-----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, Dnm89BaErV5qpQGLt/XX2XasH2GptoKZ4Na62gVnGpWFjMSLaYDMjwfnaDAGDJ1W ADn3I6ngUHHVXAivgugxzw== 0000950150-98-001416.txt : 19991027 0000950150-98-001416.hdr.sgml : 19991027 ACCESSION NUMBER: 0000950150-98-001416 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 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: 98691551 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 FORM 6-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 6-K REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13A - 16 AND 15D - 16 OF THE SECURITIES EXCHANGE ACT OF 1934 FOR QUARTER ENDED JUNE 30, 1998 COMMISSION FILE NUMBER 001-11145 BIOVAIL CORPORATION INTERNATIONAL (TRANSLATION OF REGISTRANT'S NAME INTO 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 THEREBY 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, JUNE 30, 1998 AND DECEMBER 31, 1997 ................................ 1 CONSOLIDATED STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997 .. 2 CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997 .. 3 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ................ 4 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ........................ 7 PART II. OTHER INFORMATION......................... 10
(ALL DOLLAR AMOUNTS IN THIS DOCUMENT ARE EXPRESSED IN U.S. DOLLARS UNLESS OTHERWISE STATED.) 3 BIOVAIL CORPORATION INTERNATIONAL CONSOLIDATED BALANCE SHEETS (All dollar amounts are expressed in thousands of U.S. dollars)
JUNE 30, DECEMBER 31, 1998 1997 --------- -------- (UNAUDITED) ASSETS Current Cash and short-term deposits .... $ 20,882 $ 8,275 Accounts receivable ............. 28,983 33,114 Inventories ..................... 18,423 16,609 Executive loans ................. 2,818 2,933 Deposits and prepaids ........... 2,302 2,053 --------- -------- 73,408 62,984 Long-term investments ........... 7,500 -- Fixed Assets, net ............... 24,423 24,172 Other Assets, net ............... 20,899 6,583 --------- -------- $ 126,230 $ 93,739 ========= ======== LIABILITIES Current Accounts payable ................ $ 5,392 $ 4,579 Accrued liabilities ............. 4,267 6,002 Income taxes payable ............ 1,470 1,013 Customer prepayments ............ 7,080 1,840 Current portion of long-term debt 1,739 1,887 --------- -------- 19,948 15,321 Long-Term Debt ..................... 9,857 2,960 --------- -------- 29,805 18,281 --------- -------- SHAREHOLDERS' EQUITY Share capital ................... 21,869 18,465 Warrants ........................ 8,244 8,244 Retained earnings ............... 67,099 49,709 Cumulative translation Adjustment ................... (787) (960) --------- -------- 96,425 75,458 --------- -------- $ 126,230 $ 93,739 ========= ========
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 SIX MONTHS ENDED JUNE 30, JUNE 30, 1998 1997 1998 1997 REVENUE Research and development $4,109 $1,419 $11,953 $2,159 Manufacturing 17,296 15,247 28,763 28,537 Royalty and licensing 3,850 1,784 6,428 4,146 ------ ------ ------- ------ 25,255 18,450 47,144 34,842 ------ ------ ------- ------ EXPENSES Research and development 4,103 3,010 8,132 6,559 Cost of manufactured goods sold 6,867 3,858 12,009 8,181 Selling, general and administrative 4,143 4,078 8,454 6,725 ------ ------ ------- ------ 15,113 10,946 28,595 21,465 ------ ------ ------- ------ OPERATING INCOME 10,142 7,504 18,549 13,377 INTEREST INCOME (EXPENSE), net (89) (51) (157) (66) INCOME BEFORE INCOME TAXES 10,053 7,453 18,392 13,311 PROVISION FOR INCOME TAXES 510 375 1,001 683 ------ ------ ------- ------- NET INCOME $9,543 $7,078 $17,391 $12,628 ====== ====== ======= ======= EARNINGS PER SHARE (Note 8 ) $0.36 $0.28 $0.65 $0.50 ====== ====== ======= ======= WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 26,849,900 25,435,000 26,849,900 25,435,000 ========== ========== ========== ==========
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)
SIX MONTHS ENDED JUNE 30, 1998 1997 NET INFLOW (OUTFLOW) OF CASH RELATED TO THE FOLLOWING ACTIVITIES OPERATING Net income for the period $17,391 $12,628 Depreciation and amortization 2,346 1,431 ------- -------- 19,737 14,059 Change in non-cash operating items (Note 2) 6,966 (17,883) ------- -------- 26,703 (3,824) ------- -------- INVESTING Acquisition of royalty interest (Note 5) (15,000) - Long-term investments (Note 4) (7,500) - Additions to fixed assets, net (2,235) (1,703) Increase in other assets (170) (495) Executive loans (Note 3) 116 (63) -------- -------- (24,789) (2,261) -------- -------- FINANCING Increase in long-term debt (Note 6) 14,706 - Issuance of share capital 3,858 337 Reduction in long-term debt (7,840) (1,304) -------- -------- 10,724 (967) -------- -------- EFFECT OF EXCHANGE RATE CHANGES ON CASH (31) (32) -------- -------- INCREASE (DECREASE) IN CASH 12,607 (7,084) CASH, BEGINNING OF PERIOD 8,275 4,526 -------- -------- CASH, END OF PERIOD $20,882 $(2,558) ======== ======== REPRESENTED BY Cash and short-term deposits $20,882 $6,774 Bank indebtedness - (9,332) -------- -------- $20,882 $(2,558) ======== ========
The accompanying notes are an integral part of the consolidated financial statements 3 6 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 except for those described in Note 8. 1997 Figures Certain of the 1997 figures have been reclassified to conform to the 1998 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, 1997. In the opinion of management, all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the period presented have been made and all such adjustments are of a normal recurring nature. 2. CHANGE IN NON-CASH OPERATING WORKING CAPITAL
Six Months ended June 30, (In Thousands) ------------------------------ 1998 1997 ------------- ------------ Accounts receivable $4,311 $(11,089) Inventories (1,893) (834) Deposits and prepaid expenses (249) (2,106) Accounts payable and accrued liabilities (880) 1,615 Income taxes payable 437 38 Customer prepayments 5,240 (5,507) ------- --------- $6,966 $(17,883) ======= =========
3. EXECUTIVE LOANS Executive loans as at June 30, 1998 consist of Executive Stock Purchase Plan ("ESPP") loans of $2,818,000 made to finance the acquisition of shares of the Company on the open market by executive officers. The loans are secured by shares of the Company owned by the executive officers, bear interest at 1/4% over the bank prime rate, which is equal to the Company's rate for borrowings, and are due on December 1, 1998. 4 7 4. LONG-TERM INVESTMENTS In March, 1998, the Company made a $7,500,000 investment in a marketable securities fund for a term of two years. The investment is carried at cost, less provision to recognize any decline in value that is other than temporary. The fair value of the investment at June 30, 1998, was $7,543,000. 5. OTHER ASSETS In March, 1998, the Company completed the acquisition of the royalty interest of Galephar Puerto Rico, Inc., Limited ("Galephar") in certain of the Company's products. The Company paid $15,000,000 to Galephar in full satisfaction of the Company's royalty obligation on the sales of Tiazac(R) and the Company's generic controlled release version of Cardizem CD in the United States and Canada. 6. LONG-TERM DEBT In March, 1998, the Company utilized a $15,000,000 revolving term bank loan to acquire the royalty interest of Galephar (See Note 5). The loan is secured by a general security agreement bearing interest at the bank's London Interbank Offer Rate ("LIBOR"), plus 1 1/2% The Company may make repayments on the loan at any time and in June, 1998, repaid $7,000,000. 7. LITIGATION From time to time, the Company becomes involved in various legal proceedings which it considers to be in the ordinary course of business. The vast majority of these proceedings involve intellectual property issues that often result in patent infringement suits brought by patent holders upon the Company's filing of its ANDA applications. The timing of these actions is mandated by statute and may result in a delay of FDA's approval for such filed ANDAs until the final resolution of such actions or the expiry of 30 months, whichever occurs earlier. The Company is currently litigating two separate actions for alleged infringement of the applicable patents related to the Company's filing of ANDAs for the generic equivalent of Adalat CC and Procardia XL products. Both actions make a technical claim of infringement and, by virtue of applicable statutory provisions, the filing of these suits may delay approval of the Company's ANDAs for a period of 30 months or resolutions of these patent infringement questions, whichever occurs sooner. The Company is vigorously defending these suits by denying infringement of the patents. In addition, the Company has brought an action against the patent holders seeking declaratory judgement and invalidity of the relevant patent and seeking damages for violation of the anti-trust laws and for tortious interference with the Company's prospective business advantage. 8. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in Canada ("Cdn. GAAP") which differ in certain respects from those applicable in the United States ("U.S. GAAP"). The material differences as they apply to the Company's financial statements are as follows: 5 8 a) Reconciliation of net income under Cdn. and U.S. GAAP
SIX MONTHS ENDED JUNE 30 (IN THOUSANDS EXCEPT PER SHARE DATA) 1998 1997 --------- ------- Net income under Cdn. GAAP................ $17,391 $12,628 U.S GAAP adjustments: Collection of warrant subscription Receivable................................ (537) - ------- ------- $16,854 $12,628 ------- ------- Earnings per share under U.S. GAAP Basic $0.63 $0.50 Diluted $0.62 $0.47 Weighted average number of common shares Outstanding under U.S. GAAP Basic..................................... 26,850 25,435 Diluted................................... 27,189 26,891
b) The components of shareholders' equity under U.S. GAAP are as follows:
JUNE 30, DECEMBER 31, 1998 1997 ---------- ------------ Share Capital........................ $21,869 $18,465 Warrants............................. 8,244 8,244 Warrants subscription receivable, net (6,957) (7,494) Retained earnings.................... 74,056 57,203 Cumulative translation adjustment.... (787) (960) Unrealized holding gain -- long term investment (Note 4).................. 43 0 ------- ------- $96,468 $75,458 ------- -------
6 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (ALL DOLLAR AMOUNTS ARE EXPRESSED IN U.S. DOLLARS) OVERVIEW Biovail Corporation International ("Biovail" or the "Company") derives its revenues from (i) developing and licensing oral controlled release products using its proprietary drug delivery technologies; (ii) manufacturing such products for sale to licensees and wholesalers; and (iii) providing pharmaceutical contract research services to third parties. RESULTS OF OPERATIONS Revenues for the first six months of 1998 were $47,144,000 compared with $34,842,000 in 1997. The increase was primarily due to increased research and development and royalty and licensing revenues. Net income increased 38% to $17,391,000, or $0.65 per share, in the first six months of 1998 compared with net income of $12,628,000 or $0.50 per share in 1997. Research and development revenue from third-party customers was $11,953,000 in the first six months of 1998, compared to $2,159,000 in 1997. The increase in revenue was due to product development activities undertaken on behalf of Teva Pharmaceuticals ("Teva") and Intelligent Polymers Limited ("IPL"). Research and development expenses for the first six months of 1998 were $8,132,000 as compared to $6,559,000 in 1997. The increased spending over 1997 reflects the Company's higher level of research and development activity for third party customers. Manufacturing revenues for the first six months of 1998 were $28,763,000 compared to $28,537,000 in 1997. In 1998 revenues were generated primarily on sales of Tiazac(R) to Forest Laboratories ("Forest") for the U.S. market, Canadian market sales of Tiazac(R) by the Company's subsidiary, Crystaal Corporation ("Crystaal"), and the shipment of prelaunch product to Teva in the first quarter. The cost of manufactured goods increased to 42% of revenue in the first six months of 1998 as compared to 29% in 1997. This cost increase is primarily from the one time contractual price reduction to Forest of approximately 25% which occurred in the second quarter of 1997. Royalty and licensing revenue, net of related expenses, totaled $6,428,000 in the first six months of 1998, compared to $4,146,000 in 1997. Net royalties increased 55% in 1998 as compared to 1997 as a result of increased Tiazac(R) sales in the U.S. market and the elimination of royalty obligations of Biovail to Galephar on sales of Tiazac(R) in the U.S. and Canada. Selling, general and administrative expenses increased to $8,454,000 in the first six months of 1998, compared to $6,725,000 in 1997. The increase primarily stems from increased sales and marketing expenses related to the launch of Tiazac(R) in Canada, the registration costs associated with Tiazac(R) in European markets, and the hiring of key management personnel. 7 10 Operating income of $18,549,000 was achieved in the first six months of 1998 compared to operating income of $13,377,000 in 1997. Canadian operations (including Crystaal, manufacturing and contract research facilities, research and development and corporate administrative functions), incurred operating losses of $6,698,000 in the first six months of 1998 compared to $141,000 in 1997. The lower level of Canadian losses for the first half of 1997 was due primarily to the significant revenues generated from Canadian launch shipments of Tiazac(R) in May, 1997. Operating income of $2,161,000 and $2,619,000 in each of the 1998 and 1997 periods respectively was earned by the Company's subsidiary in Switzerland through royalties earned on Biovail products excluding Tiazac(R). Operations in Barbados and Puerto Rico contributed operating income of $23,086,000 in the first six months of 1998 compared to $10,899,000 in 1997. The increase in operating income in Barbados and Puerto Rico was due primarily to third party product development and manufacturing sales activities. Net interest expense was $157,000 in the first six months of 1998 compared to $66,000 in 1997. Income taxes in the first six months of 1998 were $1,001,000 compared to $683,000 in 1997. The tax provisions are reflective of the geographic sources of income at appropriate rates. LIQUIDITY AND CAPITAL RESOURCES As at June 30, 1998, the Company's working capital was $53,460,000 compared to $47,663,000 at December 31, 1997 which represented a working capital ratio of 3.7:1 as compared to 4.1:1 respectively. The Company had positive cash flow from operations of $26,703,000 for the six months ended June 30, 1998 compared to a cash flow deficiency of $3,824,000 in 1997. Net income before non-cash charges generated $19,737,000 for the six month period in 1998 compared with $14,059,000 in 1997. A further $6,966,000 was generated in 1998 by a reduction in non-cash working capital items during the period, primarily attributable to a reduction in accounts receivable and an increase in customer prepayments. In the comparable period in 1997 an increase in accounts receivable and a decrease in customer prepayments was responsible for cash utilization of $17,883,000. Investing activities in the first six months of 1998 related to the acquisition of the royalty interest from Galephar for $15,000,000, long-term investments of $7,500,000, and additions to fixed assets of $2,235,000. In the comparable 1997 period investing activities totalled $2,261,000 of which the majority related to fixed assets. Net cash was generated from financing activities of $10,724,000 in the first six months of 1998 compared to net cash used in financing activities of $967,000 in 1997. The 1998 cash generated was as a result of a net increase in long-term debt of $6,866,000 and $3,858,000 received from the issuance of common shares on the exercise of stock options. In the comparable period in 1997, cash utilization was as a result of net long-term debt repayments of $1,304,000 offset by proceeds of $337,000 received from the issuance of common shares on the exercise of stock options. 8 11 Exchange rate changes on foreign cash balances resulted in a decrease in cash of $31,000 in the first six months of 1998 compared to a reduction of cash of $32,000 in 1997. As a result of the foregoing, the Company's cash position as at June 30, 1998 was $20,882,000 compared to a cash flow deficit of $2,558,000 at June 30, 1997. The Company's total long-term debt (including current portions thereof) was $11,596,000 as at June 30, 1998 compared to $4,847,000 at December 31, 1997. The Company has available lines of credit aggregating $45,000,000. As of June 30, 1998, $8,000,000, related to the acquisition of the Galephar royalty obligation buy back, was outstanding under these lines of credit. The Company believes it has adequate capital and sources of short-term 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. There can be no assurance, however, that these financial resources will be available on acceptable terms and will be sufficient to sustain the Company's longer term growth objectives. The Company and its subsidiaries generate revenue and expenses primarily in U.S. and Canadian dollars. In the first six months of 1998, revenue was generated in the following proportions: 89% in U.S. dollars, 10% in Canadian dollars and 1% in other currencies. In addition expenses were incurred in the following proportions: 70% in U.S. dollars, and 30% in Canadian dollars. The Company does not believe that its exposure to foreign currency exchange risk is significant because of the relatively minor, and diminishing, proportion of Canadian dollar to U.S. dollar denominated transactions. The Company has not historically utilized foreign currency hedging instructions. Inflation has not had a material impact on the Company's operations. 9 12 BIOVAIL CORPORATION INTERNATIONAL PART II - OTHER INFORMATION 1. OPERATIONAL INFORMATION The press releases issued by the Company in the 1998 second quarter are attached as the following exhibits: a) On April 6, 1998, the Company commented on recent court proceedings with respect to a recent ruling dissimilar from Biovail's factual circumstances in critical aspects. Company confirms it has intervened in relevant related litigation. b) On April 15, 1998, the Company applauded Court Ruling. The Opinions in the Mova Decision support the Company Position. c) On April 23, 1998, the Company's subsidiary, Crystaal Corporation, in-licensed Canadian Rights to Corlopam from Neurex. d) On April 29, 1998, Biovail reported record 1998 First Quarter Financial Results. e) On May 5, 1998, the Company signed Latin American Marketing Agreement with Glaxo Wellcome. f) On June 23, 1998, the Company in-licenced Canadian rights to D-Methylphenidate from Celgene. 2. LEGAL PROCEEDINGS For detailed information concerning legal proceedings, reference is made to Note 7 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 August 14, 1998 By /s/Kenneth G. Howling Kenneth G. Howling Vice President, Finance and Chief Financial Officer 11 EX-99.A 2 PRESS RELEASE DATED APRIL 6, 1998 1 EXHIBIT "A" [BIOVAIL LETTERHEAD] FOR: Biovail Corporation International APPROVED BY: Eugene Melnyk Chairman of the Board Kenneth C. Cancellara, Q.C General Counsel (416) 285-6000 FOR IMMEDIATE RELEASE: * BIOVAIL COMMENTS ON RECENT COURT PROCEEDINGS * -RECENT RULING DISSIMILAR FROM COMPANY'S FACTUAL CIRCUMSTANCES IN CRITICAL ASPECTS- - COMPANY CONFIRMS IT HAS INTERVENED IN RELEVANT RELATED LITIGATION - TORONTO, Canada, April 6, 1998 - Biovail Corporation International (NYSE, TSE: BVF) today commented on two court proceedings dealing with issues concerning the exclusivity provisions of the Food Drug and Cosmetic Act ("FD&C") relating to generic products. The two relevant court proceedings are Granutec vs. Genpharm et. al. and Mova vs. FDA et. al. Biovail confirmed that the Fourth Circuit Court of Appeal's decision released today in Granutec overturned the decision of the District Court which had upheld FDA's "successful defense" interpretation of the exclusivity provision of the FD&C Act. The Company confirmed its position that the facts applicable to the parties in the Granutec case are dissimilar from Biovail's factual circumstances in a number of critical and key aspects as they relate to Biovail's version of its generic Cardizem CD. As a result, the Company commented that the decision does not squarely rule on the applicability of the exclusivity provisions relating to its filed generic Cardizem CD. [RECYCLE LOGO] [BIOVAIL LETTERFOOT] 2 Biovail also confirmed today that on March 20, 1998, in a related Court Case it became an Intervenor amicus curiae in Mova v. FDA et. al. at the District of Columbia Court of Appeal level. The Court of Appeal in Mova has accepted for filing Biovail's submission, as it specifically relates to the filing of its generic version of Cardizem CD, is considering Biovail's position, and is expected ultimately to rule on Biovail's specific circumstances in the context of determining all the issues in that Appeal. The most crucial and differentiating fact is that, unlike other ANDA submissions, Biovail was not sued for patent infringement. Biovail reaffirmed its position that any interpretation that does not take into account the built-in abuses and unfairness to legitimate ANDA non-infringing filers when determining the applicability or otherwise of the 180-day exclusivity set forth in the FD&C Act is inappropriate and will be litigated vigorously by the Company. 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. To the extent any statements made in this release contain information that is not historical, these statements are essentially forward looking and are subject to risks and uncertainties, including the difficulty of predicting FDA and 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, 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. EX-99.B 3 PRESS RELEASE DATED APRIL 15, 1998 1 EXHIBIT "B" [BIOVAIL LETTERHEAD] CONTACT: Kenneth C. Cancellara Q.C. Senior Vice President General Counsel Eugene Melnyk Chairman of the Board FOR IMMEDIATE RELEASE: (416) 285-6000 * BIOVAIL APPLAUDS COURT RULING* OPINIONS IN MOVA DECISION SUPPORT COMPANY POSITION TORONTO, Canada, April 15, 1998 - Biovail Corporation International (NYSE, TSE: BVF) commented on yesterday's decision and opinions expressed by the District of Columbia Court of Appeal on Mova vs. FDA et al dealing with the exclusivity provisions of the Food, Drug and Cosmetic Act relating to generic products. The Court of Appeal opined on Biovail's specific circumstances, the most crucial of which, unlike other applicants in Mova vs. FDA et al and Granutec vs. Genpharm et al, is that Biovail was not sued for patent infringement when it submitted its Paragraph IV Certification related to its generic version of Cardizem CD. Biovail, who intervened in the Mova litigation and submitted an amicus curiae brief, confirmed that the Court of Appeals' decision upholding the lower court decision relates only to those applicants who have been sued after Certification. In the opinion of the Court, the FDA is encouraged to address the issue of a meritorious or non-litigated subsequent applicant through appropriate regulations or otherwise. The Company therefore anticipates that the FDA review of Biovail's ANDA for a generic version of Cardizem CD will proceed pursuant to the mandate provided in Section 505 (j) (B) (5) (iii) of the Food, Drug and Cosmetic Act. 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. To the extent any statements made in this release contain information that is not historical, these statements are essentially forward looking and are subject to risks and uncertainties, including the difficulty of predicting FDA and 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, 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. [RECYCLE LOGO] [BIOVAIL LETTERFOOT] EX-99.C 4 PRESS RELEASE DATED APRIL 23, 1998 1 EXHIBIT "C" [BIOVAIL LETTERHEAD] CONTACT: Eugene Melnyk Chairman of the Board Kenneth Howling Chief Financial Officer Rolf Reininghaus President Crystaal Corporation FOR IMMEDIATE RELEASE: (416) 285-6000 * BIOVAIL'S CRYSTAAL IN-LICENSES CANADIAN RIGHTS TO CORLOPAM FROM NEUREX * TORONTO, Canada, April 23, 1998 - Biovail Corporation International (NYSE, TSE: BVF) today announced that its wholly owned subsidiary, Crystaal Corporation ("Crystaal"), has entered into a licensing agreement with Neurex for the marketing of Corlopam (fenoldopan) in Canada. Corlopam is indicated for the in-hospital management of hypertension when emergency reduction in blood pressure is required. Corlopam is the first of a new pharmacological class of acute care cardiovascular drugs with a novel mechanism of action. Corlopam has been approved by the FDA and was launched commercially in the United States in January, 1998. Crystaal anticipates filing a New Drug Submission with the Therapeutic Products Directorate (T.P.D.) in the second half of this year, with approval expected in late 1999 or early 2000. Rolf Reininghaus, President of Crystaal, commented "Corlopam is the first in a series of acute care products Crystaal is contemplating to in-license. Corlopam will enhance the visibility of Crystaal in hospitals and with leading and influential cardiologists in Canada. It will also provide a positive contribution to earnings. In addition, Corlopam is currently being investigated for additional indications which could provide opportunities for the further use of this medication." 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. To the extent any statements made in this release contain information that is not historical, these statements are essentially forward looking and are subject to risks and uncertainties, including the difficulty of predicting FDA and 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, 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. [RECYCLE LOGO] [BIOVAIL LETTERFOOT] EX-99.D 5 PRESS RELEASE DATED APRIL 29, 1998 1 EXHIBIT "D" [BIOVAIL LETTERHEAD] CONTACT: Eugene Melnyk Chairman of the Board Ken Howling Chief Financial Officer (416) 285-6000 FOR IMMEDIATE RELEASE: * BIOVAIL REPORTS RECORD 1998 FIRST QUARTER FINANCIAL RESULTS * TORONTO, Canada, April 29, 1998 - Biovail Corporation International (NYSE,TSE:BVF) today reported record first quarter financial results for the period ended March 31, 1998. Revenue for the first quarter of 1998 increased 34% to $21.9 million, compared with $16.4 million reported for the first quarter of 1997. Net income for the first quarter of 1998 was $7.9 million, or $0.29 per share, a 41% increase over net income of $5.6 million or $0.22 per share in the comparable period of 1997. Eugene Melnyk, Chairman of the Board, commented, "Our first quarter results demonstrate the Company's focus on continually growing its business, both scientifically and financially. A number of important milestones were achieved in the quarter including the ANDA filings with the FDA of controlled release generic versions of Adalat CC and Procardia XL; the buyout of royalty obligations related to future U.S. and Canadian sales of Tiazac and the Company's generic version of Cardizem CD; and four new licensing agreements for the distribution of Tiazac in Italy, Argentina, Brazil and Australia. Crystaal Corporation, Biovail's wholly-owned Canadian subsidiary, in-licensed two new products for Canada including Brexidol, used in the treatment of pain commonly associated with sports injuries and dysmenorrhea, and Corlopam, used for the in-hospital management of hypertension. Finally, Tiazac, currently holding approximately 14 1/2% market share of once-daily diltiazem new prescriptions, was approved by the FDA for chronic stable angina in the quarter, positioning the Company to further improve its diltiazem market share, particularly in the managed care segment. [RECYCLE LOGO] [BIOVAIL LETTERFOOT] 2 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. To the extent any statements made in this release contain information that is not historical, these statements are essentially forward looking and are subject to risks and uncertainties, including the difficulty of predicting FDA and 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, 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. - Tables Follow - 3 BIOVAIL CORPORATION INTERNATIONAL CONSOLIDATED BALANCE SHEETS (ALL DOLLAR AMOUNTS ARE EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
MARCH 31, DECEMBER 31, 1998 1997 ----------- ------------ (UNAUDITED) ASSETS Current Cash and short-term deposits $11,248 $8,275 Accounts receivable 36,359 33,114 Inventories 18,981 16,609 Executive loans (Note 3) 2,720 2,933 Deposits and prepaids 2,132 2,053 -------- ------- 71,440 62,984 Long-term investments (Note 4) 7,500 - Fixed Assets, net 24,680 24,172 Other Assets, net (Note 5) 21,215 6,583 -------- ------- $124,835 $93,739 ======== ======= LIABILITIES Current Accounts payable 7,189 4,579 Accrued liabilities 3,724 6,002 Income taxes payable 1,146 1,013 Customer prepayments 6,352 1,840 Current portion of long-term debt 1,791 1,887 -------- ------- 20,202 15,321 Long-term Debt (Note 6) 17,483 2,960 -------- ------- 37,685 18,281 -------- ------- SHAREHOLDERS' EQUITY Share capital 22,215 18,465 Warrants 8,244 8,244 Retained earnings 57,557 49,709 Cumulative translation adjustment (866) (960) -------- ------- 87,150 75,458 -------- ------- $124,835 $93,739 ======== =======
The accompanying notes are an integral part of the consolidated financial statements. 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 MARCH 31, 1998 1997 -------- -------- REVENUE Research and development $ 7,844 $ 740 Manufacturing 11,467 13,290 Royalty and licensing 2,578 2,362 ------ ------ 21,889 16,392 ------ ------ EXPENSES Research and development 4,029 3,549 Cost of manufactured goods sold 5,142 4,323 Selling, general and administrative 4,311 2,647 ------ ------ 13,482 10,519 ------ ------ OPERATING INCOME 8,407 5,873 INTEREST INCOME (EXPENSE), net (68) (15) ------ ------ INCOME BEFORE INCOME TAXES 8,339 5,858 PROVISION FOR INCOME TAXES 491 308 ------ ------ NET INCOME $ 7,848 $ 5,550 ====== ====== EARNINGS PER SHARE (Note 8) $0.29 $0.22 ====== ====== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 26,736,000 25,430,000 ========== ==========
The accompanying notes are an integral part of the consolidated financial statements. EX-99.E 6 PRESS RELEASE DATED MAY 5, 1998 1 EXHIBIT "E" [BIOVAIL LETTERHEAD] CONTACT: Eugene Melnyk Chairman of the Board Kenneth Howling Chief Financial Officer (416) 285-6000 FOR IMMEDIATE RELEASE: * BIOVAIL SIGNS LATIN AMERICAN MARKETING AGREEMENT WITH GLAXO WELLCOME * TORONTO, Canada, May 5, 1998 - Biovail Corporation International (NYSE, TSE: BVF) today announced that it has signed a licensing agreement with Glaxo Wellcome S.A. for the marketing of Biovail's controlled release generic version of Trental(R), (Pentoxifylline) in Argentina, Brazil and Mexico. Trental(R) is prescribed for the treatment of chronic peripheral arterial disease and generates annual sales in excess of $52 million in Latin America. Glaxo Wellcome has an option to market the product in seven additional Latin American markets. Eugene Melnyk, Chairman of the Board, commented, "Biovail continues to exploit its capability of successfully licensing its products in International markets. Latin America is currently one of the fastest growing pharmaceutical markets and Glaxo Wellcome's presence in Latin America is strong. The market dynamics are favorable and launch of the product is anticipated in the first half of 1999." Glaxo Wellcome is a research based company whose people are committed to fighting disease by bringing innovative medicines and services to patients throughout the world and the healthcare providers that serve them. 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. To the extent any statements made in this release contain information that is not historical, these statements are essentially forward looking and are subject to risks and uncertainties, including the difficulty of predicting FDA and 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, 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. [RECYCLE LOGO] [BIOVAIL LETTERFOOT] EX-99.F 7 PRESS RELEASE DATED JUNE 23, 1998 1 EXHIBIT "F" [BIOVAIL LETTERHEAD] CONTACT: Eugene Melnyk Chairman of the Board Kenneth Howling Chief Financial Officer Rolf Reininghaus President Crystaal Corporation (416) 285-6000 FOR IMMEDIATE RELEASE: *BIOVAIL IN-LICENCES CANADIAN RIGHTS TO D-METHYLPHENIDATE FROM CELGENE* TORONTO, Canada, June 23, 1998 -- Biovail Corporation International (NYSE, TSE: BVF) today announced that it has entered into a licensing agreement with Celgene Corporation (NASDAQ: CELG) for the exclusive marketing rights to d-methylphenidate (d-MPH) in Canada. Crystaal Corporation, a wholly owned subsidiary of Biovail, intends to market d-MPH for use in the treatment of Attention Deficit-Hyperactivity Disorder (ADHD). d-MPH is the pure and active form of the marketed raecemic version of methylphenidate, offering advantages such as reduced doses, diminished metabolic load and the possibilities of significant reductions in adverse effects and abuse potential that tend to be associated with the use of the raecemic form. Crystaal Corporation ("Crystaal") anticipates filing a New Drug Submission for d-MPH with the Therapeutic Products Directorate (TPD) during the course of next year. Rolf Reininghaus, President of Crystaal, commented "due to the growing awareness and recognition of ADHD in children by the public and the medical community, coupled with the growth of diagnoses in adults, the market for therapies aimed at this condition is expected to grow in Canada to U.S.$50 to $100 million by the year 2000 and beyond. Crystaal plans to become the market leader in this segment with the introduction of d-MPH." -- more -- [RECYCLE LOGO] [BIOVAIL LETTERFOOT] 2 Concurrent with the licensing agreement, Biovail has entered into a Stock Purchase Agreement whereby Biovail will purchase U.S.$2.5 million of newly issued Celgene Corporation stock. 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. To the extent any statements made in this release contain information that is not historical, these statements are essentially forward looking and are subject to risks and uncertainties, including the difficulty of predicting FDA and 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, 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. -----END PRIVACY-ENHANCED MESSAGE-----