Milan Panic, widely criticized for personal loans and large bonuses granted to him by his company, yesterday said he would retire at the end of the month as chairman and chief executive officer of ICN Pharmaceuticals Inc.
After a shareholder vote in May added three dissident-backed directors to three already serving on the pharmaceutical company's nine-member board, analysts expected the Yugoslav-born Mr. Panic, who founded ICN in 1959, to be forced out.
Mr. Panic, 72, had previously said he would step down as ICN's CEO but had not set a date.
Some shareholders complained that Mr. Panic dragged his feet on a company restructuring.
As part of the reorganization, Costa Mesa, Calif.-based ICN in April spun off about 20 per cent of a unit that makes ribavirin, used in the blockbuster Hepatitis C treatment Rebetron, co-marketed by Schering-Plough Corp. Mr. Panic received a $33-million (U.S.) bonus after the initial public offering of the unit, Ribapharm Inc.
Sources close to Mr. Panic, who served as prime minister of Yugoslavia before Slobodan Milosevic, have said he may run for the Serbian presidency in upcoming elections.
Shares of ICN closed up 27 cents to $24.88 in trading on the New York Stock Exchange, near their 52-week low of $24.01.
Mr. Panic will remain on ICN's board and serve as a consultant to the company, which focuses on dermatology products and is expected to have sales of more than $1-billion this year.
"I have given my life's work to building this successful company, and I have led it for more than 40 years," Mr. Panic said. "I started with $200 and watched this company grow to become a billion-dollar multinational corporation."
But the company has faced a storm of criticism recently.
The U.S. Securities and Exchange Commission is investigating ICN for not letting investors know that U.S. regulators had concerns about ribavirin and would not approve it as a mono-therapy, or a drug to be used alone.
Mr. Panic sold ICN stock before disclosing the U.S. Food and Drug Administration questions to shareholders, and as a result the SEC is seeking to ban Mr. Panic from serving again as an officer or director of any company.
In a case brought by the U.S. Justice Department, ICN pleaded guilty in December to a felony count of fraud and paid a $5.6-million fine for not disclosing the FDA's uneasiness about ribavirin sooner.
ICN has also been chastised for its overall spending and its payments to Mr. Panic, both of which he defended last week at a pharmaceuticals conference in New York hosted by UBS Warburg.
"We are not in the business of manipulating the books," he said. "The people that develop the drugs and make true contributions deserve to be paid more. That's for everyone and that's for me too, although I don't get paid as much as I'd like."
ICN paid Mr. Panic a $900,000 salary last year, plus a $1-million bonus and stock options. The company in April, 2001, loaned Mr. Panic $2.7-million as part of its stock options program.