ICN profit warnings for 2000 and 2001

ICN Pharmaceuticals has issued a profit warning for 2000 and 2001,saying that its income will be hit by higher R&D costs, taxes and a slowing royalty stream from ribavirin, ICN's hepatitis C treatment sold by Schering-Plough in combination with its own Intron A (interferon alfa-2b) as Rebetrol.

ICN expects 2000 earnings per share to range between $1.25 and $1.30, well short of First Call/Thomson Financial's consensus estimate of $1.68 per share. Revenues for last year are expected to rise in the mid-single digits, while EPS for 2001 should be in the range of $1.50-$1.55. ICN will release all its full-year 2000 financials in the first week of March.

The slowdown in ICN's royalties on ribavirin is a result of doctors who normally prescribe the drug waiting for S-P's Peg-Intron (peginterferon alfa-2b; Marketletter November 6, 2000) to get regulatory approval in the USA. The product has already received pan-European approval. Despite the profit warnings, ICN still expects full-year 2000 ribavirin royalties of $150-$155 million, compared with $109 million in 1999, while for this year, the firm's estimate is $180-$190 million.