SCHEDULE 14A INFORMATION Proxy Statement Pursuant To Section 14(a) Of The Securities Exchange Act Of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [_] Check the appropriate box: [_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(E)(2)) [_] Definitive Proxy Statement [X] Definitive Additional Materials [_] Soliciting Material Pursuant to Section 240.14a-12 ICN Pharmaceuticals, Inc. -------------------------------------------------------- (Name of Registrant as Specified in its Charter) N/A -------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: ------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------------- (5) Total fee paid: ------------------------------------------------------------------- [_] Fee paid previously with preliminary materials. [_] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: ------------------------------------------------------------------- (3) Filing Party: ------------------------------------------------------------------- (4) Date Filed: ------------------------------------------------------------------- Following is additional information first available on the "ICN Annual Meeting" section of ICN Pharmaceutical, Inc.'s website, www.icnpharm.com, on or about May 10, 2002: Frequently Asked Questions Voting Questions - Who is eligible to vote? - What do I do if I haven't yet received my proxy and voting information in the mail? - Where do I mail my proxy card if I lost my return envelope? - By when do I have to mail in my GOLD proxy card? - Who do I call if I have questions about materials I received in the mail ? - What is the significance of whether I hold my shares as a record holder or street name? - What color proxy materials should I vote? WHITE vs GOLD proxy cards - Does the color of the proxy card matter? - I have received a WHITE proxy card. Should I sign it and mail it? - I have already submitted a WHITE proxy card. May I change my vote? Voting Questions Q: Who is eligible to vote? A: If you were an ICN shareholder as of the close of business on April 9, 2002 (we referred to April 9, 2002 as the "record date"), you should have already received a proxy statement containing important information about the ICN 2002 Annual Meeting and the ICN proposed board slate. You should have also received GOLD voting materials for the ICN Annual Meeting, which will allow you to vote your shares of ICN common stock without attending the ICN annual meeting. If you purchased shares of ICN common stock after April 9, 2002, those shares are not eligible in this vote. Q: What do I do if I haven't yet received my proxy and voting information in the mail? A: If you have not received your proxy materials, please call or e-mail Morrow & Co. toll-free: 1-800-662-5200 international: 212 754-8000 banks and brokers: 1-800-607-0088 e-mail: icn.info@morrowco.com You may also download a copy of the ICN proxy statement at www.icnannualmeeting.com or obtain a copy of the ICN definitive proxy statement on Form 14A on May 3, 2002, which contains the proxy statement, free of charge at www.SEC.gov. To obtain a GOLD proxy card, you will need to contact the numbers or e-mail address at Morrow & Co. Q: Where do I mail my proxy card if I lost my return envelope? A: Please mail your GOLD proxy card or voting instruction card to the following address: Morrow & Co. 445 Park Avenue New York, NY 10022 Q: By when do I have to mail in my GOLD proxy card? A: GOLD proxy cards must be received on or before 10:00 a.m. on May 29, 2002. GOLD proxy cards that are received after May 29, 2002 will not count. Q: Who do I call if I have questions about materials I received in the mail? A: If you have any questions about your proxy materials, please call or e-mail Morrow & Co.: toll-free: 1-800-662-5200 international: 212-754-8000 banks and brokers: 1-800-607-0088 e-mail: icn.info@morrowco.com Q: What is the significance of whether I hold my shares as a record holder or in street name? A: ICN shareholders are being asked to vote all shares held directly in their name as shareholders of record or as beneficial owner of any shares that are held in street name. Shares held in street name are shares held in a stock brokerage account or shares held by a bank or other nominees. The method of voting differs for shares held as a record holder and shares held in street name. Record holders will receive proxy cards. Holders of shares in street name will receive voting instruction cards in order to instruct their brokers or nominees how to vote. Q: What color proxy materials should I vote? A: You should vote the Gold Proxy card. Disregard the White Proxy card. WHITE vs GOLD Proxy Cards Q: Does the color of the proxy card matter? A: GOLD proxy cards and voting instruction cards are being solicited on behalf of your Board of Directors in favor of the three nominees for director proposed by ICN. The ICN nominees are Senator Birch E. Bayh, Jr., Abraham E. Cohen and Rosemary Tomich. The WHITE proxy cards are being sent to ICN shareholders by a dissident group soliciting proxies in support off their nominees. The ICN Board of Directors urges ICN shareholders to discard any WHITE proxy or voting instruction cards sent by the dissident group that is soliciting proxies against the ICN Board of Directors proposed Board slate. Q: I have received a WHITE proxy card. Should I sign it and mail it? A: No, the ICN Board of Directors urges ICN shareholders to discard any WHITE proxy or voting instruction cards sent by the dissident group that is soliciting proxies against the ICN Board of Directors proposed Board slate. Q: I have already submitted a WHITE proxy card. May I change my vote? A: Yes. You may revoke a previously granted WHITE proxy card or voting instruction card at any time prior to the annual meeting by: 1. Signing and returning the later dated GOLD proxy or voting instruction card for the ICN proposed Board slate. 2. Attending the ICN annual meeting and voting in person. ICN Pharmaceuticals, Inc. notes the following corrections to the first full paragraph on page 27 of its Proxy Statement, dated May 3, 2002, relating to its 2002 Annual Meeting of Stockholders. The second sentence in the paragraph should read, "This amount is subject to annual cost-of-living adjustments from the base year of 1967 until the date of retirement (currently estimated to be in excess of $627,905 per year, as adjusted)." The penultimate sentence in the paragraph should read, "If Mr. Panic's employment is terminated under any of the circumstances described above following such a change in control, in addition to the consulting fee as described above, Mr. Panic would be entitled to receive (based upon present compensation) approximately $5,000,000." Following is the text of additional presentation materials delivered to ICN Pharmaceuticals, Inc. stockholders on or about May 10, 2002: [LOGO - ICN] ICN PHARMACEUTICALS, INC. MAY 2002 FORWARD LOOKING STATEMENTS ------------------------------------------------------------------------------ THE SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: o Except for the historical information herein, the matters discussed in this presentation include forward-looking statements that may involve a number of risks and uncertainties, including but not limited to, projections of future sales, operating income, returns on invested assets, obtaining and maintaining regulatory approval processes, market acceptance of, and continuing demand for ICN pharmaceuticals' products and other risks detailed from time to time in the Company's Securities and Exchange Commission filings 1 PROMISES KEPT ----------------------------------------------------------------------------- RESTRUCTURING HISTORY ------------------------------------------------------------------------------ o The restructuring was ALWAYS ICN's and UBS's idea; no one else had it. o It was ALWAYS designed to unlock value for shareholders. o The restructuring is a complicated process that cannot be rushed. o The timing has been SOLELY impacted by market conditions. 3 RESTRUCTURING OVERVIEW ------------------------------------------------------------------------------ o Initiatives to unlock significant shareholder value Biotechnology Ribapharm - RNA listed on NYSE on April 12, 2002 - IPO Completed - tax-free spin-off in 2002 Specialty ICN Pharmaceuticals Pharmaceuticals ICN Americas Americas Specialty Pharmaceuticals ICN International Europe o IPO Prospectus filed 4 RESTRUCTURING PROGRESS ------------------------------------------------------------------------------ o Ribapharm IPO completed - raised nearly $300 million in 20% interest. o Second largest biotech IPO EVER. o Debt repurchase completed. o Request for tax-free treatment filed with the IRS. o Spin off or distribution of remaining interenst in Ribapharm as soon as IRS approves. 5 RESTRUCTURING STEPS ------------------------------------------------------------------------------ Tax Free Distribution & Spin-off of Rebapharm Ribapharm IPO ICN International IPO Retire Remaining Debt Retire Partial Debt Convertible Offering Filed Prospectus for ICN International S-1 Filed for Ribapharm Announced UNLOCKING EQUITY VALUE Restructuring Reorganization of Business Operations Into Three Distinct Businesses 6 INTERNATIONAL SPIN-OFF - FACT VS. FICTION ------------------------------------------------------------------------------ o Committed to the international IPO. o European market conditions do not exist for this transaction. o International IPO scheduled in early 2003 or sooner. 7 RESTRUCTURING - FACT VS. FICTION ------------------------------------------------------------------------------ o ICN has DELIVERED on its promise to restructure the company with tangible results. o To have done so when market conditions were not conducive would have been DESTRUCTIVE to shareholder value. o The results point to management's patience, wisdom and experience. o Opposition suggestion that a restructuring should have been done sooner points to their lack of experience and the danger to shareholders of electing their slate. 8 SG&A COST CONTROLS ------------------------------------------------------------------------------ o SG&A expenses in line with pharmaceutical industry o Attributed to cost of business: - Acquisitions - Increased investment in specialty business, esp. photonics o Target expense reduction from 8.5% to 7% post-proxy through: - Legal - New hire freeze - IR/PR expenses - Redundancy reduction - Centralization/RNA shift - Tighten vendor controls 9 GOVERNANCE ------------------------------------------------------------------------------ o ICN has had a long history of dependable corporate governance. o Corporate governance provisions adopted that codify what ICN has practiced all along. o Nominating committee established that it is comprised solely of independent directors. - Membership - Process o CEO succession process established that will result in a timely and orderly change in leadership. 10 BOARD INDEPENDENCE ------------------------------------------------------------------------------ o ICN's board has ALWAYS been comprised of independent directors. o Since ICN's founding, 39 out of 42 directors have been non-insiders. o As of May 29, 2002, five elected within the last year: - Three as shareholder candidates - Two as qualified by nominating committee - Roderick Hills - Barry Cohen - Gen. Ronald Fogleman - Ed Burkhardt - Steven Lee 11 ICN Board of Directors ------------------------------------------------------------------------------- o Milan Panic - Chairman of the Board and CEO, ICN Pharmaceuticals o Norman Barker, Jr.* - Former Chairman of the Board, First Interstate Bank of California o Senator Birch E. Bayh, Jr. - Senior Partner, Venerable, Baetjer, Howard and Civiletti, LLP, United States Senator, 1963-1981 o Edward A. Burkhardt - President, Rail World, Inc. o Abraham E. Cohen - Retired SVP, Merck & Co. and President Merck Sharp & Dohme International o Ronald R. Fogleman - General, Chief of Staff, United States Air Force o Roderick M. Hills - Partner, Hills and Stern, Former Chairman of United States Securities and Exchange Commission o Adam Jerney* - President and COO, ICN Pharmaceuticals o Jean-Francois Kurz - Chairman of the Board, Banque Pashe, SA o Steven J. Lee - Chairman and CEO, PolyMedica Corp. o Stephen D. Moses* - Chairman of the Board, Stephen Moses Interests o Rosemary Tomich - Chairman and CEO, Livestock Clearing, Inc. * Not standing for reelection 13 ICN Management ------------------------------------------------------------------------------- o Milan Panic - Chairman of the Board and Chief Executive Officer o Adam Jerney - President and Chief Operating Officer o Greg Keever - EVP, General Counsel and Corporate Secretary o John E. Giordani - EVP and Chief Financial Officer o Bill A. MacDonald - EVP, Strategic Planning o Alan F. Charles - EVP, Corporate Relations o James McCoy - EVP, Human Resources o Marinko Vekovic - SVP, Worldwide Sales o Mark Taylor - EVP, North America o Dr. Javier Rovalo - General Manager, Latin America 14 OPPOSITION - NO STRATEGY ------------------------------------------------------------------------------ o Opposition has NEVER articulated a strategy or objective for ICN shareholders - EVER. o They have NO experience managing a global pharmaceutical company. o They have NO scientific knowledge needed for continued innovations. o They are very recent shareholders who have executed at least 195 trades, including 62 sales. 15 SUBSTANTIAL RISK TO SHAREHOLDERS ------------------------------------------------------------------------------ o There is ENORMOUS RISK to shareholders in siding with the opposition. o They have NO track record, NO experience and NO strategy. o ICN management has CONSISTENTLY delivered on its promises. o A VOTE FOR THE OPPOSITION PLACES YOUR INVESTMENT IN ICN AT SUBSTANTIAL RISK. 16 FINANCIAL OVERVIEW ----------------------------------------------------------------------------- SPECIALTY PHARMACEUTICALS REVENUES 1 ----------------------------------------------------------------------------- 1995 - 2001 CAGR: +18% [BAR GRAPH OMITTED] 1995-273 $mm 1996-347 $mm 1997-527 $mm 1998-659 $mm 1999-639 $mm 2000-645 $mm 2001-721 $mm 1 Excludes ICN Yugoslavia 2 Reflects effect of Major Russia Devaluation in Q3 1998 through 2001 18 2001 vs. 2000 Full Year -------------------- ------------------------- ---------------------------- -------------------------- ------------------------- North America Latin America Western Europe Eastern Europe -------------------- ------------------------- ---------------------------- -------------------------- ------------------------- -------------------- ------------- ----------- ------------- ------------- ------------- ------------ ------------- ------------ Actual Actual Actual Actual Actual Actual Actual Actual 2001 2000 2001 2000 2001 2000 2001 2000 -------------------- ------------- ----------- ------------- ------------ ------------- ------------ ------------- ------------ - -------------------- ------------- ----------- ------------- ------------ ------------- ------------ ------------- ------------ - Product Sales 156,201 119,994 128,218 127,485 208,374 187,192 103,066 106,271 -------------------- -------------------- Royalties -- -- -- -- 2 14 -- -- -------------------- -------------------- Services 18,473 593 -- -- -- -- -- -- -------------------- -------------------- Revenues 173,674 120,587 128,218 127,485 206,376 187,206 100,066 106,271 -------------------- -------------------- Cost of Sales 23,576 13,692 34,745 35,662 106,597 96,021 66,054 64,651 -------------------- -------------------- Gross Profit 131,625 106,302 50,473 91,823 99,777 91,171 37,012 41,620 -------------------- -------------------- Gross Margin 85% 89% 73% 72% 48% 49% 36% 39% -------------------- -------------------- Operating Expenses: -------------------- -------------------- Selling 42,276 22,606 26,996 26,831 39,506 35,654 25,130 24,784 -------------------- -------------------- Advertising 22,045 19,918 11,364 10,563 9,629 9,815 5,493 3,479 -------------------- -------------------- Goodwill 11,507 10,872 3,642 3,313 8,605 7,797 (1,977) (1,192) -------------------- -------------------- R & D 2,304 1,746 168 273 478 2,571 107 782 -------------------- -------------------- G & A 6,145 1,027 6,618 5,434 14,272 15,096 8,002 10,465 -------------------- -------------------- Other (2,406) 2,795 3,880 3,459 863 3,848 6.170 7,878 -------------------- -------------------- Total Op. Exp. 81,889 58,964 52,666 49,873 73,352 74,781 42,925 45,476 -------------------- -------------------- Operating Income 68,229 47,931 40,807 41,950 26,427 16,404 (5,913) (3,856) -------------------- -------------------- O.P. % 39% 40% 32% 33% 13% 9% (6%) (4%) -------------------- ------------- ----------- ------------- ------------ ------------- ------------ -------------- ------------ ------------------------------------------------ -------------------------- --------------------------- AAA Biomedical Specialty Pharma ------------------------------------------------ -------------------------- --------------------------- --------------------------------- -------------- ------------ ------------- ------------- ------------- Actual Actual Actual Actual Actual Actual 2001 2000 2001 2000 2001 2000 -------------------------------- -------------- ------------ ------------- ------------- ------------- -------------------------------- -------------- ------------ ------------- ------------- ------------- Product Sales 49,826 45,133 59,955 58,522 702,640 644,597 -------------------- -------------------- Royalties -- -- -- -- 2 14 -------------------- -------------------- Services -- -- -- -- 18,473 590 -------------------- -------------------- Revenues 49,826 45,133 59,955 58,522 721,115 645,204 -------------------- -------------------- Cost of Sales 25,174 25,420 27,949 28,013 284,095 263,459 -------------------- -------------------- Gross Profit 24,652 19,713 32,006 30,509 418,545 381,138 -------------------- -------------------- Gross Margin 49% 44% 53% 52% 60% 59% -------------------- -------------------- Operating Expenses: -------------------- -------------------- Selling 9,995 10,320 18,456 17,476 162,358 137,671 -------------------- -------------------- Advertising 3,126 2,479 2,317 3,469 53,974 49,723 -------------------- -------------------- Goodwill 4,156 4,562 2,089 1,657 28,022 26,289 -------------------- -------------------- R & D 161 175 -- -- 3,218 5,547 -------------------- -------------------- G & A 1,879 2,571 3,500 3,178 40,414 37,771 -------------------- -------------------- Other 29 106 745 3,032 9,279 21,118 -------------------- -------------------- Total Op. Exp. 19,346 20,213 27,107 28,812 297,265 278,119 -------------------- -------------------- Operating Income 5,306 (500) 4,899 1,697 139,755 100,626 -------------------- -------------------- O.P. % 11% (1%) 8% 3% 19% 16% --------------------------------- -------------- ------------ ------------- ------------- ------------- 19 SG&A Expenses 2001 ------------------------------------------------------------------------------- ($ in Millions): S,G&A expenses as reported $320 One time charges: Ribapharm charges/allocation 8 Legal expenses 3 Other non-recurring charges 3 IR/PR Expenses 3 Facility Closing 2 SG&A expenses without one time charges $301 Product sales $721 S,G&A % of sales 42% Target by Q4 2002 40% 20 FINANCIAL POSITION ------------------------------------------------------------------------------ SELECTED CONSOLIDATED BALANCE SHEET DATA DECEMBER 31, DECEMBER 31, (US$mm) 2000 2001 ------------------------------------------------------------------------- Cash 155.6 327.6 Total Assets 1,477.1 1,754.4 Senior Debt 496.9 191.2* Convertible Debt - 525.0 Total Debt 510.8 740.7 Total Stockholders Equity 757.2 810.7 ------------------------------------------------------------------------- CREDIT STATISTICS 2000 2001 ------------------------------------------------------------------------- Total Debt/EBITDA 1.86x 2.80x EBITDA/Interest 4.56x 4.73x Total Debt/Total Book Cap. 40% 48% ------------------------------------------------------------------------- * paid off in April 21 Q1 2002 CONSOLIDATED RESULTS FINANCIAL PERFORMANCE ----------------------------------------------------------------------------- Q1 02 Q1 01 %CHG. ----- ----- ----- Revenues $246M R $199M 23 Royalties 57M R 28M 103 REVENUES - SPECIALTY PHARMA 189M 171M 10 Operating income 66M R 41M 60 Net Interest 13M up $2M 11M 22 Translation 2M .4M nm Provision for income taxes 20M up $11M 9M 119 Net Income(1) 30M R 21M 43 Cumulative effect 4M -- nm Net Income 34M R 21M 62 EPS (diluted)-income 0.36 R 0.26 38 Cumulative efect 0.04 -- Net Income 0.40 R 0.26 54 (1) Before Cumulative Effect of Accounting Change R = Record results 22 Q1 2002 ----------------------------------------------------------------------------- o Record revenue for First Quarter 2002 ------------------------------------- o Record Gross Margin - 62% ------------------------- o Record royalties in 1Q' 02 -------------------------- o Record operating income in 1Q'02 -------------------------------- o Record pre-tax income --------------------- - Spec.Pharma -- Increased sales in all regions - Improved Gross Margin from 59% to 62% > Better manufacturing utilization and cost reductions > Improved supply chain function due to transfer of manufacturing of acquired products to our own facilities 23 Q1 2002 (cont'd) o Provision for Taxes -- We are generating more income in higher tax jurisdictions, such as North America. Royalties are taxed at the full U.S. rate o S, G & A (in $ in Millions): S,G & A expenses as reported $92 One time charges: Ribapharm charges/allocation 2 Legal expense 3 Stock comp. Charges 3 Debt repurchase expenses 1 Other non-recurring charges 2 IR/PR expenses 2 ---- S, G & A expenses without one-time charges $79 Product Sales 189 S, G & A % of sales 42% Target by Q4 2002 40% 24 SPECIALTY PHARMACEUTICALS ------------------------------------------------------------------------------ SPECIALTY PHARMA INVESTMENT HIGHLIGHTS ------------------------------------------------------------------------------ o High margin specialty business in Americas - Record of historical growth in Latin America since 1970 - Consistent new product flow in pharmaceuticals - New growth platform in vast cosmetic dermatology market o One of the largest specialty pharmaceutical businesses in Europe - 57% of international revenues from Western Europe - New product pipeline 26 TOP TEN PRODUCTS ICN PHARMACEUTICALS ($ IN MILLIONS): PRODUCT NAME/TRADE NAME GENERIC NAME THERAP. CATEG 2000 2001 % INCREASE fluorouracil antimetabolit 35.5 46.1 27.8 pyridostigmine cholinesterase I 33.9 42.4 25.1 vitamin B vitamins 25.6 25.3 -1.2 laser Derm. 1.3 17.3 1230.8 combination Derm. 5.0 13.9 178.0 ribavirin antivirals 15.1 13.6 -9.9 N-furfuryladen Derm. 13.2 13.2 0.0 omeprazole Gastro 10.9 12.7 16.5 methoxal. antispor. 6.5 9.4 44.6 composite NSAID 8.3 9.2 10.8 SUB-TOTAL 155.1 202.1 30.3 All Other products 431.6 459.1 6.4 Biomed 58.5 60.0 2.6 TOTAL SALES 645.2 721.2 11.8 top ten % of total 26 31 27 SPECIALTY PHARMACEUTICALS REVENUES ------------------------------------------------------------------------------ SPECIALITY PHARMA REVENUES ANNUAL GROWTH 12% [BAR GRAPH OMITTED] ICN International Annual Growth 6% 2000 $338mm 50% 2001 $359mm of specialty pharma revenues ICN Americas Annual Growth 18% 2000 $307mm 50% 2001 $362mm of specialty pharma revenues 2000 $645mm 2001 $721mm 28 SPECIALTY PHARMACEUTICALS OPERATING INCOME* ----------------------------------------------------------------------------- SPECIALTY PHARMA OPERATING INCOME ANNUAL GROWTH 35% [BAR GRAPH OMITTED] ICN International Annual Growth 114% 2000 $12mm 22% 2001 $26mm of specialty pharma 0I ICN Americas Annual Growth 24% 2000 $94mm 2001 $117mm 78% of specialty pharma OI 2000 $105mm 2001 $142mm * Before corporate charges 29 SPECIALTY PHARMACEUTICALS EBITDA* ------------------------------------------------------------------------------ SPECIALTY PHARMA EBITDA ANNUAL GROWTH 26% [BAR GRAPH OMITTED] ICN International Annual Growth 32% 2000 $41mm 30% 2001 $54mm of specialty pharma EBITDA ICN Americas Annual Growth 24% 2000 $121mm 70% 2001 $150mm of specialty pharma EBITDA 2000 $162mm 2001 $204mm *Before corporate charges 30 0Q4'01 vs. Q4'00 (000's) ------------------- ---------------------------- -------------------------- -------------------------- -------------------------- North America Latin America Western Europe Eastern Europe ------------------- ---------------------------- -------------------------- -------------------------- -------------------------- ------------------- ------------- -------------- ------------ ------------- ------------- ------------ ------------- ------------ Actual Actual Actual Actual Actual Actual Actual Actual 2001 2000 2001 2000 2001 2000 2001 2000 ------------------- ------------- -------------- ------------ ------------- ------------- ------------ ------------- ------------ ------------------- ------------- -------------- ------------ ------------- ------------- ------------ ------------- ------------ Product Sales 44,637 37,756 41,806 37,079 56,436 50,620 32,802 30,752 ------------------- ------------------- Royalties - - - - - 12 - - ------------------- ------------------- Services 3,601 593 - - - - - - ------------------- ------------------- Revenues 48,238 38,349 41,806 37,079 56,436 50,632 32,802 30,152 ------------------- ------------------- Cost of Sales 8,231 5,296 11,009 10,489 29,087 28,919 18,753 18,073 ------------------- ------------------- Gross Profit 38,406 32,460 30,797 26,610 27,049 21,701 14,049 12,679 ------------------- ------------------- Gross Margin 82% 86% 74% 72% 48% 43% 43% 41% ------------------- ------------------- Operating Expenses: ------------------- ------------------- Selling 10,100 6,030 7,441 7,114 10,479 9,716 6,743 7,763 ------------------- ------------------- Advertising 8,704 5,456 3,488 2,787 2,578 3,239 1,767 1,254 ------------------- ------------------- Goodwill 2,909 2,750 1,067 830 2,384 1,937 (488) (462) ------------------- ------------------- R & D 780 641 41 62 397 849 (19) 77 ------------------- ------------------- G & A 1,577 4,662 1,713 1,484 3,990 5,244 1,700 2,692 ------------------- ------------------- Other (1,901) 57 1,871 1,521 (1,301) 1,713 2,207 2,156 ------------------- ------------------- Total Op. Exp. 20,142 19,606 15,6519 13,758 18,527 22,698 11,913 13,480 ------------------- ------------------- Operating Income 19,885 13,447 15,178 12,852 8,822 (965) 2,136 (801) ------------------- ------------------- O.P. % 41% 35% 36% 35% 16% (2%) % (3%) ------------------- ------------- -------------- ------------ ------------- ------------- ------------ ------------- ------------ -------------------- -------------------------- ---------------------------- ------------------------- AAA Biomedical Specialty Pharma -------------------- -------------------------- ---------------------------- ------------------------- -------------------- ------------ ------------- -------------- ------------- ------------- ----------- Actual Actual Actual Actual Actual Actual 2001 2000 2001 2000 2001 2002 -------------------- ------------ ------------- -------------- ------------- ------------- ----------- -------------------- ------------ ------------- -------------- ------------- ------------- ----------- Product Sales 13,658 8,685 15,363 13,692 204,702 178,584 ------------------- ------------------- Royalties - - - - - 12 ------------------- ------------------- Services - - - - 3,601 593 ------------------- ------------------- Revenues 13,658 8,685 15,363 13,692 208,300 179,189 ------------------- ------------------- Cost of Sales 6,846 7,220 1,013 7,279 80,999 77,256 ------------------- ------------------- Gross Profit 6,812 1,465 8,290 6,413 123,703 101,328 ------------------- ------------------- Gross Margin 50% 17% 54% 47% 60% 57% ------------------- ------------------- Operating Expenses: ------------------- ------------------- Selling 3,299 2,515 5,040 4,420 43,105 37,588 ------------------- ------------------- Advertising 646 688 650 608 15,831 14,202 ------------------- ------------------- Goodwill 1,056 1,131 522 423 7,450 6,609 ------------------- ------------------- R & D 22 42 - - 1,221 1,671 ------------------- ------------------- G & A 558 499 1,014 796 10,565 15,357 ------------------- ------------------- Other 12 35 138 975 996 6,457 ------------------- ------------------- Total Op. Exp. 5,593 4,920 7,364 7,422 79,158 81,884 ------------------- ------------------- Operating Income 1,219 (3,455) 928 (1,009) 48,146 20,049 ------------------- ------------------- O.P. % 9% (40%) 6% (7%) 23% 11% -------------------- ------------ ------------- -------------- ------------- ------------- ----------- 31 Q4 2001 Corporate Expenses ($ in Millions) ------------------------------------------------------------------------------- Corporate expenses 14 Estimated one time charges: Ribapharm charges/allocation 2 Other non-recurring charges 2 Facility Closing 1 --- Total one time charges 5 Corporate expenses without one time Charges 9 Product Sales 208 Corporate Expenses % of Sales 4% *Corporate charges do not include international corporate of $1 M 32 Q1'02 vs. Q1'01 (OOO's) -------------------- --------------------------- -------------------------- -------------------------- -------------------------- North America Latin America Western Europe Eastern Europe --------------------------- -------------------------- -------------------------- -------------------------- -------------- ------------ ------------- ------------ ------------- ------------ ------------- ------------ Actual 2002 Actual 2001 Actual 2002 Actual 2001 Actual 2002 Actual 2001 Actual 2002 Actual 2001 Product Sales 44,077 37,112 29,487 26,092 54,854 52,501 29,778 24,399 Royalties - - - - - 2 - Services 2,662 5,171 - - - - - - Revenues 46,939 42,280 29,487 26,092 54,854 52,533 29,776 24,399 Cost of Sales 6,587 5,010 8,269 6,885 26,945 28,626 16,877 16,224 Gross Profit 37,510 32,099 21,198 19,207 27,909 23,905 12,899 8,175 Gross Margin 85% 86% 72% 74% 51% 46% 43% 34% Operating Expenses Selling 10,421 11,212 6,296 5,782 10,072 9,205 6,058 5,980 Advertising 6,260 3,989 2,536 2,516 2,923 2,562 1,654 1,236 Goodwill 2,562 2,867 1,029 827 2,397 1,946 - (483) R&D 842 550 11 62 586 23 232 105 G&A 1,958 990 1,539 1,468 3,216 3,370 2,156 2,027 Other 1,747 (648) 740 397 121 2,469 915 1,165 Total Op. Exp. 23,780 18,960 12,151 11,052 19,315 19,585 11,013 10,350 Operating Income 16,592 18,310 9,047 8,155 8,594 4,322 1,886 (2,175) O.P.% 35% 43% 31% 31% 16% 8% 6% (9%) -------------------- -------------- ------------ ------------- ------------ ------------- ------------ ------------- ------------ ----------------------------------------------- --------------------------- ---------------------------- AAA Biomedical Specialty Pharma --------------------------- --------------------------- ---------------------------- ------------- ------------- ------------- ------------- -------------- ------------- Actual 2002 Actual 2001 Actual 2002 Actual 2001 Actual 2002 Actual 2001 Product Sales 11,820 10,638 15,785 15,474 185,790 166,246 Royalties - - - - - 2 Services - - - - 2,862 5,171 Revenues 11,820 10,638 15,785 15,474 188,661 171,419 Cost of Sales 5,613 5,619 7,431 7,118 71,722 69,485 Gross Profit 6,207 5,019 8,354 8,356 114,077 96,761 Gross Margin 53% 47% 53% 54% 61% 58% Operating Expenses Selling 2,533 1,548 4,577 4,200 39,955 37,927 Advertising 923 619 867 595 15,163 11,507 Goodwill 1,090 1,074 2 523 7,070 6,754 R&D 39 52 - - 1,710 792 G&A 684 487 891 783 10,444 9,425 Other (478) (22) 67 56 3,112 3,457 Total Op. Exp. 4,791 3,758 6,404 6,157 77,454 69,862 Operating Income 1,416 1,261 1,950 2,199 39,485 32,072 O.P.% 12% 12% 12% 14% 21% 19% --------------------------------- ------------- ------------- ------------- -------------- ------------- * Before Corporate allocations 33 Q1 2002 Corporate Expenses ($ in Millions) ------------------------------------------------------------------------------- Corporate expenses 20 Estimated one time charges: Ribapharm charges/allocation 2 Legal expenses 3 Stock Comp Charges 3 Debt Repurchase Expenses 1 Other non-recurring charges 2 IR/PR expenses 2 ---- Total one time charges 13 Corporate expenses without one time Charges 7 Product Sales 189 Corporate Expenses % of Sales 4% * Corporate charges do not include international corporate of $4M 34 Growth of Selected Top Products 1997 vs. 2001 ------------------------------------------------------------------------------- 40,000 35,000 30,000 [Bar Chart Omitted] 25,000 20,000 15,000 10,000 5,000 Calcitonin Virazole Omeprazol Bedoyecta Efudex 1997 Sales 2001 Sales 38 SPECIALTY PHARMACEUTICALS INTERNATIONAL ------------------------------------------------------------------------------ SPECIALTY PHARMACEUTICALS INTERNATIONAL - OVERVIEW ------------------------------------------------------------------------------ 2001 Revenue: US$359mm o 466 ethical products 2001 EBITDA: US$54mm* o 266 OTC products o A broad product portfolio with increasing focus on: - central nervous system - anti-infective / anti-virals [PIE CHART OMITTED] - dermatology Export (AAA) - alimentary tract and metabolism 14% - oncology Eastern Europe o 2,100+ sales and marketing staff 29% Western Europe * before corporate allocations 57% 41 SPECIALTY PHARMACEUTICALS AMERICAS ------------------------------------------------------------------------------ SPECIALTY PHARMACEUTICALS AMERICAS - OVERVIEW ----------------------------------------------------------------------------- o High-margined product portfolio 2001 Revenue: US$362mm o Increasing investment in sales 2001 EBITDA: US$150mm* and marketing o Significant expansion in dermatology o consistent new product flow [PIE CHART OMITTED] Latin America 35% North America 65% * before corporate allocations 44 SPECIALTY PHARMACEUTICALS AMERICAS - GEOGRAPHIC SALES ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2001 [PIE CHART OMITTED] Brazil $6mm Argentina $15mm Mexico $107mm Canada $24mm United States $210mm $362mm 45 SPECIALTY PHARMACEUTICALS AMERICAS - REVENUE MIX [PIE CHART OMITTED] ----------------------------------------------------------------------------- 2000 2001 ---- ---- Biomedical Biomedical $59mm $60mm Ethical Pharma Ethical Pharma $248mm $269mm $307 Photonics $33mm $362mm 46 THERAPEUTIC MIX - NORTH AMERICA PRODUCT SALES* ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2001 [PIE CHART OMITTED] HRT 8% Neurology 14% Dermatology 60% Other 18% $155mm *Excluding Biomedicals 47 TOP TEN PRODUCTS - SALES SUMMARY* ----------------------------------------------------------------------------- 2000 Sales 2001 Sales Gross Product Category (US$mm) (US$mm) Margin ------- -------- -------- ------- ------ Efudex Dermatologic 32.4 41.4 93% Bedoyecta Vitamin 25.5 25.3 71% Mestinon Myasthenia Gravis 18.1 24.3 85% NLite Dermatologic Laser na 19.0 64% Kinerase Dermatologic 12.6 12.1 86% GlyQuin Dermatologic 1.7 9.8 84% Virazole Antiviral 11.7 9.8 94% Oxsoralen Dermatologic 6.6 9.3 90% Testred HRT 5.2 7.9 93% CES HRT 5.7 5.3 41% --------- -------- -------- 119.5 164.2 82% Percentage of Total Revenue 48% 54% *Excluding Biomedicals 48 ICN NORTH AMERICA ----------------------------------------------------------------------------- MARKET LEADERSHIP IN PHYSICIAN SKIN CARE 49 DEMOGRAPHICS DRIVE DEMAND ----------------------------------------------------------------------------- o 78 million Americans between 35-54 o 22 million women with household income of $56,000 o Seek non-invasive products that will [GRAPHIC OMITTED] treat and prevent aging with minimal downtime o Growing importance of AK therapy as risk of skin cancer increases 50 SKIN CARE STRATEGY ----------------------------------------------------------------------------- [GRAPHIC OMITTED] DERMATOLOGY --- Rx DERMATOLOGY --- Physician Dispensed DERMATOLOGY --- Aesthetic Elective 51 BROAD SKIN AGING PORTFOLIO ----------------------------------------------------------------------------- [GRAPHIC OMITTED] 52 Top Ten Products North America* ------------------------------------------------------------------------------- (*$ in Millions) % Product 2001 Actual 2000 Actual Inc/(Dec) 2001 GM% ------- ----------- ----------- --------- ------- Efudix/Efudex $ 39,854 $ 30,802 29.4% 93.1% Mestinon 21,262 15,250 39.4% 84.6% N-Lite 14,552 1,144 1172.0% 61.5% Kinerase 11,716 12,365 -5.2% 85.6% Bleaches 9,827 1,735 466.4% 84.3% Oxsoralens 9,212 6,478 42.2% 90.3% Androif/Testred 7,962 5,168 54.1% 92.6% C.E.S. 5,350 5,743 -6.8% 41.2% Ancobon/Ancotil 3,758 1,785 110.5% 51.8% Glyderm 3,044 3,278 -7.1% 68.0% ----------- ----------- --------- Subtotal $ 126,537 $ 83,748 51.1% All Others 47,137 36,839 28.0% ----------- ----------- --------- Grand Total $ 173,674 $ 120,587 44.0% ----------- ----------- --------- 53 Source: ICN North America GLYQUIN TRx MARKET SHARE ----------------------------------------------------------------------------- 52 WEEK TREND [GRAPHIC OMITTED] Source: IMS Health National Prescription Audit 54 WRINKLE REDUCTION PROCEDURE MARKET ----------------------------------------------------------------------------- Number of Procedures (000s) 1997 1998 1999 2000 2001 -------- -------- ------- -------- -------- BOTOX 65 180 498 1,097 1,600 ABLATIVE RESURFACING 64 283 1,262 1,358 2,399 COLLAGEN 347 406 475 592 1,099 NONABLATIVE LASER -- -- -- 50 150 ------- ------ ------ ------ ------ TOTAL 476 869 2,235 3,097 5,248 ======= ====== ====== ====== ====== Sources: ASAPS, ICN Estimate 55 GROWTH DRIVERS ----------------------------------------------------------------------------- NLITE Laser Collagen Replenishment o GROWTH OF NON ABLATIVE PROCEDURES o CONTINUED PHYSICIAN ADOPTION FOR NON-ABLATIVE LASERS [GRAPHIC OMITTED] o COMBINATION THERAPY WITH BOTULINUM TOXIN FOR WRINKLES DUE TO COLLAGEN DEFICIENCY o MULTI APPLICATION SYSTEM - FDA approved: wrinkles - Current studies: acne scars, vascular, active acne o CONSUMER MARKETING - Drive patients directly to physicians 56 PHYSICIAN DIRECT ----------------------------------------------------------------------------- o DISTRICT OFFICES - AESTHETIC ACCOUNT MANAGEMENT [] AREAS SERVED 2000 2001 (ACTUAL) (ACTUAL) -------- -------- PROCEDURES PER MONTH NA 4200 STATES SERVED 47 50 -------------------- -------- -------- [GRAPHIC OMITTED] DOCTORS SERVED PLASTIC SURGEONS 687 1,400 Dermatologists 518 2,977 --- ----- 1,105 4,377 OBGYN NA 1,055 Podiatrists NA 0 -- - 1,105 1,105 ----- ----- TOTAL 2,720 5,432 57 R&D PIPELINE ----------------------------------------------------------------------------- PHOTOTHERAPY NEW INDICATION PIPELINE ----------------------------------------------------------------------------- DISCOVERY PRECLINICAL CLINICAL SUBMISSION CLEARANCE PERIOCULAR WRINKLE GENERAL WRINKLE [BAR GRAPH OMITTED] VASCULAR ACNE SCAR STRIAE ACNE 59 ICN INTERNATIONAL PIPELINE ----------------------------------------------------------------------------- [GRAPH OMITTED] Therapeutic Area Discovery Preclinical Phase I Phase II Phase III NDA ICN INT 0001* (extended release) TRICHOVAC (new indication) ICN INT 0002 (new indication) ICN INT 0003 (topical) *Bioequivalence/kinetic-study required 60 ICN LATIN AMERICA PIPELINE ----------------------------------------------------------------------------- [GRAPH OMITTED] Discovery Preclinical Phase I Phase II, Phase III NDA BIOPROTECT Antioxidant ARGENTAFIL Topical antibacterial SINPEBAC Skin infection CLOBESOL Anti-allergy & anti-inflammatory IVEXTERM Intestinal parasites YUREDOL Muscle pain EUVENT Bronchial asthma KETOPROFEN Pain, fever, inflammation 61 THE VISION ----------------------------------------------------------------------------- o Concentrate in the fast growing skin aging market o Cross sell Rx, light and cosmetic products. o Invest in product development, clinical proof and line extensions. o Accelerate consumer advertising. o Licensing, product and corporate acquisition consistent with the growth strategy. ICN - FORMULA FOR SUCCESS ----------------------------------------------------------------------------- o Record Operating Performance o Strong Drivers for Future Growth o Successful Completion of Ribapharm IPO o Final Stages of Restructuring on Target o Independent Board o Proven Management Team with Global Pharmaceutical Experience 63 Following is the text of a press release issued by ICN Pharmaceuticals, Inc. on May 10, 2002: [Logo-ICN] ICN PHARMACEUTICALS, INC. MAY 2002 [ICN Logo] ICN CHAIRMAN ANNOUNCES PLAN FOR CEO SUCCESSION COSTA MESA, CA, May 10, 2002 - ICN Pharmaceuticals (NYSE: ICN) today announced that its Board of Directors approved a CEO succession process for the company. Milan Panic, Chairman and Chief Executive Officer, asked the Board to appoint a committee made up of independent directors who will seek candidates and recommend a smooth transition plan. The Board appointed Norman Barker, Jr., who will be Chair, Roderick Hills and General Ronald Fogleman, with company CEO Milan Panic as a non-voting member, as is typical in situations where companies are conducting a succession search. Mr. Panic commented, "I founded this company and have led it through 42 years of innovation and strong operating performance, including record results for the first quarter of this year and the successful completion of our $300 million IPO of Ribapharm, the second largest IPO in biotechnology." Mr. Panic is committed to carrying out an orderly management succession plan, including ICN management in the U.S. and in Europe with specific emphasis on Russia and other Eastern European countries. The committee has retained the international executive search firm of Korn/Ferry International to assist with the search and will report back recommendations to the Board of Directors at its own discretion. ICN is an innovative, research-based global pharmaceutical company that manufactures, markets and distributes a broad range of prescription and non-prescription pharmaceuticals, and devices under the ICN brand name. Its research and new product development focuses on innovative treatments for dermatology, oncology and hepatology. Additional information is also available on the Company's Website at http://www.icnpharm.com. _______ THE SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. This press release contains forward-looking statements that involve risks and uncertainties, including but not limited to, projections of future sales, operating income, returns on invested assets, regulatory approval processes, and other risks detailed from time to time in the Company's Securities and Exchange Commission filings. ###