Yugoslavia Offers ICN Boss His Trickiest Task : Profile: Belgrade-born Milan Panic has fought Nazi invaders, fled Communists and founded a pharmaceutical empire in Costa Mesa. Now all he has to do is stop his homeland’s bloodshed.

COSTA MESA —  If there’s one theme that runs through the life of Milan Panic--the Orange County executive who agreed to become Yugoslavia’s new prime minister--it is this: He loves a challenge.

During the last half-century, Belgrade-born Panic has waged war against Nazi invaders, successfully engineered his family’s escape from Communist Yugoslavia and created an Orange County pharmaceutical conglomerate that tries to tackle problems such as finding a cure for AIDS.

On Thursday, he agreed to take on what may be his toughest task: stopping the bloodshed in the region where he was born. Panic said at a Washington press conference that his priority as prime minister will be to “stop the fighting” in Bosnia-Herzegovina.

Thousands of people have looked to Panic (pronounced PAN-eesh) for salvation, ranging from people with acquired immune deficiency syndrome in search of a wonder drug to citizens of Yugoslavia and its former republics caught in the cross-fire of ethnic warfare. Panic has relished the role.

“He is dedicated to the idea one person can make a difference,” said former Sen. Birch Bayh (D-Ind.), one of Panic’s closest confidants. “He is one of the most indefatigable human beings I have ever met.”

However, Panic and his firm--Costa Mesa-based ICN Pharmaceuticals--are not without their critics. Panic, 62, has regularly butted heads with U.S. officials who have said he promises more than he can deliver, such an effective treatment for the AIDS virus. His outspoken manner and hot temper have made him an all-too-visible target.

“He is a very unusual man. Very strong. Very manipulative,” one Justice Department official said. “He may be just what Yugoslavia needs.”

Panic has a virtual arsenal of influential friends.

Bayh, former California Gov. Edmund G. (Jerry) Brown Jr., former U.S. diplomat and publisher Francis Dale, former Democratic National Committee Chairman Charles T. Manatt and onetime Health, Education and Welfare Secretary Robert H. Finch, appointed during the Nixon Administration, have all helped him run ICN or its subsidiaries.

He has generously donated his time and money to their political careers, along with those of former President Jimmy Carter, former Massachusetts Gov. Michael Dukakis, Sen. Alan Cranston (D-Calif.) and Mayor Tom Bradley.

“Mr. Panic has had some run-ins with the federal bureaucracy, all of which he has basically won,” Brown said in an interview earlier this year. “He is a buccaneer, a two-fisted guy. He is an American success story.”

TV commentator Bill Press, a close friend of Panic’s, calls him “the Ross Perot of the Balkans.”

“Yugoslavians believe because he is an entrepreneur and a successful capitalist, he can work miracles with that government,” Press said.

Panic seems to agree.

“On the economic side, I will pursue a rapid policy of privatization” modeled on the European subsidiary of ICN, he said in an article for the Los Angeles Times Syndicate. “We made 5,000 new capitalists out of the workers by giving them shares in the company.”

Panic, who has not often given interviews, last week told Nathan Gardels, editor of Global Viewpoint, a feature of the Los Angeles Times Syndicate: “I want to bring American-style democracy and a market economy to the country of my birth and youth.”

Asked who should bear the blame for the killing in the Balkans, he replied: “There is no question that the blame is on everybody. The most important thing is that people there stop shooting each other. Extremists who won’t stop shooting should be put in jail, whether they are Serbs, Muslim or Croat.”

With the breakup of the old Yugoslav federation, just two of its six former republics--Serbia and Montenegro--remain. The post of federal prime minister is not expected to have much power, since control of the army, the monetary system, security and foreign policy are believed to be in the hands of the Serbian strongman, President Slobodan Milosevic.

Even Panic himself could not have predicted 50 years ago that he would one day preside over a pharmaceutical giant with nearly half a billion dollars in sales and take home a $6-million annual salary--only to return to the place where he started.

Biographical materials furnished by Panic indicate that he was just 3 when his father died. He raised vegetables as a youngster during the 1930s in Belgrade to help support his mother and two sisters.

“I used to wake up in the dark and sit on the steps outside my house,” he told an interviewer. “My mother would come out and ask: ‘What are you doing?’ I would tell her that I was waiting for the sun to come up so I could go to work.”

By 1944, Panic had joined a band of guerrillas led by Josip Broz Tito to oust German forces who had invaded three years earlier. Panic was just 14.

After World War II, Panic enrolled in a Belgrade university and spent his spare time cycling. He eventually became an alternate on Yugoslavia’s Olympic team.

Panic defected on a team outing in 1955. The Panic family arrived in the United States in 1956, carrying two suitcases and $20. He worked as a research assistant in the chemistry department at USC in the late 1950s before starting ICN in 1960 with $200 and a washing machine.

Today, ICN Pharmaceuticals and its subsidiaries employ 6,300 people worldwide. One of ICN’s subsidiaries merged in 1990 with Yugoslavia’s largest drug company, Galenika Pharmaceuticals. ICN sells 600 prescription drugs to more than 60 countries for the treatment of varied maladies, including cancer, arthritis and cardiovascular disease.

Panic’s Newport Beach neighbors said Thursday that he and his wife, Sally, are just average rich folks.

Though Panic has a French Colonial estate and a yacht called Bella, his wife walks him out of the house in her green robe each morning and kisses him goodby as he climbs into a limousine and heads to the office in Costa Mesa.

“He is a wonderful guy and a fabulous neighbor,” Laura Lee Browne said.

Panic’s reputation in the business world is a little different--that of a strong and forceful leader who doesn’t let anything or anyone get in his way. He can be particularly stern with employees, routinely raising his voice.

“He is a dominant personality in many ways, sort of like the old-fashioned captains of industry,” said former California Atty. Gen. John K. Van de Kamp.

ICN became embroiled in controversy in large part because of Panic’s premature claims in early 1987 that one of its drugs, ribavirin, was an effective treatment for AIDS. That year, Panic called the head of the Food and Drug Administration “the jerk commissioner” and said he was being persecuted by federal agencies.

“In all my mature life, I have tried to come up with medicine to help people,” he told The Times in an interview published that year. “I’m being crucified, and I can’t believe it. . . . All I can say is: ‘Forgive them, God, for they know not what they do.’ ”

The Securities and Exchange Commission sued Panic last year in a securities fraud case, alleging that he knowingly misled the public about ribavirin. Three years before, a federal grand jury began investigating allegations that ICN illegally offered to sell ribavirin as a treatment for AIDS without government approval.

Panic and ICN quickly settled the SEC suit--without admitting or denying wrongdoing--by signing a consent decree in which they agreed not to violate future securities laws. The criminal investigation was dropped in exchange for a $600,000 civil settlement last year, although the company and Panic did not admit any wrongdoing.

Although some members of the AIDS community felt burned by Panic’s actions, others still see him as a hero because he fought to make ribavirin available to them.

“He’s a fire-breathing, strong-handed leader. A one-man show,” said Martin Delaney, executive director of Project Inform, a San Francisco-based AIDS treatment and advisory service. “But he had a tendency to shoot from the hip with regulators. He created a lot of problems.”

Panic, like those in the AIDS community, has lived with death. The ICN founder lost many of his friends in their guerrilla campaign to oust the Germans, then endured the deaths of both his wife and teen-age son after coming to America. He remarried, but has said he never fully recovered.

“Why (must we) die? When I was a kid, I always asked the question,” Panic said in a 1987 Times story about life-extending drugs. “Must be a reason to die; something must be wrong. The time has come to challenge death, challenge the concept.”

Years ago, Panic had his favorite quotation installed at the entrance to ICN’s headquarters: “He who has health has hope, and he who has hope has everything.”

Times staff writer James M. Gomez and librarian Sheila Kern helped to research this article.

PRESS CONFERENCE: First priority: Halt killing. A14

BREAKTHROUGH IN BOSNIA: U.N. troops in Sarajevo. A12

FIRM IS WELL-POSITIONED: Panic’s leap could aid ICN. D5