<PAGE> 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 SEPTEMBER 30, 1997 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
--- ---
<PAGE> 2
BIOVAIL CORPORATION INTERNATIONAL
QUARTERLY REPORT
INDEX
<TABLE>
<S> <C>
PART 1. FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEETS, SEPTEMBER 30, 1997 AND
DECEMBER 31, 1996.................................................... 1
CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996................ 2
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996................ 3
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS................................ 4
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS............................................ 6
PART II. OTHER INFORMATION........................................ 9
</TABLE>
(ALL DOLLAR AMOUNTS IN THIS DOCUMENT ARE EXPRESSED IN U.S. DOLLARS UNLESS
OTHERWISE INDICATED.)
<PAGE> 3
BIOVAIL CORPORATION INTERNATIONAL
CONSOLIDATED BALANCE SHEETS
(ALL DOLLAR AMOUNTS ARE EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------------------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current
Cash and short-term deposits $ 4,409 $ 4,526
Accounts receivable 33,550 10,364
Inventories 15,871 8,134
Executive loans (Note 3) 2,901 2,512
Deposits and prepaids 2,098 1,063
---------- ----------
58,829 26,599
Fixed Assets, net 24,868 24,819
Other Assets, net 7,046 7,188
---------- ----------
$ 90,743 $ 58,606
========== ==========
LIABILITIES
Current
Bank Indebtedness (Note 5) $ 10,117 $ -
Accounts payable 8,453 5,468
Accrued liabilities 4,818 1,738
Income taxes payable 562 808
Customer prepayments 1,826 6,681
Current portion of long-term debt 1,955 2,298
---------- ----------
27,731 16,993
Long-Term Debt 3,428 4,670
---------- ----------
31,159 21,663
---------- ----------
SHAREHOLDERS' EQUITY
Share capital 15,210 14,614
Retained earnings 44,749 22,712
Cumulative translation adjustment (375) (383)
---------- ----------
59,584 36,943
---------- ----------
$ 90,743 $ 58,606
========== ==========
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements
1
<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 NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUE
Research and development $ 4,887 $ 837 $ 7,046 $ 3,187
Manufacturing 10,367 15,175 38,904 43,156
Royalty and licensing 5,978 1,825 10,124 6,170
----------- ----------- ----------- -----------
21,232 17,837 56,074 52,513
----------- ----------- ----------- -----------
EXPENSES
Research and development 4,893 2,590 11,452 8,498
Cost of manufactured goods sold 2,947 6,222 11,128 17,951
Selling, general and administrative 3,350 2,608 10,075 8,880
----------- ----------- ----------- -----------
11,190 11,420 32,655 35,329
----------- ----------- ----------- -----------
OPERATING INCOME 10,042 6,417 23,419 17,184
INTEREST INCOME (EXPENSE), net (142) 75 (208) 397
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES 9,900 6,492 23,211 17,581
PROVISION FOR INCOME TAXES 491 209 1,174 831
----------- ----------- ----------- -----------
NET INCOME $ 9,409 $ 6,283 $ 22,037 $ 16,750
=========== =========== =========== ===========
EARNINGS PER SHARE (Note 6) $ 0.37 $ 0.25 $ 0.87 $ 0.66
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 25,447,000 25,352,000 25,447,000 25,352,000
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements
2
<PAGE> 5
BIOVAIL CORPORATION INTERNATIONAL
CONSOLIDATED STATEMENTS OF CASH FLOWS
(ALL DOLLAR AMOUNTS ARE EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1997 1996
-------- -------
<S> <C> <C>
NET INFLOW (OUTFLOW) OF CASH RELATED
TO THE FOLLOWING ACTIVITIES
OPERATING
Net income for the period $22,037 $16,750
Depreciation and amortization 2,188 1,538
------- -------
24,225 18,288
Change in non-cash operating items (Note 2) (30,952) (17,433)
------- -------
(6,727) 855
------- -------
INVESTING
Additions to fixed assets, net (2,005) (5,278)
Executive loans (Note 3) (389) (2,479)
Increase in other assets (250) -
------- -------
(2,644) (7,757)
------- -------
FINANCING
Issuance of share capital 708 198
Increase in long-term debt 387 847
Reduction in long-term debt (1,919) (1,878)
------- -------
(824) (833)
------- -------
EFFECT OF EXCHANGE RATE
CHANGES ON CASH (39) (600)
------- -------
DECREASE IN CASH (10,234) (8,335)
CASH, BEGINNING OF PERIOD 4,526 24,323
------- -------
(BANK INDEBTNESS) CASH, END OF PERIOD $(5,708) $15,988
======= =======
REPRESENTED BY
Cash and short-term deposits $4,409 $15,988
Bank indebtedness (Note 5) (10,117) -
------- -------
$(5,708) $15,988
======= =======
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements
3
<PAGE> 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.
Research and Product Development
Biovail's research and development revenue represents clients'
reimbursement to Biovail of costs incurred in contract research and product
development. The Company's policy is to expense all costs of research and
product development related to both costs incurred on its own behalf and on
behalf of its third party customers.
1996 Figures
Certain of the 1996 figures have been reclassified to conform to the 1997
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, 1996.
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>
Nine Months ended September 30,
(In thousands)
--------------------------------
1997 1996
---------- ----------
<S> <C> <C>
Accounts receivable $ (23,159) $ (1,324)
Inventories (7,727) (5,938)
Deposits and prepaid expenses (1,035) (584)
Accounts payable and accrued liabilities 6,071 5,930
Income taxes payable (247) 98
Customer prepayments (4,855) (15,615)
---------- ----------
$ (30,952) $ (17,433)
========== ==========
</TABLE>
4
<PAGE> 7
3. EXECUTIVE LOANS
Executive loans as at September 30, 1997 consist of Executive Stock
Purchase Plan ("ESPP") loans of $2,605,000 made to finance the acquisition of
shares of the Company on the open market by executive officers and an
additional loan of $296,000 made to an executive officer of the Company.
These loans are secured by shares of the Company owned by the executive
officers, bear interest at 1/4% over the bank prime rate, equal to the
Company's rate for borrowings, and are due on December 31, 1997.
4. LITIGATION
From time to time, the Company becomes involved in various legal matters
which it considers to be in the ordinary course of business. While the Company
is not currently able to determine the potential liability, if any, related to
such matters, the Company believes none of the matters, individually or in the
aggregate, will have a material adverse effect on its financial position.
5. BANK INDEBTEDNESS
The Company has available lines of credit of $45,000,000 for short-term
financing with a Canadian chartered bank of which $10,117,000 was utilized as
at September 30, 1997.
6. RESEARCH AND DEVELOPMENT ARRANGEMENTS
In September 1997, the Company concluded a development and license
agreement (the "Development Contract") and a services agreement with Intelligent
Polymers Limited ("IPL") a company formed by Biovail in July, 1997, whereby
Biovail will develop on IPL's behalf once-daily controlled release branded
generic versions of designated products. In October, 1997, IPL completed a
public offering of 3,737,500 units ("the Unit Offering"). Each unit comprised
one common share of IPL and one warrant to purchase one common share of Biovail.
The net proceeds to IPL of the offering amounted to approximately $69,500,000.
Beginning September 30, 1999 the units will separate and the IPL common shares
and the Biovail warrants may trade independently of each other. The warrants are
exercisable at $40.00 per share from October 1, 1999 until September 30, 2002.
The proceeds of the offering will be used by IPL primarily to make payments to
Biovail under the Development Contract. The Development Contract provides for
Biovail to conduct product development in respect of the designated products.
Such costs shall be computed with respect to internal costs incurred by Biovail
at Biovail's cost plus a 45% mark-up, consistent with contractual relationships
Biovail has with other third parties. Services provided by third parties under
contract to Biovail however, will be billed at Biovail's actual cost plus 15%.
Revenue received by the Company from IPL pursuant to the development contract
in the nine months ended September 30, 1997, included: i) an initial payment
of $3.5 million for access to and use by IPL of Biovail's proprietary
technology in connection with product development, and ii) payments of $4.5
million for product development.
5
<PAGE> 8
Biovail has an option, exercisable on Biovail's sole discretion, to purchase,
according to a pre-determined formula, all (but not less than all) of the
outstanding common shares of IPL commencing on the closing date of the Unit
Offering and ending on the earlier of (i) September 30, 2002 or (ii) the 90th
day after the date IPL provides Biovail with quarterly financial statements
showing cash or cash equivalents of less than $3 million. If the purchase
option is exercised, the purchase price calculated on a per share basis will be
as follows:
<TABLE>
<CAPTION>
Purchase Option
Exercise Price
<S> <C>
Before October 1, 2000 $39.06
On or after October 1, 2000 and on or before September 30, 2001 48.83
On or after October 1, 2001 and on or before September 30, 2002 61.04
</TABLE>
The purchase option exercise price may be paid in cash or Biovail common
shares, or any combination of the foregoing, at Biovail's sole discretion.
7. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in Canada ("Canadian GAAP") which
differ in certain significant 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:
<TABLE>
<CAPTION>
Nine Months ended September 30,
(In thousands except per share data)
1997 1996
-------------- --------------
<S> <C> <C>
Net income under Canadian GAAP $ 22,037 $ 16,750
U.S. GAAP adjustments:
Collection of warrant subscription receivable (693) -
-------------- --------------
Net Income under U.S. GAAP $ 21,344 $ 16,750
============== ==============
Earnings per share under U.S. GAAP $ 0.79 $ 0.63
============== ==============
Weighted average number of common
shares outstanding under U.S. GAAP (1) 26,880 26,751
============== ==============
</TABLE>
(1) The weighted average number of common shares outstanding for
purposes of the computation of the earnings per share data under
U.S. GAAP gives effect to the exercise of outstanding options.
Warrant Subscription Receivable
Under U.S. GAAP, the Company will record upon closing of the Unit Offering
referred to in Note 6 a credit to equity reflecting the fair value of the
Company's warrants issued pursuant to the Unit Offering in October, 1997 with
an offsetting debit to a contra-equity account entitled "Warrant Subscription
Receivable".
Further, under U.S. GAAP, cash received from IPL pursuant to the Development
Contract (see Note 6) is pro-rated between revenue and the warrant subscription
receivable. There is no similar accounting requirement under Canadian GAAP.
6
<PAGE> 9
New Accounting Standard - In February, 1997, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards No. 128 "Earnings per
Share" ("SFAS 128") which is effective for financial statements for both interim
and annual periods after December 15, 1997. SFAS No. 128 replaces the
presentation of primary earnings per share with a presentation of basic
earnings per share.
Taking into effect of the implementation of SFAS No. 128, Earnings per Share
under U.S. GAAP would be $0.84 and $0.66 for the nine months ended September 30,
1997 and 1996, respectively.
There are no differences between total shareholders' equity determined under
Canadian and U.S. GAAP at either September 30, 1997, or December 31, 1996.
7
<PAGE> 10
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 nine months ended September 30, 1997 were $56,074,000 compared
with $52,513,000 in the comparable period in 1996. The 1997 revenue increase
was primarily due to increased research and development and royalty and
licensing revenues. The increase in revenues and the impact of a sales mix
change with respect to Tiazac(R) resulted in an improvement in manufacturing
margins and net income, as described below. As a result, net income for the
first nine months of 1997 of $22,037,000 represented a 31% improvement over
net income of $16,750,000 in the comparable period in 1996.
Research and development revenue from third-party customers was $7,046,000 in
the nine months ended September 30, 1997, compared to $3,187,000 in the
comparable period in 1996. The increase in revenue was due to product
development activities undertaken on behalf of Intelligent Polymers Limited
("IPL"). IPL which commenced operation in July 1997, was formed by the Company
primarily to develop once-daily controlled release versions of selected drugs
by combining Biovail's proprietary drug delivery technologies with various drug
compounds, and ultimately commercializing such products. Biovail and IPL have
a development agreement pursuant to which Biovail conducts product development
activities on behalf of IPL. Research and development expenses for the nine
months ended September 30, 1997 were $11,452,000 as compared to $8,498,000 in
1996, The increased spending over 1996 reflects the Company's increased level
of research and development activity on its greater number of pipeline products
and the increased research and development activity for third party customers.
Manufacturing revenues of $38,904,000 were generated on sales of Tiazac(R) in
the nine months ended September 30, 1997, compared to $43,158,000 in the
comparable period in 1996. In the nine months ended September 30, 1997, U.S.
"trade sales" (sales other than sample sales) were approximately 86% of total
unit sales as compared to only 35% in the comparable period in 1996. Trade
supplies are sold at a higher price than sample sales and also have a lower
cost of manufacture due to lower packaging and labor costs, resulting in a
higher margin for trade sales. In addition, the Company launched Tiazac(R) in
Canada in 1997, accounting for approximately 20% of total manufacturing
revenues in the first nine months of 1997. Canadian sales are at a higher
margin than U.S. sales due to the direct sale by the Company's distribution
subsidiary, Crystaal Corporation ("Crystaal"), as opposed to U.S. sales, which
are made through a third-party distributor. As a result of the higher
percentage of trade sales, launch of Tiazac(R) in Canada and improved
manufacturing efficiencies, the manufacturing margin increased to $27,776,000
or 71% of revenues in the first nine months of 1997, as compared to $25,205,000
or 58% in the comparable period in 1996.
8
<PAGE> 11
Royalty and licensing revenue, net of related expenses, totaled $10,124,000 in
the nine months ended September 30, 1997, compared to $6,170,000 in the
comparable period in 1996. Included in royalty and licensing revenue in the
1997 period is a technology transfer fee of $3,500,000 charged to IPL for
access to and use of Biovail's proprietary technology to be used in the
development of IPL's products. Excluding the impact of this transfer fee, net
royalties increased 7% as compared to the first nine months of 1996 as a result
of increased Oruvail and Tiazac(R) sales in the U.S. market.
Selling, general and administrative costs were $10,075,000 in the nine months
ended September 30, 1997, an increase from $8,880,000 in the comparable period
in 1996, primarily as a result of the impact of increased levels of activity in
the Company, including sales and marketing expenses related to the launch of
Tiazac in Canada.
Operating income of $23,419,000 was achieved in the nine months ended September
30, 1997 compared to operating income of $17,184,000 in the comparable 1996
period. Canadian operations incurred operating losses of $1,355,000 in the
nine months ended September 30, 1997 compared to operating losses of $9,260,000
in the comparable period of 1996. The decrease in operating losses is due to
the impact of the launch of Tiazac in Canada in 1997. Canadian operational
losses are due to expenses incurred with respect to corporate office, sales and
marketing operations and research and development activity. Operating income
of $3,203,000 and $3,491,000 in each of the nine months ended September 30,
1997 and 1996 respectively, was earned by the Company's subsidiary in
Switzerland through royalties earned on Biovail's products. Operations in
Barbados and Puerto Rico contributed operating income of $21,571,000 in the
nine months ended September 30, 1997 compared to $22,953,000 in the comparable
period in 1996. The decline in operating income in Barbados and Puerto Rico
was due primarily to the higher level of research and development costs
incurred in the 1997 period.
LIQUIDITY AND CAPITAL RESOURCES
As at September 30, 1997, the Company's working capital was $31,098,000
compared to $9,606,000 at December 31, 1996 which represented a working capital
ratio of 2.1:1 as compared to 1.6:1 respectively.
The Company had negative cash flow of $6,727,000 in the nine months ended
September 30, 1997, compared to positive cash flow of $855,000 in the
comparable period in 1996. Cash generated from operations was $24,225,000 and
$18,288,000 in the nine months ended September 30, 1997 and 1996,
respectively. Working capital requirements in 1997 exceeded the cash flow
generated from operations primarily due to an increase in accounts receivable
related to the launch of Tiazac(R) in Canada, amounts owing from IPL relating
to research and development activities and the technology transfer fee and
increases in inventories related to raw material inventories for Tiazac(R) and
generic products' forecast production.
Although similar increases in the non-cash components of working capital
relative to operating income may occur in the future, the Company believes such
increases are temporary in nature and are not expected to have a long-term
effect on the Company's cash flow.
9
<PAGE> 12
Investing activities in the nine month period ended September 30, 1997,
related to additions to fixed assets of $2,005,000, an increase in other assets
of $250,000 and an increase in loans to executive officers of $389,000. In the
comparable 1996 nine month period investing activities included additions to
fixed assets of $5,278,000 and loans of $2,479,000 to executive officers to
finance the acquisition on the open market of shares of the Company.
In the nine months ended September 30, 1997, net long-term debt repayments were
$1,532,000 and proceeds of $708,000 were received from the issuance of common
shares on the exercise of stock options. In the comparable period in 1996, net
long-term debt repayments were $1,031,000 and proceeds of $198,000 were
received from the issuance of common shares on the exercise of stock options.
Exchange rate changes on foreign cash balances resulted in a reduction of cash
of $39,000 in the nine months ended September 30, 1997, compared to a reduction
of $600,000 in the comparable period in 1996.
As a result of the foregoing, the Company's cash net of bank indebtedness as of
September 30, 1997, was a negative $5,708,000, compared to a positive cash of
$4,526,000 and $15,988,000, at December 31, 1996 and September 30, 1996,
respectively.
The Company's total long-term debt (including current portions thereof) was
$5,383,000 as at September 30, 1997 compared to $6,968,000 at December 31, 1996
and $10,195,000 at September 30, 1996. In addition, the Company has available
lines of credit aggregating $45,000,000 for short-term financing, of which
$10,117,000 was utilized as at September 30, 1997, while none was utilized as
of December 31, 1996.
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. There can be no assurance, however, that the Company's
capital and sources of financing or its ability to obtain additional capital or
sources of financing, at acceptable terms, will be sufficient to sustain the
Company's ongoing operational requirements or its growth objectives.
The Company and its subsidiary generate revenue and expenses primarily in U.S.
and Canadian dollars. For the period ending September 30, 1997, revenue was
generated in the following proportions: 80% in U.S. dollars, 19% in Canadian
dollars and 1% in other currencies. In addition expenses were incurred in the
following proportions: 72% in U.S. dollars, and 28% in Canadian dollars. The
Company does not believe that its exposure to foreign currency exchange risk is
significant because of the relative stability of the Canadian dollar to the
U.S. dollar. The Company has not historically utilized foreign currency
hedging instructions.
INFLATION
Inflation has not had a material impact on the Company's operations.
10
<PAGE> 13
BIOVAIL CORPORATION INTERNATIONAL
PART II - OTHER INFORMATION
1. OPERATIONAL INFORMATION
The press releases issued by the Company in the 1997 third quarter are
attached as the following exhibits:
a) On July 24, 1997, the Company reported its 1997 Second Quarter
and Six Month Financial Results.
b) On August 14, 1997, the Company confirmed an analyst report
related to the expiration of the 45-day Waxman-Hatch certification
period with respect to the ANDA filing of a generic version of
Cardizem CD.
c) On August 19, 1997, the Company announced it has received
regulatory approval in ten European countries for its once daily
diltiazem formulation.
d) On September 16, 1997, the Company announced the signing of a
licensing agreement for the marketing of Viazem(R) (Tiazac(R) in
North America) in Denmark, Finland, and Sweden, with A/S GEA
Farmaceutisk Fabrick, a subsidiary of Bristol Myers Squibb.
e) On September 18, 1997 the Company and Intelligent Polymers
Limited announced the filing of a registration statement with the
Securities and Exchange Commission relating to a proposed public
offering to raise approximately U.S. $65 million.
f) On October 1, 1997, the Company and Novopharm Limited announced
the completion of a licensing agreement for the Canadian distribution
of Biovail's generic version of Cardizem CD.
g) On October 10, 1997, the Company and Intelligent Polymers
Limited announced the public offering of 3.25 million units at a
price of $20.00 per unit.
h) On October 15, 1997, the Company and Intelligent Polymers
Limited announced the completion of the public offering.
i) On October 16, 1997, the Company and Technilab Pharma Inc.
announced the signing of a licensing agreement for the marketing in
Canada, and key markets in Africa, the Middle and Far East and the
Eastern European countries of Biovail's generic versions of Trental,
Verelan and Cardizem SR.
j) On October 29, 1997, the Company reported its 1997 Third
Quarter and Nine Month Financial Results.
2. LEGAL PROCEEDINGS
For detailed information concerning legal proceedings, reference is made
to Note 4 in the financial statement contained as part hereof.
9
<PAGE> 14
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 21, 1997 By /s/ Robert A.Podruzny
---------------------
Robert A. Podruzny
Vice President, Finance and
Chief Financial Officer
10
<PAGE> 1
Exhibit "A"
[BIOVAIL LETTERHEAD]
FOR: Biovail Corporation International
APPROVED BY: Eugene Melnyk
Chairman of the Board
Bob Podruzny
Chief Financial Officer
(416) 285-6000
FOR IMMEDIATE RELEASE
BIOVAIL REPORTS RECORD 1997 SECOND QUARTER
AND SIX MONTHS FINANCIAL RESULTS
TORONTO, Canada, July 24, 1997 -- Biovail Corporation International (NYSE,
TSE:BVF) today reported second quarter and six month financial results for the
period ended June 30, 1997.
Revenues for the second quarter of 1997 were $18.5 million, compared to
$18.3 in the second quarter of 1996. Record operating income of $7.5 million
was achieved representing a 28% increase over last year's operating income of
$5.9 million. Net income for the second quarter of 1997 was $7.1 million, or
$0.28 per share, compared with net income of $5.8 million or $0.23 per share in
1996. The increase in net income was primarily due to improved manufacturing
margins as a result of the Company's successful launch of Tiazac(R) in Canada
in the quarter.
Revenues for the six months ended June 30, 1997 were $34.8 million
compared to $34.6 million in 1996. Net income of $12.6 million, or $0.50 per
share, increased by 21% over last year's net income of $10.4 million or $0.41
per share. The improvement in the 1997 six month result is primarily due to the
combination of the successful launch of Tiazac(R) in Canada in the second
quarter and a higher proportion of trade vs sample sales of Tiazac(R) in the
U.S. throughout the six month period.
-more-
[RECYCLE LOGO]
[BIOVAIL LETTERFOOT]
<PAGE> 2
Eugene Melnyk, Chairman of the Board, commented, "We are very pleased
with the continually improving financial performance of the Company that meets
or exceeds analysts' expectations. The success of Tiazac(R)'s penetration of
the U.S. diltiazem market is unquestioned, and expected further market share
gains will fuel growth of the Company in the coming quarters. The successful
launch of Tiazac(R) in Canada in the second quarter by the Company's
subsidiary, Crystaal Corporation, as well as the product's launch in the U.K.
by our marketing partner, Dupont Merck Pharmaceutical Co., significantly
broadens the geographic base for Tiazac(R)'s expected continued growth."
Mr. Melnyk concluded, "The Company is well positioned to take advantage
of future opportunities. The continuing success of Tiazac(R); the expected
success of Biovail's generic controlled release versions of Cardizem SR,
Cardizem CD, Trental and Verelan currently pending FDA approval; and the
potential of the Company's additional eight products in various stages of
development, will all contribute to the ongoing success of 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
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-
<PAGE> 3
BIOVAIL CORPORATION INTERNATIONAL
CONSOLIDATED BALANCE SHEETS
(All dollar amounts are expressed in thousands of U.S. dollars)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
----------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current
Cash and short-term deposits $ 6,774 $ 4,526
Accounts receivable 21,150 10,364
Inventories 8,968 8,134
Executive stock purchase plan loans 2,865 2,512
Deposits and prepaids 3,169 1,063
------- -------
42,927 26,599
Fixed Assets 25,232 24,819
Other Assets 7,423 7,188
------- -------
$75,582 $58,606
======= =======
LIABILITIES
Current
Bank Indebtness $ 9,332 $ -
Accounts payable 3,913 5,468
Accrued liabilities 4,909 1,738
Income taxes payable 846 808
Customer prepayments 1,173 6,681
Current portion of long-term debt 1,956 2,298
------- -------
22,130 16,993
Long-Term Debt 3,659 4,670
------- -------
25,789 21,663
------- -------
SHAREHOLDERS' EQUITY
Share capital 14,847 14,614
Retained earnings 35,340 22,712
Cumulative translation adjustment (394) (383)
------- -------
49,793 36,943
------- -------
$75,582 $58,606
======= =======
</TABLE>
<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,
1997 1996 1997 1996
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUE
Contract $ 1,419 $ 1,190 $ 2,159 $ 2,344
Manufacturing 15,247 15,160 28,537 27,901
Royalty and licensing 1,784 1,991 4,146 4,332
----------- ----------- ----------- -----------
18,450 18,341 34,842 34,577
----------- ----------- ----------- -----------
EXPENSES
Cost of contract revenue 710 950 1,194 1,876
Cost of manufactured goods sold 3,858 6,244 8,181 11,696
Research and product development 2,300 1,980 5,365 4,015
Selling, general and administrative 4,078 3,317 6,725 6,254
----------- ----------- ----------- -----------
10,946 12,491 21,465 23,841
----------- ----------- ----------- -----------
OPERATING INCOME 7,504 5,850 13,377 10,736
INTEREST INCOME (EXPENSE), net (51) 151 (66) 321
----------- ----------- ----------- ----------
INCOME BEFORE INCOME TAXES 7,453 6,001 13,311 11,057
PROVISION FOR INCOME TAXES 375 239 683 620
----------- ----------- ----------- ----------
NET INCOME $ 7,078 $ 5,762 $ 12,628 $ 10,437
=========== =========== =========== ==========
EARNINGS PER SHARE $ 0.28 $ 0.23 $ 0.50 $ 0.41
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 25,435,000 25,346,000 25,435,000 25,346,000
=========== =========== =========== ===========
</TABLE>
<PAGE> 1
Exhibit "B"
[BIOVAIL LETTERHEAD]
FOR: Biovail Corporation International
APPROVED BY: Eugene Melnyk
Chairman of the Board
Bob Podruzny
Chief Financial Officer
(416) 285-6000
FOR IMMEDIATE RELEASE
BIOVAIL CONFIRMS ANALYST REPORT
-CARDIZEM CD GENERIC WAXMAN-HATCH CERTIFICATION PERIOD EXPIRES-
TORONTO, Canada, August 14, 1997 -- Biovail Corporation International
(NYSE, TSE:BVF) today confirmed the expiration of the 45-day Waxman-Hatch
certification period with respect to its Abbreviated New Drug Application
(''ANDA'') filing of a generic version of Cardizem CD. Under the provisions of
the Waxman-Hatch legislation, Biovail notified Hoechst Marion Roussel
(''Hoechst'') as patent holder for Cardizem CD, that Biovail's ANDA filing did
not infringe upon any of Hoechst's patents relating to Cardizem CD. Hoechst has
not challenged Biovail's filing within the required 45-day time limit and
accordingly, Biovail's ANDA filing for its generic version of Cardizem CD may
now proceed through the FDA review process without the encumbrance contemplated
by the Waxman-Hatch 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
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]
<PAGE> 1
Exhibit "C"
[BIOVAIL LETTERHEAD]
FOR: Biovail Corporation International
APPROVED BY: Eugene Melnyk
Chairman of the Board
Bob Podruzny
Chief Financial Officer
(416) 285-6000
FOR IMMEDIATE RELEASE
-BIOVAIL'S TIAZAC(R) RECEIVES TEN EUROPEAN APPROVALS-
TORONTO, Canada, August 19, 1997 -- Biovail Corporation International
(NYSE, TSE:BVF) today announced that it has successfully completed the Mutual
Recognition Procedure for its once daily diltiazem product, VIAZEM(R) SR
(Tiazac(R) in North America) in Austria, Belgium, Denmark, Finland, Germany,
Ireland, Italy, Luxembourg, Sweden and The Netherlands. With the previous
approval in England, VIAZEM(R) SR can now be marketed in 11 European countries.
Efforts are ongoing to secure approval in the remaining European countries.
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
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]
<PAGE> 1
Exhibit "D"
[BIOVAIL LETTERHEAD]
FOR: BIOVAIL CORPORATION INTERNATIONAL
APPROVED BY: Eugene Melnyk
Chairman of the Board
Bob Podruzny
Chief Financial Officer
(416) 285-6000
FOR IMMEDIATE RELEASE
-BIOVAIL NAMES SCANDINAVIAN LICENSEE FOR TIAZAC(R)-
-BRISTOL MYERS UNIT A/S GEA FARMACEUTISK FABRIK TO MARKET-
TORONTO, Canada, September 16, 1997 -- Biovail Corporation International
(NYSE, TSE:BVF) today announced the signing of a licensing agreement with A/S
GEA Farmaceutisk Fabrik ("GEA"), a subsidiary of Bristol Myers Squibb, for
the marketing of Viazem(R) SR (Tiazac(R) in North America) in Denmark, Finland
and Sweden, as well as an option to market in Norway. Viazem(R) SR is the
Company's once-daily formulation of the calcium channel blocker, diltiazem,
used in the treatment of angina pectoris and hypertension.
Eugene Melnyk, Chairman of the Board, commented, "The signing of this
agreement with GEA demonstrates the continuing successful progress being made
internationally by Viazem(R) with approvals now in eleven European countries and
marketing agreements with seven major partners. We are very excited about our
prospects in these dynamic markets."
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
approvals, acceptance and demand for net 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]
<PAGE> 1
Exhibit "E"
[BIOVAIL LETTERHEAD]
FOR: Biovail Corporation International
APPROVED BY: Eugene Melnyk
Chairman of the Board
Bob Podruzny
Chief Financial Officer
(416) 285-6000
FOR IMMEDIATE RELEASE
BIOVAIL CORP. & INTELLIGENT POLYMERS TO DEVELOP
CONTROLLED RELEASE BRANDED PRODUCTS
TORONTO, Canada, September 18, 1997 -- Biovail Corporation International
("Biovail")(NYSE, TSE:BVF) and Intelligent Polymers Limited ("Polymers"), a
newly-formed corporation, today announced that they have filed a registration
statement with the Securities and Exchange Commission relating to a proposed
public offering through Donaldson, Lufkin & Jenrette Securities Corporation, SBC
Warburg Dillon Read Inc. and Lazard Freres & Co. LLC of units to raise
approximately U.S.$65 Million. Each unit will consist of one Common Share of
Polymers and one warrant to acquire a Biovail Common Share. Polymers will
receive all of the net proceeds from the offering.
Polymers was formed in July, 1997, primarily to develop once-daily
controlled release formulations of selected drug compounds currently marketed
in conventional immediate release forms or in sustained release form requiring
multiple daily dosing. Polymers' primary focus is to develop once-daily
controlled release products for drug compounds used in the treatment of chronic
illnesses such as anxiety, depression, chronic pain and diabetes.
-more-
[RECYCLE LOGO]
[BIOVAIL LETTERFOOT]
<PAGE> 2
Substantially all of the net proceeds of the offering and interest thereon
will be used to undertake product development and clinical testing, as well as
pursuing regulatory approval of selected products under a development contract
between Biovail and Polymers.
Biovail and Polymers will each have certain licensing, manufacturing and
marketing rights relating to the products to be developed under the development
contract. In addition, Biovail will have the option to acquire all (but not less
than all) of Polymers' common shares at escalating predetermined prices per
share through dates no later than September 30, 2002.
A registration statement relating to the units has been filed with the
Securities and Exchange Commission but has not yet become effective. The
securities may not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective. This communication shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such state. A written prospectus may be
obtained from Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park
Avenue, New York, New York 10172, Attention: Equity Capital Markets Group.
Biovail Corporation International is a global integrated pharmaceutical
company, engaged in the formulation, clinical testing, registration, licensing
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 risks associated with technology
and product development, risks relating to clinical development and medical
acceptance of products, changes in the healthcare marketplace, patent and
intellectual property matters, regulatory and manufacturing issues, risks
associated with competition from other companies, fluctuations in operating
results and other risks detailed from time to time in the Company's filings
with the Securities and Exchange Commission by Biovail or Polymers.
<PAGE> 1
Exhibit "F"
[BIOVAIL LETTERHEAD]
FOR IMMEDIATE RELEASE
CONTACT: Stephanie Brooks Eugene Melnyk
Public Affairs Officer Chairman of the Board
Novopharm Limited Bob Podruzny
Tel: (416) 291-8888, ext. 5404 Chief Financial Officer
Biovail Corporation International
Tel: (416) 285-60000
BIOVAIL CORPORATION AND NOVOPHARM LIMITED SIGN EXCLUSIVE
AGREEMENT TO MARKET GENERIC VERSION OF CARDIZEM CD(R) IN CANADA
TORONTO, ONTARIO -- (OCTOBER 1, 1997) -- Novopharm Limited and Biovail
Corporation International (NYSE, TSE:BVF) today announced they have entered into
an exclusive licensing agreement for the Canadian distribution of a generic
version of Cardizem CD(R), a once-daily formulation of the calcium channel
blocker diltiazem, used in the treatment of angina and hypertension. This is the
first such agreement between the two companies.
This agreement will allow Novopharm to distribute a generic version of
Cardizem CD(R) (diltiazem) throughout Canada. Novopharm will use its extensive
sales force to market the product to pharmacists in both the retail and hospital
sectors.
"This agreement adds an exceptional product to our existing product line,"
said Dr. Jacques Messier, President and Chief Operating Officer of Novopharm
Limited. "Our relationship with Biovail reinforces Novopharm's ability to adapt
to changing market needs and ensure we have the products available to answer
market demands," added Dr. Messier.
Eugene Melnyk, Chairman of the Board for Biovail Corporation International
commented, "This licensing agreement represents a tremendous opportunity for
Biovail in the Canadian market. With diltiazem annual sales in Canada in 1996 in
excess of $142 million CDN, the dynamics are very favourable for the entry of
this product."
According to Leslie Dan, Chairman and Chief Executive Officer of Novopharm
Limited, "This deal demonstrates Novopharm's ongoing commitment to diversify and
strengthen our Canadian business. It is essential that as the marketplace
develops, we continue to find unique and innovative ways to offer our customers
an extensive product line, while at the same time supporting our own research
endeavours."
<PAGE> 2
PAGE 2 OF 2
BIOVAIL CORPORATION INTERNATIONAL AND NOVOPHARM LIMITED SIGN EXCLUSIVE...
OCTOBER 1, 1997
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.
Novopharm Limited is a privately-held Canadian-based global pharmaceutical
company. Novopharm is diversified through its 13 divisions and subsidiaries
which specialize in the development and manufacture of generic and OTC
pharmaceuticals as well as leading-edge innovative research into treatments for
cancer and HIV. With an ever expanding product line in excess of 380 products,
this diversity has enabled Novopharm to remain a leader in Canada for more than
30 years. In 1996, Canadian sales were $300 million CDN and worldwide sales were
over $650 million CDN. Novopharm has a history of providing quality products at
affordable prices. This vision now continues on a global scale -- the commitment
to make a world of difference.
###
(R)Cardizem CD is a registered trademark of Hoechst Marion Roussel
"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
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.
<PAGE> 1
Exhibit "G"
[BIOVAIL LETTERHEAD]
FOR: Biovail Corporation International
APPROVED BY: Eugene Melnyk
Chairman of the Board
Bob Podruzny
Chief Financial Officer
(416) 285-6000
FOR IMMEDIATE RELEASE
BIOVAIL CORP. AND INTELLIGENT POLYMERS LTD. ANNOUNCE PUBLIC OFFERING
TORONTO, Canada, October 10, 1997 -- Biovail Corporation International
(NYSE, TSE:BVF) ("Biovail") and Intelligent Polymers Limited (AMEX:INP.U)
("Intelligent Polymers"), a newly formed Bermuda company, announced today the
public offering of 3.25 million units at a price of $20.00 per unit. Each unit
consists of one common share of Intelligent Polymers and one warrant to acquire
one Biovail common share. The units have been approved for listing on the
American Stock Exchange and will trade under the symbol "INP.U" until September
30, 1999. Thereafter, the Intelligent Polymers common shares and the warrants
will trade separately. The warrants are exercisable at anytime from October 1,
1999 until September 30, 2002 at an exercise price of $40.00. Biovail has an
exclusive option to purchase all of the issued Intelligent Polymers common
shares at fixed premiums on or before September 30, 2002.
Intelligent Polymers Limited was formed in July, 1997 to develop
once-daily controlled release versions of selected drugs which are currently
marketed only in immediate release form or in controlled release form requiring
multiple daily dosing. Substantially all of the proceeds of the offering and
interest thereon will be used to undertake clinical testing, final product
development, including regulatory approval and commercialization of products
designated under a development agreement between Intelligent Polymers and
Biovail. Donaldson, Lufkin & Jenrette Securities Corporation, Lazard Freres &
Co. LLC and SBC Warburg, Dillon Read Inc. are managing the offering. A written
prospectus may be obtained from the New York offices of each of the managers.
Intelligent Polymers and Biovail have granted the underwriter a 30 day
over-allotment option to purchase an additional 487,000 units.
-more-
[RECYCLE LOGO]
[BIOVAIL LETTERFOOT]
<PAGE> 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.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
"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
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 companys' filings with the Securities and Exchange
Commission.
<PAGE> 1
Exhibit "H"
[BIOVAIL LETTERHEAD]
FOR: Biovail Corporation International
APPROVED BY: Eugene Melnyk
Chairman of the Board
Bob Podruzny
Chief Financial Officer
(416) 285-6000
FOR IMMEDIATE RELEASE
BIOVAIL AND INTELLIGENT POLYMERS COMPLETE OFFERING
* UNDERWRITERS EXERCISE OVERALLOTMENT OPTION IN FULL *
Toronto, Canada, October 15, 1997 -- Biovail Corporation International
(NYSE, TSE:BVF) ("Biovail") and Intelligent Polymers Limited (AMEX:INP.U)
("Intelligent Polymers"), a newly formed Bermuda company, announced today the
closing of the sale of 3,737,500 units, each consisting of one common share of
Intelligent Polymers and one warrant to acquire one Biovail common share. The
units are listed on the American Stock Exchange and trade under the symbol
"INP.U." The underwriters of the offering, represented by Donaldson, Lufkin &
Jenrette Securities Corporation, Lazard Freres & Co. LLC and SBC Warburg, Dillon
Read Inc., exercised in full an over-allotment option resulting in total net
proceeds before expenses of $69,517,500.
Intelligent Polymers Limited was formed in July, 1997 to develop once-daily
release versions of selected drugs which are currently marketed only in
immediate release form or in controlled release form requiring multiple daily
dosing. Substantially all of the proceeds of the offering and interest thereon
will be used to undertake clinical testing, final product development, including
regulatory approval and commercialization of products designated under a
development agreement between Intelligent Polymers and Biovail.
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.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there by any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
"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
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 companys' filings with the Securities and Exchange
Commission.
[RECYCLE LOGO]
[BIOVAIL LETTERFOOT]
<PAGE> 1
Exhibit "I"
[BIOVAIL LETTERHEAD]
[TECHNILAB LOGO]
<TABLE>
<S> <C> <C>
FOR: Technilab Pharma Inc. FOR: Biovail Corporation International
APPROVED BY: Vincent Taillefer APPROVED BY: Eugene Melnyk
Vice-President, Finance Chairman of the Board
and Administration Bob Podruzny
(514) 433-7673 Ext. 337 Chief Financial Officer
(416) 285-6000
</TABLE>
FOR IMMEDIATE RELEASE
BIOVAIL AND TECHNILAB SIGN CANADIAN LICENSING AGREEMENT
** THREE OF BIOVAIL'S GENERIC PRODUCTS TO BE MARKETED BY TECHNILAB **
TORONTO, Canada, October 16, 1997 -- Biovail Corporation International
(NYSE, TSE:BVF) and Technilab Pharma Inc. (ME,TSE:TAB) ("Technilab") announced
today that they have signed a licensing agreement for the marketing in Canada,
as well as key markets in Africa, the Middle and Far East and the Eastern
European countries, of Biovail's generic versions of Trental (Pentoxifylline
SR), Verelan (Verapamil SR) and Cardizem SR (Diltiazem SR). These products are
used in the treatment of cardiovascular diseases and will be marketed following
regulatory approvals. Marketing in Canada is expected in early 1999.
Technilab develops, manufactures and sells a wide range of prescription
and over-the-counter products. Founded in 1974, Technilab also distributes
drugs manufactured by other pharmaceutical companies under the terms of
exclusive agreements. Headquartered in Mirabel, Quebec, the Company benefits
from highly advanced facilities, a solid scientific team and a Canada-wide
sales force.
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
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.
<PAGE> 1
Exhibit "J"
[BIOVAIL LETTERHEAD]
FOR: Biovail Corporation International
APPROVED BY: Eugene Melnyk
Chairman of the Board
Bob Podruzny
Chief Financial Officer
(416) 285-6000
FOR IMMEDIATE RELEASE
* BIOVAIL REPORTS RECORD 1997 THIRD QUARTER
AND NINE MONTH FINANCIAL RESULTS *
Toronto, Canada, October 29, 1997 -- Biovail Corporation International
(NYSE, TSE:BVF) today reported record third quarter and nine month financial
results for the period ended September 30, 1997.
Biovail's revenues for the third quarter of 1997 were $21.2 million,
compared to $17.8 in the third quarter of 1996. Net income for the third
quarter of 1997 was $9.4 million, or $0.37 per share, compared with net income
of $6.3 million, or $0.25 per share, in the third quarter of 1996.
Revenues for the nine months ended September 30, 1997 were $56.1 million
compared to $52.5 million in the comparable period of 1996. Net income for the
nine months ended September 30, 1997 was $22.0 million, or $0.87 per share,
compared to $16.8 million, or $0.66 per share in the comparable period of 1996.
"We are extremely pleased with the Company's strong performance" commented
Eugene Melnyk, Chairman of the Board. "Biovail continues to perform as expected
in meeting the Company's stated objectives. We have just completed a very
successful quarter in which three new licensing agreements were signed;
approval to market Viazem(R) (Tiazac(R) in North America) in ten additional
European countries was received;
-more-
[RECYCLE LOGO]
[BIOVAIL LETTERFOOT]
<PAGE> 2
and finally and most significantly, Biovail and Intelligent Polymers Limited
completed a public offering to fund the development of once-daily controlled
release versions of selected drugs. The Company as well, has been very active
in pursuing numerous other opportunities that are expected to contribute to our
ongoing success."
The Company also reported on behalf of Intelligent Polymers Limited
(AMEX:INP.U) that, effective October 29, 1997, at the market opening of the
American Stock Exchange, the trading symbol for the Units of Intelligent
Polymers will change from INP.U to IXP.U.
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
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 -
<PAGE> 3
BIOVAIL CORPORATION INTERNATIONAL
CONSOLIDATED BALANCE SHEETS
(ALL DOLLAR AMOUNTS ARE EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current
Cash and short-term deposits .............. $ 4,409 $ 4,526
Accounts receivable ....................... 33,550 10,364
Inventories ............................... 15,871 8,134
Executive loans ........................... 2,901 2,512
Deposits and prepaids ..................... 2,098 1,063
------- -------
58,829 26,599
Fixed Assets, net ........................... 24,868 24,819
Other Assets, net ........................... 7,046 7,188
------- -------
$90,743 $58,606
======= =======
LIABILITIES
Current
Bank indebtedness ......................... $10,117 $ --
Accounts payable .......................... 8,453 5,468
Accrued liabilities ....................... 4,818 1,738
Income taxes payable ...................... 562 808
Customer prepayments ...................... 1,826 6,681
Current portion of long-term debt ......... 1,955 2,298
------- -------
27,731 16,993
Long-Term Debt .............................. 3,428 4,670
------- -------
31,159 21,663
------- -------
SHAREHOLDERS' EQUITY
Share capital ............................... 15,210 14,614
Retained earnings ........................... 44,749 22,712
Cumulative translation adjustment ........... (375) (383)
------- -------
59,584 36,943
------- -------
$90,743 $58,606
======= =======
</TABLE>
<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 NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUE
Research and development .................. $ 4,887 $ 837 $ 7,046 $ 3,187
Manufacturing ............................. 10,367 15,175 38,904 43,156
Royalty and licensing ..................... 5,978 1,825 10,124 6,170
----------- ----------- ----------- -----------
21,232 17,837 56,074 52,513
----------- ----------- ----------- -----------
EXPENSES
Research and development .................. 4,893 2,590 11,452 8,498
Cost of manufactured goods sold ........... 2,947 6,222 11,128 17,951
Selling, general and administrative ....... 3,350 2,608 10,075 8,880
----------- ----------- ----------- -----------
11,190 11,420 32,655 35,329
----------- ----------- ----------- -----------
OPERATING INCOME ............................ 10,042 6,417 23,419 17,184
INTEREST INCOME (EXPENSE), net .............. (142) 75 (208) 397
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES .................. 9,900 6,492 23,211 17,581
PROVISION FOR INCOME TAXES .................. 491 209 1,174 831
----------- ----------- ----------- -----------
NET INCOME .................................. $ 9,409 $ 6,283 $ 22,037 $ 16,750
=========== =========== =========== ===========
EARNINGS PER SHARE .......................... $ 0.37 $ 0.25 $ 0.87 $ 0.66
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING ................. 25,447,000 25,352,000 25,447,000 25,352,000
=========== =========== =========== ===========
</TABLE>
