Biovail Acquires Metformin GR Product Rights From DepoMed; Accelerates Anticipated Commercialization Timelines; Biovail Acquires a 15% Interest in DepoMed.

Business Editors

TORONTO--(BUSINESS WIRE)--May 29, 2002

Biovail Corporation (NYSE:BVF) (TSX:BVF) and DepoMed, Inc. (AMEX:DMI) today announced that Biovail has signed a definitive agreement to license from DepoMed, Inc. ("DepoMed") the rights to manufacture and market a once-daily metformin HCl product that is currently undergoing Phase III clinical trials ("Metformin GR") In conjunction with the assignment of the marketing rights to this product, Biovail has also signed a definitive agreement to acquire approximately 2.4 million newly issued common shares (or 15% of the issued and outstanding common shares) of DepoMed for $12.3 million. This equity investment represents the continued execution of Biovail Ventures' strategy of accessing novel technological and product opportunities by making minority equity investments in development stage companies.

The license confers to Biovail the right to market Metformin GR in the United States (including Puerto Rico) and Canada. Though specific financial terms of the Agreements are undisclosed, DepoMed will be responsible for completing the clinical development program in support of Metformin GR and Biovail will pay to DepoMed a $25 million milestone fee upon Regulatory Approval from the Food and Drug Administration in the United States as well as customary royalties on the net sales of the product in the Territories. Biovail will not derive any revenues from DepoMed as a result of its investment. The license agreement is subject to approval of U.S. antitrust regulatory authorities.

DepoMed began Phase III trials on Metformin GR in mid-year 2001 and a 505 b(1) New Drug Application regulatory filing with the Food and Drug Administration is expected in 2004. Metformin, the drug contained in Metformin GR, is a well established chronic therapy among primary care physicians and, as a result, will permit Biovail to take advantage of excellent synergies between this product and the rest of Biovail's primary care chronic product line.

Under the terms of the Stock Purchase Agreement, Biovail will invest approximately $12.3 million to acquire 15% of the issued and outstanding shares of DepoMed. Biovail will also have an option to purchase up to an additional 5% interest in DepoMed at predetermined prices for a specified period and another 5% interest over a three-year period at predetermined prices. This strategic investment will help finance DepoMed's product development initiatives and growth strategies. The closing of the investment is subject to customary closing conditions, including approval of U.S. antitrust regulatory authorities.

Eugene Melnyk, Biovail's Chairman of the Board and Chief Executive Officer, stated, "Biovail's investment in DepoMed, coupled with the associated Agreements, significantly advances Biovail's internal developmental timelines for a once-daily metformin HCl product. DepoMed's Gastric Retention System also contributes to Biovail's strategy to develop and market a broad line of metformin HCl formulations, including a fixed combination product which should offer once-daily dosing versus the currently marketed twice-daily presentation and a rapid dissolve controlled-release Flash Dose line extension."

John Fara, Chief Executive Officer of DepoMed, stated, "Biovail's investment in DepoMed represents further validation of our technology and provides additional working capital that will be used to advance our ongoing Metformin GR activities as well as several of our other development programs. Metformin GR has been designed to provide physicians with a therapeutic option that may cause fewer side effects than those frequently associated with other marketed metformin formulations. The synergies resulting from combining Biovail's toxicology and clinical studies with DepoMed's extensive clinical data package should accelerate the commercial timelines for Metformin GR and the balance of Biovail's metformin product line."

BACKGROUND:

Metformin HCl (metformin) is indicated for the control of hyperglycemia in metformin responsive, stable, mild, non-ketosis prone, maturity onset type of diabetes (Type II) which cannot be controlled by proper dietary management, exercise and weight reduction or when insulin therapy is not appropriate. Metformin can also be of value in the treatment of obese diabetic patients.

Diabetes Mellitus is a condition characterized by high levels of blood glucose resulting from defects in insulin secretion, insulin activity, or both. Diabetes can be associated with serious complications, including heart disease, stroke, high blood pressure, blindness, kidney and nervous system diseases, amputations and others. Currently, 15.7 million Americans, approximately 5.9% of the general population, have diabetes and 5.4 million American are undiagnosed. As many as 800,000 new cases of diabetes are diagnosed per year.

Type II diabetes was previously called non-insulin dependent diabetes mellitus (NIDDM) or adult-onset diabetes. Type II diabetes accounts for as many as 95% of all diagnosed cases of diabetes. Risk factors for type II diabetes include; old age, obesity, family history of diabetes, prior history of gestational diabetes, impaired glucose tolerance, physical inactivity, and race/ethnicity. An aging and increasingly unfit population therefore suggests that incidents of diabetes may increase in the future.

For the period ending twelve months ended March 2002:

-- Metformin single drug formulations (Glucophage plus generics and Glucophage
XR) recorded sales of $2.2 billion and generated approximately 30.5 million
prescriptions (an increase of 7.0% from the previous period).

-- Metformin fixed combination (Glucovance, metformin plus glyburide) achieved
sales of $319 million and 5.4 million prescriptions, demonstrating rapid growth
since the product's launch in August 2000.

-- Metformin is used extensively in combination with sulfonylurea drugs and
insulin sensitizers, which contributes to its continued growth.

DepoMed's Gastric Retention System (GR) is a patented oral drug delivery technology designed specifically for drugs preferentially absorbed high in the gastrointestinal tract. Utilizing normal physiological processes by which the stomach retains large objects for further digestion, the GR System tablet swells following ingestion and is retained in the stomach for 6-8 hours, while it continuously releases the incorporated drug at a controlled rate to absorption sites in the upper gastrointestinal tract. The controlled release of the drug at the preferred absorption site optimizes delivery of the drug, maximizing its therapeutic benefits and reduces side effects by permitting a large portion of the drug to be absorbed before passing through the more irritable areas of the lower GI tract. The GR System is fully dissolved at the end of the transit phase and is eliminated through the intestine.

Biovail Corporation is a full-service pharmaceutical company, engaged in the formulation, clinical testing, registration, manufacture, sale and promotion of pharmaceutical products utilizing advanced drug delivery technologies. Additional information about Biovail may be found at the Company's website at http://www.biovail.com. DepoMed, Inc., a development stage company, is applying its innovative oral drug delivery systems to the development of novel oral products and improved formulations of existing oral drugs. The company is developing two types of proprietary systems. The Gastric Retention (GR) System is designed to improve the absorption and bioavailability of oral drugs through controlled release high in the gastrointestinal tract. The Reduced Irritation System is designed to reduce gastrointestinal irritation, a side effect of many orally administered drugs. In addition to developing products jointly with other companies, DepoMed is developing its own line of proprietary products based on off-patent and over-the-counter drugs. Additional information about DepoMed may be found at the company's web site at http://www.depomedinc.com.

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995.

To the extent any statements made in this release contain information that is not historical, these statements are essentially forward looking and are subject to risks and uncertainties, including the difficulty of predicting FDA approvals, acceptance and demand for new pharmaceutical products, the impact of competitive products and pricing, new product development and launch, reliance on key strategic alliances, availability of raw materials, the regulatory environment, fluctuations in operating results and other risks detailed from time to time in the company's filings with the Securities and Exchange Commission.