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.
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(Name of Registrant as Specified in its Charter)
N/A
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(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.
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
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Following is information presented at an ICN Pharmaceuticals, Inc. analyst
meeting on May 24, 2002.
THE SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995. This presentation 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, market acceptance of and continuing demand for ICN
Pharmaceuticals, Inc.'s products, and other risks detailed from time to
time in the Company's Securities and Exchange Commission filings. It also
assumes that the Company's operations are not adversely affected by any
disruption that may be caused by the pending proxy contest.
We shall now provide our current pro forma estimate of year end results for
specialty pharmaceuticals. We are presenting the estimate in two ways:
One is without ICN's ownership of 80% of Ribapharm "ICN Specialty
Pharmaceuticals".
The other is with ICN ownership of 80% of Ribapharm.
Our estimate is as follows:
Sales GP% EBITDA EPS
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Without Ribapharm: $800+ M 62% $200+ M $.80+
With Ribapharm no IPO: $1B 62% $400+M $2.05+
With IPO $600+M $3.00+
As I mentioned, these projections do not include proxy expenses, one time
charges, or IPO profits or expenses.
Consolidated Condensed Statement of Income
Projected Year End December 2002
Excludes one time charges*
ICN Consolidated without IPO
Year Ended
December 2002
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Low Range Adjustments High Range
--------- ----------- ----------
Total Revenues: $ 1,122 $ 1,122
Product Sales 810 810
Royalties 312 312
Cost of Product Sales 315 (11) 304
Gross Profit 484 60% 495 61%
Selling, general and administrative 337 42% (2) 335 41%
Research and development costs 80 80
Amortization of goodwill and intangibles 28 28
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446 443
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Income from Operations 361 32% 375 33%
Interest, net 30 30
Translation and exchange losses, net 3 3
Income before provision for income
taxes and minority interest 328 342
Provision from income taxes 115 35% 5 120 35%
Minority Interest 23 23
Income 190 199
Cumulative effect of change in accounting (4) (4)
Net income $ 194 $ 203
Diluted EPS - Before Extraordinary Item $ 2.13 $ 2.21
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Diluted EPS $ 2.16 $ 2.25
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Shares O/S 99.50 99.50
Consolidated Condensed Statement of Income
Projected Year End December 2002
Excludes one time charges*
Specialty Pharmaceuticals
Year Ended
December 2002
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Low Range Adjustments Hlgh Range
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Total Revenues; $ 810 $ 810
Product Sales 799 799
Services 11 11
Cost of Product Sales 315 (11) 304
Gross Profit 484 61% 495 62%
Selling, general and administrative 325 40% (2) 323 40%
Research and development costs 18 18
Amortization of goodwill and intangibles 28 28
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372 370
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Income from Operations 123 15% 13 136 17%
Interest, net 30 30
Translation and exchange losses, net 3 3
Income before provision for income
taxes and minority interest 90 103
Provision from income taxes 30 34% 5 35 34%
Minority Interest 0 0
Net income $ 59 $ 68
Diluted EPS $ 0.70 $ 0.80
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Shares O/S 84.40 84.40
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Consolidated Condensed Statement of Income
Projected Year End December 2002
Excludes one time charges*
ICN Consolidated without IPO
Year Ended
December 2002
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Low Range Adjustments Hlgh Range
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Total Revenues: $ 1,122 $ 1,122
Product Sales 810 810
Royalties 312 312
Cost of Product Sales 315 (11) 304
Gross Profit 484 60% 495 61%
Selling, general and administrative 337 42% (2) 336 41%
Research and development costs 80 80
Amortization of goodwill and intangibles 28 28
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446 443
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Income from Operations 361 32% 375 33%
Net gain on IPO* -203 (203)
Interest, net 30 30
Translation and exchange losses, net 3 3
Income before provision for Income
taxes and minority interest 531 13 544
Provision from Income taxes 203 38% 208 38%
Minority Interest 23 23
Income 306 314
Cumulative effect of change in accounting 26 26
Net income $ 278 $ 288
Diluted EPS - Before Extraordinary Item $ 3.28 $ 3.37
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Diluted EPS $ 3.02 $ 3.11
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Shares O/S 99.50 99.50
*Note: Does not include the following expenses
(a) Gain on IPO - $257M gain, bonus of $48.7M, $1M other UBS expenses.
(b) Extraordinary loss on redemption of 8 3/4% senior notes, net of tax.
(c) Severance of $4M, $6M of proxy costs and additional legal fees of $4M
(d) Circe acquisition in process R&D of $12M.
(e) Taxes - $91.4M on IPO, $(3.2)M on legal fees, $(760)k on Circe.
(f) Stock comp expenses of $3M, and $2M of other non recurring expenses
ICN
International ICN International Ltd.
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Costa Mesa Report May 2002 Marketing & Sales
Marketing Activity Focus
Trichovac(R) Skin Care OTC/ Selected
Urovac(R) Kelo-Cote(R) countries in
AAA
Global Product enter Selected
range policy products local
to global
Dermatological [Graphic
range & Unicare build Omitted] expand Antivirals,
anticancer
International
Marketing WE & AAA
organisation defend markets
(incl. FF sizes)
Galenical life cycle
management
(e.g. Virazole(R) i.v., Selected local Efudix(R) for Actinic
Mestinon(R) QS) portfolios Keratoses
ICN INTERNATIONAL LTD.
COSTA MESA REPORT MAY 2002 MARKETING & Sales
THERAPEUTIC AREA FOCUS
INTERNATIONAL PORTFOLIO
DERMATOLOGY/VENEREOLOGY GYNAECOLOGY
- Derm range - Trichovac(R)
- Glyderm(R) - Urovac(R)suppos.
- Kinerase(R) - (Norprolac(R))
- Kelo-Cote(R) - Derm range
- (Minocycline s.r.)
- Solaquin(R) bleach cream
- Nlite(R) ICU'S
- Trichovac(R) - Virazole(R)i.v. aerosol (Aiolos)
- (Combi Acyclovir/Ribavirine cream) - Ancotil(R)
- (Morphine range)
CNS (MG SPEC. ONLY)
- Mestinon(R)s.r. (quick-slow)
Following is the text of a letter sent by Senator Birch Bayh to
Iridian Asset Management LLC and Franklin Mutual Advisors, LLC on
May 23, 2002:
[Letterhead of Birch Bayh]
May 23, 2002
Iridian Asset Management LLC
276 Post Road West
Westport, CT 06880
Franklin Mutual Advisors, LLC
51 John F. Kennedy Parkway
Short Hills, NJ 07078
Dear Sirs:
Your open letter to ICN stockholders dated May 22, 2002 is another
example of the constant theme that you have used during the entire proxy
contest - a personal attack on ICN CEO Milan Panic. I find it incredible to
believe that the "burden" you described in your letter is the same man that
has built ICN Pharmaceuticals into the multi-billion company it is today.
Yes, it is easy to criticize and attack. You have become very good at it.
It is not as easy to start with $200 and develop one of the top selling
pharmaceutical products in the world. I can attest to the fact that the
success of ribavirin is attributable to the vision and perseverance of
Milan Panic. When many argued that ICN should not expend any more funds on
the development of ribavirin, Mr. Panic had the wisdom not to listen to
them.
If I read your letter without any background about ICN, I would have
thought from the tone of your remarks that ICN was a troubled company, on
the brink of bankruptcy. But nothing could be further from the truth. 2001
was a banner year for ICN in which many record operating results were
achieved. It was a year that our economy was in a recession and our country
experienced one of the worst disasters of its history. Yet ICN was able to
overcome these obstacles and provide increased value to its stockholders.
ICN stock would be trading at a higher value today were it not for your
constant, misleading and vitriolic attacks. I am convinced that our
successes, both past and present, are attributable in large part to Mr.
Panic.
ICN has, and is keeping, its promises. Mr. Panic had the foresight to
decide to split the company into three separate businesses. It is difficult
for a founder of a company to make that decision. But, Milan had the
ability to take action in the best interests of all stockholders rather
than to maintain the status quo. The decision was based upon outside advice
that such action would increase shareholder value. But change takes time.
We did not make the decision to change ICN for the sake of change.
Therefore, our actions to implement the change must be done in a careful
and sensible manner. We did not complete the initial public offering of
Ribapharm until April of this year not because we dragged our feet, but
because we waited until the markets permitted us to refinance our debt and
sell the Ribapharm equity on acceptable terms, leading to the second
largest initial public offering for a biotechnology company at a time when
other biotechnology companies were virtually unable to go public.
I am proud to have served as a director of ICN and been able to help
Mr. Panic achieve his dream that has benefited all stockholders. In my
opinion, your ill defined plan simply to change proven leadership will not
benefit shareholders, but will only lead to the erosion of shareholder
value. In addition, you are well aware that the ICN Board has employed
Corn-Ferry, a highly respected executive search company, to identify a
candidate to succeed Mr. Panic.
Very truly yours,
/s/ Birch Bayh
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Birch Bayh