Biovail Reports Fourth Quarter, Year-End 2005 Financial Results.TORONTO -- Biovail Corporation (NYSE NYSE See: New York Stock Exchange :BVF BVF Biovail Corporation (stock symbol) BVF Berufsverband der Frauenärzte eV (Muenchen, Germany) BVF Bearing Versus Frequency )(TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :BVF): --Company Achieves Record Revenues of $288 Million in Fourth Quarter, $936 Million in Full-Year 2005; --U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of $0.75 in Fourth Quarter, $1.48 in Full-Year 2005; --Record Cash Flows From Operations of $223 Million in Fourth Quarter, $502 Million in Full-Year 2005 Biovail Corporation (NYSE:BVF)(TSX:BVF) today announced financial results for the three-month and 12-month periods ending December 31, 2005. To the extent that this press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , investors are cautioned that these are based on our current views, and actual outcomes are not certain. For more information see the note on forward-looking information following the conference call details below. Total revenues for the three months ended December 31, 2005 were $287.6 million, compared with $275.4 million for the fourth quarter of 2004, an increase of 4%. Total revenues for the 12 months ended December 31, 2005 were $935.5 million, compared with $879.2 million for the full year of 2004, an increase of 6%. Fourth-quarter 2005 net income, in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP), was $119.7 million, compared with $46.0 million for the corresponding 2004 period. For the 12 months ended December 31, 2005, net income was $236.2 million, compared with $161.0 million for the same period a year earlier. GAAP diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of (EPS) for the fourth quarter of 2005 were $0.75, versus $0.29 for the fourth quarter of 2004. In the full year of 2005, GAAP EPS were $1.48, versus EPS of $1.01 for the full year of 2004. GAAP net income and EPS figures for the fourth quarter of 2005 were negatively impacted by a charge related to the write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of the Company's investment in Reliant Pharmaceuticals, which negatively impacted net income by $2.7 million and EPS by $0.02. GAAP net income and EPS figures for the full year of 2005 were impacted by a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , an equity loss in the Company's investment in Western Life Sciences, a non-cash write-down of assets and the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of inventory related to the transaction with Kos Pharmaceuticals, Inc. in May 2005 (see Specific Items Affecting Operations for details). These items negatively impacted 2005 GAAP net income and EPS by $60.6 million and $0.38, respectively. In 2004, net income and EPS figures were impacted by an acquired research-and-development charge associated with the acquisition of the remaining interest in BNC-PHARMAPASS, a write-off of the Rondec product rights, a write-down of Biovail's investment in Ethypharm, an equity loss in the Company's investment in Western Life Sciences and a gain on the sale of Cedax Ce·dax A trademark for the drug ceftibuten. ceftibuten Cedax Pharmacologic class: Third-generation cephalosporin Therapeutic class: Anti-infective . These items negatively impacted 2004 EPS by $0.34. "Biovail's record level of operating cash flows Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. in the fourth quarter and full-year 2005 has further solidified so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. the Company's financial position," said Biovail Chief Executive Officer Dr. Douglas Squires. "Given our strong base business, which has been further enhanced by the recent launch of Ultram(R) ER, we are well positioned to execute our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth strategy. To this end, we are actively evaluating a number of complementary product and company acquisition opportunities." Strategic Alliance for Tramadol tramadol /tra·ma·dol/ (tram´ah-dol?) an opioid analgesic used as the hydrochloride salt for the treatment of pain following surgical procedures and oral surgery. tramadol an opioid partial µ agonist. In November 2005, Biovail announced that it had entered into a supply agreement with Ortho-McNeil, Inc., a Johnson & Johnson company, for the marketing and distribution of Biovail's once-daily, extended-release extended-release /ex·tend·ed-re·lease/ (ek-stend´ed-re-les´) allowing a twofold or greater reduction in frequency of administration of a drug in comparison with the frequency required by a conventional dosage form. formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation and an orally disintegrating, immediate-release formulation of tramadol in the United States. On February 21, 2006, Ortho-McNeil and Biovail's specialty sales force formally launched the once-daily formulation to U.S. physicians under the brand name Ultram(R) ER. Under the agreement, which has a 10-year term, Biovail will manufacture and supply Ultram(R) ER to Ortho-McNeil for distribution at contractually determined prices, which will be based on Ortho-McNeil's net selling price. Biovail anticipates the commercial launch of Ultram(R) ODT See SCO Open Desktop. ODT - Open Desktop in the coming weeks. For more details, see the news release issued November 3, 2005, Biovail Enters Into Commercial Alliance for Tramadol Products. Citizen Petition In the fourth quarter of 2005, Biovail submitted a Citizen Petition to the United States Food and Drug Administration United States Food and Drug Administration (FDA), n.pr a unit of the Public Health Service created to protect the health of the nation against impure and unsafe foods, drugs, and cosmetics. (FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. ) to require rigorous bioequivalence bioequivalence /bio·equiv·a·lence/ (-e-kwiv´ah-lens) the relationship between two preparations of the same drug in the same dosage form that have a similar bioavailability. testing for generic products that reference Wellbutrin Well·bu·trin A trademark for the drug bupropion hydrochloride, used to treat depression. bupropion hydrochloride Budeprion SR, Budeprion XL, Wellbutrin, Wellbutrin SR, Wellbutrin XL, Zyban XL(R) before they can be approved. Biovail took this step to protect patients against potentially serious risks (particularly seizures In counterdrug operations, includes drugs and conveyances seized by law enforcement authorities and drug-related assets (monetary instruments, etc.) confiscated based on evidence that they have been derived from or used in illegal narcotics activities. ) which are currently disclosed in the approved Wellbutrin XL(R) labeling, and to ensure that generic versions of Wellbutrin XL(R) are as safe and effective as the innovator product. Wellbutrin XL(R) Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Biovail believes that the intellectual property that protects Wellbutrin XL(R) has been infringed by the four companies seeking FDA approval for generic formulations of a once-daily bupropion bupropion /bu·pro·pi·on/ (bu-pro´pe-on) a monocyclic compound structurally similar to amphetamine, used as the hydrochloride salt as an antidepressant and as an aid in smoking cessation. (Anchen Pharmaceuticals, Abrika Pharmaceuticals, Impax Laboratories and Watson Pharmaceuticals Watson Pharmaceuticals, Incorporated (NYSE: WPI) is the 5th largest pharmaceutical company in the United States based on number of prescriptions dispensed. Based in Corona, California, Watson's Generics division markets over 150 pharmaceutical product families, including one of the ), and is actively pursuing ongoing litigation against each company. Fourth-Quarter 2005 Financial Performance Product revenues for the fourth quarter of 2005 were $274.8 million, compared with $264.5 million in the fourth quarter of 2004, a 4% increase that primarily reflects the positive performance of Wellbutrin XL(R) and Cardizem Car·di·zem A trademark for the drug diltiazem hydrochloride. diltiazem hydrochloride Adizem (UK), Angitil (UK), Apo-Diltiaz (CA), Apo-Diltiazem (CA), Calcicard (UK), Cardizem, Cardizem CD, Cardizem LA, Cartia XT, (R) LA; partially offset by declines in Biovail Pharmaceuticals Canada (BPC BPC British Potato Council BPC Brewton-Parker College (Mt Vernon, GA) BPC Bible Presbyterian Church BPC Bangladesh Petroleum Corporation (Chittagong, Bangladesh) BPC British Pharmaceutical Codex ) and Biovail's generics portfolio, as well as in Teveten Tev·e·ten A trademark for the drug eprosartan mesylate. eprosartan mesylate Teveten Pharmacologic class: Angiotensin II receptor antagonist Therapeutic class: revenues following the May 2005 transaction with Kos. Product revenues for the 12 months ended December 31, 2005 were $884.3 million compared with $837.1 million for the 12 months ended December 31, 2004. Product revenues for Wellbutrin XL(R) were $137.7 million in the fourth quarter of 2005, and $354.2 million in the full year of 2005, compared with $109.7 million and $317.3 million in the corresponding periods in 2004, respectively. In December 2005, Wellbutrin XL(R) captured 58.5% of the new prescriptions written for the Wellbutrin brand (including generics). Revenues for Biovail's Zovirax Zo·vi·rax A trademark for the drug acyclovir. acyclovir sodium Alti-Acyclovir (CA), Avirax (CA), Zovirax Pharmacologic class: Acyclic purine nucleoside analogue Therapeutic class: franchise were $27.7 million in the fourth quarter of 2005, and $95.9 million in the full year of 2005, representing a decrease of 10% and an increase of 27%, respectively, when compared with $30.8 million and $75.5 million in the prior-year periods. Revenues in 2005 were favourably impacted by a 3% increase in total prescription volume, a price increase and a reduction in wholesaler inventory levels in 2004. In the fourth quarter of 2005, Zovirax Ointment ointment /oint·ment/ (oint´ment) a semisolid preparation for external application to the skin or mucous membranes, usually containing a medicinal substance. oint·ment n. and Zovirax Cream held a combined 68.2% share of the U.S. topical topical /top·i·cal/ (top´i-k'l) pertaining to a particular area, as a topical antiinfective applied to a certain area of the skin and affecting only the area to which it is applied. top·i·cal adj. herpes Herpes Any virus of the herpesvirus group, which comprises a family of 70 species, 5 of which are pathogenic to humans; the term also refers to any infection caused by these viruses. market, an increase of 3.4 percentage points in market share versus fourth-quarter 2004 levels. Fourth-quarter 2005 revenues for Biovail Pharmaceuticals Canada (BPC) were $27.4 million, compared with $29.7 million in the prior year period. BPC revenues for the full year of 2005 were $99.5 million, compared with $101.9 million in the full year of 2004. The key performance driver for BPC was the Tiazac Tiazac® Diltiazem, see there (R) line (including Tiazac(R) XC), where total prescription volume increased 14% in the fourth quarter and 15% in the full year of 2005, relative to the corresponding periods in 2004. Launched in January 2005, Tiazac(R) XC continues to perform ahead of expectations. Also contributing in the fourth quarter of 2005 was Glumetza(TM), a once-daily formulation of metformin metformin /met·for·min/ (met-for´min) an antihyperglycemic agent that potentiates the action of insulin, used in the treatment of type 2 diabetes mellitus. met·for·min n. that was launched to Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. physicians by the BPC sales force in November 2005. Offsetting these growth drivers was a 38% decline in total prescription volume for Wellbutrin(R) SR in the fourth quarter of 2005 versus the comparable 2004 period, as a result of the availability of a generic formulation. Looking forward, Biovail received approval from Canada's Therapeutic Products Directorate Therapeutic Products Directorate (TPD) is a Canadian federal authority that regulates pharmaceutical drugs and medical devices for human use, a role performed by the Food and Drug Administration in the United States. (TPD TPD Tons Per Day TPD Therapeutic Products Directorate TPD Total and Permanent Disablement (insurance) TPD Temperature Programmed Desorption TPD Temporary Partial Disability (insurance) ) in January 2006 for Wellbutrin XL(R) and initial trade shipments commenced in March 2006. Biovail anticipates the formal launch of this product to Canadian physicians in April 2006. In the third quarter of 2005, the litigation between RhoxalPharma Inc. and Biovail concerning a generic formulation of Tiazac(R) concluded with a decision in RhoxalPharma's favour. It is Biovail's understanding that the generic product became commercially available in February 2006. This event has not impacted Biovail's ongoing conversion strategy for Tiazac(R) XC to date, and has been considered in the Company's 2006 guidance (see the separate news release issued March 23, 2006 Biovail Provides 2006 Guidance). In the U.S., Cardizem(R) LA generated revenues of $13.4 million in the fourth quarter of 2005, compared with $10.3 million for the corresponding period in 2004. In the full year of 2005, Cardizem(R) LA generated revenues of $59.7 million, compared with $53.6 million in the full year of 2004. Biovail now manufactures and supplies Cardizem(R) LA to Kos at contractually determined prices that are in excess of 30% of their net selling prices. The amortization of deferred revenues associated with the May 2005 Kos transaction positively impacted Cardizem(R) LA revenues by $3.8 million and $10.0 million in the fourth quarter and full year of 2005, respectively. The Teveten line, divested in May 2005 to Kos, generated revenues of $6.4 million in the full year of 2005, compared with $17.6 million in the prior-year period. Biovail no longer has an economic interest in Teveten. Biovail's legacy products generated revenues of $35.0 million for the fourth quarter of 2005, compared with $35.7 million in the fourth quarter of 2004, representing a decrease of 2%. In the full year of 2005, legacy products generated revenues of $133.4 million, compared with $121.6 million in the full year of 2004, an increase of 10%. This performance is largely attributable to price increases in 2005 and a reduction of wholesaler inventory levels in 2004. Partially offsetting factors include the expected year-over-year declines in total prescription volumes for these mature products, and the termination of the sub-licensing agreement for Cedax in August 2004. In November 2005, Biovail announced its intention to pursue a spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. of substantially all of the Company's off-patent branded products to its shareholders on a pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share. In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. basis, either as a dividend in kind or a return of capital. The spin-off transaction is subject to a number of conditions including, but not limited to, the preparation, review and approval of an offering document containing financial statements and other related disclosures related to the performance of these products; satisfactory third-party consents; and regulatory and shareholder approval, depending on the form of the distribution. Product revenue for Biovail's portfolio of generic products (distributed by a subsidiary of Teva Pharmaceutical Industries Teva Pharmaceutical Industries Ltd. (Hebrew: טבע תעשיות פרמצבטיות בע"מ), NASDAQ: TEVA is an international pharmaceutical company headquartered in Ltd.) was $33.7 million in the fourth quarter of 2005, compared with $43.1 million in the fourth quarter of 2004, a 22% decrease that is largely attributable to weaker sales of generic Cardizem CD and Adalat Ad·a·lat A trademark for the drug nifedipine. CC. Full-year 2005 revenues were $135.2 million, compared with $149.7 million in the prior-year period, a decrease of 10%. Total prescription volume for these products increased 7% in the fourth quarter and 1% in the full year of 2005. Performance Summary(1) The following table summarizes Biovail's product revenue performance in the fourth quarter and full year (YTD See Year-to-date. YTD See year to date (YTD). ) of 2005:
----------------------------------------------------------------------
($000s) Q4/05 Q4/04 Change 2005 2004 Change
Revenues Revenues (%) Revenues Revenues (%)
----------------------------------------------------------------------
Wellbutrin
XL(R) 137,727 109,715 26 354,213 317,298 12
Zovirax 27,683 30,787 (10) 95,858 75,451 27
Biovail
Pharma-
ceuticals
Canada 27,432 29,673 (8) 99,508 101,865 (2)
Cardizem(R)
LA 13,401 10,324 30 59,672 53,625 11
Legacy
Products 34,978 35,672 (2) 133,419 121,588 10
Generics 33,687 43,104 (22) 135,209 149,675 (10)
Teveten (146) 5,223 (103) 6,388 17,600 (64)
----------------------------------------------------------------------
Total Product
Revenues 274,762 264,498 4 884,267 837,102 6
----------------------------------------------------------------------
The following table summarizes total prescription volume in the fourth quarter and full year (YTD) of 2005:
----------------------------------------------------------------------
Q4/05 Q4/04 Change 2005 2004 Change
Total Rx Total Rx (%) Total Rx Total Rx (%)
----------------------------------------------------------------------
Wellbutrin
XL(R) 3,238,231 2,780,630 16 12,282,312 9,420,011 30
Zovirax 371,082 351,669 6 1,387,647 1,342,757 3
Biovail
Pharma-
ceuticals
Canada 595,281 804,341 (26) 2,691,242 3,138,954 (14)
Cardizem(R)
LA 431,278 384,330 12 1,697,725 1,422,032 19
Legacy
Products 814,746 973,345 (16) 3,454,214 4,200,125 (18)
Generics 2,119,089 1,984,994 7 8,158,341 8,037,868 1
----------------------------------------------------------------------
Total
Prescrip-
tions 7,569,707 7,279,309 4 29,671,481 27,561,747 8
----------------------------------------------------------------------
(1) Inconsistencies between reported revenues and prescription volume
may be due to a number factors, including price increases and the
timing of wholesaler or partner inventory purchases
Source: IMS NPA
Research-and-development revenue decreased 5% in the fourth quarter of 2005 to $6.7 million, and increased 45% to $27.9 million for the full year of 2005, compared with the corresponding periods of 2004. The full-year increase in 2005 reflects a higher level of clinical research and laboratory testing services provided to external customers by Biovail's Contract Research Division. Royalty and other revenue was $6.1 million in the fourth quarter of 2005 and $23.3 million in the full year of 2005, compared with $3.7 million and $22.8 million in the corresponding periods in 2004, respectively. The increase reflects higher royalty income from our economic interest in Tricor TriCor® Fenofibrate Cardiology An adjunct to diet for managing stratospheric serum TG levels in Pts unresponsive to diet or at risk of pancreatitis and Cardizem(R) CD, partially offset by a decrease in royalties from branded Tiazac(R) sales. Cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold for the fourth quarter of 2005 was $53.6 million, compared with $63.9 million in the fourth quarter of 2004. Gross margins based on product sales were 80.5% and 76.6% in the fourth quarter and full year of 2005, respectively, compared with 75.9% and 73.5% in the fourth quarter and full year of 2004, respectively. Excluding the $10.6 million in inventory charges incurred in the second quarter of 2005 (related to Cardizem(R) CD and inventories of Teveten and Cardizem(R) LA not purchased by Kos), gross margins were 77.8% in the full year of 2005. Research-and-development expenditures were $26.3 million for the fourth quarter of 2005 and $88.4 million for the full year of 2005, compared with $18.5 million and $68.4 million for the corresponding periods in 2004, respectively. These increases reflect activity within Biovail's product-development pipeline, including ongoing development efforts for a novel once-daily formulation of carvedilol carvedilol /car·ve·dil·ol/ (kahr´ve-dil?ol) a beta-adrenergic blocking agent used in the treatment of hypertension and as an adjunct in the treatment of congestive heart failure. , a combination product incorporating tramadol and a long-acting, non-steroidal anti-inflammatory drug Non-steroidal anti-inflammatory drugs, usually abbreviated to NSAIDs, are drugs with analgesic, antipyretic and anti-inflammatory effects - they reduce pain, fever and inflammation. (NSAID NSAID: see nonsteroidal anti-inflammatory drug. ), combination products incorporating bupropion with other anti-depressant agents, and Biovail's formulation of a bupropion salt. Based on the availability of new data, this formulation is being further optimized, and a New Drug Application (NDA (Non Disclosure Agreement) An agreement signed between two parties that have to disclose confidential information to each other in order to do business. In general, the NDA states why the information is being divulged and stipulates that it cannot be used for any ) filing is now anticipated in mid-2006. With respect to Wellbutrin XL(R), GSK GSK GlaxoSmithKline plc (pharmaceutical company) GSK Glycogen Synthase Kinase GSK Gruppentraining Sozialer Kompetenzen (Germany) GSK Greenland Shark (FAO fish species code) recently submitted applications for regulatory approval in several European countries. Selling, general and administrative (SG&A) expenses for the fourth quarter and full year of 2005 were $53.1 million and $227.4 million, respectively, compared with $72.0 million in the fourth quarter of 2004, and $253.5 million in the full year of 2004. The decreases reflect Biovail's restructured approach to commercializing products in the U.S., and an associated reduction in headcount in the Company's U.S. commercial operations group. Amortization expense in the fourth quarter of 2005 was $15.4 million, compared with $15.7 million in the fourth quarter of 2004, a modest decrease that reflects the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of the Teveten products in May 2005. In the full year of 2005, amortization expense was $62.3 million, compared with $64.7 million, a decrease that also reflects the final amortization of Biovail's interest in generic omeprazole omeprazole /omep·ra·zole/ (o-mep´ra-zol) an inhibitor of gastric acid secretion used in the treatment of dyspepsia , gastroesophageal reflux disease, disorders of gastric hypersecretion, and peptic ulcer, including that associated with in the first quarter of 2004. Specific Items Affecting Operations In the fourth quarter of 2005, Biovail recorded a $2.7-million charge related to the write down of the Company's investment in Reliant Pharmaceuticals, a $0.4-million equity loss in the Company's investment in the Western Life Sciences Fund, and a $0.5-million adjustment to the write-down of the Company's Nutravail assets. In the full year of 2005, Biovail incurred a $19.8-million restructuring charge, primarily related to severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when costs associated with the May 2005 realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. of the Company's U.S. commercial operations. The decision to divest To deprive or take away. Divest is usually used in reference to the relinquishment of authority, power, property, or title. If, for example, an individual is disinherited, he or she is divested of the right to inherit money. the Company's Nutravail division resulted in a $5.6-million non-cash write-down of the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of those assets, which is recorded in the loss from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . In addition, the disposal of the Teveten line resulted in a $25.8 million write-down of the carrying value of these product rights to reflect their fair value at the date of disposition. Biovail also wrote off a $0.7 million investment in convertible debentures Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. of Procyon Biopharma Inc. following the termination of the Fibrostat licensing agreement. Additionally, $4.9 million of Cardizem(R) LA and Teveten inventory not purchased by Kos was written-off to cost of goods sold in 2005. Further, Biovail incurred a $1.2-million equity loss in 2005 related to the Company's investment in the Western Life Sciences Fund. In the fourth quarter of 2004, Biovail recorded a $4.4-million charge related to the write off of the remaining value of Rondec, a $37.8-million charge relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the write-down of the carrying value of the Company's investment in Ethypharm, and a $4.1-million loss on an investment in Western Life Sciences. In the full year of 2004, Biovail also incurred an $8.6-million acquired R&D charge related to the acquisition of the remaining interest in BNC-PHARMAPASS, and a $1.5-million gain related to the sale of the Cedax product rights. Significant items and their effect on U.S. GAAP EPS in the fourth quarter and full year of 2005 are listed in the following table:
Table 1. Significant Items included in U.S. GAAP earnings
----------------------------------------------------------------------
Amounts expressed in millions of U.S. dollars, except per share data
----------------------------------------------------------------------
Three Months Ended Twelve months Ended
December 31, 2005 December 31, 2005
----------------------------------------------------------------------
Per Per
diluted diluted
Amount share Amount share
---------------------------------------
Restructuring costs - - 19.8 $0.12
Write-down of assets 2.2 $0.01 34.8 $0.22
Write-off of Cardizem(R) LA,
Teveten inventory - - 4.9 $0.03
Equity Loss (Western Life
Sciences Fund) 0.4 $0.00 1.2 $0.01
----------------------------------------------------------------------
Total 2.6 $0.02 60.6 $0.38
----------------------------------------------------------------------
Balance Sheet & Cash Flow At the end of December 2005, Biovail's cash balances were $445.3 million, with no outstanding borrowings under its revolving term credit facility. The Company's debt-to-equity ratio debt-to-equity ratio The relationship between long-term funds provided by creditors and funds provided by owners. A firm's debt-to-equity ratio is calculated by dividing long-term debt by owners' equity. Both items are shown on the balance sheet. was 0.4 at the end of the fourth quarter of 2005, compared with 0.5 at December 31, 2004. Cash flows from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the were $223.4 million in the fourth quarter of 2005 and $501.9 million in full year of 2005, representing growth of 99% and 80%, respectively, compared with $112.1 million and $279.6 million in the corresponding periods of 2004. Net capital expenditures amounted to $13.7 million in the fourth quarter of 2005 and $37.8 million in the full year of 2005, compared with $7.8 million in the fourth quarter of 2004 and $28.0 million in the full year of 2004. The increases reflect the ongoing expansion of the Company's Steinbach manufacturing facility, which Biovail expects to complete in 2006. Regulatory Matters With respect to regulatory matters, Biovail continues to co-operate fully with the SEC and OSC O.S.C. n. short for Order to Show Cause. (See: Order to Show Cause) . The Company will provide an update as material developments in these matters occur. Conference Call Biovail management will host a conference call and Webcast on Thursday, March 23, 2006, at 8:30 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy for Company executives to discuss 2005 fourth-quarter earnings. Following the discussion, Biovail executives will address inquiries from research analysts. A live Webcast of this call will be available through the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Biovail Web site, www.biovail.com. To access the call live, please dial 416-340-8010 (Toronto and International callers) and 1-866-540-8136 (U.S. and Canada). Listeners are encouraged to dial in 10 minutes before the call begins to avoid delays. A replay of the conference call will be available until 7 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. on Thursday, March 30, 2006, by dialing 416-695-5800 (Toronto and International callers) and 1-800-408-3053 (U.S. and Canada), using access code, 3180221#. Caution Regarding Forward-Looking Information and "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement Under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 To the extent any statements made in this release contain information that is not historical, these statements are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Section 21E of the Securities Exchange Act of 1934, as amended, and may be forward-looking information within the meaning of the "safe harbor" provisions of applicable Canadian provincial securities legislation (collectively, "forward-looking statements"). These forward-looking statements relate to, among other things, our objectives, goals, targets, strategies, intentions, plans, beliefs, estimates and outlook, including, without limitation, statements concerning the anticipated commercial launch of Ultram(R) ODT, the anticipated formal launch of Wellbutrin XL(R), the anticipated filing of a New Drug Application for Biovail's formulation of a bupropion salt, and the expected completion of the expansion of the Steinbach manufacturing facility, and can generally be identified by the use of words such as "believe," "anticipate," "expect," "intend," "plan," "will," "may" and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or are forward-looking statements. Although Biovail believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results to differ materially from these expectations include, among other things: the difficulty of predicting U.S. Food and Drug Administration and Canadian Therapeutic Products Directorate 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 and finished products, the regulatory environment, tax rate assumptions, the outcome of legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. , fluctuations in operating results and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission and the Ontario Securities Commission The Ontario Securities Commission (OSC) is a regulatory agency which administers and enforces securities legislation in the Canadian province of Ontario. The OSC is an Ontario Crown corporation which reports to the Ontario legislature through the Minister of Finance. , as well as the Company's ability to anticipate and manage the risks associated with the foregoing. Additional information about these factors and about the material factors or assumptions underlying such forward-looking statements may be found in the body of this news release, as well as under the heading "Risk Factors" contained in Item 3(D) of Biovail's most recent Annual Report on Form 20-F. The Company cautions that the foregoing list of important factors that may affect future results is not exhaustive. When relying on Biovail's forward-looking statements to make decisions with respect to the Company, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Biovail undertakes no obligation to update or revise any forward-looking statement. About Biovail Corporation Biovail Corporation is a specialty pharmaceutical company, engaged in the formulation, clinical testing, registration, manufacture and commercialization of pharmaceutical products utilizing advanced drug-delivery technologies. For more information about Biovail, visit the Company's Web site at www.biovail.com. For further information, please contact Ken Howling at 905-286-3000 or send inquiries to ir@biovail.com.
BIOVAIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(All dollar amounts are expressed in thousands of U.S. dollars,
except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31 December 31
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
REVENUE
Product sales $274,762 $264,498 $884,267 $837,102
Research and development 6,733 7,117 27,949 19,279
Royalty and other 6,119 3,735 23,320 22,775
--------- --------- --------- ---------
287,614 275,350 935,536 879,156
--------- --------- --------- ---------
EXPENSES
Cost of goods sold 53,567 63,859 206,531 221,935
Research and development 26,302 18,453 88,437 68,382
Selling, general and
administrative 53,131 71,993 227,394 253,531
Amortization 15,442 15,739 62,260 64,704
Write-down of assets, net of
gain on disposal 2,670 42,156 29,230 40,685
Restructuring costs 85 - 19,810 -
Acquired research and
development - - - 8,640
--------- --------- --------- ---------
151,197 212,200 633,662 657,877
--------- --------- --------- ---------
Operating income 136,417 63,150 301,874 221,279
Interest income 3,499 277 7,175 1,034
Interest expense (9,205) (9,637) (37,126) (40,104)
Foreign exchange gain (loss) 736 594 (1,417) (564)
Other expense (356) (4,052) (1,160) (6,486)
--------- --------- --------- ---------
Income from continuing
operations before provision
for income taxes 131,091 50,332 269,346 175,159
Provision for income taxes 10,575 3,750 22,550 8,950
--------- --------- --------- ---------
Income from continuing
operations 120,516 46,582 246,796 166,209
Loss from discontinued
operation (797) (537) (10,575) (5,215)
--------- --------- --------- ---------
Net income $119,719 $46,045 $236,221 $160,994
--------- --------- --------- ---------
--------- --------- --------- ---------
Basic earnings per share
Income from continuing
operations $0.76 $0.29 $1.55 $1.04
Loss from discontinued
operation (0.01) - (0.07) (0.03)
--------- --------- --------- ---------
Net income $0.75 $0.29 $1.48 $1.01
--------- --------- --------- ---------
--------- --------- --------- ---------
Diluted earnings per share
Income from continuing
operations $0.75 $0.29 $1.55 $1.04
Loss from discontinued
operation - - (0.07) (0.03)
--------- --------- --------- ---------
Net income $0.75 $0.29 $1.48 $1.01
--------- --------- --------- ---------
--------- --------- --------- ---------
Weighted average number of
common shares outstanding
(000s)
Basic 159,526 159,280 159,433 159,115
--------- --------- --------- ---------
--------- --------- --------- ---------
Diluted 160,250 159,349 159,681 159,258
--------- --------- --------- ---------
--------- --------- --------- ---------
BIOVAIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)
At December 31
-----------------------
2005 2004
----------- -----------
ASSETS
Cash and cash equivalents $445,289 $34,324
Other current assets 239,493 280,327
Long-term investments 66,421 68,046
Property, plant and equipment, net 199,567 186,556
Intangible assets, net 910,276 978,073
Goodwill 100,294 100,294
Other long-term assets 67,472 63,440
----------- -----------
$2,028,812 $1,711,060
----------- -----------
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $273,556 $190,237
Long-term obligations 412,508 445,471
Other long-term liabilities 122,392 21,439
Shareholders' equity 1,220,356 1,053,913
----------- -----------
$2,028,812 $1,711,060
----------- -----------
----------- -----------
BIOVAIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)
Twelve Months Ended
December 31
-------------------
2005 2004
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Income from continuing operations $246,796 $166,209
Adjustments to reconcile income from continuing
operations to cash provided by continuing
operating activities
Depreciation and amortization 101,842 86,137
Amortization and write-down of deferred financing
costs 3,445 4,322
Amortization of discounts on long-term obligations 2,420 3,218
Write-down of assets, net of gain on disposal 29,230 40,685
Equity loss 1,160 4,179
Acquired research and development - 8,640
Other (258) 6,920
Changes in deferred revenue 47,962 4,305
Changes in other operating assets and liabilities 69,282 (45,049)
--------- ---------
Net cash provided by continuing operating
activities 501,879 279,566
Net cash provided by (used in) continuing investing
activities 31,825 (42,258)
Net cash used in continuing financing activities (119,095) (334,526)
Net cash used in discontinued operation (3,817) (2,481)
Effect of exchange rate changes on cash and cash
equivalents 173 762
--------- ---------
Net increase (decrease) in cash and cash
equivalents 410,965 (98,937)
Cash and cash equivalents, beginning of period 34,324 133,261
--------- ---------
Cash and cash equivalents, end of period $445,289 $34,324
--------- ---------
--------- ---------
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion