SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16249 / August 11, 1999
SECURITIES AND EXCHANGE COMMISSION v. ICN PHARMACEUTICALS, INC., MILAN PANIC, NILS O. JOHANNESSON, AND DAVID C. WATT,
Civil Action No. 99-1016DOC (ANX) (C.D. Cal. August 11, 1999)
SEC Sues ICN Pharmaceuticals, Milan Panic, and Other Top Officials for Fraud
The Securities and Exchange Commission filed a complaint today in federal district court in Los Angeles against ICN Pharmaceuticals, Inc. ("ICN"), a Southern California-based manufacturer and distributor of pharmaceutical products, Milan Panic, ICN's President and Chairman of the Board of Directors, Nils O. Johannesson, a former Executive Vice-President of Research and Development at ICN, and David C. Watt, ICN's General Counsel. The Commission has charged the defendants with failing to publicly disclose that the FDA had rejected ICN's application for approval of a new drug to treat hepatitis C, and with making fraudulent misleading public statements about that new drug application.
The Commission's complaint alleges that ICN received a letter from the FDA on November 28, 1994 informing ICN that its drug application for ribavarin was "not approvable" because the data in ICN's drug application failed to show that ribavarin was safe and effective in the treatment of hepatitis C. The complaint further alleges that on December 22, 1994 the FDA sent ICN another letter which restated the FDA's earlier rejection of its drug application, and urged ICN to withdraw its application. The Commission alleges that the defendants failed to publicly disclose the FDA's November 28, 1994 rejection of its drug application until it issued a press release on February 17, 1995, and that prior to the issuance of that press release, ICN made numerous public statements which misled the public about the status of its ribavarin application.
The Commission's complaint charges the defendants with violating Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. The Commission is seeking to permanently enjoin each of the defendants from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and is seeking an order requiring each of the defendants to pay civil penalties pursuant to Section 21(d)(3) of the Exchange Act. The Commission is also seeking an order barring Panic from serving as an officer or director of a publicly-traded company.http://www.sec.gov/litigation/litreleases/lr16249.htm