<PAGE> 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 June 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
<PAGE> 2
BIOVAIL CORPORATION INTERNATIONAL
QUARTERLY REPORT
INDEX
PART 1. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
<S> <C>
Consolidated Balance Sheets, June 30, 1996 and
December 31, 1995 .............................................. 1
Consolidated Statements of Income
for the three and six months ended June 30, 1996 and 1995 ...... 2
Consolidated Statements of Cash Flows for the six
months ended June 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 ...................................... 9
</TABLE>
(All dollar amounts in this document are expressed in US dollars
unless otherwise stated.)
<PAGE> 3
BIOVAIL CORPORATION INTERNATIONAL
CONSOLIDATED BALANCE SHEETS
(All dollar amounts are expressed in thousands of US dollars)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
----------- ------------
(Unaudited) (Audited)
<S> <C> <C>
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
======= =======
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE> 4
BIOVAIL CORPORATION INTERNATIONAL
CONSOLIDATED STATEMENTS OF INCOME
(All dollar amounts except per share data are expressed in thousands of U.S.
dollars)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------ -------------------------
1996 1995 1996 1995
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUE
Contract $ 1,190 $ 995 $ 2,344 $ 2,857
Manufacturing 15,160 -- 27,901 1,254
Royalty and licensing 1,991 1,538 4,332 3,689
----------- ----------- ----------- -----------
18,341 2,533 34,577 7,800
----------- ----------- ----------- -----------
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
----------- ----------- ----------- -----------
12,491 3,005 23,841 6,832
----------- ----------- ----------- -----------
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 -- CANADIAN GAAP
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
=========== =========== =========== ===========
EARNINGS PER SHARE -- U.S. GAAP (NOTE 4)
Income (loss) before gain on licensing
settlement $ 0.22 $ (0.02) $ 0.39 $ 0.03
=========== =========== =========== ===========
Net Income $ 0.22 $ .02 $ 0.39 $ 0.07
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 26,763,000 26,250,000 26,763,000 26,250,000
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE> 5
BIOVAIL CORPORATION INTERNATIONAL
CONSOLIDATED STATEMENTS OF CASH FLOWS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------
1996 1995
------- -------
<S> <C> <C>
NET INFLOW (OUTFLOW) OF CASH
RELATED TO FOLLOWING ACTIVITIES
OPERATING
Net income $10,437 $ 1,851
Depreciation and amortization 993 588
------- -------
11,430 2,439
Change in non-cash operating items (Note 2) (9,350) (248)
------- -------
2,080 2,191
INVESTING
Additions to fixed assets (3,351) (541)
------- -------
(3,351) (541)
FINANCING
Issuance of share capital 99 84
Increase in long-term debt 249 2,831
Reduction in long-term debt (737) (393)
------- -------
(389) 2,522
------- -------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (727) 428
------- -------
INCREASE (DECREASE) IN CASH (2,387) 4,600
CASH AND SHORT-TERM DEPOSITS, BEGINNING OF
PERIOD 24,323 2,819
------- -------
CASH AND SHORT-TERM DEPOSITS, END OF PERIOD $21,936 $ 7,419
======= =======
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE> 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 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 period presented have been made and all such adjustments are of a normal
recurring nature.
2. CHANGE IN NON-CASH OPERATING WORKING CAPITAL
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
(IN THOUSANDS)
--------------------------
1996 1995
------- -------
<S> <C> <C>
Accounts receivable $(2,191) $ 2,413
Inventory (3,456) 207
Deposits and prepaid expenses (593) (487)
Accounts payable and accrued liabilities 2,922 (383)
Amount due on acquisition -- (975)
Income taxes payable (61) 36
Deferred revenue (5,971) (1,059)
------- -------
$(9,350) $ (248)
======= =======
</TABLE>
<PAGE> 7
3. 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.
4. 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"). Whereas, except in the case of adjustments with respect to
translating amounts to U.S. dollars, these items are appropriately included in
the Company's consolidated statement of income and deficit under Canadian
GAAP, they would be reflected as capital transactions under U.S. GAAP.
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
(IN THOUSANDS EXCEPT PER SHARE DATA)
1996 1995
<S> <C> <C>
RECONCILIATION OF NET INCOME UNDER
CANADIAN AND U.S. GAAP
Net income as shown in the consolidated statement of income and deficit $ 10,437 $ 1,851
Use of weighted average rate for the year versus year end rate for
purposes of translating net income amounts from Canadian dollars
(the currency of measurement) to U.S. dollars (the reporting currency) (8) (20)
-------- --------
Net income according to U.S. GAAP $ 10,429 $ 1,831
======== ========
Earnings per share under U.S. GAAP $ 0.39 $ .07
======== ========
Weighted average number of common shares outstanding under U.S. GAAP (1) 26,763 26,250
======== ========
</TABLE>
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 June 30, 1996, or December 31, 1995.
<PAGE> 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 first half was $2,344,000 as
compared to $2,857,000 in the 1995 first half. The first half of 1995 included
a cancellation fee payment for a special study by a former Tiazac(R) licensee.
Excluding that payment, revenues for the Contract Research Division were
approximately equal over the comparable periods.
Manufacturing revenue was $27,901,000 in the 1996 first half as compared to
$1,254,000 in the 1995 first half. 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 first half, royalty and licensing revenue was $4,332,000 as
compared to $3,689,000 in the 1995 first half.
Royalty revenue increased to $4,332,000 in the 1996 first half period
from $2,689,000 in the 1995 first half period. The increase in royalty
revenues are primarily due to the launch of Tiazac(R) by Forest in the United
States and increased Oruvail sales volumes in the United States by Wyeth-Ayerst
Laboratories.
Revenue from the licensing of new products was nil in the 1996 first half
as compared to $1,000,000 in the 1995 first half. The licensing revenue
received in 1995 relates to the assignment and licensing rights for Tiazac(R)
to the Company's previous licensee.
<PAGE> 9
The gross margin on contract revenue was 20% in the 1996 first half as
compared to 42% in the 1995 first half. The 1995 gross margin was favourably
impacted due to the inclusion of $567,000 of non-refundable prepaid amounts
related to the cancellation of a special study by a former licensee; excluding
this amount the gross margin for the 1995 first half was 27%.
The gross margin on manufacturing revenue was 58% in the 1996 first half,
as compared to 61% in the 1995 first half. 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 $4,015,000 in the
1996 first half from $1,458,000 in the 1995 first half, 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 increased to $6,254,000 in
the 1996 first half compared to $3,218,000 in the 1995 first half. 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 $10,736,000 was achieved in the 1996 first half as
compared to operating income of $968,000 in the 1995 comparable period.
Canadian operations incurred losses of $5,611,000 in 1996 as compared to
operating losses of $1,245,000 in 1995. Operating income of $2,129,000 and
$1,307,000 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 $14,218,000 in the 1996
first half compared to $906,000 in the 1995 comparable period. The increased
operating contribution in Barbados is due to the sales of Tiazac(R).
Net interest income was $321,000 in the 1996 first half as compared to
interest expense of $224,000 in the 1995 first half. 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 first half increased to $620,000 from $23,000 in
the 1995 first half period as a result of increased operating income.
In the 1996 first half, the Company reported net income of $10,437,000, or
$0.41 per share. This compares to net income of $1,851,000 or $0.07 per share
in the 1995 first half, which included a gain on licensing settlement of
$1,130,000 or $0.04 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.
<PAGE> 10
LIQUIDITY AND CAPITAL RESOURCES
For the six months ended June 30, 1996, the Company generated $2,080,000 in
cash-flow from operating activities compared to $2,191,000 in the 1995
comparable period. Cash generated was as a result of income from operations
(after adding back non-cash charges) of $11,430,000 and $2,439,000 in the 1996
first half and 1995 first half respectively, and a decrease in non-cash
operating items of $9,350,000 and $248,000 in the two respective periods.
Net cash of $389,000 was used in financing activities in the 1996 first
half, compared to a provision of net cash of $2,522,000 in the 1995 first half.
The 1996 cash utilization was as a result of long-term debt repayments of
$737,000, offset in part by the issuance of common shares for $99,000 and
increases in long-term debt of $249,000. In the same period of 1995, cash
provided was due to the issuance of common shares for $84,000, increases in
long-term debt of $2,831,000, offset in part by long-term debt repayments of
$393,000.
Investing activities related to additions to fixed assets of $3,351,000 in
the 1996 first half compared to $541,000 in the 1995 first half.
Exchange rate changes on foreign cash balances resulted in a U.S. dollar
cash equivalent reduction of $727,000 in the 1996 first half, compared to an
increase of $428,000 in the 1995 first half.
As a result of the foregoing, cash balances decreased to $21,936,000 as at
June 30, 1996, from $24,323,000 as at December 31, 1995, but increased from
$7,419,000 as at June 30, 1995.
The Company's total long-term debt was $9,694,000 as at June 30, 1996 as
compared to $10,195,000 at December 31, 1995. Long-term debt at June 30, 1996,
is comprised of $6,068,000 related to the manufacturing facility located in
Manitoba, Canada; $1,795,000 is a mortgage payable on its laboratory facility;
and $1,831,000 is a bank term loan. With respect to the debt relating to the
manufacturing facility, an aggregate amount of $3,034,000 is a non-interest
bearing loan from a Canadian government agency and $3,034,000 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.
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.
<PAGE> 11
BIOVAIL CORPORATION INTERNATIONAL
PART II - OTHER INFORMATION
1. OPERATIONAL INFORMATION
The press releases issued by the Company in the 1996 second quarter are
attached as the following exhibits:
a) On April 3, 1996, the Company announced the regulatory approval of
its Tiazac(R) product in the United Kingdom by the Medicines Control
Agency.
b) On April 17, 1996, the Company reports its 1996 First Quarter
Financial results.
c) On May 22, 1996, the Company announced that the Soros led
Investor Group acquired 20% of the Company previously held by
Forest Laboratories.
d) On July 17, 1996, the Company reported its 1996 Second Quarter and
Six Month Financial results.
e) On July 22nd, 1996, the Company announced that it has been issued a
U.S. patent on the Company's Diltiazem Delivery System.
2. LEGAL PROCEEDINGS
For detailed information concerning legal proceedings, reference is made
to Note 3 in the financial statement contained as part hereof.
<PAGE> 12
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 15, 1996 By Robert A. Podruzny
------------------------------
Robert A. Podruzny
Vice President - Finance and
Chief Financial Officer
<PAGE> 13
[BIOVAIL LOGO]
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'S TIAZAC(R) APPROVED IN UNITED KINGDOM;
ADDITIONAL APPROVALS ACCEPTED IN SECOND HALF 1996
-INITIAL EUROPEAN SHIPMENTS IN FOURTH QUARTER 1996-
TORONTO, Canada, April 3, 1996 -- Biovail Corporation International (AMEX,
TSE:BVF) today announced that it has received approval from the Medicines
Control Agency (MCA) to market all five dosage strengths of Tiazac(R), its
once-daily formulation of diltiazem, in the United Kingdom. The Company
expects to announce its initial European marketing partners during the second
quarter of 1996, with an initial product rollout in the U.K. anticipated in the
fourth quarter of 1996.
Eugene Melnyk, Chairman of the Board, commented, "We are excited to have
received our first international approval to market Tiazac(R) in England. This
acceptance serves as a springboard for securing additional approvals for
Tiazac(R) throughout the European Community (EC). The EC represents an overall
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, in particular France, Italy,
Germany and Spain."
- more -
[RECYCLE LOGO]
BIOVAIL CORPORATION INTERNATIONAL
460 COMSTOCK ROAD, TORONTO, ONTARIO, CANADA M1L 4S4
TEL (416) 285-6000 FAX (416) 285-6499
<PAGE> 14
"With this approval," continued Mr. Melnyk, "we will accelerate our
international licensing program and begin manufacturing product to fill initial
stocking programs for the fourth quarter of 1996. We expect early European sales
to begin contributing to Biovail's sales and earnings by the end of this year,
with a much stronger impact in 1997 as more approvals are obtained and
additional licensing agreements are reached." The Company is currently
registering Tiazac(R) in the balance of the EC using the decentralized mutual
recognition procedure, a process which should be completed by the fourth quarter
of 1996.
Mr. Melnyk concluded, "Forest Laboratories' aggressive rollout of Tiazac(R)
in the U.S., initiated in late February, is being spearheaded by heavy promotion
and advertising to physicians specializing in the treatment of hypertension. Our
initial feedback is very positive; with new prescriptions being written and
filled, a trend that we anticipate will escalate rapidly in subsequent quarters.
To meet this growing demand, we are ramping up and expanding our production
capabilities in Puerto Rico and Manitoba, Canada."
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.
###
<PAGE> 15
BIOVAIL CORPORATION INTERNATIONAL
CONSOLIDATED STATEMENTS OF INCOME AND DEFICIT
(All amounts except per share data are expressed in thousands of U.S. dollars)
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------------ ------------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUE
Contract $ 574 $1,208 $4,333 $3,909
Manufacturing 6,685 4,479 7,915 4,975
Royalty and licensing 2,220 2,660 8,321 8,404
---------- ---------- ---------- ----------
9,479 8,347 20,569 17,288
---------- ---------- ---------- ----------
EXPENSES
Cost of contract revenue 461 806 2,732 3,036
Cost of goods sold 2,238 1,824 2,715 2,102
Research and product development 1,665 740 4,462 2,542
Selling, general and administrative 1,911 2,151 7,182 6,359
Royalty and commission 364 92 925 724
---------- ---------- ---------- ----------
6,639 5,613 18,016 14,763
---------- ---------- ---------- ----------
OPERATING INCOME 2,840 2,734 2,553 2,525
INTEREST INCOME (EXPENSE), net 214 (217) (99) (589)
GAIN ON LICENSING SETTLEMENT -- -- 3,617 --
GAIN ON DEBT SETTLEMENT -- -- -- 7,955
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES 3,054 2,517 6,071 9,891
PROVISION FOR INCOME TAXES 164 211 201 430
---------- ---------- ---------- ----------
NET INCOME $2,890 $2,306 $5,870 $9,461
========== ========== ========== ==========
EARNINGS PER SHARE $ 0.12 $ 0.11 $ 0.23 $ 0.43
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 24,993,000 21,850,000 24,993,000 21,850,000
========== ========== ========== ==========
</TABLE>
<PAGE> 16
BIOVAIL CORPORATION INTERNATIONAL
CONSOLIDATED BALANCE SHEETS
(All dollar amounts are expressed in thousands of U.S. dollars)
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
CURRENT
Cash and short-term deposits $24,323 $ 2,819
Trade accounts receivable 6,379 5,346
Inventories 3,868 480
Deposits and prepaid expenses 176 57
------- -------
34,746 8,702
FIXED ASSETS, net 19,910 14,182
GOODWILL, net 3,594 2,746
PRODUCT RIGHTS, net 2,617 -
------- -------
$60,867 $25,630
======= =======
LIABILITIES
CURRENT
Accounts payable $ 5,628 $ 2,864
Accrued liabilities 3,043 1,794
Income taxes payable 968 736
Deferred revenue 22,167 1,239
Amount due on acquisition - 955
Current portion of long-term debt 2,244 567
------- -------
34,050 8,155
------- -------
DEFERRED REVENUE 4,274 -
------- -------
LONG-TERM DEBT
Non-interest bearing and forgivable
interest government loans 2,019 4,717
Other 5,932 5,065
------- -------
7,951 9,782
------- -------
46,275 17,937
------- -------
SHAREHOLDERS' EQUITY
Share capital 14,489 13,415
Deficit (572) (6,442)
Cumulative translation adjustment 675 720
------- -------
14,592 7,693
------- -------
$60,867 $25,630
======= =======
</TABLE>
<PAGE> 17
[BIOVAIL LOGO]
EXHIBIT "B"
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 FIRST
QUARTER FINANCIAL RESULTS
TORONTO, Canada, April 17, 1996 --- Biovail Corporation International
(AMEX, TSE:BVF) today reported record first quarter financial results for the
period ended March 31, 1996.
Revenues for the first quarter of 1996 increased 207% to $16.9 million,
compared with $5.5 million reported for the first quarter of 1995. Operating
income rose 246% to $4.9 million in the first quarter of 1996, compared with
$1.4 million in the first quarter of 1995. Net income for the first quarter of
1996 was $4.7 million, or $0.18 per share, compared with net income of $1.3
million, or $0.05 per share in the comparable period of 1995. Weighted average
number of common shares outstanding were 25.3 million compared to 24.8 million
in 1995 (on a post-split 3-for-1 basis).
-more-
[RECYCLE LOGO]
BIOVAIL CORPORATION INTERNATIONAL
460 COMSTOCK ROAD, TORONTO, ONTARIO, CANADA M1L 4S4
TEL (416) 285-6000 FAX (416) 285-6499
<PAGE> 18
"We are extremely pleased with our strong start in 1996," stated Eugene
Melnyk, Chairman of the Board. "The substantial increase in our quarterly
revenues, net income and earnings per share was driven by sales from the formal
launch of Tiazac(R) by our U.S. marketing partner, Forest Laboratories.
Preliminary results of this launch indicate that Tiazac(R) is successfully
penetrating the once-daily diltiazem market, as evidenced by the recent
prescription data provided by IMS, a medical market research organization.
Forest Laboratories' aggressive promotion and stocking program has placed
initial quantities of Tiazac(R) in approximately 55,000 pharmacies across the
U.S."
"Tiazac(R)'s unique bioequivalence, which allows patients treated on
Cardizem CD to switch to Tiazac(R) at the nearest equivalent daily dose, has
substantially affected the number of new prescriptions written to date for our
product. Also, due to its wider dosing range and attractive price, we are
confident that Tiazac(R) will continue to gain increased market acceptance both
domestically and abroad. As recently announced, we received approval from the
Medicines Control Agency (MCA) to market all five dosage strengths of Tiazac(R)
in the UK. This marks Tiazac(R)'s first international approval," continued
Mr. Melnyk.
Mr. Melnyk concluded, "In keeping with our strategy of providing optimum
shareholder value, during the quarter we announced a 3-for-1 stock split which
took effect in January. We also strengthened our senior management team, with
the hiring of Bob Podruzny (Corporate Finance), Kenneth Cancellara (Legal),
Marie-Claire Pilon (International Marketing) and Paul Desjardins Ph.D. (Contract
Research), providing the infrastructure needed for Biovail to continue to grow
within the global pharmaceutical community."
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 --
<PAGE> 19
BIOVAIL CORPORATION INTERNATIONAL
CONSOLIDATED STATEMENTS OF INCOME
(All amounts except per share data are expressed in thousands of U.S. dollars)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1996 1995
------- -------
<S> <C> <C>
REVENUE
Contract $ 1,157 $ 1,829
Manufacturing 12,771 1,231
Royalty and licensing 2,963 2,441
------- -------
16,891 5,501
------- -------
EXPENSES
Cost of contract revenue 929 995
Cost of goods sold 5,464 477
Research and product
development 2,039 648
Selling, general and
administrative 2,943 1,638
Royalty and commission 617 329
------- -------
11,992 4,087
------- -------
OPERATING INCOME 4,899 1,414
INTEREST INCOME(EXPENSE), net 170 (106)
------- -------
INCOME BEFORE INCOME TAXES 5,069 1,308
INCOME TAXES 382 8
------- -------
NET INCOME $ 4,687 $ 1,300
======= =======
EARNINGS PER SHARE $ 0.18 $ 0.05
======= =======
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 25,343,000 24,826,000
========== ==========
</TABLE>
<PAGE> 20
BIOVAIL CORPORATION INTERNATIONAL
CONSOLIDATED BALANCE SHEETS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
-------- ------------
<S> <C> <S>
ASSETS
CURRENT
Cash and short-term deposits $ 28,431 $ 24,323
Trade accounts receivable 6,913 6,379
Inventories 5,300 3,868
Deposits and prepaid expenses 457 176
-------- --------
41,101 34,746
FIXED ASSETS, net 21,157 19,910
GOODWILL, net 3,554 3,594
PRODUCT RIGHTS, net 2,602 2,617
-------- --------
$ 68,414 $ 60,867
======== ========
LIABILITIES
CURRENT
Accounts payable $ 4,717 $ 5,628
Accrued liabilities 6,320 3,043
Income taxes payable 883 968
Deferred revenue 25,602 22,167
Current portion of long-term debt 2,833 2,244
-------- --------
40,355 34,050
-------- --------
DEFERRED REVENUE 1,560 4,274
-------- --------
LONG-TERM DEBT 7,252 7,951
-------- --------
49,167 46,275
-------- --------
SHAREHOLDERS' EQUITY
Share capital 14,528 14,489
Retained earnings (deficit) 4,115 (572)
Cumulative translation adjustment 604 675
-------- --------
19,247 14,592
-------- --------
$ 68,414 $ 60,867
======== ========
</TABLE>
<PAGE> 21
[BIOVAIL LOGO]
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/
Courtney Levi/Cindy Hintelmann
Press: Michael McMullan
Morgen-Walke Associates
(212) 850-5600
FOR IMMEDIATE RELEASE
SOROS LED INVESTOR GROUP ACQUIRES 20% BIOVAIL STAKE
FROM FOREST LABORATORIES
TORONTO, Canada, MAY 22, 1996 -- Biovail Corporation International (AMEX,
TSE:BVF) today announced that 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, has acquired all of the common
share holdings of Forest Laboratories, Inc. in Biovail.
The Company advised that all terms relating to the manufacturing and
licensing of Tiazac(R) remain in place and unchanged. However, the Option
Agreement, which concerns the Right of First Negotiation with respect to
Biovail's future products, has been amended to provide that in the event Biovail
chose to directly market certain products, either itself or through an
affiliate, Biovail will now have the right to do so, except with respect to the
generic version of Procardia XL(R), whereby Forest Laboratories Inc. will
continue to have the Right of First Negotiation, pursuant to the Option
Agreement.
Eugene Melnyk, Chairman of the Board, Biovail Corporation, commented, "We
look forward to continuing our partnership with Forest Laboratories and our
working relationship with respect to Tiazac(R), our once-daily formulation of
Diltiazem. Early results confirm the initial success of this product launch as
evidenced by continued positive prescription data indicating widespread
acceptance of Tiazac(R) in the anti-hypertensive market place."
Mr. Melnyk also stated, "Biovail's ability to now market its future
products gives the Company added flexibility in expanding its role of marketer
and distributor of its own and other products in the United States."
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.
###
[RECYCLE LOGO]
BIOVAIL CORPORATION INTERNATIONAL
460 COMSTOCK ROAD, TORONTO, ONTARIO, CANADA M1L 4S4
TEL (416) 285-6000 FAX (416) 285-6499
<PAGE> 22
[BIOVAIL LOGO]
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/
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 -
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BIOVAIL CORPORATION INTERNATIONAL
460 COMSTOCK ROAD, TORONTO, ONTARIO, CANADA M1L 4S4
TEL (416) 285-6000 FAX (416) 285-6499
<PAGE> 23
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."
- more -
<PAGE> 24
"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--
<PAGE> 25
BIOVAIL CORPORATION INTERNATIONAL
CONSOLIDATED STATEMENTS OF INCOME
(All dollar amounts except per share data
are expressed in thousands of U.S. dollars)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------- --------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
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
========== ========== ========== ==========
</TABLE>
<PAGE> 26
BIOVAIL CORPORATION INTERNATIONAL
CONSOLIDATED BALANCE SHEETS
(All dollar amounts are expressed in thousands of U.S. dollars)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
----------- ------------
(Unaudited)
<S> <C> <C>
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
======= =======
</TABLE>
<PAGE> 27
[BIOVAIL LOGO]
EXHIBIT "E"
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 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 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.
###
[RECYCLE LOGO]
BIOVAIL CORPORATION INTERNATIONAL
460 COMSTOCK ROAD, TORONTO, ONTARIO, CANADA M1L 4S4
TEL (416) 285-6000 FAX (416) 285-6499
