Biovail Reports Record Fourth Quarter and Full Year 2002 Financial Results.Business Editors/Health/Medical Writers TORONTO--(BUSINESS WIRE)--March 4, 2003 -- Total revenue increased 34% for fourth quarter 2002 and 35% for full year 2002 -- Excluding certain charges, 2002 diluted EPS was $1.77 reflecting an increase of 31% Biovail Biovail TSX: BVF NYSE: BVF is Canada's largest pharmaceutical company, operating internationally in all aspects of pharmaceutical products. Its major production facility is located in Steinbach, Manitoba. 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) today reported record financial results for the fourth quarter and year ended December December: see month. 31, 2002. Total revenues for the fourth quarter of 2002 increased 34% to $238.7 million, compared to $178.3 million reported for the fourth quarter of 2001. Total revenues for the year ended December 31, 2002 were $788.0 million reflecting an increase of $204.7 million or 35% over the year ended December 31, 2001 sales of $583.3 million. These favourable results are primarily driven by a significant increase in product sales revenues through Biovail's expanded U.S. sales and marketing organization, positive results from the U.S. Tiazac Tiazac® Diltiazem, see there franchise, strong growth from the Company's 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. sales and marketing group, as well as the contributions related to U.S. co-promotion activities of 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 SR and a participating interest in the gross profit of the sales of a generic version of Prilosec Pri·lo·sec A trademark for the drug omeprazole. omeprazole Losec (CA) (UK), Heartburn Relief (UK), Prilosec, Prilosec OTC, Zegerid, Zanprol (UK) Pharmacologic class: Proton pump inhibitor . Net income/loss and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. earnings/loss per share for fourth quarter and full year 2002 and fourth quarter and full year 2001 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 U.S 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 GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) are as follows:
Three Months Ended Twelve Months Ended
December 31 December 31
------------------- -------------------
In $millions, except per
share data 2002 2001 2002 2001
------------------------ --------- --------- --------- ---------
Net income (loss)
-- US GAAP $(102.8) $(18.9) $87.8 $87.4
========= ========= ========= =========
Diluted earnings (loss)
per share -- US GAAP $(0.65) $(0.13) $0.55 $0.58
========= ========= ========= =========
Net income (loss) -- US GAAP $(102.8) $(18.9) $87.8 $87.4
Add (deduct) certain items
Write-down of assets 30.6 80.5 31.9 80.5
Acquired research and
development 167.8 - 167.8 -
Other income (0.2) - (3.4) -
Debt conversion premiums - 12.2 - 35.0
--------- --------- --------- ---------
Net income excluding
certain items $95.4 $73.8 $284.1 $202.9
========= ========= ========= =========
Diluted earnings per
share excluding certain
items $0.60 $0.46 $1.77 $1.35
========= ========= ========= =========
Fourth quarter 2002 net losses of $102.8 million compared to a net loss of $18.9 million for the fourth quarter of 2001. Excluding certain charges, 2002 fourth quarter net income of $95.4 million increased 29% over 2001 fourth quarter net income of $73.8 million. Net income for full year 2002 of $87.8 million compared to net income of $87.4 million for the prior year equivalent period. Excluding certain charges, net income for full year 2002 increased 40% to $284.1 million versus full year 2001 net income of $202.9 million. Diluted loss per share of $0.65 for the fourth quarter 2002 compared to the diluted loss per share of $0.13 for the fourth quarter 2001. Excluding certain charges, 2002 fourth quarter 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 increased 30% to $0.60 versus 2001 fourth quarter earnings per share of $0.46. Diluted earnings per share for full year 2002 were $0.55 versus full year 2001 diluted earnings per share of $0.58. Excluding certain charges, full year 2002 diluted earnings per share increased 31% to $1.77 versus $1.35 diluted earnings per share for full year 2001. Eugene Melnyk Eugene Melnyk (born May 27, 1959 in Toronto, Ontario) is a Canadian businessman of Ukrainian origin who now resides in Barbados. He is the chairman and chief executive officer of Biovail Corporation. , Chairman of the Board and Chief Executive Officer, commented, "Biovail continues to achieve earnings growth in excess of 30% however, very importantly, Biovail continues to execute on its operational mandate. Biovail's U.S. sales organization more than doubled during 2002 and this sales force has already demonstrated its effectiveness by increasing monthly Teveten Tev·e·ten A trademark for the drug eprosartan mesylate. eprosartan mesylate Teveten Pharmacologic class: Angiotensin II receptor antagonist Therapeutic class: prescriptions over 90% from June to December 2002. As well, the Company has fully integrated the operational aspects of 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: , Teveten, Vasotec Vas·o·tec A trademark for the drug enalapril maleate. enalapril maleate Innovace (UK), Vasotec Pharmacologic class: Angiotensin-converting enzyme (ACE) inhibitor Therapeutic class: , Vaseretic and has begun developmental programs that will allow Biovail to further exploit these brands. During 2002, the Company has had numerous significant product development successes including the approval of 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, LA, the filing of Wellbutrin XL and numerous other clinical advancements. These clinical successes include favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. results from clinical programs related to once-daily versions of 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. and 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. and successful Phase IV clinical programs related to Cardizem LA. The combination of Biovail's clinical successes, sales force expansion programs and investments in early stage pipelines will continue to create a high level of future growth for Biovail and its shareholders." Fourth quarter and full year 2002 and 2001 U.S. GAAP calculations of net income/loss and fully diluted earnings/loss per share included 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 in-process research and development (IPR&D) and 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 certain assets. Management utilizes a measure of net income and earnings per share on a basis that excludes certain charges to better assess operating performance. Each of the items excluded are considered to be of a non-operational nature in the applicable period. Management has consistently applied this measure when discussing earnings or earnings guidance and will continue to do so going forward. Management believes that most of the Company's shareholders prefer to analyze the Company's results based on this measure, as it is consistent with industry practice. Earnings excluding charges are also disclosed to give investors the ability to further analyze the Company's results. During the fourth quarter of 2002, Biovail acquired two developmental companies, Pharma Pass LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control and a private development partner, both of which had IPR&D at the time of the acquisition. Accordingly, the associated IPR&D has been written-off. While this IPR&D has been written-off, the Company believes the products and technologies purchased will create substantial value in the future if and when approved by the U.S. Food and Drug Administration (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. ). The 2002 write-down of certain assets is primarily attributed to the write-off of the net asset value of the Adalat Ad·a·lat A trademark for the drug nifedipine. CC license rights previously acquired from Elan (Emulated LAN) A virtual LAN in the ATM world. See LANE and virtual LAN. Elan - ["Top-down Programming with Elan", C.H.A. Koster, Ellis Horwood 1987]. . This agreement has been terminated and the Company is in negotiations with Elan for compensation related to this agreement and is considering if 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. will be required to fairly compensate the Company for the loss of this product. The write-down of certain assets also reflects a decline in certain equity investments made by Biovail in early stage development companies including DepoMed, Inc and Hemispherx Biopharma Inc. Excluded from the 2001 net income and diluted earnings per share calculations are the write-down of assets primarily associated with two product rights, Keftab and Duravent, which were originally acquired as part of the acquisition of DJ Pharma in October 2000. Additionally, the premium paid on the conversion of $300 million of 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. has also been excluded from the calculations of 2001 net income and diluted earnings per share excluding charges. Financial Results Product sales revenue of $183.8 million increased $26.2 million for the fourth quarter 2002 versus fourth quarter 2001 and increased 24% to $646.0 million for the full year 2002 versus full year 2001. The increase in product sales revenue is primarily attributable to the sales of Zovirax, Vasotec and Teveten in the U.S. marketplace. Additionally, incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. 2002 product sales revenues versus 2001 have been favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted by the launch of a bioequivalent bi·o·e·quiv·a·lent n. A value indicating the rate at which a substance enters the bloodstream and becomes available to the body. version of Adalat CC 90mg and strong sales via the Company's Canadian sales and marketing organization. Product sales revenue represents almost 80% of the Company's revenue base. Research and development revenues were $9.3 million and $28.4 million for the fourth quarter and full year 2002 respectively compared to 2001 levels of $4.5 million and $14.6 million respectively. The increase in 2002 fourth quarter and full year research and development revenues versus 2001 is primarily related to fees earned from GlaxoSmithKline (GSK GSK GlaxoSmithKline plc (pharmaceutical company) GSK Glycogen Synthase Kinase GSK Gruppentraining Sozialer Kompetenzen (Germany) GSK Greenland Shark (FAO fish species code) ) due to the development of a once-daily version of 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. (Wellbutrin XL) which was filed as 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 ) by GSK in August of 2002. Co-promotion, royalty and licensing revenue of $45.6 million and $113.6 million for the fourth quarter and full year 2002 respectively reflects increases of approximately $29.4 million and $66.1 million respectively versus comparable 2001 levels. These increases are primarily due to co-promotion revenues received from GSK given Biovail's successful promotional of Wellbutrin SR in the U.S. and due to the Company's interest in the gross profit on the sales of a generic version of Prilosec during the fourth quarter of 2002. Gross margins were approximately 76% for fourth quarter 2002 reflecting an increase in excess of 100 basis points from the third quarter 2002 and were 74% for full year 2002. Fourth quarter and full year 2001 gross margins were 77% and 76% respectively. The change in year over year gross margins is primarily due to a change in the sales mix sales mix See product mix. of the in-market products. Research and development expenses were $12.6 million and $52.2 million for the fourth quarter and full year 2002. Research and development expenses for the fourth quarter 2002 were favourably impacted by the early and successful completion of Phase IV studies comparing Cardizem LA to ramipril ramipril /ra·mi·pril/ (rah-mi´pril) an angiotensin-converting enzyme inhibitor used in treatment of hypertension and congestive heart failure and the prevention of a major cardiovascular event in high-risk patients. which came in under budget, the strategy to initiate development of a Flash Dose version of Paxil Pax·il A trademark for the drug paroxetine. paroxetine hydrochloride Paxil, Paxil CR, Seroxat (UK) Pharmacologic class: Selective serotonin reuptake inhibitor (SSRI) CR instead of Paxil FD as previously disclosed and the timing of patient recruitment for ongoing Phase III Noun 1. phase III - a large clinical trial of a treatment or drug that in phase I and phase II has been shown to be efficacious with tolerable side effects; after successful conclusion of these clinical trials it will receive formal approval from the FDA and Phase IV trials. All significant development and clinical trial program timelines This article or section contains self-references. For other uses of "Timeline", see Timeline (disambiguation). The following is an index of timelines found on Wikipedia. remain unchanged and include expected New Drug Application (NDA) filings for a once-daily tramadol in the second half of 2003, an NDA filing for metformin in the first half of 2004 and the approval and launch of a once-daily formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation of Wellbutrin XL in the second half of 2003. Fourth quarter and full year 2002 selling, general and administrative expenses increased 31% and 50% respectively to $42.5 million and $165.7 million due to the U.S. sales force expansion program, an increase in advertising and promotional expenses Noun 1. promotional expense - the cost of promoting a product business expense, trade expense - ordinary and necessary expenses incurred in a taxpayer's business or trade for the Company's in-market brands and the inclusion of co-promotion expenses payable to Reliant Pharmaceuticals, LLC for detailing activities associated with Teveten and Cedax Ce·dax A trademark for the drug ceftibuten. ceftibuten Cedax Pharmacologic class: Third-generation cephalosporin Therapeutic class: Anti-infective . Amortization expense was $29.0 million for fourth quarter 2002 versus $12.0 million for fourth quarter 2001. Amortization expense for full year 2002 and 2001 was $71.5 million and $44.5 million respectively. A substantial increase in fourth quarter 2002 amortization expense versus 2001 is due to amortization expense associated with the purchase of a participating interest in the gross profit of a generic version of Prilosec. Additionally, both fourth quarter and full year 2002 amortization expense was impacted by the acquisitions of the Zovirax, Vasotec and Teveten in-market brands. Excluding the charges outlined in the chart above, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for fourth quarter 2002 increased to $111.0 million reflecting an increase of 32% or $26.9 million versus $84.1 million earned in the fourth quarter of 2001. On the same basis, operating income was $334.0 million for the full year 2002 reflecting an increase of 33% versus $251.6 million for the full year 2001. Net interest expense was $8.5 million for the fourth quarter 2002 and $28.4 million for the full year 2002. Net interest expense was $4.8 million for the fourth quarter 2001 and $33.5 million for the year 2001. The change in net interest expense is primarily due to differences in the Company's interest bearing cash balances, the interest paid on the Company's Senior Subordinated Notes issued March 2002 versus interest paid on the convertible debentures issued in March of 2000 and redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. over the course of 2001 as well as advances made against the Company's $600 million revolving term credit facility. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. meaning. Therefore, this measure may not be comparable to similar measures presented by other companies. The Company will be hosting a conference call today to review the fourth quarter and year end December 31, 2002 financial results. The conference call will be broadcast live at 8:30 a.m. E.S.T. on the world wide web at www.biovail.com and a replay of the conference call will be available on this website shortly after the call. For further information, please contact Ken Howling at 905-286-3000 or send inquiries to ir@biovail.com. "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 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.
BIOVAIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(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
-------------------- ---------------------
2002 2001 2002 2001
---------- --------- ---------- ----------
REVENUE
Product sales $183,836 $157,679 $645,986 $521,154
Research and development 9,257 4,479 28,425 14,596
Co-promotion, royalty and
licensing 45,604 16,184 113,614 47,513
---------- --------- ---------- ----------
238,697 178,342 788,025 583,263
---------- --------- ---------- ----------
EXPENSES
Cost of goods sold 43,692 35,712 164,706 125,995
Research and development 12,603 14,154 52,150 51,017
Selling, general and
administrative 42,457 32,425 165,697 110,100
Amortization 28,977 11,955 71,499 44,513
Write-down of assets 30,575 80,482 31,944 80,482
Acquired research and
development 167,745 - 167,745 -
---------- --------- ---------- ----------
326,049 174,728 653,741 412,107
---------- --------- ---------- ----------
Operating income (loss) (87,352) 3,614 134,284 171,156
Interest income 749 1,081 3,608 2,742
Interest expense (9,252) (5,925) (32,005) (36,242)
Other income 165 - 3,408 -
Debt conversion premiums - (12,192) - (34,923)
---------- --------- ---------- ----------
Income (loss) before
provision for income taxes (95,690) (13,422) 109,295 102,733
Provision for income taxes 7,100 5,500 21,500 15,285
---------- --------- ---------- ----------
Net income (loss) $(102,790) $(18,922) $87,795 $87,448
========== ========= ========== ==========
Diluted earnings (loss) per
share $(0.65) $(0.13) $0.55 $0.58
========== ========= ========== ==========
Net income (loss) $(102,790) $(18,922) $87,795 $87,448
Add (deduct) certain items
Write-down of assets 30,575 80,482 31,944 80,482
Acquired research and
development 167,745 - 167,745 -
Other income (165) - (3,408) -
Debt conversion premiums - 12,192 - 34,923
---------- --------- ---------- ----------
Net income excluding certain
items $95,365 $73,752 $284,076 $202,853
========== ========= ========== ==========
Diluted earnings per share
excluding certain items $0.60 $0.46 $1.77 $1.35
========== ========= ========== ==========
Weighted average number of
common shares outstanding
(000s)
Basic 157,038 146,469 151,960 136,928
========== ========= ========== ==========
Diluted 158,099 159,478 160,463 150,690
========== ========= ========== ==========
BIOVAIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(All dollar amounts are expressed in thousands of U.S. dollars,
except per share data)
(Unaudited)
Notes
Prior year's figures reflect the reclassification of co-promotion
revenue from product sales to co-promotion, royalty and licensing to
conform with the presentation adopted in the current year.
Management utilizes a measure of net income and diluted earnings per
share on a basis that excludes certain items. This measure is a
non-GAAP measure that does not have a standardized meaning and, as
such, is not necessarily comparable to similarly titled measures
presented by other companies. Management has consistently applied
this measure when discussing earnings or earnings guidance and will
continue to do so going forward. This measure is provided to assist
our investors in assessing the Company's operating performance.
Management believes that most of our investors prefer to analyze the
Company's results based on this measure as it is consistent with
industry practice. The items were excluded because they were
considered to be of a non-operational nature in the applicable period.
The excluded items are also disclosed to give investors the ability to
further analyze the Company's results. Investors should consider this
non-GAAP measure in the context of the Company's U.S. GAAP results.
BIOVAIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)
December 31
-----------------------
2002 2001
----------- -----------
ASSETS
Cash and cash equivalents $56,080 $434,891
Other current assets 265,551 141,705
Long-term investments 79,324 2,355
Property, plant and equipment, net 136,784 85,581
Goodwill, net 102,212 96,477
Intangible assets, net 1,121,159 556,360
Other assets, net 72,694 14,114
----------- -----------
$1,833,804 $1,331,483
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $345,158 $148,740
Deferred revenue 18,200 23,100
Long-term obligations 624,760 33,569
Shareholders' equity 845,686 1,126,074
----------- -----------
$1,833,804 $1,331,483
=========== ===========
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
---------------------
2002 2001
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $87,795 $87,448
Add (deduct) items not involving cash
Depreciation and amortization 82,368 55,287
Amortization of deferred financing costs 2,267 1,580
Amortization of discounts on long-term
obligations 5,329 10,999
Write-down of assets 31,944 80,482
Acquired research and development 167,745 -
Debt conversion premiums, net of cash paid - 23,574
Other items not involving cash (1,409) 3,437
---------- ----------
376,039 262,807
Net change in non-cash operating items (41,935) 21,314
---------- ----------
Cash provided by operating activities 334,104 284,121
CASH FLOWS FROM INVESTING ACTIVITIES (792,467) (57,747)
CASH FLOWS FROM FINANCING ACTIVITIES 79,533 83,602
Effect of exchange rate changes on cash and cash
equivalents 19 (229)
---------- ----------
Increase (decrease) in cash and cash equivalents (378,811) 309,747
Cash and cash equivalents, beginning of year 434,891 125,144
---------- ----------
Cash and cash equivalents, end of year $56,080 $434,891
========== ==========
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion