No Russia Prozac Deal After All, ICN Says

COSTA MESA — ICN Pharmaceuticals Inc. on Thursday retracted last month’s announcement that it had an agreement to sell the antidepressant Prozac in Russia.

David Watt, the Costa Mesa drug company’s general counsel, attributed the company’s misstatement to “honest confusion” on the part of ICN officials regarding terms of its multi-drug licensing agreement with Prozac’s manufacturer, Eli Lilly & Co.

A Lilly spokeswoman said the Indianapolis-based drug giant is negotiating with ICN for sales of Lilly’s drugs in states of the former Soviet Union, including Russia. But she said no agreement has been reached.

ICN’s Belgrade-based unit has a long-standing agreement to sell various Lilly drugs, including Prozac, in Yugoslavia, the spokeswoman said.

ICN has had previous run-ins with federal securities regulators over alleged misstatements in its public releases.

In 1977 and 1992, the company signed consent decrees with the Securities and Exchange Commission in which it agreed not to violate securities laws. The company admitted no wrongdoing.

ICN and its chairman, Milan Panic, are also targets of investigations by a federal grand jury and the SEC into alleged insider trading by Panic. In November 1994, Panic sold $1.24 million of company stock after the company learned that federal regulators wouldn’t approve the company’s drug Virazole as a stand-alone treatment for hepatitis C.

The company didn’t disclose the regulators’ decision until February 1995. After the disclosure, the company’s stock lost 42% of its value in six days of trading. The company and Panic have said they did nothing wrong.

Watt said Thursday that it would be “ridiculous” for anyone to interpret the mistake in the company’s recent press release on Prozac as a continuation of any questionable practices.

Separately, ICN said it won a bid to buy a majority stake in a Hungarian pharmaceutical company, Alkaloida Chemical Co. ICN said it expects to buy up to a 59% stake in the state-owned company and close the deal in September.

Alkaloida, which had sales last year of $66 million, makes and markets drugs, chemicals and other products.