section 5.8(i) of the Common Stock
Undertaking. For purposes of the Common Stock
Undertaking, Minimum Prepaid Value, as of any date,
shall be (A) that dollar amount equal to the cash
payments that are or will (assuming exercise of the
Seller's Put Option) be payable by ICN under Sections
2.1(a), 2.1(b) and 2.4(b), if computed as of such date,
minus (B) the value of the ICN Shares, valued based on
the foregoing average of the closing sale prices, then
owned by Seller.
(d) Upon satisfaction of all of ICN's obligations
under the Common Stock Undertaking, including, without
limitation, payment of the cash amounts referred to in
Sections 2.1(a), 2.1(b), 2.4(b) and 2.4(c) hereof,
Seller shall return to ICN that number of Additional
ICN Shares then held by Seller and, if any, cash equal
to the amount of net proceeds received by Seller upon
the sale of any Additional ICN Shares. Any such cash
paid over to ICN by Seller may be handled as a credit
to ICN for amounts otherwise payable hereunder by ICN;
the return of such Additional ICN Shares, however,
shall not be treated as a credit against any such cash
payments owing by ICN to Seller.
(e) ICN and Seller hereby restate as of the date
hereof their respective representations and warranties
set forth in Section 3 and 4, respectively, of the
Common Stock Undertaking, and ICN hereby restates its
representations and warranties set forth in Section
4.08 and 4.09 of the Purchase Agreement.
6. Except as specifically amended herein, the parties
hereby agree that all other terms and provisions of the Common
Stock Undertaking shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 2 to Common Stock Undertaking to be executed as of
the date first above written.
"ICN"
ICN PHARMACEUTICALS, INC.,
a Delaware corporation
By:__________________________
Name:_____________________
Title:____________________
"SIEMENS"
SIEMENS MEDICAL SYSTEMS, INC.,
a Delaware corporation
By:__________________________
Name:_____________________
Title:____________________
By:__________________________
Name:_____________________
Title:____________________
Exhibit 5
October 3, 1996
ICN Pharmaceuticals, Inc.
3300 Hyland Avenue
Costa Mesa, California 92626
RE: Registration Statement of Form S-3
ICN Pharmaceuticals, Inc.
400,000 Shares of Common Stock
Ladies and Gentlemen:
I am Executive Vice President, General Counsel and Corporate
Secretary of ICN Pharmaceuticals, Inc., a Delaware corporation
(the "Company"), and have been involved with the registration
under the Securities Act of 1933, as amended (the "Act"), of an
aggregate of 400,000 shares (the "Shares") of common stock, $.01
par value of the Company, being offered pursuant to the above
described Registration Statement.
In connection with the offering of the Shares, I have
examined the Amended and Restated Certificate of Incorporation,
By-laws and other corporate records of the Company, and such
other documents I have deemed relevant to this opinion.
Based and relying solely upon the foregoing, it is my
opinion that 195,122 of the Shares are duly authorized, validly
issued, fully paid and nonassessable and the balance of the
Shares, when issued, will be duly authorized, validly issued,
fully paid and nonassessable.
This opinion may be filed as an exhibit to the above
described Registration Statement. Consent is also given to the
reference to me under the caption "Legal Matters" in such
Registration Statement as having passed upon the validity of the
issuance of the Shares. In giving this consent, I do not hereby
admit that I come within the category of persons whose consent is
required under Section 7 of the Act or the rules and regulations
of the Securities and Exchange Commission promulgated thereunder.
Respectfully submitted,
/s/ David C. Watt
David C. Watt
Executive Vice President,
General Counsel and Corporate Secretary
Exhibit 15.1
Awareness Letter
October 3, 1996
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: ICN Pharmaceuticals, Inc.
Registration Statement on Form S-3 (File No.
333-)
We are aware that our reports dated July 30, 1996 and April
26, 1996, on our reviews of interim financial information of ICN
Pharmaceuticals, Inc. for the three and six month periods ended
June 30, 1996 and for the three month period ended March 31, 1996
and included in the Company's quarterly reports on Form 10-Q for
the periods then ended, are incorporated by reference in this
registration statement. Pursuant to Rule 436(c) under the
Securities Act of 1933, this report should not be considered a
part of the registration statement prepared or certified by us
within the meaning of Sections 7 and 11 of that Act.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement on Form S-3 (File No. 333- ) of our report, which
includes, as it relates to 1994 and 1993, an emphasis of matter
paragraph related to certain transactions between affiliates,
dated February 19, 1996, appearing in the Annual Report on Form
10-K of ICN Pharmaceuticals, Inc. for the year ended December 31,
1995, on our audits of the consolidated financial statements and
financial statement schedule listed in the index on page 24 of
the Form 10-K. We also consent to the reference to our firm
under the caption "Independent Public Accountants."
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Los Angeles, CA
October 3, 1996
