SCHEDULE 14A INFORMATION Proxy Statement Pursuant To Section 14(a) Of The Securities Exchange Act Of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [_] Check the appropriate box: [_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(E)(2)) [_] Definitive Proxy Statement [X] Definitive Additional Materials [_] Soliciting Material Pursuant to Section 240.14a-12 ICN Pharmaceuticals, Inc. -------------------------------------------------------- (Name of Registrant as Specified in its Charter) N/A -------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: ------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------------- (5) Total fee paid: ------------------------------------------------------------------- [_] Fee paid previously with preliminary materials. [_] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: ------------------------------------------------------------------- (3) Filing Party: ------------------------------------------------------------------- (4) Date Filed: ------------------------------------------------------------------- Following is the text of additional presentation materials delivered to ICN Pharmaceuticals, Inc. stockholders on or about May 9, 2002: [LOGO - ICN] ICN PHARMACEUTICALS, INC. MAY 2002 FORWARD LOOKING STATEMENTS ------------------------------------------------------------------------------ THE SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: o Except for the historical information herein, the matters discussed in this presentation include forward-looking statements that may involve a number of risks and uncertainties, including but not limited to, projections of future sales, operating income, returns on invested assets, obtaining and maintaining regulatory approval processes, market acceptance of, and continuing demand for ICN pharmaceuticals' products and other risks detailed from time to time in the Company's Securities and Exchange Commission filings 1 PROMISES KEPT ----------------------------------------------------------------------------- RESTRUCTURING HISTORY ------------------------------------------------------------------------------ o The restructuring was ALWAYS ICN's and UBS's idea; no one else had it. o It was ALWAYS designed to unlock value for shareholders. o The restructuring is a complicated process that cannot be rushed. o The timing has been SOLELY impacted by market conditions. 3 RESTRUCTURING OVERVIEW ------------------------------------------------------------------------------ o Initiatives to unlock significant shareholder value Biotechnology Ribapharm - RNA listed on NYSE on April 12, 2002 - IPO Completed - tax-free spin-off in 2002 Specialty ICN Pharmaceuticals Pharmaceuticals ICN Americas Americas Specialty Pharmaceuticals ICN International Europe o IPO Prospectus filed 4 RESTRUCTURING PROGRESS ------------------------------------------------------------------------------ o Ribapharm IPO completed - raised nearly $300 million in 20% interest. o Second largest biotech IPO EVER. o Debt repurchase completed. o Request for tax-free treatment filed with the IRS. o Spin off or distribution of remaining interenst in Ribapharm as soon as IRS approves. 5 RESTRUCTURING STEPS ------------------------------------------------------------------------------ Tax Free Distribution & Spin-off of Rebapharm Ribapharm IPO ICN International IPO Retire Remaining Debt Retire Partial Debt Convertible Offering Filed Prospectus for ICN International S-1 Filed for Ribapharm Announced UNLOCKING EQUITY VALUE Restructuring Reorganization of Business Operations Into Three Distinct Businesses 6 INTERNATIONAL SPIN-OFF - FACT VS. FICTION ------------------------------------------------------------------------------ o Committed to the international IPO. o European market conditions do not exist for this transaction. o International IPO scheduled in early 2003 or sooner. 7 SG&A COST CONTROLS ------------------------------------------------------------------------------ o SG&A expenses in line with pharmaceutical industry o Attributed to cost of business: - Acquisitions - Increased investment in specialty business, esp. photonics o Target expense reduction from 8.5% to 7% post-proxy through: - Legal - New hire freeze - IR/PR expenses - Redundancy reduction - Centralization/RNA shift - Tighten vendor controls 8 RESTRUCTURING - FACT VS. FICTION ------------------------------------------------------------------------------ o ICN has DELIVERED on its promise to restructure the company with tangible results. o To have done so when market conditions were not conducive would have been DESTRUCTIVE to shareholder value. o The results point to management's patience, wisdom and experience. o Opposition suggestion that a restructuring should have been done sooner points to their lack of experience and the danger to shareholders of electing their slate. 9 GOVERNANCE ------------------------------------------------------------------------------ o ICN has had a long history of dependable corporate governance. o Corporate governance provisions adopted that codify what ICN has practiced all along. o Nominating committee established that it is comprised solely of independent directors. - Membership - Process o CEO succession process established that will result in a timely and orderly change in leadership. - CANDIDATE INTERVIEWS - NOMINEE QUALIFICATIONS 10 BOARD INDEPENDENCE ------------------------------------------------------------------------------ o ICN's board has ALWAYS been comprised of independent directors. o Since ICN's founding, 39 out of 42 directors have been non-insiders. o As of May 29, 2002, five elected within the last year: - Three as shareholder candidates - Two as qualified by nominating committee - Roderick Hills - Barry Cohen - Gen. Ronald Fogleman - Ed Burkhardt - Steven Lee 11 SUCCESSION PLANNING ------------------------------------------------------------------------------ o Plan for succession process presented to Board o Search committee formed consisting of the following directors: - Hills, Fogleman, Barker o Retained Korn Ferry International o The committee will perform search function in orderly and timely fashion 12 OPPOSITION - NO STRATEGY ------------------------------------------------------------------------------ o Opposition has NEVER articulated a strategy or objective for ICN shareholders - EVER. o They have NO experience managing a global pharmaceutical company. o They have NO scientific knowledge needed for continued innovations. o They are very recent shareholders who have executed at least 195 trades, including 62 sales. 13 SUBSTANTIAL RISK TO SHAREHOLDERS ------------------------------------------------------------------------------ o There is ENORMOUS RISK to shareholders in siding with the opposition. o They have NO track record, NO experience and NO strategy. o ICN management has CONSISTENTLY delivered on its promises. o A VOTE FOR THE OPPOSITION PLACES YOUR INVESTMENT IN ICN AT SUBSTANTIAL RISK. 14 FINANCIALS ----------------------------------------------------------------------------- SPECIALTY PHARMACEUTICALS REVENUES 1 ----------------------------------------------------------------------------- 1995 - 2001 CAGR: +18% [BAR GRAPH OMITTED] 1995-273 $mm 1996-347 $mm 1997-527 $mm 1998-659 $mm 1999-639 $mm 2000-645 $mm 2001-721 $mm 1 Excludes ICN Yugoslavia 16 SPECIALITY PHARMACEUTICALS EBITDA 1 ----------------------------------------------------------------------------- 1995 - 2001 CAGR: +15% [BAR GRAPH OMITTED] 1995-66 $mm 1996-68 $mm 1997-103 $mm 1998-148 $mm 1999-166 $mm 2000-117 $mm 2001-151 $mm 1 Excludes ICN Yugoslavia 17 FINANCIAL POSITION ------------------------------------------------------------------------------ SELECTED CONSOLIDATED BALANCE SHEET DATA DECEMBER 31, DECEMBER 31, (US$mm) 2000 2001 ------------------------------------------------------------------------- Cash 155.6 327.6 Total Assets 1,477.1 1,754.4 Senior Debt 496.9 191.2* Convertible Debt - 525.0 Total Debt 510.8 740.7 Total Stockholders Equity 757.2 810.7 ------------------------------------------------------------------------- CREDIT STATISTICS 2000 2001 ------------------------------------------------------------------------- Total Debt/EBITDA 1.86x 2.80x EBITDA/Interest 4.56x 4.73x Total Debt/Total Book Cap. 40% 48% ------------------------------------------------------------------------- * paid off in April 18 Q1 CONSOLIDATED RESULTS FINANCIAL PERFORMANCE ----------------------------------------------------------------------------- Q1 02 Q1 01 %CHG. ----- ----- ----- Revenues $246M R $199M 23 Royalties 57M R 28M 103 REVENUES - SPECIALTY PHARMA 189M 171M 10 Operating income 66M R 41M 60 Net Interest 13M 11M 22 Translation 2M .4M nm Provision for income taxes 20M 9M 119 Net Income* 30M R 21M 43 Cumulative effect 4M -- nm Net Income 34M R 21M 62 EPS (diluted)-income 0.36 R 0.26 38 Cumulative efect 0.04 -- Net Income 0.40 R 0.26 54 * Before Cumulative Effect of Accounting Change 19 Q1 2002 KEY MESSAGES ----------------------------------------------------------------------------- o Record revenue for First Quarter 2002 ------------------------------------- o Record Gross Margin - 62% ------------------------- o Record royalties in 1Q' 02 -------------------------- o Record operating income in 1Q'02 -------------------------------- o Record pre-tax income --------------------- - Spec.Pharma -- Increased sales in all regions - Improved Gross Margin from 59% to 62% > Better manufacturing utilization and cost reductions > Improved supply chain function due to transfer of manufacturing of acquired products to our own facilities 20 Q1 2002 KEY MESSAGES (cont'd) o Provision for Taxes -- We are generating more income in higher tax jurisdictions, such as North America. Royalties are taxed at the full U.S. rate o S, G & A (in $M): S,G & A expenses as reported 92 One time charges: Ribapharm charges/allocation 2 Legal expense 3 Stock comp. Charges 3 Debt repurchase expenses 1 Other non-recurring charges 2 IR/PR expenses 2 ---- S, G & A expenses without one-time charges 79 84 Product Sales 189 S, G & A % of sales 42% 21 SPECIALTY PHARMACEUTICALS ------------------------------------------------------------------------------ SPECIALTY PHARMA INVESTMENT HIGHLIGHTS ------------------------------------------------------------------------------ o High margin specialty business in Americas - Record of historical growth in Latin America since 1970 - Consistent new product flow in pharmaceuticals - New growth platform in vast cosmetic dermatology market o One of the largest specialty pharmaceutical businesses in Europe - 57% of international revenues from Western Europe - New product pipeline 23 SPECIALTY PHARMACEUTICALS REVENUES ------------------------------------------------------------------------------ SPECIALITY PHARMA REVENUES ANNUAL GROWTH 12% [BAR GRAPH OMITTED] ICN International Annual Growth 6% 2000 $338mm 50% 2001 $359mm of specialty pharma revenues ICN Americas Annual Growth 18% 2000 $307mm 50% 2001 $362mm of specialty pharma revenues 2000 $645mm 2001 $721mm 24 SPECIALTY PHARMACEUTICALS OPERATING INCOME* ----------------------------------------------------------------------------- SPECIALTY PHARMA OPERATING INCOME ANNUAL GROWTH 35% [BAR GRAPH OMITTED] ICN International Annual Growth 114% 2000 $12mm 22% 2001 $26mm of specialty pharma 0I ICN Americas Annual Growth 24% 2000 $94mm 2001 $117mm 78% of specialty pharma OI 2000 $105mm 2001 $142mm * Before corporate charges 25 SPECIALTY PHARMACEUTICALS EBITDA* ------------------------------------------------------------------------------ SPECIALTY PHARMA EBITDA ANNUAL GROWTH 26% [BAR GRAPH OMITTED] ICN International Annual Growth 32% 2000 $41mm 30% 2001 $54mm of specialty pharma EBITDA ICN Americas Annual Growth 24% 2000 $121mm 70% 2001 $150mm of specialty pharma EBITDA 2000 $162mm 2001 $204mm *Before corporate charges 26 SPECIALTY PHARMA REVENUES Q1 2002 vs. 2001 ------------------------------------------------------------------------------ Q1 2002 Q1 2001 % CHANGE ------- ------- -------- AMERICAS $92,211 $83,849 10% -------- ------- -------- INTERNATIONAL 96,450 87,570 10% -------- ------- -------- TOTAL SPECIALTY 188,661 171,419 10% SPECIALTY PHARMA OPERATING INCOME Q1 2002 VS. 2001 ------------------------------------------------------------------------------ Q1 2002 Q1 2001 % CHANGE ------- ------- -------- AMERICAS $27,6 $28,6 -4% -------- ------- -------- INTERNATIONAL 9,0 3,4 166% -------- ------- -------- TOTAL 36,6 32,0 14% * Before corporate charges SPECIALTY PHARMA EBITDA Q1 2002 VS. 2001 ------------------------------------------------------------------------------ Q1 2002 Q1 2001 % Actual Actual CHANGE ------- ------- ------- AMERICAS $34,4 $36,4 -5% -------- ------- ------- INTERNATIONAL 18,3 11,4 60% -------- ------- ------- TOTAL 52,7 47,8 10% *Before corporate charges SPECIALTY PHARMACEUTICALS INTERNATIONAL ------------------------------------------------------------------------------ SPECIALTY PHARMACEUTICALS INTERNATIONAL - OVERVIEW ------------------------------------------------------------------------------ 2001 Revenue: US$359mm o 466 ethical products 2001 EBITDA: US$54mm* o 266 OTC products o A broad product portfolio with increasing focus on: - central nervous system - anti-infective / anti-virals [PIE CHART OMITTED] - dermatology Export (AAA) - alimentary tract and metabolism 14% - oncology Eastern Europe o 2,100+ sales and marketing staff 29% Western Europe * before corporate allocations 57% 31 SPECIALTY PHARMACEUTICALS AMERICAS ------------------------------------------------------------------------------ SPECIALTY PHARMACEUTICALS AMERICAS - OVERVIEW ----------------------------------------------------------------------------- o High-margined product portfolio 2001 Revenue: US$362mm o Increasing investment in sales 2001 EBITDA: US$150mm* and marketing o Significant expansion in dermatology o consistent new product flow [PIE CHART OMITTED] Latin America 35% North America 65% * before corporate allocations 33 SPECIALTY PHARMACEUTICALS AMERICAS - GEOGRAPHIC SALES ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2001 [PIE CHART OMITTED] Brazil $6mm Argentina $15mm Mexico $107mm Canada $24mm United States $210mm $362mm 34 SPECIALTY PHARMACEUTICALS AMERICAS - REVENUE MIX [PIE CHART OMITTED] ----------------------------------------------------------------------------- Biomedical 2000 $59mm 2001 $60mm Ethical Pharma 2000 $248mm 2001 $269mm Photonics 2000 $33mm 2000 $307mm 2001 $362mm 35 THERAPEUTIC MIX - NORTH AMERICA PRODUCT SALES* ----------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2001 [PIE CHART OMITTED] HRT 8% Neurology 14% Dermatology 60% Other 18% $155mm *Excluding Biomedicals 36 TOP TEN PRODUCTS - SALES SUMMARY* ----------------------------------------------------------------------------- 2000 Sales 2001 Sales Gross Product Category (US$mm) (US$mm) Margin ------- -------- -------- ------- ------ Efudex Dermatologic 32.4 41.4 93% Bedoyecta Vitamin 25.5 25.3 71% Mestinon Myasthenia Gravis 18.1 24.3 85% NLite Dermatologic Laser na 19.0 64% Kinerase Dermatologic 12.6 12.1 86% GlyQuin Dermatologic 1.7 9.8 84% Virazole Antiviral 11.7 9.8 94% Oxsoralen Dermatologic 6.6 9.3 90% Testred HRT 5.2 7.9 93% CES HRT 5.7 5.3 41% --------- -------- -------- 119.5 164.2 82% Percentage of Total Revenue 48% 54% *Excluding Biomedicals 37 ICN NORTH AMERICA ----------------------------------------------------------------------------- MARKET LEADERSHIP IN PHYSICIAN SKIN CARE 38 DEMOGRAPHICS DRIVE DEMAND ----------------------------------------------------------------------------- o 78 million Americans between 35-54 o 22 million women with household income of $56,000 o Seek non-invasive products that will [GRAPHIC OMITTED] treat and prevent aging with minimal downtime o Growing importance of AK therapy as risk of skin cancer increases 39 SKIN CARE STRATEGY ----------------------------------------------------------------------------- [GRAPHIC OMITTED] DERMATOLOGY --- Rx DERMATOLOGY --- Physician Dispensed DERMATOLOGY --- Aesthetic Elective 40 BROAD SKIN AGING PORTFOLIO ----------------------------------------------------------------------------- [GRAPHIC OMITTED] 41 GLYQUIN TRx MARKET SHARE ----------------------------------------------------------------------------- 52 WEEK TREND [GRAPHIC OMITTED] Source: IMS Health National Prescription Audit 42 WRINKLE REDUCTION PROCEDURE MARKET ----------------------------------------------------------------------------- Number of Procedures (000s) 1997 1998 1999 2000 2001 -------- -------- ------- -------- -------- BOTOX 65 180 498 1,097 1,600 ABLATIVE RESURFACING 64 283 1,262 1,358 2,399 COLLAGEN 347 406 475 592 1,099 NONABLATIVE LASER -- -- -- 50 150 ------- ------ ------ ------ ------ TOTAL 476 869 2,235 3,097 5,248 ======= ====== ====== ====== ====== Sources: ASAPS, ICN Estimate 43 GROWTH DRIVERS ----------------------------------------------------------------------------- NLITE Laser Collagen Replenishment o GROWTH OF NON ABLATIVE PROCEDURES o CONTINUED PHYSICIAN ADOPTION FOR NON-ABLATIVE LASERS [GRAPHIC OMITTED] o COMBINATION THERAPY WITH BOTULINUM TOXIN FOR WRINKLES DUE TO COLLAGEN DEFICIENCY o MULTI APPLICATION SYSTEM - FDA approved: wrinkles - Current studies: acne scars, vascular, active acne o CONSUMER MARKETING - Drive patients directly to physicians 44 PHYSICIAN DIRECT ----------------------------------------------------------------------------- o DISTRICT OFFICES - AESTHETIC ACCOUNT MANAGEMENT [] AREAS SERVED 2000 2001 (ACTUAL) (ACTUAL) -------- -------- PROCEDURES PER MONTH NA 4200 STATES SERVED 47 50 -------------------- -------- -------- [GRAPHIC OMITTED] DOCTORS SERVED PLASTIC SURGEONS 687 1,400 Dermatologists 518 2,977 --- ----- 1,105 4,377 OBGYN NA 1,055 Podiatrists NA 0 -- - 1,105 1,105 ----- ----- TOTAL 2,720 5,432 45 R&D PIPELINE ----------------------------------------------------------------------------- PHOTOTHERAPY NEW INDICATION PIPELINE ----------------------------------------------------------------------------- DISCOVERY PRECLINICAL CLINICAL SUBMISSION CLEARANCE PHOTOTHERAPY ------------ PERIOCULAR WRINKLE GENERAL WRINKLE [BAR GRAPH OMITTED] VASCULAR ACNE SCAR STRIAE ACNE 47 ICN INTERNATIONAL PIPELINE ----------------------------------------------------------------------------- [GRAPH OMITTED] 48 ICN LATIN AMERICA PIPELINE ----------------------------------------------------------------------------- [GRAPH OMITTED] 49 THE VISION ----------------------------------------------------------------------------- o Concentrate in the fast growing skin aging market o Cross sell Rx, light and cosmetic products. o Invest in product development, clinical proof and line extensions. o Accelerate consumer advertising. o Licensing, product and corporate acquisition consistent with the growth strategy. 50 [Logo-ICN] ICN PHARMACEUTICALS, INC. MAY 2002