As filed with the Securities and Exchange Commission on September 24, 1997
Registration No. 333-35167
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
Amendment No. 1 to
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: [ ]
<TABLE>
<CAPTION>
Calculation of Registration Fee
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Title of Each Class Proposed Maximum Proposed Maximum
of Securities to be Amount to be Offering Price Per Aggregate Offering Amount of Registration
Registered Registered Share (1) Price Fee
- ------------------- ---------------- ------------------- ------------------- ----------------------
<S> <C> <C> <C> <C>
Common Stock, 1,500,864 share $36.12 $54,218,712 $16,429.91
$.01 par value per (3)
share (2)
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<FN>
(1) 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 August
29, 1997 (which date is within five business days prior to the
date of the filing of this Registration Statement).
(2) Also includes associated Preferred Stock Purchase Rights.
(3) Pursuant to Rule 416, an indeterminate number of additional
shares of Common Stock are registered hereunder which may be
issued in the event that applicable antidilution provisions with
respect to the exchange of the Certificates become operative.
(4) A fee of $16,429.91 was paid upon the initial filing of this
Registration Statement on September 8, 1997.
</FN>
</TABLE>
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.
Subject to Completion, Dated September 24, 1997
PROSPECTUS
ICN PHARMACEUTICALS, INC.
1,500,864 SHARES OF COMMON STOCK
This Prospectus relates to an offering of up to 1,500,864 shares
of Common Stock, par value $0.01 per share (the "Common Stock") of ICN
Pharmaceuticals, Inc., a Delaware corporation ("ICN" or the
"Company"), that may be issued upon the exchange of the 5-5/8%
Exchangeable Certificates 1986-2001 in the aggregate principal amount
of Swiss Francs 100,000,000 (the "Certificates") of Xr Capital
Holding, a Guernsey, Channel Islands trust. From and after the
combination on November 10, 1994 (the "Merger") of ICN
Pharmaceuticals, Inc. ("Old ICN"), SPI Pharmaceuticals ("SPI"),
Viratek, Inc. ("Viratek") and ICN Biomedicals, Inc. ("Biomedicals")
(collectively the "Predecessor Companies"), the Certificates have been
exchangeable into shares of Common Stock. In conjunction with the
Merger, 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., and ICN Merger Corp. was renamed ICN
Pharmaceuticals, Inc.
As of August 29, 1997, the Certificates were exchangeable at a
price of $26.695 per share, subject to adjustment for dilutive issues.
Accordingly, each Certificate representing 5000 Swiss Francs principal
amount is exercisable into 112.83 shares of Common Stock. Cash will be
paid in lieu of fractional shares. For the purposes of calculating the
number of shares issued on exchange of the Certificates, the exchange
rate of 1.66 Swiss Francs per U.S. Dollar is used throughout the life
of the Certificates. The Company has agreed to bear all expenses in
connection with the registration of the Common Stock being offered by
the Certificate holders.
The Common Stock is traded on the New York Stock Exchange
("NYSE") under the symbol "ICN." On August 29, 1997, the closing sale
price per share, as reported by the NYSE, was $36.25.
AN INVESTMENT IN THE COMMON STOCK 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 September __,
1997.
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.
[RED HERRING]
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 450 Fifth Street, N.W., Judiciary
Plaza, 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 can be
obtained (at prescribed rates), by writing to the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549. Such material also is available through the Commission's
Website (http://www.sec.gov). Such material also can 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 Common Stock. 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 Common Stock 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, 1996, dated March 31, 1997, as amended by Form
10-K/A, dated July 24, 1997.
2. Quarterly Report on Form 10-Q for the three months ended
March 31, 1997, dated May 15, 1997.
3. Quarterly Report on Form 10-Q for the three months ended
June 30, 1997, dated August 14, 1997.
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
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date of this Prospectus and prior to the termination of the
offering of the Common Stock 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
ICN is a multinational pharmaceutical company that develops,
manufactures, distributes and sells pharmaceutical, research and
diagnostic products and provides radiation monitoring services. The
Company pursues a strategy of international expansion which includes
(i) the consolidation of the Company's leadership position in Eastern
Europe and Russia; (ii) the acquisition of high margin products that
complement existing product lines and can be registered and introduced
into additional markets to meet the specific needs of those markets;
and (iii) the creation of a pipeline of new products through internal
research and development, as well as strategic partnerships and
licensing arrangements. References to ICN or the Company includes the
subsidiaries of ICN, unless the context requires otherwise.
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. Among the Company's products 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
TRADEMARK]. Virazole[REGISTERED TRADEMARK] 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 human
immundeficiency virus (HIV). In the United States, Virazole[REGISTERED
TRADEMARK] 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. On
July 28, 1995, the Company entered into an Exchange License and Supply
Agreement (the "Agreement") and a Stock Purchase Agreement with a
subsidiary of Schering-Plough Corporation ("Schering") to license the
Company's proprietary drug ribavirin as a treatment for chronic
hepatitis C in combination with Schering's alpha interferon (the
"Combination Therapy"). The 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 the drug, 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 in the countries of the European
Economic Community. In addition, Schering will purchase up to
$42,000,000 in Common Stock upon the achievement of certain regulatory
milestones. Under the Agreement, Schering is responsible for all
clinical developments and regulatory activities worldwide. During
1996, clinical trials commenced with the enrollment of more than 2000
patients. See "Risk Factors -- No Assurance of Successful Development
and Commercialization of Future Products."
The Company believes it is positioned to expand its presence in
the pharmaceutical markets in Eastern and Central Europe. In 1991, a
75% interest was acquired in Galenika Pharmaceuticals ("Galenika"), a
large drug manufacturer and distributor in Yugoslavia. Galenika was
subsequently renamed ICN Yugoslavia. This acquisition added new
products and significantly expanded the sales volume of the Company.
With the investment in ICN Yugoslavia, the Company became one of the
first Western pharmaceutical companies to establish a direct
investment in Eastern Europe. ICN Yugoslavia 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, the United Nations Security Council adopted
resolutions, that in December 1995, suspended and, in October 1996,
lifted economic sanctions imposed on the Federal Republic of
Yugoslavia since May of 1992. The suspension and lifting of economic
sanctions enabled ICN Yugoslavia to resume exporting certain of its
product lines to Russia, other Eastern European Markets, Africa, the
Middle East and the Far East. See "Risk Factors -- Risk of Operation
in Yugoslavia."
In 1995, the Company acquired a 75% interest in Oktyabr, one of
the largest pharmaceutical companies in the Russian Federation. In
1996, the Company purchased an additional 15% interest in Oktyabr,
raising its ownership to 90%. Additionally, the Company greatly
expanded its Russian presence through the acquisition of two
additional pharmaceutical companies: Leksredstva, located in Kursk,
and Polypharm, located in Chelyabinsk. The combined sales of these
three companies establish the Company among the largest pharmaceutical
companies in Russia today and a pioneer and leader in the
privatization movement. In 1996, the Company acquired a 60% interest
in Alkaloida Chemical Co. ("Alkaloida"), one of the largest
pharmaceutical companies in terms of sales in Hungary and a major
world producer of morphine and related compounds. The Company is
currently exploring acquisition opportunities in Poland, Russia and
the Czech Republic. See "Risk Factors -- Risk of Operations in Eastern
Europe, Russia and China."
In August 1997, ICN Puerto Rico, Inc. (the "Subsidiary") acquired
the worldwide rights (except India) to seven Roche products:
Alloferin, Ancotil, Glutril, Limbitrol, Mestinon, Prostigmin and
Protamin from F. Hoffmann-La Roche Ltd. ("Hoffmann"). The Subsidiary
also obtained worldwide rights outside of the United States and India
to Efudix and Librium. In addition, the Subsidiary obtained an option
to obtain the U.S. rights to these two products.
Also in August 1997, the Subsidiary purchased the Hoffmann's
Humacao, Puerto Rico manufacturing plant (the "Humacao, Puerto Rico
Plant"), which meets current U.S. Food and Drug Administration Good
Manufacturing Practices for various products, including: Aleve,
Naprosyn, EC Naprosyn, Anaprox and Cytovene, for $55 million, payable
in a combination of cash and the assumption of certain debt.
In addition to its pharmaceutical operations, the Company also
develops, manufacturers and sells, through its wholly-owned
subsidiary, ICN Biomedical, Inc., a broad range of research and
diagnostic products 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 Common Stock involves a high degree of risk
and may not be appropriate for investors who cannot afford to lose
their entire investment. A holder of the Certificates should be fully
aware of the risk factors set forth herein, when evaluating whether to
convert their Certificates into Common Stock. 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 may 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 80% of the Company's net sales for 1995 and
1996, respectively, and approximately 79% and 81% of the Company's net
sales for the six months ended June 30, 1996 and 1997, 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. The Company does not currently have a hedging program to
protect against foreign currency exposure and, in certain of the
countries in which the Company operates, no effective hedging program
is available.
RISK OF OPERATIONS IN YUGOSLAVIA
ICN Yugoslavia represents a material part of the Company's
business. Approximately 46% and 44% of the Company's net sales for
1995 and 1996, respectively, were from ICN Yugoslavia. In addition,
approximately 39% and 62% of the Company's operating income for 1995
and 1996, respectively, and approximately 46% and 31% of the Company's
net sales for the six months ended June 30, 1996 and 1997,
respectively, were from ICN Yugoslavia. ICN Yugoslavia, a 75% owned
subsidiary, operates in a business environment that is subject to
significant economic volatility and political instability. The
economic conditions in Yugoslavia include continuing liquidity
problems, unemployment, a weakened banking system and a high trade
deficit. Between May 1992 and December 1995, ICN Yugoslavia operated
under United Nations' sanctions that severely limited the ability to
import raw materials and prohibited all exports. While the sanctions
have been suspended, certain risks, such as hyperinflation, currency
devaluations, wage and price controls and potential government action
could continue to have material adverse impact on the Company's
financial position and results of operations.
During 1992 and 1993, the rate of inflation in Yugoslavia was
over one billion percent per year. Inflation was dramatically reduced
in January 1994 when the government enacted a stabilization program
designed to strengthen its currency. This program reduced the
annualized inflation rate to five percent by the end of 1994,
increased the availability of hard currency, stabilized the exchange
rate of the dinar and improved the overall economy. In 1995, the
effectiveness of the stabilization program began to wane, resulting in
a decline in the availability of hard currency and an acceleration of
inflation to an annual rate of 90% by year end. In November 1995, the
dinar was devalued from a rate of 1.4 dinars per U.S.$1 to a rate of
4.7 dinars per U.S.$1.
During 1996, inflation increased further to an annual rate of 95%
and the availability of hard and local currency continued to decline.
The lifting of sanctions by the United Nations eventually provided
opportunities to export outside of Yugoslavia. A policy of strict
monetary control in Yugoslavia has kept inflation at a current annual
level of approximately 40%. However, Yugoslavia has not fully
recovered the international status it held before sanctions were
imposed and management believes that economic reform and privatization
is necessary before the economy will improve dramatically. The
Yugoslavian government is still negotiating to regain membership in
the International Monetary Fund and World Bank. Management believes
that the 1997 Presidential and parliamentary elections may result in
political change that would lead to economic reform, although such
elections also have the potential to create additional political
instability and currency devaluations.
In an effort by the National Bank of Yugoslavia to control
inflation through tight monetary controls, Yugoslavia is now
experiencing severe liquidity problems. This has resulted in longer
collection periods on ICN Yugoslavia's receivables. Most of ICN
Yugoslavia's customers are slow to pay due to delays of health care
payments by the government. This has also resulted in ICN Yugoslavia
being unable to make timely payments on its payables. ICN Yugoslavia
is attempting to reduce its receivables and improve its cash flow by
restricting future sales; however, these actions may result in sales
and earnings in 1997 that are lower than such amounts in 1996.
ICN Yugoslavia began the year with a net monetary asset exposure
of $134,000,000 which was subject to foreign exchange loss if a
devaluation of the dinar were to occur. During the first six months of
1997, the Company was successful in reducing its monetary exposure by
converting dinar denominated accounts receivable into notes receivable
from the Yugoslavian government payable in dinars, but fixed in dollar
amounts. The first conversion was made early in the first quarter with
$50,000,000 of accounts receivable converted into a one year note with
interest at the European LIBOR rate plus one percent. A second
conversion was arranged in the middle of the first quarter through an
agreement with the Yugoslavian government to purchase an additional
$50,000,000 of drugs. The accounts receivable under this agreement
were converted into a non-interest bearing short term note receivable
that has special payment guarantees from the Serbian government with
the payment fixed in dollar amounts. Approximately $30,000,000 of
accounts receivable were converted to notes receivable in the first
quarter under this arrangement and the remainder was converted in the
second quarter. The second agreement also allows the Company to offset
payroll tax obligations against outstanding accounts receivable
balances. As of June 30, 1997, ICN Yugoslavia had a net monetary asset
position of $49,000,000 which would be subject to foreign exchange
loss if a devaluation of the dinar were to occur.
The Company was able to reduce its overall accounts receivable
balance from the beginning of the year through collections and the
conversion of $100,000,000 of accounts receivable into notes
receivable discussed above. As of June 30, 1997, the accounts
receivable balance was $93,056,000. Based on current levels of
collections, the Company will impose even stricter credit terms on its
customers which will likely result in lower future domestic sales. The
willingness of the government to provide the Company protection
against devaluation on its receivables in exchange for longer payment
terms is a reflection of the strict adherence to government policy on
controlling inflation by limiting the amount of hard currency in
circulation. This policy was initially established with the start of
the stabilization program in 1994. The Company is currently
negotiating an arrangement with the government of Yugoslavia under
which ICN Yugoslavia would commit to continue to provide products, in
dollar denominated sales, in an amount up to $50,000,000 per calendar
quarter for one year, and the government would pay a minimum of
$9,000,000 per month toward outstanding receivables. However, at no
point in time can the amount due to ICN Yugoslavia from the government
under this arrangement exceed $200,000,000, including both accounts
and notes receivable.
With 80% of ICN Yugoslavia sales arising from government or
government-sponsored entities, ICN Yugoslavia is financially dependent
on the Yugoslavian government. Additionally, ICN Yugoslavia is also
subject to credit risk in that 60% of its December 31, 1996, domestic
accounts receivables and 31% of its year-to-date sales are with three
major customers.
ICN Yugoslavia 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 ICN Yugoslavia products. During 1995, 1996
and the first six months of 1997, ICN Yugoslavia 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 ICN Yugoslavia 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 ICN Yugoslavia receives on its
products. Although the Company expects that ICN Yugoslavia 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, RUSSIA AND CHINA
The Company has invested a total of approximately $21,900,000 for
majority interests in three pharmaceutical companies located in
Russia. The Company also has invested approximately $22,100,000 in its
60.0% interest in ICN Hungary. In September 1996, the Company
committed to invest an aggregate of $24,000,000 in a joint venture
with Jiangsu Provincial Wuxi Pharmaceutical Corporation ("Wuxi"), a
Chinese state-owned pharmaceutical corporation. Although the Company
believes that investment in Russia, Eastern Europe, China and other
emerging markets offers access to growing world markets, the economic
and political conditions in such countries are uncertain. See "--
Dependence on Foreign Operations."
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 TRADEMARK] 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 TRADEMARK] in the countries of the European Union,
where the Company has retained marketing rights under the License
Agreement. It may be desirable or necessary for the Company to 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 TRADEMARK] 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 TRADEMARK] 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 TRADEMARK] to treat specified human viral
diseases. If future development of Virazole[REGISTERED TRADEMARK] 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 the use of Virazole[REGISTERED
TRADEMARK] 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 TRADEMARK] and/or its use in certain foreign
countries where Virazole[REGISTERED TRADEMARK] 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 TRADEMARK] 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 or financed with the issuance of Common Stock or securities
convertible into Common Stock, 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 a consolidated class action lawsuit
alleging, among other things, violations of federal securities laws
(the "Class Action"). Plaintiffs alleged that ICN made
misrepresentations of material facts and omitted to state material
facts in 1994 and 1995 concerning the Company's NDA for the use of
Virazole[REGISTERED TRADEMARK] for monotherapy treatment of chronic
hepatitis C (the "Hepatitis C NDA"). In July 1997, the Company and the
plaintiffs in the Class Action agreed to settle the litigation for the
sum of $15.0 million. The settlement is in the process of being
documented and is subject to the approval of the court. A settlement
hearing is expected to be held in the fall of 1997. The Company
intends to urge the district court to approve the settlement of the
Class Action. If the settlement is not approved, and the Class Action
proceeds to trial, the ultimate outcome of any such trial cannot be
predicted with certainty, and any unfavorable outcome could have a
material adverse effect on the Company.
Pursuant to an Order Directing Private Investigation and
Designating Officers to Take Testimony, entitled In the Matter of ICN
Pharmaceuticals, Inc., (P-177) (the "Order"), a private investigation
is being conducted by the SEC with respect to certain matters
pertaining to the status and disposition of the Hepatitis C NDA. As
set forth in the Order, the investigation concerns whether, during the
period June 1994 through February 1995, the Company, persons or
entities associated with it and others, in the offer and sale or in
connection with the purchase and sale of ICN securities, engaged in
possible violations of Section 17(a) of the Securities Act and Section
10(b) of the Exchange Act and Rule 10b-5 thereunder, 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 and continues to produce documents to the SEC pursuant to
its request and the SEC has taken the depositions of certain current
and former officers, directors and employees of the Company.
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, Chairman and Chief Executive Officer, are subjects of the
investigation. The Company has and continues to cooperate in the
production of documents pursuant to the Subpoenas. A number of current
and former employees of the Company have been interviewed by the
government in connection with the investigation.
The ultimate outcome of the SEC and Grand Jury investigations
cannot be predicted and any unfavorable outcome could have a material
adverse effect on the Company.
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 of the Company, as described under
"Potential Litigation Exposure," 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. In
addition, Mr. Panic, who served as Prime Minister of Yugoslavia from
July 1992 to March 1993, remains active in Yugoslavian politics and
may again serve in a governmental office in the future.
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 TRADEMARK]. While to date no material adverse
claim for personal injury resulting from allegedly defective products,
including Virazole[REGISTERED TRADEMARK], 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 or of existing drugs or compounds for
new applications 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[REGISTERED TRADEMARK], 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[REGISTERED TRADEMARK] 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. In
addition, a number of companies and researchers are engaged in
developmental efforts for the treatment of Hepatitis C, including
through the use of protease inhibitions. 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.
INDEBTEDNESS AND OTHER OBLIGATIONS OF THE COMPANY
As of June 30, 1997, after giving effect to the issuance in
August 1997 of $275 million of aggregate principal amount of 9 1/4%
Senior Notes due 2005, the Company has outstanding long-term debt of
$497.0 million. The indenture for certain of the Company's debt
contains, and other debt instruments of the Company may in the future
contain, a number of significant covenants that, among other things,
restrict the ability of the Company to dispose of assets, incur
additional indebtedness, repay other indebtedness or amend other debt
instruments, pay dividends, create liens on assets, enter into
investments or acquisitions, engage in mergers or consolidations, make
capital expenditures or engage in certain transactions with
subsidiaries and affiliates, and otherwise restrict certain corporate
activities. The Company's strategy contemplates continued strategic
acquisitions, and a portion of the cost of such acquisitions may be
financed through additional indebtedness. There can be no assurance
that financing will continue to be available on terms acceptable to
the Company or at all. In the absence of such financing, the Company's
ability to respond to changing business and economic conditions, to
fund scheduled investments and capital expenditures, to make future
acquisitions or developments and to absorb adverse operating results
may be adversely affected.
EFFECT OF CONVERSION OF THE SERIES B CONVERTIBLE
PREFERRED STOCK - OUTSTANDING PUT RIGHT
On October 9, 1996, the Company issued 50,000 shares of Series B
Convertible Preferred Stock ("Series B Preferred Stock"). As of August
29, 1997, 18,749 shares of the Series B Preferred Stock remained
outstanding (with the remaining shares of Series B Preferred Stock
having been converted into an aggregate of 1,392,116 shares of Common
Stock). The exact number of shares of Common Stock issuable upon
conversion of all of, or as dividends on, the remaining outstanding
shares of Series B Preferred Stock will vary inversely with the market
price of the Common Stock. The holders of Common Stock may be
materially diluted by conversion of the Series B Preferred Stock
depending on the future market price of the Common Stock and the
discount rate applied to determine the number of shares of Common
Stock issuable upon conversion. On August 29, 1997, the last reported
sales price of the Common Stock on the NYSE was $36.25 per share. If
such market price were used to determine the number of shares of
Common Stock issuable upon conversion of the remaining outstanding
shares of Series B Preferred Stock and using the present discount rate
of 13%, the Company would issue a total of approximately 611,364
shares of Common Stock, if all shares of the outstanding Series B
Preferred Stock were converted. To the extent the market price of the
Common Stock used for determination of the conversion of the Series B
Preferred Stock is lower or higher than such price as of any date on
which shares of Series B Preferred Stock are converted, the Company
would issue more or fewer shares of Common Stock than reflected in
such estimate, and such difference could be material. In addition, the
discount rate that applies in calculating the number of shares of
Common Stock issuable upon conversion is subject to further increases
under certain circumstances, with any such increases resulting in more
shares of Common Stock being issuable upon conversion.
The Company has granted to certain persons the right to put
709,988 shares of Common Stock to the Company at $30 per share in
January 2000, subject to acceleration under certain circumstances at a
put price equal to $22.50 plus 10% per annum from December 23, 1996.
This put right would be terminated (in whole or in part) if the market
price of the Common Stock exceeds certain specified levels.
USE OF PROCEEDS
This Prospectus relates to the offering of up to 1,500,864 shares
of Common Stock that may be issued to the Certificates holders, upon
the exchange of the Certificates from and after the Merger described
above. The Company will not receive any of the proceeds from the sale
of the Common Stock offered hereby.
For information regarding their exchange rights, Certificate
holders are referred to the terms of the Certificates and the related
agreements pertaining to such rights, copies of the indenture and
related documents are attached as an exhibit to the registration
statement of which this prospectus is a part.
The transfer agent for the Common Stock is the American Stock
Transfer & Trust Company unless and until a successor is selected by
the Company.
PLAN OF DISTRIBUTION
This Prospectus has been prepared for the benefit of the
Certificate holders who exchange Certificates for the Common Stock.
There can be no assurance that any of the Certificate holders
will exchange any of the Certificates into Common Stock. To the extent
required, the Company will use its best efforts to file, during any
period in which exchanges 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.
LEGAL MATTERS
The legality of the Common Stock 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
September 3, 1997, Mr. Watt beneficially owned 129,673 shares of
Common Stock, including 127,678 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, 1996 and 1995,
and the consolidated statements of income, stockholders' equity and
cash flows for each of the three years in the period ended December
31, 1996, incorporated by reference in this Prospectus, have been
included herein in reliance on the report, which includes an emphasis
of matter paragraph related to the Company's net monetary assets at
ICN Yugoslavia which would be subject to foreign exchange loss if a
devaluation of the dinar were to occur, 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, 1997 and
1996, 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 report included in the Company's
quarterly report on Form 10-Q for the quarter ended June 30, 1997, and
incorporated by reference herein, states 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. The Certificate holders will not bear any of
these expenses.
<TABLE>
<S> <C>
SEC Filing Fee.........................................$16,429.91
Legal Fees and Expenses................................$25,000.00
Accounting Fees and Expenses...........................$20,000.00
Miscellaneous..........................................$ 5,000.00
Total ..................................$66,429.91
</TABLE>
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 By laws 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 Xr Capital Holding Trust Instrument between ICN
Pharmaceuticals, Inc. and Ansbacher (C.I.) Limited dated as of
September 17, 1986; Subscription Agreement between Ansbacher
(C.I.) Limited, ICN Pharmaceuticals, Inc., SPI Pharmaceuticals,
Inc., and Banque Gutzwiller, Kurz, Bungener S.A. and the other
financial institutions named therein dated as of September 17,
1986; Bond Issue Agreement between ICN Pharmaceuticals, Inc.
and Ansbacher (C.I.) Limited dated as of September 17, 1986 and
Exchange Agency Agreement between ICN Pharmaceuticals, Inc.,
SPI Pharmaceuticals, Inc., Banque Gutzwiller, Kurz, Bungener
S.A., and the other financial institutions named therein dated
as of September 17, 1986, previously filed as Exhibit 10.36 to
Annual Report on Form 10-K for the fiscal year ended November
30, 1986, which is incorporated herein by reference.*
4.5 Supplemental Agreement between ICN Merger Corp. and Bank Leu AG
dated October 14, 1994.**
4.6 Indenture between ICN Pharmaceuticals, Inc. and American Stock
Transfer and Trust Company, as trustee, relating to
$115,000,000 8 1/2% Convertible Subordinated Notes due 1999
(incorporated by reference to the Company's Annual Report on
Form 10-K for the Year ended December 31, 1996).*
4.7 Indenture, dated as of August 14, 1997, by and among ICN and
United States Trust Company of New York (incorporated by
reference to the Company's Quarterly Report on Form 10-Q for
the Three Months ended June 30, 1997).*
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 Accountant regarding Unaudited
Interim Financial Information.
15.2 Review Report of Independent Accountants for the period ended
June 30, 1997, previously filed as Exhibit 15.1 to Quarterly
Report on Form 10-Q for the quarter ended June 30, 1997, 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).**
- --------------------
[FN]
* None of the other indebtedness of the Registrant exceeds 10% of
its total consolidated assets. The Registrant will furnish copies
of the instruments relating to such other indebtedness upon
request.
** Previously filed.
</FN>
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 September 24,1997.
ICN PHARMACEUTICALS, INC.
/s/ David C. Watt
-------------------------------
By: David C.Watt
Executive Vice President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITY INDICATED.
SIGNATURE TITLE DATE
*
- ------------------------
Milan Panic Chairman and Chief Executive September 24, 1997
Officer (Principal Executive
Officer)
*
- ------------------------ Executive Vice President, September 24, 1997
John E. Giordani Chief Financial Officer
(Principal Financial and
Accounting Officer)
*
- ------------------------
Norman Barker, Jr. Director September 24, 1997
*
- ------------------------
Senator Birch E. Bayh, Jr. Director September 24, 1997
*
- ------------------------
Alan F. Charles Director September 24, 1997
*
- ------------------------
Roger Guillemin, M.D., Director September 24, 1997
Ph.D.
*
- ------------------------
Adam Jerney Director, President, Chief
Operating Officer September 24, 1997
*
- ------------------------
Dale M. Hanson Director September 24, 1997
*
- ------------------------
Weldon B. Jolley, Ph.D. Director September 24, 1997
*
- ------------------------
Jean-Francois Kurz Director September 24, 1997
*
- ------------------------
Thomas H. Lenagh Director September 24, 1997
*
- ------------------------
Charles T. Manatt Director September 24, 1997
*
- ------------------------
Stephen D. Moses Director September 24, 1997
*
- ------------------------
Michael Smith, Ph.D. Director September 24, 1997
*
- ------------------------
Roberts A. Smith, Ph.D. Director September 24, 1997
*
- -------------------------
Richard W. Starr Director September 24, 1997
*By: David C. Watt
Power of Attorney
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 By laws 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 Xr Capital Holding Trust Instrument between ICN
Pharmaceuticals, Inc. and Ansbacher (C.I.) Limited dated as of
September 17, 1986; Subscription Agreement between Ansbacher
(C.I.) Limited, ICN Pharmaceuticals, Inc., SPI Pharmaceuticals,
Inc., and Banque Gutzwiller, Kurz, Bungener S.A. and the other
financial institutions named therein dated as of September 17,
1986; Bond Issue Agreement between ICN Pharmaceuticals, Inc.
and Ansbacher (C.I.) Limited dated as of September 17, 1986 and
Exchange Agency Agreement between ICN Pharmaceuticals, Inc.,
SPI Pharmaceuticals, Inc., Banque Gutzwiller, Kurz, Bungener
S.A., and the other financial institutions named therein dated
as of September 17, 1986, previously filed as Exhibit 10.36 to
Annual Report on Form 10-K for the fiscal year ended November
30, 1986, which is incorporated herein by reference.*
4.5 Supplemental Agreement between ICN Merger Corp. and Bank Leu AG
dated October 14, 1994.**
4.6 Indenture between ICN Pharmaceuticals, Inc. and American Stock
Transfer and Trust Company, as trustee, relating to
$115,000,000 8 1/2% Convertible Subordinated Notes due 1999
(incorporated by reference to the Company's Annual Report on
Form 10-K for the Year ended December 31, 1996).*
4.7 Indenture, dated as of August 14, 1997, by and among ICN and
United States Trust Company of New York (incorporated by
reference to the Company's Quarterly Report on Form 10-Q for
the Three Months ended June 30, 1997).*
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 Accountant regarding Unaudited
Interim Financial Information.
15.2 Review Report of Independent Accountants for the period ended
June 30, 1997, previously filed as Exhibit 15.1 to Quarterly
Report on Form 10-Q for the quarter ended June 30, 1997, 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).**
- ------------------
[FN]
* None of the other indebtedness of the Registrant exceeds 10% of
its total consolidated assets. The Registrant will furnish
copies of the instruments relating to such other indebtedness
upon request.
** Previously filed.
</FN>
Exhibit 15.1
------------
September 23, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: ICN Pharmaceuticals, Inc.
Amendment No. 1 to Registration Statement on Form S-3
(File No. 333-35167)
We are aware that our report dated July 31, 1997, on our review
of interim financial information of ICN Pharmaceuticals, Inc. for the
three and six month periods ended June 30, 1997 and included in the
Company's quarterly report on Form 10-Q for the quarter then ended is
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 ACCOUNTANTS
We consent to the incorporation by reference in this Amendment No. 1
to Registration Statement on Form S-3 (File No. 333-35167) of our
report dated March 4, 1997, which includes an emphasis of a matter
paragraph related to the Company's net monetary assets at ICN
Yugoslavia, which would be subject to foreign exchange loss if a
devaluation of the Yugoslavian dinar were to occur, on our audits of
the consolidated financial statements and financial statement schedule
of ICN Pharmaceuticals, Inc. We also consent to the reference to our
firm under the caption "Independent Public Accountants."
Coopers & Lybrand L.L.P.
Newport Beach, California
September 23, 1997
