Biovail Reports Third Quarter 2004 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) --Product Sales Up 13% in Third Quarter to $203.5 Million --Core Product Sales Up 44% and 75% for Third Quarter and First Nine Months of 2004 vs. Prior Year Periods --Biovail Reaches Highest Revenue Tier 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 XL Agreement Biovail Corporation (NYSE:BVF) (TSX:BVF) today announced financial results for the three-month and nine-month periods ending September 30, 2004. Total revenues for the three months ended September 30, 2004 were $215.7 million, compared with $215.3 million for the third quarter of 2003. Total revenues for the nine months ended September 30, 2004 were $608.7 million, compared with $624.0 million for the first nine months of 2003. Third-quarter 2004 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 $49.6 million, compared with $16.1 million for the corresponding 2003 period. Net income for the nine-month period ended September 30, 2004 was $114.9 million, compared with $68.8 million in 2003. 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 third quarter of 2004 were $0.31, versus $0.10 for the third quarter of 2003. In the first nine months of 2004, GAAP 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. EPS was $0.72, versus EPS of $0.43 for the first nine months of 2003, an increase of $0.29. "Biovail's performance in the third quarter of 2004 - and for the first nine months of 2004 - continues to demonstrate the company's ongoing commitment to enhanced operational efficiencies and more transparent reporting into the company's performance and business activities," said Biovail Chairman 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. . "While changes to wholesaler business models and buying patterns temporarily impacted revenues for our promoted products, it is important to note that total prescriptions for our core products in the third quarter of 2004 have increased 92% relative to the same period a year ago." Third Quarter 2004 Financial Performance Product sales for the third quarter of 2004 were a record $203.5 million, compared with $180.0 million in the third quarter of 2003, an increase of 13%. This performance is largely attributable to the ongoing success of Wellbutrin XL, for which rapidly increasing sales in the third quarter moved Biovail into the third and highest tier of its pricing agreement with marketing partner GlaxoSmithKline. Also contributing to this positive performance was 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 portfolio of generic products. Mitigating mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. this growth was a reduction in wholesaler inventory levels for Biovail's promoted products, reflecting the wholesaler industry's ongoing shift towards a fee-for-service fee-for-ser·vice adj. Charging a fee for each service performed. distribution model. Product sales for the nine months ended September 30, 2004 were $575.8 million, compared with $464.6 million for first nine months of 2003, an increase of 24%. As a percentage of total corporate revenue, product sales were 94% and 95% in the third quarter and first nine months of 2004, respectively, compared with 84% and 74% in the third quarter and first nine months of 2003, respectively. Core products - those that Biovail, or a distribution partner, is actively promoting (represented by 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 Teveten Tev·e·ten A trademark for the drug eprosartan mesylate. eprosartan mesylate Teveten Pharmacologic class: Angiotensin II receptor antagonist Therapeutic class: line, 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: , BPC and Wellbutrin XL) - generated revenues of $132.0 million in the third quarter of 2004 and $380.1 million in the first nine months of 2004, compared with $91.4 million and $216.6 million in the corresponding periods in 2003, an increase of 44% and 75%, respectively. Core products represented 61% of overall revenues in the third quarter of 2004, compared with 42% in the corresponding 2003 period, demonstrating continued organic growth in Biovail's strategic business areas. In the first nine months of 2004, Core products represented 62% of overall revenues, compared with 35% in the first nine months of 2003. Product revenues for Wellbutrin XL, launched in September 2003, were $86.4 million in the third quarter of 2004, compared with $8.2 million in the third quarter of 2003, as Wellbutrin XL continues to rapidly gain share in the U.S. anti-depressant market. For the first nine months of 2004, Wellbutrin XL revenues were $207.6 million, compared with $16.3 million in the first nine months of 2003. In September 2004, Wellbutrin XL captured 52.2% of the new prescriptions written for the Wellbutrin brand (including generics). Revenues from Biovail's promoted products (Cardizem LA, Teveten, Teveten HCT Hct abbr. hematocrit HCT Hematocrit, see there , 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) were $20.3 million in the third quarter of 2004, compared with $60.1 million in the corresponding period in 2003. The decrease reflects fluctuations in wholesaler buying patterns for these products that are generally not related to their prescription trends. Total prescriptions for Biovail's promoted products increased 18% in the third quarter of 2004, compared with the third quarter of 2003, and increased 44% for the first nine months of 2004, compared with the first nine months of 2003. Pharmaceutical wholesalers in the United States are undergoing a significant change in their business models and, as a result, are affecting a reduction in the level of inventories they historically held. Cardizem LA generated revenues of $5.2 million in the third quarter of 2004, compared with $6.2 million for the corresponding period in 2003. For the first nine months of 2004, revenues for Cardizem LA (launched in April 2003) were $43.3 million, up 56% from the $27.7 million recorded in the same period in 2003. Cardizem LA prescription volume increased 40% for the third quarter of 2004 and 168% for the first nine months of 2003, versus the comparable periods in 2003, as Cardizem LA continued to gain market share in the once-daily diltiazem diltiazem /dil·ti·a·zem/ (dil-ti´ah-zem) a calcium channel blocker that acts as a vasodilator; used as the hydrochloride salt in the treatment of angina pectoris, hypertension, and supraventricular tachycardia. market. Cardizem LA captured 7.8% of total prescription volume for the class in the third quarter of 2004, compared with 5.5% in the third quarter of 2003. Thus far in 2004, Cardizem LA's share of the once-daily diltiazem market has increased 22.5%. Biovail's Teveten line of products generated revenues of $5.3 million in the third quarter of 2004 versus $6.8 million in the prior year period. For the first nine months of 2004, revenues for the Teveten line were $12.4 million, compared with $20.1 million in the first nine months of 2003. Total prescriptions for Biovail's Teveten line of products increased 20% in the third quarter of 2004 and 30% in the first nine months of the year, compared with the corresponding periods in 2003. During the third quarter of 2004, results from the 1,400-patient MOSES Moses (mō`zĭs), Hebrew lawgiver, probably b. Egypt. The prototype of the prophets, he led his people in the 13th cent. B.C. out of bondage in Egypt to the edge of Canaan. study were released at the European Society of Cardiology The European Society of Cardiology (ESC) represents more than 50,000 cardiology professionals across Europe and the Mediterranean. Its mission is to reduce the impact of cardiovascular disease in Europe. meeting, and the data showed that Teveten offers protection against cerebrovascular cer·e·bro·vas·cu·lar adj. Relating to the blood supply to the brain, particularly with reference to pathological changes. cerebrovascular pertaining to the blood vessels of the cerebrum or brain. and cardiovascular cardiovascular /car·dio·vas·cu·lar/ (-vas´ku-ler) pertaining to the heart and blood vessels. car·di·o·vas·cu·lar adj. Abbr. events in hypertensive hypertensive /hy·per·ten·sive/ (-ten´siv) 1. characterized by increased tension or pressure. 2. an agent that causes hypertension. 3. a person with hypertension. patients who had suffered a previous stroke, over and above that offered by blood-pressure reduction alone. Third-quarter 2004 revenues for Biovail's Zovirax franchise were $9.7 million, compared with $47.1 million in the prior-year period. Zovirax revenues for the nine months ended September 30, 2004, were $44.7 million, compared with $90.7 million for the comparable period in 2003. Total prescriptions for Zovirax decreased a modest 1% in the third quarter of 2004 and in the first nine months of the year, compared with the corresponding periods in 2003. In the third quarter of 2004, Zovirax Ointment and Zovirax Cream held a combined 65.6% 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 4.7 percentage points in market share versus third-quarter 2003 levels. Biovail Pharmaceuticals Canada (BPC) revenues were $25.4 million in the third quarter of 2004 and $72.2 million in the first nine months of 2004, compared with $23.1 million and $61.8 million in the third quarter and first nine months of 2003, respectively. The key performance drivers for BPC were Wellbutrin SR and Tiazac Tiazac® Diltiazem, see there . Total prescription volume for Wellbutrin SR increased 22.5% in the third quarter of 2004, versus the comparable 2003 period. Total prescription volume for Tiazac increased 21.2% in the third quarter of 2004, compared with the same period in 2003. During the third quarter of 2004, Biovail received approval from the 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) ) for Tiazac XC - a 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 of diltiazem for the treatment of hypertension hypertension or high blood pressure, elevated blood pressure resulting from an increase in the amount of blood pumped by the heart or from increased resistance to the flow of blood through the small arterial blood vessels (arterioles). . BPC expects to launch Tiazac XC in the first quarter of 2005. Non-strategic legacy products generated revenues of $33.1 million for the third quarter of 2004 and $89.1 million for the first nine months of 2004. These amounts compare with $68.3 million in the third quarter of 2003 and $172.4 million in the first nine months of 2003, representing declines of 52% and 48%, respectively. The decrease in revenues can be attributed to expected year-over-year declines in total prescription volumes for these mature products, the introduction of generic competition to Tiazac in April 2003, a reduction in wholesaler inventory levels and the recent termination of the sub-licensing agreement for Cedax. Prescription trends for legacy products continue to track as expected, and in the third quarter of 2004 total prescription volume decreased 35% relative to 2003 levels. Sales revenue for Biovail's portfolio of generic products was $38.4 million in the third quarter of 2004, compared with $20.4 million in the third quarter of 2003. Generic product sales were $106.6 million in the first nine months of 2004, compared with $75.5 million for the first nine months of 2003. The increase in generic product sales was mainly due to higher sales of Cardizem CD and Adalat CC during the third quarter and first nine months of 2004, compared with the third quarter and first nine months of 2003. On October 1, 2004, Biovail announced the amicable am·i·ca·ble adj. Characterized by or exhibiting friendliness or goodwill; friendly. [Middle English, from Late Latin am resolution of arbitration arbitration Process of resolving a dispute or a grievance outside a court system by presenting it for decision to an impartial third party. Both sides in the dispute usually must agree in advance to the choice of arbitrator and certify that they will abide by the proceedings against Teva Pharmaceutical Industries Teva Pharmaceutical Industries Ltd. (Hebrew: טבע תעשיות פרמצבטיות בע"מ), NASDAQ: TEVA is an international pharmaceutical company headquartered in Ltd., and the extension and expansion of the exclusive marketing agreement between the two companies. In addition, Biovail's selling price to Teva for the generic products portfolio was increased for the duration of the agreement. The following table summarizes Biovail's product sales performance in the third quarter and first nine months of 2004:
($000s) Q3/04 Q3/03 Growth Q1-Q3/04 Q1-Q3/03 Growth
Sales Sales Rate Sales Sales Rate
----------------------------------------------------------------------
Promoted Products 20,251 60,075 (66%) 100,342 138,571 (28%)
Wellbutrin XL 86,423 8,223 N/M 207,583 16,296 N/M
Biovail Pharmaceuticals
Canada 25,350 23,078 10% 72,192 61,770 17%
----------------------------------------------------------------------
Total Core Products 132,024 91,376 44% 380,117 216,637 75%
Legacy Products 33,070 68,250 (52%) 89,079 172,447 (48%)
Generics 38,363 20,359 88% 106,571 75,545 41%
----------------------------------------------------------------------
Total Product Sales 203,457 179,985 13% 575,767 464,629 24%
----------------------------------------------------------------------
The following table summarizes total prescription volume in the third
quarter and first nine months of 2004:
(000s) Q3/04 Q3/03 Growth Q1-Q3/04 Q1-Q3/03 Growth
Total Rx Total Rx Rate Total Rx Total Rx Rate
----------------------------------------------------------------------
Promoted
Products 804,261 681,706 18% 2,391,486 1,662,854 44%
Wellbutrin XL 1,249,082 32,855 N/M 3,472,961 32,855 N/M
Biovail
Pharmaceuticals
Canada 776,595 761,662 2% 2,290,852 2,191,560 5%
----------------------------------------------------------------------
Total Core
Products 2,829,938 1,476,197 92% 8,155,256 3,887,198 110%
Legacy Products 723,911 1,121,186 (35%) 2,380,449 4,461,504 (47%)
Generics 1,881,291 2,034,923 (8%) 5,734,741 6,309,196 (9%)
----------------------------------------------------------------------
Total
Prescriptions 5,435,140 4,632,332 17% 16,270,489 14,657,969 11%
----------------------------------------------------------------------
Source: IMS
Co-promotion, royalty and licensing revenue was $6.3 million and $20.1 million for the third quarter and first nine months of 2004, compared with $30.8 million and $148.5 million in the corresponding periods in 2003, representing decreases of 79% and 86%, respectively. These declines reflect the conclusion of Biovail's economic interest in the sales of a generic formulation of Prilosec, in addition to the termination of the co-promotion agreements for Wellbutrin SR in the United States in March 2003, and Celexa in Canada in December 2003. 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 third quarter of 2004 was $51.8 million, compared with $40.1 million in the third quarter of 2003. Cost of goods sold for the first nine months of 2004 was $163.0 million, compared with $88.8 million in the first nine months of 2003, an increase of 84%. Gross margins on product sales were 75% and 72%, respectively, for the third quarter and first nine months of 2004, compared with 78% and 81% for the third quarter and first nine months of 2003, respectively. Overall gross margins in the third quarter and first three quarters of 2004 were impacted by product mix. Research and development expenditures for the third quarter of 2004 were $17.6 million, compared with $20.6 million for the third quarter of 2003. Research and development expenditures for the first nine months of 2004 were $51.5 million, compared with $60.4 million for the first nine months of 2003, a decrease of 15%. The decrease in 2004 reflects the completion of the clinical trial program for Ralivia ER in 2003, and the timing of the initiation of late-stage development for products in Biovail's rapidly maturing pipeline. Earlier this week, Biovail announced that it had received an Approvable Letter from the U.S. Food and Drug Administration for Ralivia ER, a once-daily formulation of the analgesic analgesic (ăn'əljē`zĭk), any of a diverse group of drugs used to relieve pain. Analgesic drugs include the nonsteroidal anti-inflammatory drugs (NSAIDs) such as the salicylates, narcotic drugs such as morphine, and synthetic drugs tramadol. The Approvable Letter involves resolution of a number of items, including a request to provide further clinical information. Biovail believes that the current clinical package has sufficient data to address this request. Biovail is also in the process of determining what additional clinical data, if any, would be required. Biovail anticipates meeting with the 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. shortly to further discuss these matters. Thus far in 2004, Biovail has completed four 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 filings, submitted one NDS See eDirectory. NDS - Netware Directory Services in Canada, and anticipates at least one more regulatory submission by year-end. In addition, development efforts continue for novel formulations of several products, including venlafaxine venlafaxine /ven·la·fax·ine/ (ven?lah-fak´sen) an inhibitor of serotonin and norepinephrine reuptake that potentiates neurotransmitter activity in the central nervous system; used as the hydrochloride salt as an antidepressant and , 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. , zolpidem zolpidem /zol·pi·dem/ (zol-pi´dem) a non-benzodiazepine sedative-hypnotic; used as the tartrate salt in the short term treatment of insomnia. , eprosartan, enalapril, metoprolol metoprolol /met·o·pro·lol/ (met?ah-pro´lol) a cardioselective ß used in the form of the succinate and tartrate salts in the treatment of hypertension, chronic angina pectoris, and myocardial infarction. and combination products involving simvastatin simvastatin /sim·va·stat·in/ (sim´vah-stat?in) an antihyperlipidemic agent that acts by inhibiting cholesterol synthesis, used in the treatment of hypercholesterolemia and other forms of dyslipidemia and to lower the risks associated . Selling, general and administrative (SG&A) expenses for the third quarter of 2004 were $67.5 million, compared with $74.1 million in the third quarter of 2003, which was impacted by the launch of Zovirax Cream in July 2003 and co-promotion fees payable to Reliant Pharmaceuticals. In the first nine months of 2004, SG&A expenses were $182.9 million compared with $176.4 million for the comparable 2003 period, an increase of 4% which reflects increased headcount in Biovail's U.S. sales force and the initiation of marketing programs in support of our promoted products. As a percentage of total revenue, SG&A expenses were 31% and 30% in the third quarter and first nine months of 2004, respectively, compared with 34% and 28% for the corresponding periods in 2003. Amortization expense in the third quarter of 2004 was $16.3 million, compared with $28.2 million in the third quarter of 2003, a decrease of 42%. Amortization expense in the first nine months of the year was $49.2 million, down from $114.7 million for the same period a year earlier. The significant decrease in this expense item primarily reflects Biovail's participating 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 third quarter and first nine months of 2003. Specific Items Affecting Operations In the third quarter of 2004, Biovail recorded a net gain of $1.5 million related to the August transfer of the Cedax product rights to Shionogi & Co. Ltd. of Japan. In the first nine months of 2004, Biovail acquired Pharma Pass II's remaining interest in BNC-Pharmapass, resulting in an $8.6 million acquired research and development charge in the first quarter of 2004. In the third quarter of 2003, Biovail recorded a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $18.4 million for acquired research and development primarily related to the Company's investment in BNC-Pharmapass. In the first nine months of 2003, Biovail recorded a non-cash charge of $102.6 million, which includes the $18.4 million charge associated with BNC-Pharmapass, as well as acquired research and development related to the acquisitions of Ativan and Isordil from Wyeth, and a number of development-stage products from Athpharma. Balance Sheet Biovail continues to strengthen its balance sheet. In the first nine months of 2004, Biovail made $180.0 million in payments against the company's revolving-term credit facility and has repaid $52.8 million of long-term obligations. The company's debt to equity ratio The debt to equity ratio (D/E) is a financial ratio indicating the relative proportion of equity and debt used to finance a company's assets. It is equal to total debt divided by shareholders' equity. stood at 0.6 at the end of the third quarter of 2004, compared with 0.9 at December 31, 2003. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses was $57.7 million for the third quarter of 2004 and $165.4 million for the first nine months of 2004. Capital expenditures in the third quarter and first nine months of 2004 amounted to $6.0 million and $20.2 million, respectively. CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Appointment In October 2004, Biovail announced the appointment of Dr. Douglas Squires as the company's Chief Executive Officer (CEO). Biovail founder Eugene Melnyk will continue in his role of Chairman of the Board, where he will devote his full attention to Board-related matters and ongoing Corporate Governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. enhancement initiatives. Dr. Squires brings 29 years of pharmaceutical industry experience to Biovail, and will take on operational and general-management responsibilities for Biovail. Prior to joining Biovail, Dr. Squires spent the past three years at MDS MDS, n See temporomandibular pain-dysfunction syndrome. MDS 1 Maternal deprivation syndrome, see there 2 Myelodysplastic syndrome, see there Inc., where he was President and Chief Executive Officer of MDS Pharma Services, a contract research organization. From 1998-2001, Dr. Squires held the title of President, MDS Panlabs and President, MDS Pharmaceutical Services. Prior to that, he spent more than 22 years with The Upjohn Company and Pharmacia Upjohn Inc. Conference Call Biovail management will host a conference call and Webcast on Thursday, November 4, 2004, at 8 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy for company executives to discuss 2004 third-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 at 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. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. on Thursday, November 11, 2004, by dialing 416-695-5800 (Toronto and International callers) and 1-800-408-3053 (U.S. and Canada), using access code, 3080496. About Biovail Corporation Biovail Corporation is an international full-service pharmaceutical company, engaged in the formulation, clinical testing, registration, manufacture, sale and promotion of pharmaceutical products utilizing advanced drug-delivery technologies. 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 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. 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. We have based these forward-looking statements on our current expectations and projections about future events. Our actual results could differ materially from those discussed in, or implied by, these forward-looking statements. Forward-looking statements are identified by 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. Forward-looking statements include, but are not necessarily limited to, risks and uncertainties, including the difficulty of predicting U.S. Food and Drug Administration ("FDA") and Canadian Therapeutic Products Directorate ("TPD") 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, third parties, 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 ("SEC") 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. ("OSC O.S.C. n. short for Order to Show Cause. (See: Order to Show Cause) "). Biovail Corporation undertakes no obligation to update or revise any forward-looking statement.
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 Nine Months Ended
September 30 September 30
-------------------------- --------------------------
2004 2003 2004 2003
----------- -------------- ----------- --------------
(Restated (a)) (Restated (a))
REVENUE
Product sales $ 203,457 $ 179,985 $ 575,767 $ 464,629
Research and
development 5,942 4,542 12,831 10,815
Co-promotion,
royalty and
licensing 6,326 30,787 20,066 148,543
----------- -------------- ----------- --------------
215,725 215,314 608,664 623,987
----------- -------------- ----------- --------------
EXPENSES
Cost of goods
sold 51,835 40,079 163,028 88,823
Research and
development 17,648 20,608 51,469 60,427
Selling, general
and
administrative 67,458 74,135 182,907 176,436
Amortization 16,330 28,243 49,169 114,650
Acquired
research and
development - 18,409 8,640 102,609
Settlements - - - (34,055)
----------- -------------- ----------- --------------
153,271 181,474 455,213 508,890
----------- -------------- ----------- --------------
Operating income 62,454 33,840 153,451 115,097
Interest income 186 1,191 757 5,893
Interest expense (10,103) (10,540) (30,467) (30,029)
Foreign exchange
gain (loss) (802) 531 (1,158) (9,594)
Other income
(expense) - (5,958) (2,434) 706
----------- -------------- ----------- --------------
Income before
provision for
income taxes 51,735 19,064 120,149 82,073
Provision for
income taxes 2,100 2,950 5,200 13,300
----------- -------------- ----------- --------------
Net income $ 49,635 $ 16,114 $ 114,949 $ 68,773
----------- -------------- ----------- --------------
----------- -------------- ----------- --------------
Diluted earnings
per share $ 0.31 $ 0.10 $ 0.72 $ 0.43
----------- -------------- ----------- --------------
----------- -------------- ----------- --------------
Weighted average
number of
common shares
outstanding
(000s) 158,904 160,426 159,227 160,115
----------- -------------- ----------- --------------
----------- -------------- ----------- --------------
(a)As disclosed in Biovail Corporation's amended Form 6-K for the
quarterly period ended September 30, 2003, financial results for
the three months and nine months ended September 30, 2003 have been
restated for non-cash foreign exchange translation adjustments,
which resulted in an increase in the net income for the three
months ended September 30, 2003 from $12,985,000 (basic and diluted
income per share of $0.08) as previously reported to $16,114,000
(basic and diluted income per share of $0.10) as restated, and a
decrease in net income for the nine months ended September 30, 2003
from $74,964,000 (basic and diluted earnings per share of $0.47) as
previously reported to $68,773,000 (basic and diluted earnings per
share of $0.43) as restated. Current and prior years' figures
reflect the reclassification of foreign exchange gains and losses
from selling, general and administrative expenses.
BIOVAIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)
September 30 December 31
2004 2003
---------------- ----------------
ASSETS
Cash and cash equivalents $ 44,043 $ 133,261
Other current assets 272,525 279,191
Long-term investments 108,961 113,546
Property, plant and equipment, net 180,506 173,804
Goodwill, net 100,814 100,814
Intangible assets, net 998,502 1,049,475
Other assets, net 65,390 72,683
---------------- ----------------
$ 1,770,741 $ 1,922,774
---------------- ----------------
---------------- ----------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 252,199 $ 262,568
Deferred revenue 17,550 14,500
Long-term obligations 504,556 764,111
Shareholders' equity 996,436 881,595
---------------- ----------------
$ 1,770,741 $ 1,922,774
---------------- ----------------
---------------- ----------------
BIOVAIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)
Nine Months Ended
September 30
-----------------------------
2004 2003
-------------- --------------
(Restated (a))
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 114,949 $ 68,773
Add (deduct) items not involving cash
Depreciation and amortization 65,919 126,645
Amortization of deferred financing costs 3,510 2,103
Amortization of discounts on long-term
obligations 2,438 5,461
Acquired research and development 8,640 102,609
Gain on disposal of intangible assets (1,471) -
Other items not involving cash (823) 5,569
-------------- --------------
193,162 311,160
Net change in non-cash operating items (27,792) (67,100)
-------------- --------------
Cash provided by operating activities 165,370 244,060
CASH FLOWS FROM INVESTING ACTIVITIES (29,386) (295,931)
CASH FLOWS FROM FINANCING ACTIVITIES (225,359) 37,958
Effect of exchange rate changes on cash
and cash equivalents 157 1,122
-------------- --------------
Net decrease in cash and cash
equivalents (89,218) (12,791)
Cash and cash equivalents, beginning of
period 133,261 56,080
-------------- --------------
Cash and cash equivalents, end of period $ 44,043 $ 43,289
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