As filed with the Securities and Exchange Commission on March 13, 1998
Registration No. 333 - 38901
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
POST-EFFECTIVE 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: [ ]
Calculation of Registration Fee
- -------------------------------------------------------------------------------
Title of Each
Class of Proposed Proposed
Securities Maximum Maximum Amount of
to be Amount to be Offering Price Aggregate Registration
Registered(1) Registered(2) Per Share Offering Price Fee
- --------------- -------------- -------------- --------------- ------------
Common Stock, 551,595
$.01 par value shares(3) (6) (6) (6)
per share
Common Stock, 31,700
$.01 par value shares(4) (6) (6) (6)
per share
Common Stock, 291,648
$.01 par value shares(5) (6) (6) (6)
per share
- --------------------------------------------------------------------------------
(1) Also includes associated Preferred Stock Purchase Rights.
(2) Pursuant to Rule 416(a) under the Securities Act of 1933, as amended,
an indeterminate number of additional shares of Common Stock are
registered hereunder that may be issued in the event that applicable
antidilution provisions with respect to the exchange of the
Certificates become operative, and an indeterminate number of
additional shares of Common Stock are registered hereunder that may be
issued by reason of any stock split, stock dividend or similar
transaction involving the Common Stock.
(3) Up to 551,595 shares of Common Stock issuable upon the exchange of the
Certificates were registered on Form S-3 as originally filed with the
Securities and Exchange Commission on October 28, 1997.
(4) By pre-effective Amendment No. 1 to Form S-3, filed with the
Securities and Exchange Commission on December 19, 1997, an additional
46,818 shares of Common Stock issuable upon the exercise of Warrants
by H.J. Meyers & Co., Inc. or its designees, and an additional 31,700
shares of Common Stock were registered. Because the Warrants expired
at 5:01 p.m. on January 27, 1998, this Registration Statement, as
amended, does not include the Common Stock issuable upon the exercise
of the Warrants.
(5) Pursuant to Rule 416(b) under the Securities Act, the number of shares
of Common Stock covered by this Registration Statement includes
291,648 additional shares of Common Stock issuable by reason of the
three for two stock split in the nature of a dividend payable on March
16, 1998 to holders of record of the Common Stock on February 17,
1998.
(6) A fee of $7,882.17 was paid upon the initial filing of this
Registration Statement on October 28, 1997 and a fee of $1,147.95 was
paid upon the filing of the pre-effective Amendment No. 1 to this
Registration Statement on December 19, 1997. Because the additional
shares are being registered pursuant to Rule 416, no additional filing
fee is being paid.
THIS POST-EFFECTIVE AMENDMENT NO. 1 SHALL BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(c) OF THE SECURITIES ACT OF 1933 ON SUCH DATE AS
THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SECTION 8(c),
MAY DETERMINE.
Subject to Completion, Dated March 13, 1998
PROSPECTUS
ICN PHARMACEUTICALS, INC.
874,943 SHARES OF COMMON STOCK
This Prospectus relates to an offering of up to 827,393 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 new and old Bio Capital Holding
Swiss Franc Exchangeable Certificates due February 17, 2002, in the
aggregate principal amounts of Swiss Francs 37,870,000 and 1,745,000,
respectively (collectively, the "Certificates"), of Bio 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. ICN has notified the trustee for Bio Capital Holding,
Ansbacher (Guernsey) Limited, of its intention to redeem the new
Certificates on April 28, 1998 at 100% of principal amount plus accrued
interest. Certificate holders will have the right to convert the new
Certificates into Common Stock prior to redemption at a conversion rate of
$31.431 based on an exchange rate of 1.494 Swiss Francs per $1.00. If all
new Certificates are converted, approximately 805,500 shares of Common
Stock will be issued. As of March 10, 1998, approximately 4,200,000 Swiss
Francs of the bonds had been converted and 33,700,000 Swiss Francs of the
bonds were still outstanding. As a result of the redemption, certain Zero
Coupon Bonds with a current value of approximately $23,000,000 that were
used as collateral for the new Certificates will be released, and the
proceeds from the sale of the Zero Coupon Bonds will be used for general
working capital purposes.
As of March 10, 1998, the new and old Certificates were exchangeable
into Common Stock at prices of $31.431 and $54.171, respectively, per
share, subject to adjustment for dilutive issues. Accordingly, each new and
old Certificate representing 5,000 Swiss Francs principal amount is
exercisable into 106.48 and 59.94 shares of Common Stock, respectively. For
the purposes of calculating the number of shares issued on exchange of the
Certificates, the exchange rates of 1.494 and 1.59 Swiss Francs per U.S.
Dollar are used throughout the life of the new and old Certificates,
respectively. Cash will be paid in lieu of fractional shares upon the
exchange of the Certificates.
In addition, this Prospectus relates to the resale of up to 47,550
shares (the "Rzeszow Shares") of Common Stock that may from time to time be
offered or sold by certain employees (the "Rzeszow Employees") of Polfa
Rzeszow S.A. ("Rzeszow"), a Polish pharmaceutical company. In connection
with ICN's acquisition of an 80% interest in Rzeszow, ICN agreed to issue
the Rzeszow Shares covered by this Prospectus to the Rzeszow Employees. The
offer and sale of the Rzeszow Shares to the Rzeszow Employees was made
outside the United States in compliance with Regulation S of the Securities
Act of 1933, as amended (the "Securities Act").
In February 1998, the Company announced a three for two stock split in
the nature of a dividend payable on March 16, 1998. Unless otherwise
indicated, references to the number of shares of Common Stock in this
Prospectus give effect to the additional shares of Common Stock issuable
pursuant to the stock split.
The Company has agreed to bear all expenses in connection with the
registration of the Common Stock on behalf of the Certificate holders and
the Rzeszow Employees.
The Rzeszow Employees and any broker-dealers, agents or underwriters
that participate with the Rzeszow Employees in the distribution of the
Rzeszow 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 Rzeszow 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 March 10, 1998, the closing sale price per
share, as reported by the NYSE, was $64.69.
The Rzeszow Shares may be sold from time to time by the Rzeszow
Employees, or, in certain cases, by their transferees or assignees. Such
sales may be made in the over-the-counter market, on the NYSE 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 Rzeszow 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
Rzeszow Shares that qualify for sale pursuant to Rule 144 may be sold under
Rule 144 rather than pursuant to this Prospectus.
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 March __, 1998.
[RED HERRING]
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.
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" or "SEC").
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 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. Quarterly Report on Form 10-Q for the three months ended
September 30, 1997, dated November 14, 1997.
5. Current Report on Form 8-K, dated December 18, 1997, as amended
by Form 8-K/A, dated February 17, 1998.
6. 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 include 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(R). Virazole(R) 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 immunodeficiency virus (HIV). In the
United States, Virazole(R) 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 2,000
patients. In December 1997, the Company was informed by Schering that
Schering had filed a New Drug Application for the Combination Therapy with
the U.S. Food and Drug Administration (the "FDA"). 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, the Company
acquired a 75% interest 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. The United Nations Security Council
adopted resolutions, however, that in December 1995, suspended and, in
October 1996, lifted economic sanctions which had been 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 ICN Oktyabr, one of
the largest pharmaceutical companies in the Russian Federation. The Company
purchased an additional 15% interest in ICN Oktyabr, in 1996, raising its
ownership to 90%. Also in 1996 and 1997, the Company acquired a 67%
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. In 1996 and 1997, the Company
greatly expanded its Russian presence through the acquisition of four
additional pharmaceutical companies: Leksredstva, located in Kursk;
Polypharm, located in Chelyabinsk; Marbiopharm, located in Yoshkar-Ola; and
AO Tomsky Chemical and Pharmaceutical Plant ("Tomsk"), located in Tomsk.
The combined sales of these five companies establish the Company among the
largest pharmaceutical companies in Russia today and a pioneer and leader
in the privatization movement. In October 1997, the Company acquired an 80%
interest in Rzeszow, a pharmaceutical company located in Poland. In
February 1998, the Company announced that it would invest $300,000,000 in
Russia over the next five years, including $47,000,000 for the construction
of a new pharmaceutical plant as part of its ongoing modernization of ICN
Oktyabr. The Company is currently exploring acquisition opportunities in
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 products: Alloferin, Ancotil,
Glutril, Limbitrol, Mestinon, Prostigmin and Protamin from F. Hoffmann-La
Roche Ltd. ("Roche"). The Subsidiary also obtained worldwide rights outside
of the United States and India to Efudix and Librium. The Company received
the product rights in exchange for $90,000,000 payable in a combination of
1,600,000 shares of the Company's Common Stock valued at $40,000,000 and
2,000 shares of a new issue of the Company's convertible preferred stock
valued at $50,000,000. Each share of the Company's convertible preferred
stock is convertible into 1,000 shares of Common Stock at a conversion
price equivalent to $25 per share. The Company guaranteed Roche a price
initially at $25.75 per share of Common Stock, increasing at a rate of 6%
per annum for three years, with the Company being entitled to any proceeds
realized by Roche from the sale of these shares during the guarantee period
in excess of the guaranteed price. The preceding share and per share
amounts do not give effect to the three for two stock split in the nature
of a dividend payable on March 16, 1998. Also in August 1997, the
Subsidiary purchased for $55,000,000 in cash and the assumption of certain
debt, Roche'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. Simultaneously, Roche leased
the Humacao, Puerto Rico Plant from the Company for two years at $8,000,000
per annum. On December 5, 1997, the Company acquired the worldwide rights
to Levo-Dromoran and Tensilon from subsidiaries of Roche, and pursuant to
an option granted by Roche to the Company in connection with the August
1997 transaction, the Company obtained the U.S. rights to Efudix and
Librium for a total aggregate purchase price of approximately $89,000,000
(the purchase price for which was paid utilizing the price appreciation in
the Common Stock issued to Roche in August 1997).
On February 24, 1998, the Company acquired from SmithKline Beecham plc
("SKB") the Asian, Australian and African rights to 39 prescription and
over-the-counter pharmaceutical products, including Actal, Breacol,
Coracten, Eskornade, Fefol, Gyno-Pevaryl, Maxolan, Nyal, Pevaryl, Ulcerin
and Vylcim. The Company received the product rights in exchange for
$45,500,000 payable in a combination of $22,500,000 in cash and preferred
stock convertible into approximately 410,000 shares of Common Stock (the
"SKB Shares") based on a price of $56.05 per share. Except under certain
circumstances, SKB has agreed not to sell the SKB Shares until November 4,
1999. The Company has agreed to pay SKB an additional amount in cash (or,
under certain circumstances, shares of Common Stock) to the extent proceeds
received by SKB from the sale of the SKB Shares during a specified period
from and after November 4, 1999 and the then market value of the unsold SKB
Shares do not provide SKB with an average value of $69.00 per share
(including any dividend paid on the SKB Shares). Alternatively, SKB is
required to pay the Company an amount, in cash or shares of Common Stock,
to the extent that such proceeds and market value provide SKB with an
average per share value in excess of $69.00 per share (including any
dividend paid on the SKB Shares). The preceding share and per share amounts
do not give effect to the three for two stock split in the nature of a
dividend payable on March 16, 1998.
In addition to its pharmaceutical operations, the Company also
develops, manufacturers and sells, through its wholly owned subsidiary, ICN
Biomedicals, 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 exchange the
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 78% and 80% of the Company's net
sales for the nine months ended September 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 50% and
62% of the Company's operating income for 1995 and 1996, respectively, and
approximately 45% and 32% of the Company's net sales for the nine months
ended September 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. See "Recent Developments."
ICN Yugoslavia began 1997 with a net monetary asset exposure of
$134,000,000 which was subject to foreign exchange loss if a devaluation of
the dinar was to occur. During the first nine months of 1997, the Company
reduced its monetary exposure by converting dinar-denominated accounts
receivable into notes receivable payable in dinars, but fixed in dollar
amounts. The first conversion was made early in the first quarter of 1997
with $50,000,000 of accounts receivable converted into a one year note with
interest at LIBOR plus one percent. A second conversion was arranged at the
end of the first quarter of 1997 through an agreement with the Yugoslavian
government to purchase $50,000,000 of drugs. The sales under this agreement
were converted into a note receivable bearing interest at LIBOR plus one
percent on the outstanding balance and has special payment guarantees with
the payment fixed in dollar amounts. The second agreement also allows the
Company to offset payroll tax obligations against outstanding accounts
receivable balances. Subsequent to these two agreements, the Company
negotiated 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 $9,500,000 per month
towards outstanding receivables. However, at no point in time can the
amount due to ICN Yugoslavia from the government exceed $200,000,000,
including both accounts and notes receivable. Receivables that arise from
this agreement are interest bearing with interest at the LIBOR rate plus
one percent. As of September 30, 1997, ICN Yugoslavia had a net monetary
asset position of $48,000,000 which would be subject to foreign exchange
loss if a devaluation of the dinar was 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
$130,000,000 of accounts receivable into notes receivable as discussed
above. As of September 30, 1997, the accounts receivable balance was
$74,471,000. The willingness of the Yugoslavian 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.
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 nine 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 RUSSIA, EASTERN EUROPE AND CHINA
The Company has invested a total of approximately $28,404,000 for
majority interests in five pharmaceutical companies located in Russia. In
addition, the Company is planning to invest $300,000,000 in Russia over the
next five years, including $47,000,000 for the construction of a new
pharmaceutical plant in connection with its modernization of ICN Oktyabr.
The Company also has invested approximately $23,600,000 in its 67% interest
in ICN Hungary. In October 1997, the Company invested approximately
$33,700,000, and 31,700 shares of Common Stock valued at $1,709,000 to be
issued to certain employees (see "Selling Stockholders"), in an 80%
interest in Rzeszow, a pharmaceutical company located in Poland, and has
committed to invest an additional $20,000,000 in 1998 and 1999, which will
give the Company a 90% interest in Rzeszow. 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(R) 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(R)
in the countries of the European Union, where the Company has retained
co-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(R) 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(R) 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(R) to treat specified human viral diseases. If future
development of Virazole(R) 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 the 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(R) 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(R)
and/or its use in certain foreign countries where Virazole(R) 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(R) 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
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 from 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 has
cooperated with the Commission in its investigation. On January 13, 1998,
ICN received a letter from the SEC's Philadelphia District Office (the
"District Office") stating the District Office's intention to recommend to
the Commission that it authorize the institution of a civil action against
the Company and Milan Panic, Chairman and Chief Executive Officer of the
Company. As set forth in the letter, the District Office seeks the
authority to commence a civil action to enjoin the Company from future
violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder
and to impose a civil penalty of up to $500,000 on ICN. In regard to Mr.
Panic, the District Office seeks the authority to begin a civil action (i)
to enjoin Mr. Panic from future violations of Section 17(a) of the
Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5
thereunder; (ii) for disgorgement of approximately $390,000; (iii) for
prejudgment interest; (iv) for a civil penalty pursuant to Section 21A of
the Exchange Act that cannot exceed three times any amount disgorged and
(v) for an officer and director bar pursuant to Section 21 of the Exchange
Act. On January 30, 1998, the Company filed submissions with the Commission
urging that it reject the District Office's request.
The Company has received Subpoenas (the "Subpoenas") 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. In March 1998, the Company was advised that the
office of the United States Attorney for the Central District of California
is considering the Company, Mr. Panic and a former officer of the Company
targets of the investigation. The Company was also advised that certain
current and former officers of the Company are considered subjects of the
investigation. The Company has and continues to cooperate in the Grand Jury
Investigation. 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 and Chief Executive Officer. The loss
of the services of its management 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," the Subpoena and the possibility of a civil action
against the Company and/or Mr. Panic, as described under "Potential
Litigation Exposure," may have on Mr. Panic's ability to continue to devote
services on a full time basis to the Company. See " -- Potential Litigation
Exposure". 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(R). While to date no material adverse claim
for personal injury resulting from allegedly defective products, including
Virazole(R), 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(R), 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(R) 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 inhibitors. 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 September 30, 1997, after giving effect to the redemption of
certain indebtedness of the Company in November 1997 (see "Recent
Developments") and repayment of indebtedness related to the Company's
acquisition of a plant in Puerto Rico, the Company had outstanding
long-term debt of [$342,000,000]. 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.
RECENT DEVELOPMENTS
On March 5, 1998, the Company announced that, for the twelve months
ended December 31, 1997, sales increased to $752,000,000 from $614,000,000
in 1996, net income increased to $114,000,000 from $87,000,000 in 1996,
basic earnings per share increased to $1.93 from $1.75 in 1996, and diluted
earnings per share increased to $1.69 from $1.51 in 1996. The Company
further announced that, for the three months ended December 31, 1997, sales
increased to $256,000,000 from $174,000,000 for the same period in 1996,
net income increased to $36,000,000 from $29,000,000 for the same period in
1996, basic earnings per share increased to 55 cents from 54 cents for the
same period in 1996, and diluted earnings per share increased to 49 cents
from 46 cents for the same period in 1996. The Company previously disclosed
that it would limit sales to the Yugoslavian government. As a result, in
Yugoslavia, sales went from $267,000,000 in 1996 to $225,000,000 in 1997, a
decline of 16%.
On February 24, 1998, the Company acquired from SmithKline Beecham plc
("SKB") the Asian, Australian and African rights to 39 prescription and
over-the-counter pharmaceutical products, including Actal, Breacol,
Coracten, Eskornade, Fefol, Gyno-Pevaryl, Maxolan, Nyal, Pevaryl, Ulcerin
and Vylcim. The Company received the product rights in exchange for
$45,500,000 payable in a combination of $22,500,000 in cash and preferred
stock convertible into approximately 410,000 shares of Common Stock (the
"SKB Shares") based on a price of $56.05 per share. Except under certain
circumstances, SKB has agreed not to sell the SKB Shares until November 4,
1999. The Company has agreed to pay SKB an additional amount in cash (or,
under certain circumstances, shares of Common Stock) to the extent proceeds
received by SKB from the sale of the SKB Shares during a specified period
from and after November 4, 1999 and the then market value of the unsold SKB
Shares do not provide SKB with an average value of $69.00 per share
(including any dividend paid on the SKB Shares). Alternatively, SKB is
required to pay the Company an amount, in cash or shares of Common Stock,
to the extent that such proceeds and market value provide SKB with an
average per share value in excess of $69.00 per share (including any
dividend paid on the SKB Shares). The preceeding share and per share
amounts do not give effect to the three for two stock split in the nature
of a dividend payable on March 16, 1998.
On February 24, 1998, the United States District Court for the Central
District of California gave final approval to the settlement of a
consolidated class action lawsuit alleging that the Company and certain
officers of the Company had 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(R) for monotherapy treatment of chronic
hepatitis C (the "Hepatitis C NDA"), in violation of the federal securities
laws. Pursuant to the settlement, the Company has paid the class
$15,000,000. At the hearing related to the settlement, no objections were
made to the settlement. The time for any appeal from the approval will
expire on or about March 26, 1998.
On February 18, 1998, the Company declared a three for two split of
the Common Stock in the nature of a dividend payable on March 16, 1998. The
record date of the stock split was February 17, 1998.
In February 1998, the Company committed to investing $300,000,000 in
Russia over the next five years, $47,000,000 of which will be used for the
construction of a new pharmaceutical plant in connection with its
modernization of ICN Oktyabr. The new factory, the construction of which is
expected to be completed in 2000, will comply with Good Manufacturing
Practice (GMP) Standards. See "The Company."
On December 5, 1997, the Company acquired the U.S. rights to Efudix
and Librium from Roche and the worldwide rights to Levo-Dromoran and
Tensilon from subsidiaries of Roche for a total aggregate purchase price of
approximately $89,000,000 (the purchase price for which was paid utilizing
the price appreciation in the Common Stock issued to Roche in August 1997).
In August 1997, the Company had acquired worldwide rights to seven Roche
products, rights outside of the United States to Efudix and Librium and an
option to obtain the U.S. rights to these two products. See "The Company."
On November 16, 1997, the Company completed its redemption of its 8
1/2% Convertible Subordinated Notes due 1999 (the "8 1/2% Notes") at
102.125% of the principal amount plus accrued interest. In addition, on
November 7, 1997, the Company completed its redemption of the 5 5/8% Xr
Capital Holding Exchangeable Certificates due 2001 (the "5 5/8%
Certificates"), issued by a trust (the "Trust") established by the Company
in 1986, at 100% of the principal amount plus accrued interest. In
connection with the redemption of the 8 1/2% Notes, $114,800,000 in
principal amount were converted into 5,200,000 shares of Common Stock, and
the balance of $61,000 in principal amount was redeemed for cash at
102.125% of the principal amount. In connection with the redemption of the
5 5/8% Certificates, Swiss Francs 59,000,000 in principal amount were
exchangeable into 1,300,000 shares of Common Stock, and the balance of
Swiss Francs 180,000 in principal amount was redeemed for cash at 100% of
the principal amount plus accrued interest. As part of the redemption and
the termination of the Trust, Swiss Francs 36,000,000 of collateral was
released and became available to the Company for general corporate
purposes. The preceeding share and per share amounts do not give effect to
the three for two stock split in the nature of a dividend payable on March
16, 1998.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Common Stock that may be issued to the Certificate holders upon the
exchange of the Certificates or from any sales of the Common Stock by the
Rzeszow Employees.
Certificate holders are referred to the terms of the Certificates and
the related agreements pertaining to such rights for information regarding
their exchange 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.
SELLING STOCKHOLDERS
The Company agreed to issue 75 shares of Common Stock to each of the
Rzeszow Employees in an offering made outside of the United States under
Regulation S of the Securities Act. The total number of shares of Common
Stock offered to the Rzeszow Employees was 47,550 shares. This Prospectus
covers the resale from time to time of the Rzeszow Shares. Because the
Rzeszow Employees may sell all or part of the Rzeszow Shares that they hold
pursuant to this Prospectus and because this Offering is not being
underwritten on a firm commitment basis, no estimate can be given as to the
amount of the Company's shares of Common Stock that will be held by the
Rzeszow Employees upon termination of this Offering.
As of March 10, 1998, the Company had outstanding approximately
71,554,945 shares of Common Stock. The Common Stock to be sold by the
Rzeszow Employees represents in the aggregate less than 1% of the
outstanding shares of Common Stock.
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.
The Rzeszow Shares may be sold from time to time by the Rzeszow
Employees or by their transferees and assigns. Such sales may be made in
the over-the-counter market, on the NYSE 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 Rzeszow 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. In addition, any Rzeszow Shares that qualify for sale
pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to
this Prospectus.
The Rzeszow Employees and any broker-dealers, agents or underwriters
that participate with the Rzeszow Employees in the distribution of the
Rzeszow 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 Rzeszow 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 Common Stock offered by this Prospectus
may not simultaneously engage in market making activities with respect to
the Common Stock, during any applicable "restricted period" prior to the
commencement of such distribution. In addition, and without limiting the
foregoing, the Rzeszow Employees will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder including,
without limitation, Regulation M, the provisions of which may limit the
timing of purchases and sales of Common Stock by the Rzeszow Employees.
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 March 10, 1998, Mr. Watt
beneficially owned 149,509 shares of Common Stock, including 146,517 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 was 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 September 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 quarters ended March 31,
June 30 and September 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
reports 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 and the Rzeszow Employees
will not bear any of these expenses.
SEC Filing Fee......................................$9,030.12
Legal Fees and Expenses............................$25,000.00
Accounting Fees and Expenses.......................$20,000.00
Miscellaneous......................................$ 5,000.00
----------
Total ..............................$59,030.12
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, which is
incorporated herein by reference.
4.4 Bio Capital Holding Trust Instrument between ICN Biomedicals,
Inc., Ansbacher (C.I.) Limited and ICN Pharmaceuticals, Inc.,
dated as of January 26, 1987; Subscription Agreement between
Ansbacher (C.I.) Limited, ICN Pharmaceuticals, Inc., and Banque
Gutzwiller, Kurz, Bungener S.A. and the other financial
institutions named therein dated as of January 26, 1987; Exchange
Agency Agreement between ICN Biomedicals, Inc., Banque
Gutzwiller, Kurz, Bungener S.A., and the other financial
institutions named therein dated as of January 26, 1987; Guaranty
between ICN Pharmaceuticals, Inc. and ICN Biomedicals, Inc. dated
as of February 17, 1987 previously filed as Exhibit 10.9 to the
Company's Form 10-Q for the quarter ended February 28, 1987,
which is incorporated herein by reference.*
4.5 Supplemental Agreement to the Bond Issue Agreement dated October
31, 1994 between ICN Biomedicals, Inc., ICN Pharmaceuticals,
Inc., ICN Subsidiary Corp., ICN Merger Corp. and Ansbacher
(Guernsey) Limited previously filed as Exhibit 10.32 to the
Company's Form 10-K for the fiscal year ended December 31, 1994,
dated March 31, 1995, which is incorporated herein by reference.
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).*
4.8 Warrant Agreement between Viratek, Inc. and H.J. Meyers & Co.,
Inc., previously filed as Exhibit 4.1 to Registration Statement
No. 33-54678 on Form S-2, which is incorporated herein by
reference.
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 Public Accountants for the period
ended March 31, 1997, previously filed as Exhibit 15.1 to
Quarterly Report on Form 10-Q for the quarter ended March 31,
1997, and incorporated herein by reference.
15.3 Review Report of Independent Public 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.
15.4 Review Report of Independent Accountants for the period ended
September 30, 1997, previously filed as Exhibit 15.1 to Quarterly
Report on Form 10-Q for the quarter ended September 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).
- ----------------
* 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.
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 the 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 March 12, 1998.
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) 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, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITY INDICATED.
SIGNATURE TITLE DATE
/s/ Milan Panic
- ---------------------------
Milan Panic Chairman and Chief Executive March 12, 1998
Officer
(Principal Executive Officer)
/s/ John E. Giordani March 12, 1998
- ---------------------------
John E. Giordani Executive Vice President,
Chief Financial Officer
(Principal Financial and
Accounting Officer)
/s/ Norman Barker, Jr.
- ---------------------------
Norman Barker, Jr. Director March 12, 1998
/s/ Senator Birch E. Bayh, Jr.
- -------------------------------
Director March 12, 1998
Senator Birch E. Bayh, Jr.
/s/ Alan F. Charles
- -------------------------------
Alan F. Charles Director March 12, 1998
/s/ Roger Guillemin
- -------------------------------
Roger Guillemin, M.D., Ph.D. Director March 12, 1998
/s/ Adam Jerney
- -------------------------------
Adam Jerney Director, President, Chief March 12, 1998
Operating Officer
/s/ Dale M. Hanson
- -------------------------------
Dale M. Hanson Director March 12, 1998
/s/ Weldon B. Jolley, Ph.D.
- ---------------------------------
Weldon B. Jolley, Ph.D. Director March 12, 1998
/s/ Andrei V. Kozyrev
- -------------------------------
Andrei V. Kozyrev Director March 12, 1998
/s/ Jean-Francois Kurz
- -------------------------------
Jean-Francois Kurz Director March 12, 1998
/s/ Thomas H. Lenagh
- -------------------------------
Thomas H. Lenagh Director March 12, 1998
/s/ Charles T. Manatt
- -------------------------------
Charles T. Manatt Director March 12, 1998
/s/ Stephen D. Moses
- -------------------------------
Stephen D. Moses Director March 12, 1998
/s/ Michael Smith, Ph.D
- -------------------------------
Michael Smith, Ph.D. Director March 12, 1998
/s/ Roberts A. Smith, Ph.D.
- -------------------------------
Roberts A. Smith, Ph.D. Director March 12, 1998
/s/ Richard W. Starr
- -------------------------------
Richard W. Starr Director March 12, 1998
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, which is
incorporated herein by reference.
4.4 Bio Capital Holding Trust Instrument between ICN Biomedicals,
Inc., Ansbacher (C.I.) Limited and ICN Pharmaceuticals, Inc.,
dated as of January 26, 1987; Subscription Agreement between
Ansbacher (C.I.) Limited, ICN Pharmaceuticals, Inc., and Banque
Gutzwiller, Kurz, Bungener S.A. and the other financial
institutions named therein dated as of January 26, 1987; Exchange
Agency Agreement between ICN Biomedicals, Inc., Banque
Gutzwiller, Kurz, Bungener S.A., and the other financial
institutions named therein dated as of January 26, 1987; Guaranty
between ICN Pharmaceuticals, Inc. and ICN Biomedicals, Inc. dated
as of February 17, 1987 previously filed as Exhibit 10.9 to the
Company's Form 10-Q for the quarter ended February 28, 1987,
which is incorporated herein by reference.*
4.5 Supplemental Agreement to the Bond Issue Agreement dated October
31, 1994 between ICN Biomedicals, Inc., ICN Pharmaceuticals,
Inc., ICN Subsidiary Corp., ICN Merger Corp. and Ansbacher
(Guernsey) Limited previously filed as Exhibit 10.32 to the
Company's Form 10-K for the fiscal year ended December 31, 1994,
dated March 31, 1995, which is incorporated herein by reference.
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).*
4.8 Warrant Agreement between Viratek, Inc. and H.J. Meyers & Co.,
Inc., previously filed as Exhibit 4.1 to Registration Statement
No. 33-54678 on Form S-2, which is incorporated herein by
reference.
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 Public Accountants for the period
ended March 31, 1997, previously filed as Exhibit 15.1 to
Quarterly Report on Form 10-Q for the quarter ended March 31,
1997, and incorporated herein by reference.
15.3 Review Report of Independent Public 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.
15.4 Review Report of Independent Accountants for the period ended
September 30, 1997, previously filed as Exhibit 15.1 to Quarterly
Report on Form 10-Q for the quarter ended September 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).
___________________________
* 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.
Exhibit 5
[LETTERHEAD OF ICN PHARMACEUTICALS, INC.]
March 12, 1998
ICN Pharmaceuticals, Inc.
3300 Hyland Avenue
Costa Mesa, California 92626
RE: Registration Statement on Form S-3
ICN Pharmaceuticals, Inc.
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 the 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 of the Company, the
By-laws of the Company, the Bio Capital Holding Trust Instrument and
related agreements (the "Trust Instrument"), 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:
(1) the Shares issuable upon the exchange of the new and old Bio
Capital Holding Swiss Franc Exchangeable Certificates due
February 17, 2002, in the aggregate principal amount of Swiss
Francs 37,870,000 and 1,745,000, respectively (jointly the
"Certificates"), when the Certificates are exchanged in
accordance with the terms of the Trust Instrument; and
(2) the Shares issuable to the employees of Polka Rzeszow S.A. in
connection with the Company's acquisition of Rzeszow, 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 also is 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
March 11, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: ICN Pharmaceuticals, Inc.
Registration Statement on Form S-3 (File No. 333-38901)
We are aware that our reports dated May 8, 1997, July 31, 1997 and
November 3, 1997, respectively, on our reviews of interim financial
information of ICN Pharmaceuticals, Inc. for the three month periods ended
March 31, 1997, June 30, 1997 and September 30, 1997 and included in the
Company's quarterly report on Form 10-Q for the respective quarter, then
ended, are incorporated by reference in this Registration Statement.
Pursuant to Rule 436(c) under the Securities Act of 1933, these reports
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 registration statement
on Form S-3 (File No. 333-38901) 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
March 11, 1998
