-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TvWw/cTjpxDBZLWfkmaH2k1bWKviI7gxts4cIJauS5s5e4s6ZW7CW7YXCTy0XfFS T7ZwS9uJYA8LMX4UEOK+LQ== 0000950124-96-005154.txt : 19991027 0000950124-96-005154.hdr.sgml : 19991027 ACCESSION NUMBER: 0000950124-96-005154 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961118 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BIOVAIL CORPORATION INTERNATIONAL CENTRAL INDEX KEY: 0000885590 STANDARD INDUSTRIAL CLASSIFICATION: 2834 IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: SEC FILE NUMBER: 001-14956 FILM NUMBER: 96668524 BUSINESS ADDRESS: STREET 1: 2488 DUNWIN DR STREET 2: MISSISSIAUGA CITY: ONTARIO STATE: A6 BUSINESS PHONE: 4162856000 MAIL ADDRESS: STREET 1: 2488 DUNWIN DR STREET 2: MISSISSAUGA CITY: ONTARIO STATE: A6 6-K 1 6-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 6-K REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13A - 16 AND 15D - 16 OF THE SECURITIES ACT OF 1934 FOR QUARTER ENDED SEPTEMBER 30, 1996 COMMISSION FILE NUMBER 001-11145 BIOVAIL CORPORATION INTERNATIONAL (TRANSLATION OF REGISTRANT'S NAME IN ENGLISH) 2488 DUNWIN DRIVE, MISSISSAUGA, ONTARIO L5L 1J9, CANADA (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (416) 285-6000 INDICATE BY CHECK MARK WHETHER THE REGISTRANT FILES OR WILL FILE ANNUAL REPORTS UNDER COVER OF FORM 20-F OR FORM 40-F FORM 20-F X FORM 40-F __ INDICATE BY CHECK MARK WHETHER FOR REGISTRANT BY FURNISHING THE INFORMATION CONTAINED IN THIS FORM IS ALSO HEREBY FURNISHING THE INFORMATION TO THE COMMISSION PURSUANT TO RULE 12G 3-2 (B) UNDER THE SECURITIES EXCHANGE ACT OF 1934. YES __ NO X 2 BIOVAIL CORPORATION INTERNATIONAL QUARTERLY REPORT INDEX PART 1. FINANCIAL INFORMATION CONSOLIDATED BALANCE SHEETS, SEPTEMBER 30, 1996 AND DECEMBER 31, 1995................................................ 1 CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 .............................. 2 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 ....................... 3 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ....................... 4 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ............................. 6 PART 11. OTHER INFORMATION ..................................... 10
(ALL DOLLAR AMOUNTS IN THIS DOCUMENT ARE EXPRESSED IN US DOLLARS UNLESS OTHERWISE STATED.) 2 3 BIOVAIL CORPORATION INTERNATIONAL CONSOLIDATED BALANCE SHEETS (ALL DOLLAR AMOUNTS ARE EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
SEPTEMBER 30, DECEMBER 31, 1996 1995 ------------- ------------ (Unaudited) (Audited) ASSETS CURRENT Cash and short-term deposits $15,988 $24,323 Trade accounts receivable 7,709 6,379 Inventories 9,793 3,868 Deposits and prepaid expenses 759 176 ------------- ------------ 34,249 34,746 DUE FROM OFFICERS AND DIRECTORS (Note 3) 2,479 - FIXED ASSETS, net 23,926 19,910 GOODWILL, net 3,448 3,594 PRODUCT RIGHTS, net 2,526 2,617 ------------- ------------ $66,628 $60,867 ============= ============ LIABILITIES CURRENT Accounts payable $8,456 $5,628 Accrued liabilities 6,176 3,043 Income taxes payable 1,068 968 Customer prepayments 10,865 22,167 Current portion of long-term debt 2,322 2,244 ------------- ------------ 28,887 34,050 ------------- ------------ CUSTOMER PREPAYMENTS - 4,274 LONG-TERM DEBT 6,857 7,951 ------------- ------------ 35,744 46,275 ------------- ------------ SHAREHOLDERS' EQUITY Share capital 14,709 14,489 Retained Earnings (Deficit) 16,178 (572) Cumulative translation adjustment (3) 675 ------------- ------------ 30,884 14,592 ------------- ------------ $66,628 $60,867 ============= ============
The accompanying notes are an integral part of the consolidated financial statements. 1 4 BIOVAIL CORPORATION INTERNATIONAL CONSOLIDATED STATEMENTS OF INCOME (ALL DOLLAR AMOUNTS EXCEPT PER SHARE DATA ARE EXPRESSED IN THOUSANDS OF U.S. DOLLARS) (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------------- ------------------------------- 1996 1995 1996 1995 ------------ ----------- ----------- ----------- REVENUE Contract $837 $936 $3,187 $3,850 Manufacturing 15,175 - 43,156 1,279 Royalty and licensing 1,825 1,889 6,170 5,653 ------------ ----------- ----------- ----------- 17,837 2,825 52,513 10,782 ------------ ----------- ----------- ----------- EXPENSES Cost of contract revenue 747 619 2,629 2,322 Cost of manufactured goods sold 6,222 - 17,951 496 Research and product development 1,843 1,351 5,869 2,838 Sellling, general and administrative 2,608 2,106 8,880 5,389 ------------ ----------- ----------- ----------- 11,420 4,076 35,329 11,045 ------------ ----------- ----------- ----------- OPERATING INCOME (LOSS) 6,417 (1,251) 17,184 (263) INTEREST INCOME (EXPENSE), net 75 (91) 397 (319) GAIN ON LICENSING SETTLEMENT - 2,510 - 3,662 ------------ ----------- ----------- ----------- INCOME BEFORE INCOME TAXES 6,492 1,168 17,581 3,080 PROVISION FOR INCOME TAXES 209 12 831 36 ------------ ----------- ----------- ----------- NET INCOME $6,283 $1,156 $16,750 $3,044 ============ =========== =========== =========== EARNINGS PER SHARE - CANADIAN GAAP Income (loss) before gain on licensing settlement $0.25 $(0.05) $0.66 $(0.02) ============ =========== =========== =========== Net income $0.25 $0.05 $0.66 $0.12 ============ =========== =========== =========== Weighted average number of common shares outstanding 25,352,000 24,880,000 25,352,000 24,880,000 ============ =========== =========== =========== EARNINGS PER SHARE -U.S.GAAP (Note 5) Income (loss) before gain on licensing settlement $0.23 $(0.05) $0.63 $(0.02) ============ =========== =========== =========== Net income $0.23 $0.04 $0.63 $0.12 ============ =========== =========== =========== Weighted average number of common shares outstanding 26,751,000 26,334,000 26,751,000 26,334,000 ============ =========== =========== ===========
The accompanying notes are an integral part of the consolidated financial statements. 2 5 BIOVAIL CORPORATION INTERNATIONAL CONSOLIDATED STATEMENTS OF CASH FLOWS (ALL DOLLAR AMOUNTS ARE EXPRESSED IN THOUSANDS OF U.S. DOLLARS) (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, -------------------------- 1996 1995 --------- -------- NET INFLOW (OUTFLOW) OF CASH RELATED TO FOLLOWING ACTIVITIES OPERATING Net income $16,750 $3,044 Depreciation and amortization 1,538 875 --------- -------- 18,288 3,919 Change in non-cash operating items (Note 2) (17,433) 20,652 --------- -------- 855 24,571 --------- -------- INVESTING Amounts loaned to officers and directors to acquire shares (Note 3) (2,479) - Additions to fixed assets (5,278) (1,100) Business acquisition - (4,358) Product rights acquisition - (2,650) --------- -------- (7,757) (8,108) --------- -------- FINANCING Issuance of share capital 198 339 Increase in long-term debt 847 2,888 Reduction in long-term debt (1,878) (774) Increase in amount due on acquisition - 1,905 --------- -------- (833) 4,358 --------- -------- EFFECT OF EXCHANGE RATE CHANGES ON CASH (600) 479 --------- -------- (DECREASE) INCREASE IN CASH (8,335) 21,300 CASH AND SHORT-TERM DEPOSITS, BEGINNING OF PERIOD 24, 323 2,819 --------- -------- CASH AND SHORT-TERM DEPOSITS, END OF PERIOD $15,988 $24,119 ========= ========
The accompanying notes are an integral part of the consolidated financial statements. 3 6 BIOVAIL CORPORATION INTERNATIONAL NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (ALL DOLLAR AMOUNTS ARE EXPRESSED IN THOUSANDS OF U.S. DOLLARS) (UNAUDITED) 1. SIGNIFICANT ACCOUNTING POLICIES Biovail Corporation International (the "Company"), was amalgamated effective March 29, 1994, under the laws of the province of Ontario. The Company's accounting and reporting policies conform to generally accepted accounting principles in Canada. There were no material differences between generally accepted accounting principles in Canada and generally accepted accounting principles in the United States in the reporting periods. Royalty revenue is recognized on an accrual basis in accordance with the contractual agreements with third parties and is net of amounts payable to sublicensees. Certain of the 1995 figures have been reclassified to conform to the 1996 presentation. For a full description of the other accounting policies of the Company, reference is made to the Annual Report on Form 20-F for the year ended December 31, 1995. In the opinion of management, all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been made and all such adjustments are of a normal recurring nature. 2. CHANGE IN NON-CASH OPERATING ITEMS
NINE MONTHS ENDED SEPTEMBER 30, (IN THOUSANDS) ----------------------------------- 1996 1995 ------------- ------------ Accounts receivable $(1,324) $2,413 Inventories (5,938) (2,671) Deposits and prepaid expenses (584) (110) Accounts payable and accrued liabilities 5,930 2,244 Income taxes payable 98 22 Customer prepayments (15,615) 18,754 ------------- ------------ $(17,433) $20,652 ============= ============
3. DUE FROM OFFICERS AND DIRECTORS Included in the amount due from officers and directors as at September 30, 1996, are loans of $2,479,000 made to finance the acquisition on the open market of shares of the Company. These loans bear interest at 1/4% over the bank prime rate, consistent with the Company's rate for borrowings, and are due on December 31, 1997. 4 7 4. CONTINGENCIES On November 12, 1993, a patent infringement lawsuit was commenced in the U.S. District Court, for the District of New Jersey, by Marion Merrell Dow, Inc. ("MMD"), Carderm Capital LP and Elan Corporation plc ("Elan") against Hoechst-Roussel Pharmaceuticals, Inc. ("Hoechst"). Hoechst was licensed at that time by the Company for the once-daily controlled release formulation of Diltiazem. The complaint alleged that Hoechst had infringed on certain patents relating to a controlled absorption diltiazem formulation and sought, among other things, to enjoin Hoechst from infringing. As a result of the Settlement Agreement among Hoechst, MMD and Carderm Capital LP, that suit was discontinued on behalf of those plaintiffs. However, Elan has continued this suit as sole plaintiff. The Company has answered Elan's allegations of patent infringement by denying any such infringement and by asserting that, in any event, Elan's patents are invalid and therefore unenforceable. The Company has received a legal opinion that Elan's lawsuit is without merit, and it has accordingly launched an Application for a summary dismissal of Elan's complaint. The Company has also commenced a substantial counterclaim against Elan. 5. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES The items included in the table below give rise to differences in net income under generally accepted accounting principles in the United States ("U.S. GAAP").
NINE MONTHS ENDED SEPTEMBER 30, (IN THOUSANDS EXCEPT PER SHARE DATA) ------------------------------------ RECONCILIATION OF NET INCOME UNDER CANADIAN AND U.S GAAP 1996 1995 --------- -------- Net income as shown in the consolidated statement of income and deficit $16,750 $3,044 Use of weighted average rate for the period versus period end rate for purposes of translating net income amounts from Canadian dollars (the currency of measurement) to U.S. dollars (the reporting currency) (30) (28) --------- -------- Net income according to U.S. GAAP $16,720 $3,016 ========= ======== Earnings per share under U.S. GAAP $0.63 $0.12 ========= ======== Weighted average number of common shares outstanding under U.S.GAAP (1) 26,751 26,334 ========= ========
1) The weighted average number of common shares outstanding for purposes of the computation of the earnings per share under U.S. GAAP gives effect to the exercise of outstanding options and the 3 for 1 stock split in January, 1996. There are no differences between shareholders' equity determined under Canadian and U.S. GAAP at either September 30, 1996, or December 31, 1995. 5 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (ALL DOLLAR AMOUNTS ARE EXPRESSED IN U.S.DOLLARS) OVERVIEW The Company derives its revenues from; (1) the development and licensing of oral controlled release products using its proprietary drug delivery technology; (2) the manufacture of such drugs for sale to licensees; (3) the royalties from sales by licensees of Company developed products; and (4) providing contract research services including pharmacokinetic studies, bioanalytical laboratory testing, and clinical research studies and regulatory services. The Company's profitability in a given year is directly impacted by the level of its research and product development activities. Such costs are charged to earnings in the year they are incurred notwithstanding the fact that the benefits therefrom are not realized until later periods when the products under development are licensed and brought to market and revenues are generated from royalties based on the level of sales and manufacturing revenues are generated through the retention of manufacturing rights. RESULTS OF OPERATIONS Contract research revenue in the 1996 nine month period was $3,187,000 as compared to $3,850,000 in the 1995 nine month period. The nine month period of 1995 included a cancellation fee payment for a special study by a former Tiazac(R) licensee and a special contract settlement that, if adjusted for, would result in 1996 reflecting a 14.3% improvement over 1995. Manufacturing revenue was $43,156,000 in the 1996 nine month period as compared to $1,279,000 in the 1995 nine month period. The 1996 manufacturing revenue was related to the manufacture of supplies of Tiazac(R) for the Company's licensee Forest Laboratories Inc. ("Forest"). The 1995 manufacturing revenue was derived from the sale of launch supplies of Tiazac(R) to the Company's previous licensee, Hoechst-Roussel Pharmaceuticals. In the 1996 nine month period, royalty and licensing revenue was $6,170,000 as compared to $5,653,000 in the 1995 nine month period. Royalty revenue increased to $6,170,000 in the 1996 nine month period from $4,903,000 in the 1995 nine month period. The increase in royalty revenues are primarily due to the launch of Tiazac(R) by Forest in the United States. Revenue from the licensing of new products was nil in the 1996 nine month period as compared to $750,000 in the 1995 nine month period. The licensing revenue received in 1995 relates to the assignment and licensing rights for Tiazac(R) to the Company's previous licensee. 6 9 The gross margin on contract revenue was 18% in the 1996 nine month period as compared to 40% in the 1995 nine month period. The 1995 gross margin was favourably impacted due to the inclusion of $1,062,000 of non-refundable prepaid amounts related to the cancellation of a special study by a former licensee and a special contract settlement amount; excluding these amounts the gross margin for the 1995 nine month period was 17%. The gross margin on manufacturing revenue was 58% in the 1996 nine month period, as compared to 61% in the 1995 nine month period. The 1996 margin was impacted by the manufacture of both trade and sample supplies of Tiazac(R) compared to only trade supplies in 1995. Research and product development expenses increased to $5,869,000 in the 1996 nine month period from $2,838,000 in the 1995 comparable period, primarily due to increased levels of product development activities and as a result of the establishment and staffing of the Toronto R & D facility. Selling, general and administrative expenses were $8,880,000 in the 1996 nine month period compared to $5,389,000 in 1995. The period to period increases are primarily as a result of the commencement of the Canadian sales operation, increased activities associated with the manufacturing facilities and increased corporate expenses due to the hiring of key management personnel. Operating income of $17,184,000 was achieved in the 1996 nine month period as compared to an operating loss of $263,000 in the 1995 comparable period. Canadian operations incurred losses of $9,260,000 in 1996 as compared to operating losses of $4,060,000 in 1995. Operating income of $3,491,000 and $2,218,000 in each of the 1996 and 1995 periods respectively was earned by the Company's subsidiary in Switzerland through royalties earned on the Company's products. Barbados contributed operating income of $22,953,000 in the 1996 nine month period compared to $1,579,000 in the 1995 comparable period. The increased operating contribution in Barbados is due to the sales of Tiazac(R). Net interest income was $397,000 in the 1996 nine month period as compared to interest expense of $319,000 in the 1995 comparable period. The interest income in 1996 was earned as a result of surplus cash and a lower level of interest bearing debt. Income taxes in the 1996 nine month period increased to $831,000 from $36,000 in 1995 as a result of increased operating income. In the 1996 nine month period, the Company reported net income of $16,750,000, or $0.66 per share. This compares to net income of $3,044,000 or $0.12 per share in the 1995 nine month period, which included a gain on licensing settlement of $3,662,000 or $0.14 per share. Earnings per share have been calculated using the weighted average number of shares outstanding during each period and take into effect the 3 for 1 stock split completed in January, 1996. 7 10 LIQUIDITY AND CAPITAL RESOURCES For the nine months ended September 30, 1996, the Company generated $855,000 in cash-flow from operating activities compared to $24,571,000 in the 1995 comparable period. Cash generated was as a result of income from operations (after adding back non-cash charges) of $18,288,000 and $3,919,000 in the 1996 nine month period and 1995 nine month period respectively, and a decrease in non-cash operating items of $17,433,000 in the 1996 nine month period as compared to an increase in non-cash operating items of $20,652,000 in the 1995 nine month period. Investing activities in the 1996 nine month period related to additions to fixed assets of $5,278,000 and loans of $2,479,000 to certain officers and directors to finance the acquisition on the open market of shares of the Company. In the 1995 nine month period investing activities included additions to fixed assets of $1,100,000 and business and product rights acquisitions of $7,008,000. Net cash of $833,000 was used in financing activities in the 1996 nine month period, compared to a provision of net cash of $4,358,000 in the 1995 nine month period. The 1996 cash utilization was as a result of long-term debt repayments of $1,878,000, offset in part by the issuance of common shares for $198,000 and increases in long-term debt of $847,000. In the same period of 1995, cash provided was due to the issuance of common shares for $339,000, increases in long-term debt of $2,888,000, an increase in the amount due on acquisition of $ 1,905,000 offset in part by long-term debt repayments of $774,000. Exchange rate changes on foreign cash balances resulted in a U.S. dollar cash equivalent reduction of $600,000 in the 1996 nine month period, compared to an increase of $479,000 in the 1995 comparable period. As a result of the foregoing, cash balances decreased to $15,988,000 as at September 30, 1996, from $24,323,000 as at December 31, 1995. The Company's total long-term debt was $9,179,000 as at September 30, 1996 as compared to $10,195,000 at December 31, 1995. Long-term debt at September 30, 1996, is comprised of $5,729,000 related to the manufacturing facility located in Manitoba, Canada; $1,798,000 is a mortgage payable on its laboratory facility; and $1,652 ,000 is a bank term loan. With respect to the debt relating to the manufacturing facility, an aggregate amount of $2,869,000 is a non-interest bearing loan from a Canadian government agency and $2,860,000 is a construction loan from a Canadian chartered bank. The Company has available a line of credit of $1,500,000 for short-term financing. The Company believes it has adequate capital and sources of financing to support its ongoing operational requirements. Furthermore, the Company believes it will be able to obtain long-term capital, if necessary, to support its growth objectives. 8 11 INFLATION Inflation has not had a material impact on the Company's operations. The Company does not currently engage in hedging or other activities to reduce exchange rate risk but may do so in the future, if conditions warrant. 9 12 BIOVAIL CORPORATION INTERNATIONAL PART II - OTHER INFORMATION 1. OPERATIONAL INFORMATION The press releases issued by the Company in the 1996 third quarter are attached as the following exhibits: a) On July 17, 1996, the Company reported its 1996 Second Quarter and Six Month Financial results. b) On July 22nd, 1996, the Company announced that it has been issued a U.S. patent on the Company's Diltiazem Delivery System. c) On October 29, 1996, the Company reported its 1996 Third Quarter and Nine Month Financial Results. d) On November 5, 1996, the Company announced the signing of European Licensing Agreements governing three markets for its once daily diltiazem product. 2. LEGAL PROCEEDINGS For detailed information concerning legal proceedings, reference is made to Note 4 in the financial statement contained as part hereof. 10 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Biovail Corporation International November 14, 1996 By /s/ Robert A. Podruzny ------------------------------ ROBERT A. PODRUZNY Vice President - Finance and Chief Financial Officer 11 14 EXHIBIT INDEX Exhibit No. Description 99.1 Press Release dated July 17, 1996 99.2 Press Release dated July 22, 1996 99.3 Press Release dated October 29, 1996 99.4 Press Release dated November 5, 1996
EX-99.1 2 EXHIBIT 99.1 1 [LOGO] Exhibit 99.1 EXHIBIT "A" FOR: BIOVAIL CORPORATION INTERNATIONAL APPROVED BY: Eugene Melnyk Chairman of the Board Bob Podruzny Chief Financial Officer (416) 285-6000 CONTACT: Investor Relations: Donna Stein/ Courtney Levi/Cindy Hintelmann Press: Michael McMullan Morgen-Walke Associates (212) 850-5600 FOR IMMEDIATE RELEASE BIOVAIL CORPORATION INTERNATIONAL REPORTS RECORD 1996 SECOND QUARTER AND SIX MONTH FINANCIAL RESULTS TORONTO, Canada, July 17, 1996 -- Biovail Corporation International (AMEX, TSE:BVF) today reported record second quarter and six month financial results for the period ended June 30, 1996. Revenues for the second quarter of 1996 increased 605% to $18.6 million, compared with $2.6 million reported for the second quarter of 1995. Operating income was $5.9 million in the second quarter of 1996, compared to an operating loss of $472,000 in the second quarter of 1995. Net income for the second quarter of 1996 was $5.8 million, or $0.23 per share, compared with net income of $528,000, or $0.02 per share in the comparable period of 1995. Revenues for the six months ended June 30, 1996 increased 330% to $35.5 million compared with $8.2 million reported for the same period of 1995. The Company reported operating income for the six months ended June 30, 1996 of $10.7 million, compared with $968,000 for the comparable period last year. Net income for the six months ended June 30, 1996 was $10.4 million, or $0.41 per share, compared with net income of $1.9 million, or $0.07 per share in the comparable period of 1995. Weighted average number of common shares outstanding for the first half of 1996 were 25,346,000 shares compared with 24,839,000 shares in the same period last year (on a post-split 3-for-1 basis). -more- [LOGO] 2 Eugene Melnyk, Chairman of the Board, commented, "We are very pleased to report a second consecutive quarter of record earnings which exceeds all analysts' estimates for Biovail Corporation. We attribute these strong results to the successful launch of Tiazac(R), our once-daily formulation of diltiazem. To date, we are extremely pleased with our marketing partner Forest Laboratories' sales effort in the U.S., as sales of Tiazac(R) continue on an upward trend. We look forward to our continuing exclusive 16-year supply partnership with Forest Laboratories for Tiazac(R)." "During the quarter we were excited to receive our first international approval from the Medicines Control Agency to market all five dosage strengths of Tiazac(R) in the United Kingdom. The Company is currently concluding agreements with multiple European marketing partners, each of which will be a unique agreement involving value-added arrangements. Additionally, we have completed our submissions and remain on schedule with our European Community (EC) Mutual Recognition Filing. The EC represents a growing calcium channel blocker market of about $2.3 billion, of which diltiazem represents approximately $400 million. In keeping with our strategy to obtain optimum market share for Tiazac(R), we will specifically target those countries with the highest market potential, including France, Italy, Germany and Spain," cited Mr. Melnyk. "Biovail Pharma, our Canadian marketing and sales organization, has moved forward and is actively engaged in discussions with potential licensees, as well as multi-national partners for other products, while awaiting Canadian approval for Tiazac(R)," added Mr. Melnyk. Mr. Melnyk continued, "Also, as recently announced, Quantum Partners, LDC, an investment vehicle advised by Soros Fund Management, and other investors including Oracle Partners, L.P., a leading health care investment firm, acquired all of the common share holdings of Forest Laboratories, Inc. in Biovail. We are pleased with this vote of confidence from Quantum Partners." 3 "Finally, we continue to make progress with several other products in our pipeline. We anticipate that the Company will enter into a licensing and distribution agreement for Nifedipine OD, a generic version of Procardia XL(R) prior to the end of this year. In addition, we expect a registration filing by year-end for Verapamil OD, a generic version of Verelan SR(R). We remain confident that Tiazac(R) will continue to win widespread acceptance within the anti-hypertensive market place, and also look forward to achieving new milestones with respect to our product pipeline, in the coming quarters." concluded Mr. Melnyk. Biovail Corporation International is an international full-service pharmaceutical company, engaged in the formulation, clinical testing, registration and manufacture of drug products utilizing advanced drug delivery technologies. -- Tables Follow -- 4 BIOVAIL CORPORATION INTERNATIONAL CONSOLIDATED BALANCE SHEETS (ALL DOLLAR AMOUNTS ARE EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
JUNE 30, DECEMBER 31, 1996 1995 ----------- ------------ (Unaudited) ASSETS CURRENT Cash and short-term deposits $21,936 $24,323 Trade accounts receivable 8,578 6,379 Inventories 7,346 3,868 Deposits and prepaid expenses 768 176 ------- ------- 38,628 34,746 FIXED ASSETS, net 22,386 19,910 GOODWILL, net 3,494 3,594 PRODUCT RIGHTS, net 2,563 2,617 ------- ------- $67,071 $60,867 ======= ======= LIABILITIES CURRENT Accounts payable $ 6,579 $ 5,628 Accrued liabilities 4,980 3,043 Income taxes payable 906 968 Deferred revenue 20,434 22,167 Current portion of long-term debt 2,827 2,244 ------- ------- 35,726 34,050 DEFERRED REVENUE -- 4,274 LONG-TERM DEBT 6,867 7,951 ------- ------- 42,593 46,275 ------- ------- SHAREHOLDERS' EQUITY Share capital 14,568 14,489 Retained earnings, (deficit) 9,865 (572) Cumulative translation adjustment 45 675 ------- ------- 24,478 14,592 ------- ------- $67,071 $60,867 ======= =======
5 BIOVAIL CORPORATION INTERNATIONAL CONSOLIDATED STATEMENTS OF INCOME (ALL DOLLAR AMOUNTS EXCEPT PER SHARE DATA ARE EXPRESS IN THOUSANDS OF U.S. DOLLARS) (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, -------------------- ------------------- 1996 1995 1996 1995 ------- ------ ------- ------- REVENUE CONTRACT $ 1,190 $ 995 $ 2,344 $ 2,857 MANUFACTURING 15,160 -- 27,901 1,254 ROYALTY AND LICENSING 2,250 1,643 5,207 4,129 ------- ------ ------- ------- 18,600 2,638 35,452 8,240 ------- ------ ------- ------- EXPENSES COST OF CONTRACT REVENUE 950 656 1,876 1,670 COST OF MANUFACTURED GOODS SOLD 6,244 -- 11,696 486 RESEARCH AND PRODUCT DEVELOPMENT 1,980 798 4,015 1,458 SELLING, GENERAL AND ADMINISTRATIVE 3,317 1,551 6,254 3,218 ROYALTY AND COMMISSION 259 105 875 440 ------- ------ ------- ------- 12,750 3,110 24,718 7,272 ------- ------ ------- ------- OPERATING INCOME (LOSS) 5,850 (472) 10,736 968 INTEREST INCOME (EXPENSE), NET 151 (115) 321 (224) GAIN ON LICENSING SETTLEMENT -- 1,130 -- 1,130 ------- ------ ------- ------- INCOME BEFORE INCOME TAXES 6,001 543 11,057 1,874 PROVISION FOR INCOME TAXES 239 15 620 23 ------- ------ ------- ------- NET INCOME $ 5,762 $ 528 $10,437 $ 1,851 ======= ====== ======= ======= EARNINGS PER SHARE INCOME (LOSS) BEFORE GAIN ON LICENSING SETTLEMENT $ 0.23 $(0.02) $ 0.41 $ 0.03 ======= ====== ======= ======= NET INCOME $ 0.23 $ 0.02 $ 0.41 $ 0.07 ======= ====== ======= ======= WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 25,346,000 24,839,000 25,346,000 24,839,000 ========== ========== ========== ==========
EX-99.2 3 EXHIBIT 99.2 1 [LOGO] Exhibit 99.2 EXHIBIT "B" FOR: BIOVAIL CORPORATION INTERNATIONAL APPROVED BY: Eugene Melnyk Chairman of the Board Bob Podruzny Chief Financial Officer FOR IMMEDIATE RELEASE (416) 285-6000 CONTACT: Investor Relations: Donna Stein/ Courtney Levi/Cindy Hintelmann Press: Michael McMullan Morgen-Walke Associates (212) 850-5600 BIOVAIL CORPORATION INTERNATIONAL RECEIVES PATENT ON DILTIAZEM DELIVERY SYSTEM - TIAZAC(R) PATENT VALID UNTIL JUNE 2013 TORONTO, Canada, July 22, 1996 --- Biovail Corporation International (AMEX, TSE:BVF) today announced that it has been issued a U.S. patent covering the use of an extended release drug delivery system for Diltiazem and salt thereof. Patent number 5,529,791 applies to beads containing Diltiazem and a wetting agent being coated with a microporous membrane comprising a water-soluble polymer. In accordance with the Food and Drug Administration (FDA) regulations, Biovail has filed relevant information concerning the Company's controlled release formulation requesting that the FDA publish the patent information provided in its List of Approved Drug Products (the Orange Book). Eugene Melnyk, Chairman of the Board of Biovail Corporation, stated, "We are pleased with this newest development concerning Tiazac(R) and wish to applaud the efforts of Messrs. Baudier, DeBoeck and their team of scientists. This patent, which expires in June of 2013, provides further protection of our recently acquired technologies developed by Galephar, Puerto Rico Inc., Ltd." Biovail Corporation International is an international full-service pharmaceutical company, engaged in the formulation, clinical testing, registration and manufacture of drug products utilizing advanced drug delivery technologies. # # # [LOGO] EX-99.3 4 EXHIBIT 99.3 1 [LOGO] Exhibit 99.3 EXHIBIT "C" FOR: BIOVAIL CORPORATION INTERNATIONAL APPROVED BY: Eugene Melnyk Chairman of the Board Bob Podruzny Chief Financial Officer (416) 285-6000 CONTACT: Investor Relations: Donna Stein/ Dan Durkin/Cindy Hintelmann Press: Michael McMullan Morgen-Walke Associates (212) 850-5600 FOR IMMEDIATE RELEASE BIOVAIL CORPORATION INTERNATIONAL REPORTS RECORD 1996 THIRD QUARTER AND NINE MONTH FINANCIAL RESULTS TORONTO, Canada, October 29, 1996 --- Biovail Corporation International (AMEX, TSE:BVF) today reported record third quarter and nine month financial results for the period ended September 30, 1996. Revenues for the third quarter of 1996 increased 531% to $17.8 million, compared with $2.8 million reported for the third quarter of 1995. Operating income increased to $6.4 million in the third quarter of 1996, compared to an operating loss of $1.3 million in the third quarter of 1995. Net income for the third quarter of 1996 was $6.3 million, or $0.25 per share, compared with net income of $1.2 million, or $0.05 per share in the comparable period of 1995. Revenues for the nine months ended September 30, 1996 increased 387% to $52.5 million compared with $10.8 million reported for the same period of 1995. The Company reported operating income for the nine months ended September 30, 1996 of $17.2 million, compared with an operating loss of $263,000 for the comparable period last year. Net income for the nine months ended September 30, 1996 was $16.8 million, or $0.66 per share, compared with net income of $3.0 million, or $0.12 per share, in the comparable period of 1995. Weighted average number of common shares outstanding for the nine months of 1996 were 25,352,000 shares compared with 24,880,000 shares in the same period last year. - more - [LOGO] 2 Eugene Melnyk, Chairman of the Board, commented, "We are very pleased to be reporting a third consecutive quarter of record earnings which exceed analysts' estimates for Biovail Corporation. The substantial increase in operating income for the third quarter is attributable to the market success of Tiazac(R), our once-daily formulation of diltiazem. New prescription data indicates the successful penetration of Tiazac(R) in the market place. We would like to congratulate Forest Laboratories, our marketing partner, for their sales results in the United States and we look forward to the continued success of our exclusive 16-year license and supply agreement." "During the quarter we were issued a U.S. patent covering the use of an extended release drug delivery system for Diltiazem HCL. Patent number 5,529,791, which expires June 2013, provides further protection of the technologies acquired from and developed by Galephar, Puerto Rico Inc., Ltd." cited Mr. Melnyk. "Finally, we continue to make progress with several other products in our pipeline. We anticipate that the Company will enter into a licensing and distribution agreement for Nifedipine OD, a generic version of Procardia XL(R) prior to the end of this year. We remain confident that Tiazac(R) will continue to win widespread acceptance within the anti-hypertensive market place, and also look forward to achieving new milestones with respect to our product pipeline, in the coming quarters." concluded Mr. Melnyk. Biovail Corporation International is an international full-service pharmaceutical company, engaged in the formulation, clinical testing, registration and manufacture of drug products utilizing advanced drug delivery technologies. "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This release contains forward looking statements that are subject to risks and uncertainties, including, but not limited to, the impact of competitive products and pricing, product demand and market acceptance, new product development, reliance on key strategic alliances, availability of raw materials, the telecommunications 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. -- Tables Follow -- 3 BIOVAIL CORPORATION INTERNATIONAL CONSOLIDATED BALANCE SHEETS (ALL DOLLAR AMOUNTS ARE EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
SEPTEMBER 30, DECEMBER 31, 1996 1995 ------------- ------------ (Unaudited) ASSETS CURRENT Cash and short-term deposits $ 15,988 $ 24,323 Trade accounts receivable 7,709 6,379 Inventories 9,793 3,868 Deposits and prepaid expenses 759 176 -------- -------- 34,249 34,746 DUE FROM OFFICERS AND DIRECTORS 2,479 -- FIXED ASSETS, net 23,926 19,910 GOODWILL 3,448 3,594 PRODUCT RIGHTS 2,526 2,617 -------- -------- $ 66,628 $ 60,867 ======== ======== LIABILITIES CURRENT Accounts payable $ 8,456 $ 5,628 Accrued liabilities 6,176 3,043 Income taxes payable 1,068 968 Deferred revenue 10,865 22,167 Current portion of long-term debt 2,322 2,244 -------- -------- 28,887 34,050 Deferred revenue -- 4,274 LONG-TERM DEBT 6,857 7,951 -------- -------- 35,744 46,275 -------- -------- SHAREHOLDERS' EQUITY Share capital 14,709 14,489 Retained earnings (deficit) 16,178 (572) Cumulative translation adjustment (3) 675 -------- -------- 30,884 14,592 -------- -------- $ 66,628 $ 60,867 ======== ========
4 BIOVAIL CORPORATION INTERNATIONAL CONSOLIDATED STATEMENTS OF INCOME (ALL DOLLAR AMOUNTS EXCEPT PER SHARE DATA ARE EXPRESS IN THOUSANDS OF U.S. DOLLARS) (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, -------------------------- ------------------------- 1996 1995 1996 1995 ------------ ----------- ----------- ----------- REVENUE Contract $ 837 $ 936 $ 3,187 $ 3,850 Manufacturing 15,175 -- 43,156 1,279 Royalty and licensing 1,825 1,889 6,170 5,653 ----------- ----------- ----------- ----------- 17,837 2,825 52,513 10,782 ----------- ----------- ----------- ----------- EXPENSES Cost of contract revenue 747 619 2,629 2,322 Cost of manufactured goods sold 6,222 -- 17,951 496 Research and product development 1,843 1,351 5,869 2,838 Selling, general and administrative 2,608 2,106 8,880 5,389 ----------- ----------- ----------- ----------- 11,420 4,076 35,329 11,045 ----------- ----------- ----------- ----------- OPERATING INCOME (LOSS) 6,417 (1,251) 17,184 (263) INTEREST INCOME (EXPENSE), net 75 (91) 397 (319) GAIN ON LICENSING SETTLEMENT -- 2,510 -- 3,662 ----------- ----------- ----------- ----------- INCOME BEFORE INCOME TAXES 6,492 1,168 17,581 3,080 PROVISION FOR INCOME TAXES 209 12 831 36 ----------- ----------- ----------- ----------- NET INCOME $ 6,283 $ 1,156 $ 16,750 $ 3,044 =========== =========== =========== =========== EARNINGS PER SHARE Income (loss) before gain on licensing settlement $ 0.25 $ (0.05) $ 0.66 $ (0.02) =========== =========== =========== =========== Net income $ 0.25 $ 0.05 $ 0.66 $ 0.12 =========== =========== =========== =========== Weighted average number of common shares outstanding 25,352,000 24,880,000 25,352,000 24,880,000 =========== =========== =========== ===========
EX-99.4 5 EXHIBIT 99.4 1 [LOGO] Exhibit 99.4 EXHIBIT "D" FOR: BIOVAIL CORPORATION INTERNATIONAL APPROVED BY: Eugene Melnyk Chairman of the Board Bob Podruzny Chief Financial Officer (416) 285-6000 CONTACT: Investor Relations: Donna Stein/ Dan Durkin/Cindy Hintelmann Press: Michael McMullan Morgen-Walke Associates (212) 850-5600 FOR IMMEDIATE RELEASE BIOVAIL CORP. ANNOUNCES THE SIGNING OF EUROPEAN LICENSING AGREEMENTS GOVERNING THREE MARKETS FOR ITS ONCE DAILY DILTIAZEM PRODUCT - - - - THE DUPONT MERCK PHARMACEUTICAL COMPANY APPOINTED EXCLUSIVE MARKETER FOR THE UNITED KINGDOM AND IRELAND; LABORATORIOS ALTER SIGNS AGREEMENT FOR SPAIN - - TORONTO, Canada, November 5, 1996 --- Biovail Corporation International (AMEX, TSE:BVF) today announced the signing of licensing agreements covering three key European territories for the Company's once daily formulation of the calcium channel blocker Diltiazem (U.S. Trade Mark: Tiazac(R), a medication for the treatment of angina pectoris and hypertension. The Company commented that Product launches are expected in the first half of 1997 and will include all five currently available doses. Further negotiations related to other European marketing agreements are ongoing. Announcements concerning these additional European licenses are expected in the near term. Biovail has signed an exclusive marketing agreement for its once daily Diltiazem product with The DuPont Merck Pharmaceutical Co. for the United Kingdom and Ireland. Revenues from both agreements will be derived from Biovail's sales transfer price of both trade and sample supplies. - more - [LOGO] 2 The DuPont Merck Pharmaceutical Company is a worldwide, research-based pharmaceutical company. Formed in 1991 as a partnership between DuPont and Merck & Co., Inc., DuPont Merck is focused on research, development and delivery of pharmaceuticals to treat unmet medical needs in the fight against cardiovascular, central nervous system and inflammatory diseases, cancer and AIDS. The company is also a leader in radiopharmaceuticals. Biovail has also entered into a similar licensing agreement for its product in Spain, Laboratories Alter, a billion dollar privately held Spanish conglomerate with operating business entities in both ethical and OTC pharmaceuticals, as well as infant nutritionals and cosmetics, has been appointed the exclusive licensee for Biovail's once daily Diltiazem. Alter's Pharmaceutical portfolio is dominated by products competing in the cardiopulmonary and gastrointestinal market segments. Eugene Melnyk, Chairman of the Board, commented, "We are very excited about these two initial marketing agreements covering the United Kingdom, Ireland and Spain. The U.K. and Spain account for two of the four major European Markets we are targeting for our product. The European community at large represents a growing market for our Diltiazem formulation. The E.C. represents collectively a $2.3 billion calcium channel blocker market, of which Diltiazem accounts for $400 million in increasing annual revenues. Tiazac was launched in the U.S. last February and sales continue to trend upward; we are pleased with the progress of the product to date and expect the upcoming European sales to contribute positively to this trend." Biovail Corporation International is an international full-service pharmaceutical company, engaged in the formulation, clinical testing, registration and manufacture of drug products utilizing advanced drug delivery technologies. "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This release contains forward looking statements that are subject to risks and uncertainties, including, but not limited to, the impact of competitive products and pricing, product demand and market acceptance, new product development, reliance on key strategic alliances, availability of raw materials, the telecommunications 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. -----END PRIVACY-ENHANCED MESSAGE-----