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Ribavirin Substitute: Viramidine entering phase III
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By Jed Seltzer
NEW YORK, Nov 6 (Reuters) - Shares of ICN Pharmaceuticals Inc. soared on Thursday after it said its experimental Hepatitis C drug carried lower safety risks than the company's commonly used treatment, prompting the start of late-stage clinical trials.
ICN in the midst of a restructuring to focus on prescription drugs for the North American market, also reported a wider third-quarter loss due to its acquisition of Ribapharm Inc., which made the older hepatitis drug, ribavirin.
But ICN stock shot up 30 percent as revenue fell less than some investors had expected and the the company said it would commence Phase III clinical trials of the new Hepatitis C drug meant to replace ribavirin.
The company said it would start Phase III trials of an anti-viral drug called Viramidine for Hepatitis C and the trials would compare it with ribavirin.
In Phase II trials, Viramidine was effective and did not cause hemoglobin, or red blood cell, levels to fall as much as ribavirin, meaning the new drug like ly would lead to less cases of anemia, the company said.
Ribavirin is expected to face generic competition in the United States soon, so a new and improved drug could help ICN stave off sales that could be lost to cheaper copycats.
ICN's receives royalties on ribavirin sales from Schering-Plough Corp. <<A HREF="aol://4785:SGP">SGP.N</A>> and Roche Holding AG <ROCZg.VX>, which both use the drug as part of combination therapies for the liver disease. Hepatitis C is the largest cause of liver transplants and can be fatal.
ICN's royalties from ribavirin have decreased in recent quarters as Roche's combination treatment is new and the Swiss company had lowered prices to compete with Schering-Plough.
Overall, ICN reported a third-quarter loss of $82.4 million, or 99 cents a share, compared with a loss of $74.9 million, or 90 cents a share, a year ago. Third-quarter royalty revenue from ribavirin slumped 43 percent to $36.2 million.
Excluding the costs of acquired research and development related to the Ribapharm acquisition, ICN reported a profit of 23 cents a share in the latest quarter.
Total revenue declined to $167.5 million from $171.7 million. Some analysts and investors had expected the revenue to fall substantially below that level.
ICN last month announced plans to cut costs and close several manufacturing plants, as part of a reorganization to slim down following a vast expansion over decades under founder and CEO Milan Panic, who has since retired. Panic was criticized for the way he spent the company's money, including a $33 million bonus he received in connection with the original spin-off of Ribapharm.
Shares of ICN, the top percentage gainer and among the most actively traded shares were up $5.05, or nearly 27 percent, at $23.78 in midday trading on the New York Stock Exchange, after touching a year high of $25.50 earlier on Thursday.
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