Biovail CEO says company in strong position with healthy cash flows

By Jennifer Lanning Drey

Portland, Ore., June 13 - Biovail Corp. has a fundamentally sound business model that generates robust cash flows, Douglas Squires, the company's chief executive officer, said in a presentation Wednesday at the Goldman Sachs 28th Annual Global Healthcare Conference in Dana Point, Calif.

"We feel that we are in a position because of our financial strength both to return some money to shareholders and to increase our [research and development] spending, and to do what we need to do externally from a [mergers and acquisitions] point of view," Squires said.

Additionally, Squires said Biovail retired its long-term debt in April.

"There's always something appealing about having incredibly robust cash flows and being debt free in terms of how you look at the world and what you can do," he said.

Biovail had a cash balance of $870 million at the end of the first quarter, according to a company news release.

The company announced a new dividend policy this year that Squires said Wednesday was a reflection of the company's strong operational cash flows, sound balance sheet and confidence in the sustainability of the balance sheet.

In addition, Biovail plans to ramp up its investments in research and development, with as much as $500 million being spent on R&D between now and 2010, he said.

When asked whether the company would be interested in doing something "transformational" with its cash, Squires said he would be interested in transactions that would broaden the company's technology or revenue stream into segments where its presence is minimal but could be more significant.

Biovail is a Toronto-based specialty pharmaceutical company, engaged in the formulation, clinical testing, registration, manufacture and commercialization of pharmaceutical products.

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