Reaction Mixed to FDA’s Disciplining of Drug Firm
Wall Street reaction was mixed Monday to the Food and Drug Administration’s unusual disciplining of ICN Pharmaceuticals for having made false and misleading claims about its drug Virazole.
Eugene Melnitchenko, who follows the drug industry for the Dallas securities firm of Rauscher Pierce Refsnes, said relations between the Costa Mesa drug maker and the FDA are bound to be “ticklish” for a while.
But Craig Dickson of Interstate Securities in Charlotte, N.C., said: “I don’t think anybody . . . in or out of the market thinks there will be any adverse consequences.”
What may hold more sway with the investment community is the performance of Virazole in the marketplace. And ICN reported Monday that strong sales of Virazole during the first fiscal quarter ended Feb. 28 resulted in increased net earnings and revenue.
The company said net income rose 54% to $2 million from $1.3 million a year ago. Revenue during the quarter climbed 80% to $25.1 million from $14 million during the comparable period of 1985.
ICN common stock fell 25 cents a share to $12.12 1/2 in trading Monday on the New York Stock Exchange.
Virazole was approved by the FDA on Jan. 2 as a treatment for respiratory syncytial virus, or RSV, a disease that frequently strikes infants. Approved overseas for use against a variety of viral diseases, Virazole is undergoing clinical trials as a possible AIDS medication.
In a letter to ICN President Milan Panic, the FDA objected to an ICN press release that claimed Virazole was “so free of side effects that it could be used in premature infants.” Moreover, the letter stated, ICN “grossly exaggerated the efficacy of Virazole beyond the single indication” for which it was approved.
Faye Peterson, an FDA spokeswoman, said ICN has been asked to furnish a draft of a new press release as well as provide an accounting to the FDA of news organizations that received the document.
Should ICN fail to comply, the FDA said, Virazole could be seized as improperly labeled.
ICN officials declined Monday to say how long it will take to send out a revised press release.
