Biovail Reports Second-Quarter 2006 Financial Results; Company Records Total Revenues of $253 Million; U.S. GAAP EPS of $0.50; Cash Balances in Excess of $570 Million; Cash Flows from Operations of $111 Million.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) today announced financial results for the three-month and six-month periods ending June 30, 2006. To the extent that this news 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 the Company's current views, and actual outcomes are not certain. For more information, see the note on forward-looking information following the conference call details in this news release. Total revenues for the three months ended June 30, 2006 were $252.8 million, compared with $216.2 million for the second quarter of 2005. Total revenues for the six months ended June 30, 2006 were $473.3 million, compared with $389.9 million for the first six months of 2005. Second-quarter 2006 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 GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), was $80.6 million, compared with $3.7 million for the corresponding 2005 period. 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 (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. ) for the second quarter of 2006 were $0.50, compared with $0.02 for the second quarter of 2005. In the first half of 2006, GAAP EPS were $0.91, compared with EPS of $0.09 for the first half of 2005. In the second-quarter of 2006, GAAP net income and EPS figures were impacted by costs associated with a recall of certain dosage dosage /dos·age/ (do´saj) the determination and regulation of the size, frequency, and number of doses. dos·age n. 1. Administration of a therapeutic agent in prescribed amounts. strengths of Ultram(R) ER, which negatively impacted 2006 U.S. GAAP pre-tax income and EPS by $13.4 million and $0.08, respectively. In the first half of 2006, Biovail also incurred a $2.3-million 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. related to the sale of Nutravail to Futuristic fu·tur·is·tic adj. 1. Of or relating to the future. 2. a. Of, characterized by, or expressing a vision of the future: futuristic decor. b. Brands USA, Inc. In the second quarter and first half of 2005, GAAP net income and EPS figures were impacted by the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of Biovail's U.S. commercial operations, a write-down of assets primarily associated with the sale of Teveten Tev·e·ten A trademark for the drug eprosartan mesylate. eprosartan mesylate Teveten Pharmacologic class: Angiotensin II receptor antagonist Therapeutic class: and Teveten HCT Hct abbr. hematocrit HCT Hematocrit, see there to Kos Pharmaceuticals, Inc., and a $4.9-million write-off of Cardizem(R) LA and Teveten inventories not purchased by Kos. These items negatively impacted first-half 2005 U.S. GAAP net income and EPS by $50.1 million and $0.31. "Biovail has again delivered a financially strong quarter, and has ended the period with over $570 million in cash on hand," said Biovail Chief Executive Officer Dr. Douglas Squires. "Although we are disappointed by recent 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. developments, we remain committed to vigorously defending Wellbutrin XL(R). The filing of a Motion for Reconsideration re·con·sid·er v. re·con·sid·ered, re·con·sid·er·ing, re·con·sid·ers v.tr. 1. To consider again, especially with intent to alter or modify a previous decision. 2. with the Court is the likely first step; however, we will pursue any and all appropriate means to defend the integrity of our intellectual property." Update on Wellbutrin XL(R) Litigation On August 1, 2006, in the United States District Court United States District Court In the U.S., any of the 94 trial courts of general jurisdiction in the federal judicial system. Each state, as well as the District of Columbia and the Commonwealth of Puerto Rico, has at least one federal district court. for the Central District of California, Judge James V James V, king of Scotland James V, 1512–42, king of Scotland (1513–42), son and successor of James IV. His mother, Margaret Tudor, held the regency until her marriage in 1514 to Archibald Douglas, 6th earl of Angus, when she lost it to John . Selna issued an order granting Anchen Pharmaceutical Inc.'s (Anchen) Motion for Summary Judgment motion for summary judgment n. a written request for a judgment in the moving party's favor before a lawsuit goes to trial and based on recorded (testimony outside court) affidavits (or declarations under penalty of perjury), depositions, admissions of fact, answers in the Wellbutrin XL(R) patent-infringement case, and denied it with respect to the invalidity in·va·lid 1 n. One who is incapacitated by a chronic illness or disability. adj. 1. Incapacitated by illness or injury. 2. Of, relating to, or intended for invalids. tr.v. issue. This ruling becomes final only after the Court has formally issued and entered a Final Judgment. New Co-Promotion and Promotion Agreements In the second quarter of 2006, Biovail further leveraged its existing sales and marketing infrastructure in both the U.S. and Canada. In May, Biovail's wholly owned U.S. subsidiary, Biovail Pharmaceuticals, Inc. (BPI (Bits Per Inch) The measurement of the number of bits stored in one linear inch of a track (storage channel) on a disk or tape. Bit density on magnetic disks has reached 800,000 bpi (800 Kbpi). See tpi, areal density and magnetic disk. BPI - bits per inch ), and AstraZeneca Pharmaceuticals LP entered into an agreement pursuant to which BPI's specialty sales force began promotional activities for Zoladex(R) 3.6mg (goserelin acetate go·se·rel·in acetate n. A synthetic peptide analog of gonadotropin-releasing hormone used primarily to treat cancer of the breast and prostate, endometriosis, and infertility. implant implant /im·plant/ (im-plant´) to insert or to graft (tissue, or inert or radioactive material) into intact tissues or a body cavity. ) to obstetricians and gynecologists for the treatment of endometriosis endometriosis (ĕn'dəmē'trē-ō`sĭs), a condition in which small pieces of the endometrium (the lining of the uterus) migrate to other places in the pelvic area. in the United States and Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. . The BPI sales force now details Zovirax(R) 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(R) Cream, Ultram(R) ER and Zoladex(R) 3.6 mg to specialist physicians in the U.S. Also in May, 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 ), the Company's Canadian sales and marketing division, entered into an agreement with Novartis Pharmaceuticals Canada Inc. to market and promote cholesterol medicines Lescol(R) (fluvastatin sodium fluvastatin sodium (floo´v  stat´ capsules),
and once-daily Lescol(R) XL (fluvastatin sodium extended-release
tablets), to Canadian specialists and primary-care physicians. These
medicines are complementary to BPC's existing product offerings,
including Tiazac(R) XC and Glumetza(TM).Second-Quarter 2006 Financial Performance Product revenues for the second quarter of 2006 were $241.1 million, compared with $204.5 million in the second quarter of 2005, a 18% increase that reflects the performance of Wellbutrin XL(R) and Zovirax; partially offset by declines in revenues from BPC, Cardizem(R) LA, and Biovail's portfolio of Legacy and generic products. Product revenues for the six months ended June 30, 2006 were $450.8 million compared with $365.1 million for the six months ended June 30, 2005. Product revenues for Wellbutrin XL(R) were $114.0 million in the second quarter of 2006, and $179.0 million in the first half of 2006, compared with $70.5 million and $107.2 million in corresponding periods in 2005, respectively. This strong performance reflects continued strength in prescription volume for the product, as well as price increases instituted by GlaxoSmithKline (GSK GSK GlaxoSmithKline plc (pharmaceutical company) GSK Glycogen Synthase Kinase GSK Gruppentraining Sozialer Kompetenzen (Germany) GSK Greenland Shark (FAO fish species code) ). In June 2006, Wellbutrin XL(R) captured 60.5% of the new prescriptions written for the Wellbutrin brand (including generics). Revenues for Biovail's Zovirax franchise were $29.1 million in the second quarter of 2006, and $53.6 million in the first half of 2006, representing increases of 59% and 18%, respectively, when compared with $18.3 million and $45.4 million in the prior-year periods. The increases reflect the timing of wholesaler inventory purchases and a January 2006 price increase. In the second quarter of 2006, Zovirax Ointment and Zovirax Cream held a combined 71.9% share of the 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 3.8 percentage points in market share versus second-quarter 2005 levels. Second-quarter 2006 revenues for Biovail Pharmaceuticals Canada (BPC) were $19.5 million, compared with $23.7 million in the prior-year period. First-half 2006 revenues for BPC were $39.3 million, compared with $48.7 million in the first half of 2005. The declines reflect the availability of generic formulations of Tiazac(R) and Wellbutrin(R) SR. Partially offsetting factors include the continued growth in Tiazac(R) XC, and the April 2006 launch of Wellbutrin(R) XL. Total prescription volume for Wellbutrin(R) SR decreased 37% in the second quarter of 2006, versus the comparable period in 2005, due to the availability of a generic competitor. Total prescription volume for Tiazac(R) declined 32% in the first quarter of 2006, compared with the corresponding period in 2005. However, Tiazac(R) XC continues to gain market share, capturing 35% of total prescriptions written for the Tiazac(R) brand in the second quarter of 2006. In the second quarter of 2006, Cardizem(R) LA generated revenues of $9.2 million, compared with $17.6 million for the corresponding period in 2005. In the first half of 2006, Cardizem(R) LA generated revenues of $25.4 million, compared with $29.0 million in the first half of 2005. These declines reflect the May 2005 strategic alliance with Kos, whereby Biovail now manufactures and supplies the product 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 Kos transaction positively impacted Cardizem(R) LA revenues by $3.8 million and $7.5 million in the second quarter and first six months of 2006, respectively. Launched in February 2006, Ultram(R) ER generated revenues of $0.9 million in the second quarter of 2006, which is net of a $7.8-million return provision related to a recent recall of certain dosages of the product. In June 2006, Biovail's marketing partner Ortho-McNeil, Inc. (OMI (1) See Open Market. (2) (Open Microprocessor Initiative, Brussels, Belgium) An organization that functions under the umbrella of the European Commission. It funds projects that research and develop advanced microcontroller technologies. ) voluntarily recalled 17 lots of Ultram(R) ER 300mg tablets, and one lot of 200mg tablets from wholesalers and pharmacies This article is a list of major pharmacies (also known as chemists and drugstores) by country. Australia Pharmacies in Australia are mostly independently-owned by pharmacists, often operated as franchises of retail brands offered by the three major , due to a small number of tablets being damaged during the printing process. Importantly, the issue was identified promptly, and resolved expeditiously ex·pe·di·tious adj. Acting or done with speed and efficiency. See Synonyms at fast1. ex with the installation and validation See validate. validation - The stage in the software life-cycle at the end of the development process where software is evaluated to ensure that it complies with the requirements. of new tablet-printing equipment. New quantities of both dosage strengths of Ultram(R) ER resumed shipment prior to the end of the second quarter of 2006. Biovail also incurred $5.6 million in inventory and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. related to the recall and the write-off of Ultram(R) ER product that had not been shipped. Legacy products generated revenues of $36.7 million for the second quarter of 2006, compared with $39.1 million in the second quarter of 2005, representing a decrease of 6%. The decline reflects lower sales of Tiazac(R) (both brand and generic) to Forest Laboratories, Inc. In the first half of 2006, legacy products generated revenues of $72.3 million, compared with $68.9 million in the first half of 2005, an increase of 5% that reflects higher sales of Cardizem(R) CD, and price increases instituted in 2006. Partially offsetting this growth were the expected year-over-year declines in total prescription volumes for these mature products. 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 pharmaceutical 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. However, following further analysis of the opportunity, Biovail's Board of Directors and senior management team have decided that Biovail will retain these assets. The profitability and associated cash flows of these products will be deployed in strategic growth initiatives and for other purposes. Product revenue for Biovail's portfolio of generic products (distributed by Teva Pharmaceutical Industries Teva Pharmaceutical Industries Ltd. (Hebrew: טבע תעשיות פרמצבטיות בע"מ), NASDAQ: TEVA is an international pharmaceutical company headquartered in Ltd.) was $32.8 million in the second quarter of 2006, compared with $34.3 million in the second quarter of 2005. The decline in sales in the second quarter of 2006 was mainly due to weaker sales of generic Cardizem(R) CD. In the first half of 2006, Biovail's generic products generated revenues of $66.4 million, compared with $59.3 million in the first half of 2005, an increase of 12% that reflects higher sales of generic Cardizem(R) CD and generic Procardia XL, and the recent launch of an authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: generic formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation of Tiazac(R) in Canada through Novopharm. The Teveten line of products, which was divested in May 2005 to Kos, generated revenues of $1.1 million in the second quarter of 2005. In the second quarter of 2006, Biovail increased its returns provision for the Teveten line (related to pre-May 2, 2005 sales of the products) by $1.1 million. Biovail no longer has an economic interest in Teveten. The following table summarizes Biovail's product revenue performance in the second quarter and first half of 2006:
($000s) Q2/06 Q2/05 Change H1/06 H1/05 Change
Revenues Revenues (%) Revenues Revenues (%)
----------------------------------------------------------------------
Wellbutrin XL(R) 113,950 70,469 62% 178,954 107,225 67%
Zovirax 29,098 18,285 59% 53,572 45,405 18%
Biovail
Pharmaceuticals
Canada 19,527 23,683 (18%) 39,307 48,722 (19%)
Cardizem(R) LA 9,208 17,599 (48%) 25,418 28,979 (12%)
Ultram(R) ER 880 - - 15,991 - -
Legacy Products 36,729 39,144 (6%) 72,258 68,924 5%
Generics 32,784 34,286 (4%) 66,381 59,261 12%
Teveten (1,058) 1,053 (200%) (1,058) 6,534 (116%)
----------------------------------------------------------------------
Total Product
Revenues 241,118 204,519 18% 450,823 365,050 23%
----------------------------------------------------------------------
Research-and-development revenue decreased 38% in the second quarter of 2006 and decreased 35% in first half of 2006, compared with the corresponding periods of 2005. This performance reflects a delay in the initiation of certain clinical research and laboratory testing services for external customers by Biovail's Contract Research Division. Royalty and other revenue was $7.7 million in the second quarter of 2006 and $13.6 million in the first half of 2006, compared with $5.3 million and $11.2 million in the corresponding periods in 2005, respectively. Biovail earned co-promotion revenues related to Ultram(R) ER of $1.8 million in the first half of 2006. 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 second quarter of 2006 was $61.8 million, compared with $59.9 million in the second quarter of 2005. Gross margins based on product sales were 74.4% and 75.3% in the second quarter and first half of 2006, respectively, compared with 70.7% and 72.3% in the corresponding 2005 periods. The second-quarter 2006 gross margins reflect the impact of manufacturing issues primarily related to Ultram(R) ER, as well as return provisions of $7.8 million. In the second quarter of 2005, Biovail recorded a provision of $5.7 million for inventory of Cardizem(R) CD due to increasing competition from generics and Cardizem(R) LA, and wrote off $4.9 million of Cardizem(R) LA and Teveten inventories not purchased by Kos. Selling, general and administrative (SG&A) expenses for the second quarter of 2006 were $66.7 million, compared with $57.2 million in the second quarter of 2005, a 17% increase that reflects higher legal expenses, the processing of the Ultram(R) ER recall, increased costs related to Sarbanes-Oxley compliance, information-technology infrastructure upgrades, and the recent launches of Glumetza(TM) and Wellbutrin(R) XL in Canada. In addition, in accordance with Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). Statement No. 123R (FAS 123R), Biovail incurred stock-based compensation costs of $2.9 million in the second quarter of 2006, the majority of which is recorded in SG&A expenses. Research-and-development expenditures were $18.4 million for the second quarter of 2006 and $40.7 million for the first half of 2006, compared with $22.3 million and $42.2 million for the corresponding periods in 2005, respectively. With respect to ongoing development programs, Biovail anticipates the filing of 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 ) for the Company's 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. salt in the third quarter of 2006, and the initiation of the 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 clinical program for the Company's tramadol/NSAID combination by the end of 2006. Amortization expense was $14.8 million in the second quarter of 2006 and $29.6 million in the first half of 2006, compared with $15.4 million and $31.4 million in the second quarter and first half of 2005, respectively. The modest decrease primarily 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 second quarter of 2006, Biovail recorded a $4.5 million contract-loss contingency contingency n. an event that might not occur. related to a sample-supply allowance with GSK. Depending upon the timing of the introduction of a generic formulation of Wellbutrin XL(R), Biovail may be required to make a payment estimated to be up to $40 million to GSK in respect to this matter. Balance Sheet & Cash Flow At the end of the second quarter of 2006, Biovail had cash balances of $571.3 million. In the second quarter of 2006, Biovail reduced its long-term obligations by $7.7 million. The Company's long-term debt-to-equity ratio Long-term debt-to-equity ratio A capitalization ratio comparing long-term debt to shareholders' equity. stood at 0.3 at the end of the second quarter of 2006, compared with 0.4 at December 31, 2005. Cash flows from operations were $110.8 million in the second quarter of 2006, compared with $88.2 million in the second quarter of 2005. Net capital expenditures in the second quarter of 2006 amounted to $14.3 million, which largely reflects the expansion of the Company's Steinbach manufacturing facility. Biovail expects the work to be completed in the third quarter of 2006. Conference Call Biovail management will host a conference call and Webcast on Thursday, August 10, 2006, at 8:30 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT for Company executives to discuss 2006 second-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 416-405-9328 (Toronto and International callers) and 1-800-387-6216 (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. EDT on Thursday, August 17, 2006, by dialing 416-695-5800 (Toronto and International callers) and 1-800-408-3053 (U.S. and Canada), using access code, 3159456#. 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 filing of a New Drug Application for Biovail's formulation of a bupropion salt, the initiation of a Phase III clinical program for a tramadol/NSAID combination product, 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 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. 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 Six Months Ended
June 30 June 30
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
REVENUE
Product sales $241,118 $204,519 $450,823 $365,050
Research and development 3,951 6,369 8,860 13,569
Royalty and other 7,737 5,290 13,646 11,245
--------- --------- --------- ---------
252,806 216,178 473,329 389,864
--------- --------- --------- ---------
EXPENSES
Cost of goods sold 61,819 59,872 111,148 100,973
Research and development 18,402 22,268 40,730 42,222
Selling, general and
administrative 66,670 57,167 123,220 131,861
Amortization 14,825 15,409 29,649 31,375
Contract loss contingency 4,500 - 4,500 -
Write-down of assets - 26,560 - 26,560
Restructuring costs - 18,607 - 18,607
--------- --------- --------- ---------
166,216 199,883 309,247 351,598
--------- --------- --------- ---------
Operating income 86,590 16,295 164,082 38,266
Interest income 6,116 912 11,312 1,290
Interest expense (8,485) (9,574) (17,509) (18,471)
Foreign exchange gain (loss) 1,401 (153) 811 (691)
Other income (expense) 50 (263) (268) (533)
--------- --------- --------- ---------
Income from continuing
operations before provision
for income taxes 85,672 7,217 158,428 19,861
Provision for income taxes 5,350 2,295 9,500 2,880
--------- --------- --------- ---------
Income from continuing
operations 80,322 4,922 148,928 16,981
Income (loss) from discontinued
operation 272 (1,215) (3,848) (2,142)
--------- --------- --------- ---------
Net income $80,594 $3,707 $145,080 $14,839
========= ========= ========= =========
Basic and diluted earnings
(loss) per share
Income from continuing
operations $0.50 $0.03 $0.93 $0.11
Income (loss) from discontinued
operation - (0.01) (0.02) (0.02)
--------- --------- --------- ---------
Net income $0.50 $0.02 $0.91 $0.09
========= ========= ========= =========
Weighted average number of
common shares outstanding
(000s)
Basic 160,071 159,398 159,868 159,391
========= ========= ========= =========
Diluted 160,071 159,441 159,905 159,444
========= ========= ========= =========
BIOVAIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)
At At
June 30 December 31
2006 2005
------------ -------------
ASSETS
Cash and cash equivalents $571,326 $445,289
Other current assets 216,740 239,493
Long-term investments 67,024 66,421
Property, plant and equipment, net 221,478 199,567
Intangible assets, net 876,040 910,276
Goodwill 100,294 100,294
Other long-term assets 59,222 67,472
------------ -------------
$2,112,124 $2,028,812
============ =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $255,091 $273,556
Long-term obligations 400,546 412,508
Other long-term liabilities 104,890 122,392
Shareholders' equity 1,351,597 1,220,356
------------ -------------
$2,112,124 $2,028,812
============ =============
BIOVAIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)
Six Months Ended
June 30
-------------------
2006 2005
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $145,080 $14,839
Adjustments to reconcile net income to net cash
provided by continuing operating activities
Depreciation and amortization 51,682 49,914
Amortization and write-down of deferred financing
costs 1,237 2,074
Amortization and write-down of discounts on long-
term obligations 793 1,344
Stock-based compensation 9,762 -
Loss from discontinued operation 3,848 2,142
Receipt of leasehold inducements 722 -
Equity loss 268 533
Write-down of assets - 26,560
Other 43 (357)
Changes in operating assets and liabilities (7,937) 58,994
--------- ---------
Net cash provided by continuing operating
activities 205,498 156,043
Net cash provided by (used in) continuing investing
activities (30,902) 86,008
Net cash used in continuing financing activities (47,874) (29,601)
Net cash used in discontinued operation (558) (1,160)
Effect of exchange rate changes on cash and cash
equivalents (127) (171)
--------- ---------
Net increase in cash and cash equivalents 126,037 211,119
Cash and cash equivalents, beginning of period 445,289 34,324
--------- ---------
Cash and cash equivalents, end of period $571,326 $245,443
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