Home | Business News | Browse by Publication | B | Business Wire

Biovail Reports Second-Quarter 2005 Financial Results.

Article Excerpt
TORONTO -- Biovail Corporation (NYSE:BVF) (TSX:BVF)

--Company Records Total Revenues of $217.4 Million

--Cash Flows From Operations of $87.5 Million

--Company Reaches Second Tier of Wellbutrin XL Supply Price

--Company Updates 2005 Guidance

Biovail Corporation (NYSE:BVF) (TSX:BVF) today announced financial results for the three-month and six-month periods ending June 30, 2005.

Total revenues for the three months ended June 30, 2005 were $217.4 million, compared with $206.3 million for the second quarter of 2004. Total revenues for the six months ended June 30, 2005 were $392.7 million, compared with $392.9 million for the first six months of 2004. Second-quarter 2005 net income, in accordance with United States Generally Accepted Accounting Principles (GAAP), was $3.7 million, compared with $44.2 million for the corresponding 2004 period. GAAP diluted earnings per share (EPS) for the second quarter of 2005 were $0.02, versus $0.28 for the second quarter of 2004. In the first half of 2005, GAAP EPS were $0.09, versus EPS of $0.41 for the first half of 2004. Second-quarter and first-half 2005 GAAP net income and EPS figures were impacted by a restructuring charge, a non-cash write-down of assets and the write-off of inventory related to the transaction with Kos Pharmaceuticals, Inc. (Kos) in May 2005. These items negatively impacted 2005 U.S. GAAP net income and EPS by $50.0 million and $0.31, respectively.

"Biovail's strong financial performance this quarter was complemented by the continued success of the Company's research-and-development group," said Biovail Chief Executive Officer Dr. Douglas Squires. "In the second quarter of 2005, we received FDA approval for Tramadol ODT and Glumetza(TM), tentative approval for Zolpidem ODT, and Canadian approval for Glumetza(TM). With a new commercialization model in place, a robust development pipeline, world-leading drug-delivery technologies, and the financial strength to execute its long-term strategy, Biovail is well positioned for future growth."

Realignment of U.S. Commercial Operations

In May 2005, Biovail announced that it was restructuring its approach to selling and marketing products in the primary-care market in the U.S. and, in conjunction with this change, entered into a strategic alliance with Kos. Biovail's restructured approach to commercializing products in the U.S. market will result in significant cost savings, which will more than offset a reduction in gross profit associated with Cardizem(R) LA and Teveten, and will favourably impact profitability over the balance of 2005. As part of the agreement with Kos, Biovail divested the Teveten and Teveten HCT products, and entered into a supply agreement for Cardizem(R) LA in the U.S. and Puerto Rico. Accordingly, Biovail no longer has an economic interest in the Teveten products, but continues to manufacture, supply and sell Cardizem(R) LA at contractually determined prices to Kos for distribution. Through the supply price, Biovail retains a significant ongoing financial interest in Cardizem(R) LA. In consideration for these items and other elements of the transaction, Kos paid $105.5 million to Biovail.

Second-Quarter 2005 Financial Performance

Product revenues for the second quarter of 2005 were $204.8 million, compared with $197.2 million in the second quarter of 2004, a 4% increase that reflects the performance of Zovirax, Biovail's legacy products and the Company's generics portfolio; partially offset by declines in Wellbutrin XL(R), and Cardizem(R) LA and Teveten revenues associated with the May 2005 Kos transaction. Product revenues for the six months ended June 30, 2005 were $366.0 million compared with $372.3 million for the six months ended June 30, 2004.

Product revenues for Wellbutrin XL(R), launched in September 2003, were $70.5 million...