ICN’s Public Face During Proxy Battle Steps Down
Analyst: Edwards Could Benefit in Valve Supplier Fallout; Healthcare Directors Fare Well
HEALTHCARE
by Vita Reed
Milan Panic’s continental,and sometimes abrasive,tone wasn’t the only sound coming out of last spring’s proxy battle at ICN Pharmaceuticals Inc., the Costa Mesa-based drug maker.
The fight, which preceded Panic’s recent retirement as ICN’s chief executive, also brought the face and carefully modulated voice of Alan Charles, the drug maker’s executive vice president of corporate relations, to the forefront.
But Charles’ voice is no more at ICN. The company announced Aug. 21 that he resigned to pursue other interests. A spokesman said that ICN isn’t focusing on finding a replacement.
Charles, who handled public relations while he was a vice chancellor at the University of California, Los Angeles, assertively defended the position of Panic against criticism leveled by institutional shareholders dissatisfied with the company’s market value and direction.
Franklin Mutual Advisors LLC of Short Hills, N.J., and Iridian Asset Management LLC of Westport, Conn., led this year’s proxy charge against ICN. Franklin and Iridian’s slate won the election after a campaign that featured plenty of verbal jousts between the shareholders and ICN management, often through Charles.
“This is not a turnaround company. This is not an insolvent company. This is not a company that’s going downhill financially,” Charles said in April. “It’s had fabulous (performance),six financial records were set at the end of 2001 and the value of the company keeps going up. One would think these are things shareholders would not want to endanger by overturning management.”
Charles, a lawyer with degrees from UCLA and Harvard Law School, had served on ICN’s board of directors since 1986. He was appointed to the corporate relations post in January.
Prior to his ICN executive appointment, Charles was director of the Institute for Civil Justice at The Rand Corp. of Santa Monica.
In his corporate position, Charles was heavily involved in ICN’s campaign to support its slate and tout its performance to shareholders. In April, he said the drug maker planned to meet with larger shareholders, send letters to shareholders and run advertisements in the Wall Street Journal and Barron’s,ads did run in those papers in the spring.
“It includes responding to mindless attacks,” Charles said of the campaign. “It’s not easy to drop everything you’re doing in a business and start doing this silly stuff.”
In late May, about a week before the pivotal shareholder vote, Charles criticized the dissidents’ campaign, saying they were more interested in replacing management than boosting value. He called their allegations “high-pitched. I would say it’s intense, and in a lot of ways, unfair. They’re claiming almost anything that would lead to a vote for the dissident slate,” he said.
Despite the combative nature of the proxy battle, Charles showed tact in making ICN’s case and was gracious in the company’s defeat.
Heart Valve Palpitations
Edwards Lifesciences Corp., Irvine, could see some gains in the fallout from a Food and Drug Administration warning about products from another heart valve company, according to one analyst.
Thom Gunderson of U.S. Bancorp Piper Jaffray said Edwards and Minneapolis-based Medtronic Inc. could see more business if supplies of human heart valves processed by Kennesaw, Ga.-based CryoLife Inc. tighten.
Last month, the FDA sent a warning letter to doctors saying CryoLife’s human heart valves carry an infection risk. Regulators didn’t recall the heart valves because they are essential for correcting certain heart problems with children. But they urged doctors to consider alternatives to the CryoLife products, causing the company’s share to plunge.
Edwards makes biomechanical valves using pig tissue. Any gains for Edwards stand to be marginal,Gunderson said he doesn’t see the trend impacting the company’s earnings. An Edwards spokeswoman told Dow Jones Newswires the company sees other sources stepping up to provide allograft valves, or human-donated valves. Edwards itself works with the American Red Cross to procure allograft valves.
Study: Directors Well Compensated
Directors of healthcare and drug companies are among the highest paid, according to a new study by Mercer Human Resource Consulting, which has an office in Orange.
Mercer’s study showed that the median total direct compensation for directors at 14 companies represented in the study totaled $180,163 last year.
Mercer’s survey found that the highest pay levels for all directors were found in the computer and data services and the computers and office equipment industries. The study found that total direct compensation for directors in those industries was $238,494 and $225,724, respectively. Telecommuni-cations company directors also ranked ahead of healthcare/pharmaceutical directors, at $183,197.
Mercer defines “total direct compensation” as the sum of annual retainers paid in cash or shares, meeting fees, and annual service fees paid for board and committee service, and long-term incentive compensation.
Overall, Mercer found that director pay went up 10.9% last year, even in view of economic turmoil in many industries. The overall median total direct compensation figure was $115,687, up from $104,439 in 2000.
New Hospice Coming to OC
St. Joseph Hospital-Orange and LaVeta Healthcare are joining to open Casa Cicely at LaVeta, an inpatient hospice and palliative care unit across the street from the hospital. The 13-bed unit is set to accept its first patients by the second week in October.
The unit is set to include 24-hour skilled nursing services, along with scenic grounds, which can be used for relaxation, reflection and visiting with family members.
