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S&P Rts ICN Pharmaceuticals' $200M Sr Nts BB;Afms Rtgs.

NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 7/22/97 --Standard & Poor's today assigned its double-'B' rating to ICN Pharmaceuticals Inc.'s proposed offering of $200 million rule 144A senior notes due 2005. At the same time, Standard & Poor's has affirmed the company's outstanding ratings (see list below).

In June 1997, the ratings on ICN were upgraded to reflect the company's increasingly diverse pharmaceutical portfolio and strengthened capital structure. ICN's speculative-grade credit profile continues to be characterized by the company's vulnerability to volatility in Yugoslavia. This is a by-product of its effort to generate relatively good profitability from prescription drugs by establishing a significant presence in developing markets where there is limited competition. Further aggressive investment pursuant to this strategy has expanded ICN's presence in Eastern Europe through acquisitions in Russia and Hungary.

The product portfolio of the Costa Mesa, Calif.-based firm has broadened with its geographic spread, while declining sales of its most notable product - the antiviral Virazole - have reduced that product's overall importance. The recent agreement to license seven products from Roche Holdings adds the prospect of increased sales and cash flow from the relatively predictable U.S. marketplace. From a financial perspective, this equity transaction and an increase in equity capital in 1996 bolsters the company's financial capacity to pursue measured growth in newer pharmaceutical markets.

OUTLOOK: Positive.

The rating does not consider the expansion of the use of Virazole to treat hepatitis C, a poorly-treated chronic disease affecting a large patient population. However, there is a reasonable prospect that marketing partner Schering-Plough Corp. may be able to begin selling Virazole in combination with alpha interferon for this use in 1998. Food and Drug Administration (FDA) approval of this treatment could provide the expanded earnings and cash flow in support of another rating upgrade, Standard & Poor's said. -- CreditWire -0-
ICN Pharmaceuticals Inc.
Corporate credit rating BB
Bank loan rating BB
Subordinated debt B+

CONTACT: Michael J Kaplan, New York (1) 212-208-1613
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Publication:Business Wire
Date:Jul 22, 1997
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