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ICN Pharmaceuticals Reports Record Third Quarter Revenues.

COSTA MESA, Calif., Nov. 1 /PRNewswire/ --

ICN Pharmaceuticals, Inc. (NYSE: ICN), today reported record revenues of $167 million for the third quarter of 2001 compared to $158 million last year, up 6%, before royalties of $24 million. The results were driven by strong performance by the company's pharmaceutical business. Earnings per diluted share before an extraordinary item for the third quarter were $0.11 compared to $0.45 in the same period of 2000.

Earnings for the quarter were affected primarily by lower than expected royalty revenue, caused by the delay in the launch of PegIntron (pegylated interferon) until October 2001. In addition, third quarter earnings were affected by an increase in research and development expenditures and higher taxes. The effective tax rate for the third quarter was 33% compared to 29% in the third quarter 2000.

As part of the ICN restructuring plan, the company repurchased $303 million in debt during the third quarter. This resulted in an extraordinary charge of $21 million, and a loss for the third quarter of $0.14 per diluted share.

Milan Panic, Chairman and Chief Executive Officer commented, "While the delay in the launch of PegIntron negatively impacted our earnings, the company reported strong results from operations. Our North American operations posted a record 53% year over year growth in revenue and a 32% increase in operating profit."

For the first nine months of 2001, revenues were a record $513 million, up 10% from last year's $466 million, before royalties. Operating income for the first nine months of the year was $112 million compared to $165 million the previous year. The decline includes a decrease in royalty revenue of $42 million, an increase in research and development and higher taxes. The effective tax rate for the nine months was 35% compared to 24% in the first nine months of 2000. Earnings per diluted share for the first nine months of the year were $0.62 compared to $1.16 in the same period of 2000.

Royalties from Schering-Plough's sales of REBETRON combination therapy for chronic hepatitis C were $24 million in the quarter, compared to $49 million in last year's third quarter. As previously reported, a temporary slowdown in ribavirin royalties existed as physicians awaited marketing authorization, pending FDA review and clearance, for the use of pegylated interferon with ribavirin. This authorization has been granted and shipments of the new product began in October. ICN believes this will have a positive impact on royalties in the fourth quarter. ICN's ribavirin is sold in capsule form as REBETOL, a component of REBETRON.

Research and Development - Ribapharm

In the quarter, research and development spending increased to $12 million, of which $5 million was capital expenditures.

The company continued to accelerate its research and development program. In July, ICN and Roche jointly announced that Roche had licensed the rights to the developmental compound Levovirin, a promising second-generation drug for the treatment of hepatitis C. Its use in combination with Levovirin is expected to set new standards of care in this therapeutic area.

During the quarter ICN also announced that it had licensed the rights to a promising liver-targeting hepatitis B compound. This Phase II compound, ICN-2001-3, will add to ICN's research and development pipeline, which is focused on the discovery and development of new antiviral, anticancer and immunology therapies.

Americas Group

Third quarter revenues for the Americas Group were $84 million, up 17% from $72 million in the third quarter 2000. Operating income for the Americas Group were $19 million compared to $22 million in the third quarter last year. North America 2001 third quarter revenues increased to $39 million from $25 million in the third quarter of 2000, an increase of 53%. Operating income increased to $11 million from $8 million in 2000, up 32%.

North American sales benefited from strong gains in sales of skin care products, which includes Efudex, used to treat actinic keratosis, a pre-cancerous skin condition. Sales of Efudex were up 17 % to $7 million from last year's third quarter. Sales of lasers, used for anti-aging, and the acquisition of a laser marketing and sales operation, also contributed to the U.S. performance.

In the Latin America region, revenues were $31 million in the third quarter, compared to $32 million in the third quarter of 2000, reflecting general economic conditions in the region, specifically Argentina. Nevertheless, Latin America benefited from the introduction of new products in the major markets of its region, continuing to buttress the company's strong dermatological presence.

In Brazil, four new dermatological products were launched: Oxitrat (oxiconazole) antimicotic lotion and cream, Bacrocin, (mupirocin ointment), an antibiotic to treat skin infections. Clobesol, (clobetazol), a corticosteroid cream and ointment to treat inflammatory conditions of the skin, and Solaquin (hydroquinone), a skin bleaching agent.

In Mexico, three new products were launched: Uniferol capsules, Iron plus Folic Acid for the prevention and treatment of iron and folic acid deficiencies of this elements, Diamin, (alpha dihidroergocriptine mesilate) tablets, for the treatment of hyperporlactinemia and fibrocystic disease, a new addition to the company's prefilled syringes line, Yectolin (lincomycin 600mg and 300mg).

North America sales for the first nine months of the year were a record $125 million, up 53% from $82 million last year. Operating income was $48 million compared to $34 million last year, a 40% increase. Latin America sales for the first nine months of the year were $86 million compared to $90 million in the same period last year, down 4%, and operating income was $26 million compared to 29 million last year, down 12%.

International Group

The International Group reported revenues of $83 million for the third quarter with operating profit of $6 million.

Third quarter revenues in Western Europe increased to $48 million from $47 million in last year's third quarter. Revenues were affected by a 3% decrease in devaluation of the euro. Operating profit was flat from last year's third quarter at $7 million. Spain benefited from 50% increase in sales of the non-steroidal anti-inflammatory Gerbin, and an increase of 82% in sales of Renpress (espirapril) an ACE inhibitor used for arterial hypertension and congestive heart failure. Sales in the United Kingdom increased 15 percent, resulting from increased sales of the antiviral Virazole and the introduction of Efudex, used to treat precancerous skin conditions (actinic keratosis). Sales in Poland were 12 percent higher than third quarter last year.

Third quarter revenues in Eastern Europe were $23 million versus $25 million a year earlier. Operating loss for the period was $1.5 million compared to $1 million last year. Sales of the analgesic Pentalgin and the multivitamin Oligovit increased substantially during the period.

The Asia, Africa and Australia region revenue was $13 million for the third quarter compared to $14 million last year. Operating profit for the third quarter was $1 million compared to $1 million last year. Sales benefited from the introduction of a new line of a cough and cold medicine, Nyal Plus, in July in Australia, which was favorably received in the marketplace. The restructuring the AAA business from sales by distributors only, towards the company's own marketing and sales network affected earnings for the quarter.

Western Europe sales for the first nine months were $150 million compared to $137 million last year, a 10% increase, and operating income was $17 million. Western Europe results for the nine months were impacted by a 4% euro currency devaluation. Eastern Europe sales for the first nine months were $70 million compared to $76 million last year. Revenue from the Asia, Africa, and Australia region for the first nine months of the year were $36 million, and operating income was $4 million, up 38 percent from last year.

ICN is an innovative, research-based global pharmaceutical company that manufactures, markets and distributes a broad range of prescription and non-prescription pharmaceuticals under the ICN brand name. Its therapeutic focus is on anti-infectives, including anti-virals, dermatology and oncology. Additional information is also available on the Company's website at http://www.icnpharm.com.

THE 'SAFE HARBOR' STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. This press release contains forward-looking statements that involve risks and uncertainties including, but not limited to, projections of future sales, operating income, subsidiary reorganization, regulatory approval processes, operations in countries with unstable economies, the progress of FDA reviews, and other risks detailed from time to time in the Company's Securities and Exchange Commission filings.

Consolidated Condensed Statement of Income

for the three and nine months ended September 30, 2001 and 2000

Three Months Ended Nine Months Ended

September 30, September 30,

In thousands, except

per share data 2001 2000 2001 2000

Total revenues: $191,060 $207,342 $595,800 $591,115

Product sales 167,053 158,342 512,812 466,015

Royalties 24,007 49,000 82,988 125,100

Cost of product sales 65,465 64,230 204,415 185,931

Selling, general and

administrative expenses 83,206 66,164 235,846 205,029

Research and development

costs 6,944 5,711 19,767 12,564

Amortization of

goodwill and intangibles 7,898 7,453 24,006 22,863

163,513 143,558 484,034 426,387

Income from operations 27,547 63,784 111,766 164,728

Interest, net 12,104 12,098 33,790 36,921

Other (income) loss, net

including translation

and exchange 1,347 491 (2,993) 4,547

Income before provision

for income taxes,

minority interest

and extraordinary loss 14,096 51,195 80,969 123,260

Provision for income taxes 4,665 15,045 28,458 29,587

Minority interest 275 (459) 856 (1,428)

Income before

extraordinary loss 9,156 36,609 51,655 95,101

Extraordinary loss,

net of tax 20,852 -- 21,066 --

Net income $(11,696) $36,609 $30,589 $95,101

Basic earnings per common

share

Income before

extraordinary loss $0.11 $0.46 $0.64 $1.20

Extraordinary loss (0.25) -- (0.26) --

Net income $(0.14) $0.46 $0.38 $1.20

Shares used in per share

computation 81,534 79,548 80,950 79,200

Diluted earnings per common

share

Income before

extraordinary loss $0.11 $0.45 $0.62 $1.16

Extraordinary loss (0.25) -- (0.25) --

Net income $(0.14) $0.45 $0.37 $1.16

Shares used in per share

computation 83,604 82,099 83,029 81,883
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