Biovail reducing costs, increasing operations in anticipation of generic Wellbutrin XL entering market

By Jennifer Lanning Drey

Portland, Ore., Nov. 9 - Biovail Corp. is assessing cost-reduction strategies and increasing its operations in order to minimize the negative impact an eventual approval of a generic Wellbutrin XL product could have on the business, chief executive officer Douglas Squires said during the company's quarterly earnings conference call on Thursday.

At the same time, the company will continue to invest in its pipeline and considers research and development to be an integral part of its future, Squires said.

"Research and development has been, and will continue to be, the major growth engine for Biovail. We will continue to invest in research and development to ensure we can further leverage our value-creating drug delivery technologies," he said.

Biovail reported cash and cash equivalents of $629.5 million at Sept. 30, compared with $445.3 million at Dec. 31, 2005.

Cash flow from operations was $81.4 million in the third quarter, compared with $122.4 million in the same quarter of 2005.

"The value of the company's business model is significant. It has resulted in excellent profitability and generates robust cash flow. We expect this to be the case even after the entrance of generic versions of Wellbutrin XL, whenever that might be," Squires said.

In addition to reviewing its business structure, Biovail is also performing an assessment of its pipeline in order to decide which product candidates to move forward and which to discontinue, Dr. Peter Silverstone, Biovail's senior vice president of medical and scientific affairs, said during Thursday's call.

The company is also looking at out-licensing opportunities for a number of the products it has developed based on its oral disintegrating tablet technology, Squires said.

Biovail plans to provide an update on its portfolio review in the coming months, Silverstone said.

Net loss at $56.5 million

Biovail reported a GAAP net loss of $56.5 million, or $0.35 per share, in the third quarter, compared with net income of $101.7 million, or $0.64 per share, for the corresponding 2005 period, according to a company news release.

Revenues from the company's commercialized products were strong during the quarter, coming in at $289.6 million, compared with $258.1 million for the third quarter of 2005, according to the release.

"This strong performance has left us well positioned to invest in strategic growth initiatives for the business while maintaining our dividend policy," Squires said.

Biovail is a specialty pharmaceutical company based in Toronto.

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