Spinoff Ribapharm Hits Down Draft on Wall Street
Beckman Fills Key Division Spot; ProCare One Bought by Horizon Health
HEALTHCARE by Vita Reed
Some in the investment community saw Ribapharm Inc., the biotechnology arm of Costa Mesa-based ICN Pharmaceuticals Inc., as the crown jewel of the drug maker’s breakup plan.
They pointed to its library of some 3,500 modified DNA compounds and ribavirin, an anti-viral drug marketed by Schering-Plough Corp. as part of the Rebetron treatment for hepatitis C.
But the difficult stock market of late,particularly for drug makers,hasn’t been easy on Ribapharm, which is based out of ICN’s Costa Mesa campus.
At recent check, Ribapharm, which ICN publicly sold 20% of in April, was trading around 9,below its opening price of 10 and a target price of $13 to $15. The company’s hit a high of 11.80 on April 9.
But Ribapharm’s market value still is impressive: it was at $1.3 billion early last week, compared with ICN’s $2 billion market capitalization at recent check.
Meanwhile, the newly seated board of directors at ICN said it planned to review previously announced plans to distribute the remaining 80% of Ribapharm and break off ICN’s international unit, citing “changed circumstances and marketing conditions.”
ICN had said it would distribute the remaining shares of Ribapharm to shareholders within six months after the initial spinoff. Ribapharm’s public debut was part of a reorganization plan that was demanded by dissident shareholders who felt that ICN wasn’t living up to its potential.
Ribapharm also became an issue during a bruising proxy fight that led to the election of three independent directors during ICN’s annual meeting in May. During the proxy battle, ICN said it was going to drop a plan to grant stock options in Ribapharm to company executives in the face of investor opposition.
But dissident shareholders kept up the criticism, particularly after Milan Panic, ICN’s now-retired founder and chief executive, paid himself a $33 million bonus after Ribapharm’s offering.
In fact, dissidents wanted to take aim at Ribapharm’s board and management “to recompose those in such a way that investors would have full confidence in the independence of the board,” said Tim Rankin, an assistant portfolio manager at Franklin Mutual Advisers LLC of Short Hills, N.J. Franklin and Iridian Asset Management of Westport, Conn. led the proxy fight that placed three new independent directors on ICN’s board, including interim Chief Executive Robert O’Leary.
Beckman Hires Diagnostics Head
Fullerton-based Beckman Coulter Inc. has filled a key position.
The maker of medical diagnostic and research gear has hired Scott Garrett, a Baxter International Inc. alum, as president of its clinical diagnostics division, which counts $1.4 billion in yearly sales.
Garrett replaces longtime division chief Albert Ziegler, who retired from Beckman Coulter in April of this year.
Most recently, Garrett served as chief executive of Chicago-based healthcare investment firm Garrett Capital Advisors LLC. Before that, he was chief executive of Kendro Laboratory Products LP, a maker of testing products that was bought by Charlotte, N.C.-based SPX Corp. last year.
“I have spent my entire career in the healthcare and life science industry focused, for the most part, on medical devices and scientific instruments,” Garrett said in a statement. “I’ve been keenly aware of Beckman Coulter and can frankly say there is no company in the industry where I would rather work.”
Earlier in his career, Garrett spent 20 years with Baxter. As a member of Baxter’s executive team, Garrett played a key role in the company’s 1994 sale of Dade International Inc.,now Dade Behring Inc.,to a group of investors.
Ziegler, 63, spent 15 years with Beckman. He is credited with building up the company’s clinical diagnostics business and plans to serve as a Beckman consultant through year’s end. Ziegler joined Beckman as vice president for North America operations in what was then the diagnostics systems group in 1986.
Nurse Staffing Agency Acquired
Horizon Health Corp. of Lewisville, Texas, has bought ProCare One Nurses LLC of Santa Ana. Terms weren’t disclosed.
ProCare provides specialized nurse staffing services to hospitals in California and Michigan.
ProCare’s annual revenue is around $24 million. The company provides more than 375 nurses to 94 client hospitals, according to Horizon. ProCare was founded in 1987 and began as a perinatal agency that provided nurses to Southern California hospitals, eventually growing into a full-service agency that provided stationary and traveling nurses in a range of specialties.
Horizon officials said the ProCare deal would allow it to diversify within the healthcare services industry and that ProCare’s Santa Ana corporate office will remain open. Horizon’s other lines of business include providing employee assistance plans and mental health services to businesses and managed care organizations, along with being a contract manager of clinical programs offered by general acute-care hospitals.
Healthcare Execs Talk Costs
Health insurance premiums have risen at a rapid rate,some estimates have costs going up in the 20% range or higher for 2003.
The subject of rising costs is set to be raised July 16, when the National Human Resources Association’s Orange County affiliate presents “The Future of Employer Sponsored Healthcare” at the Orange County Airport Hilton. There are three scheduled panelists:
n Christopher Wing, president of Health Net of California and former president of PacifiCare of California.
n Michael Stephens, president and chief executive of Hoag Memorial Hospital Presbyterian, Newport Beach.
n Christine Metz, a West Coast-based vice president of sales for Lumenos Inc., a private, venture-backed health services company out of Alexandria, Va. Lumenos’ healthcare approach is based on the concept of combining medical savings accounts with a high-deductible insurance policy for more serious conditions.
Bits and Pieces:
OnCure Technologies Corp., Newport Beach, entered a pact with Positron Imaging Technologies LLC of Oakdale to acquire Positron’s 20% equity interest in Jaxpet LLC, a Florida entity that owns a mobile positron emission tomography scanner. The scanner performs diagnostic tests on cancer patients. Jaxpet is now a subsidiary of OnCure, which owns, operates and manages 13 radiation cancer treatment centers OptimumCare Corp., Laguna Niguel, said it’s signed a letter of intent to acquire an undisclosed medical staffing company with annual revenue of around $3 million. OptimumCare provides outpatient and inpatient behavioral health services … National Fibromyalgia Association, Orange, launched Fibromyalgia Aware, a consumer-oriented magazine for people with the disease, which is marked by fatigue, widespread muscular pain and tenderness on specific points of the body I-Flow Corp., Lake Forest, launched AskYourSurgeon.com, a Web site that features information about its On-Q post-operative pain relief delivery system.
