ICN Pharmaceuticals Inc. (corporate restructuring) / ICN three-way split (Ribapharm carve-out)

Chronic Hepatitis C

Disease Overview

Chronic hepatitis C virus (HCV) infection is a blood-borne liver disease that, untreated, progresses over decades to cirrhosis, hepatocellular carcinoma, and liver failure. In 2000-2002 it was a leading indication for liver transplant in the US and the dominant chronic viral liver disease.

Competitive Landscape

In June 2000 the chronic hepatitis C treatment landscape was effectively a Schering-Plough monopoly. Schering held exclusive worldwide rights (outside the EU) to oral ribavirin from ICN under a 1995 license, and combined it with its own interferon alfa-2b (Intron A) as Rebetron — the FDA-approved standard of care that achieved sustained virologic response in roughly 30-40% of patients. Roche's Roferon-A (interferon alfa-2a) was the principal competing interferon backbone. The pegylated interferons that would soon reshape the market — Schering's PEG-Intron and Roche's Pegasys — were in late development. ICN's restructuring announcement spun the ribavirin royalty stream from Schering-Plough into Ribapharm Inc. as a pure-play royalty/R&D vehicle, ICN International for emerging-markets pharma, and a slimmed-down ICN parent. UBS Warburg, the deal's banker, argued the sum-of-the-parts could exceed the conglomerate's market value by $1-1.5B. The split was driven by activist pressure and SEC issues around chairman Milan Panic; Ribapharm IPO'd in April 2002 at $10/share and was reabsorbed by ICN in late 2002, with the corporate entity later rebranding as Valeant Pharmaceuticals.