<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 JUNE 30, 1998 COMMISSION FILE NUMBER 001-11145
BIOVAIL CORPORATION INTERNATIONAL
(TRANSLATION OF REGISTRANT'S NAME INTO ENGLISH)
2488 DUNWIN DRIVE, MISSISSAUGA, ONTARIO L5L 1J9, CANADA
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (416) 285-6000
INDICATE BY CHECK MARK WHETHER THE REGISTRANT FILES OR WILL
FILE ANNUAL REPORTS UNDER COVER OF FORM 20-F OR FORM 40-F
FORM 20-F X FORM 40-F __
INDICATE BY CHECK MARK WHETHER FOR REGISTRANT BY FURNISHING THE INFORMATION
CONTAINED IN THIS FORM IS ALSO THEREBY FURNISHING THE INFORMATION TO THE
COMMISSION PURSUANT TO RULE 12G 3-2 (B) UNDER THE SECURITIES EXCHANGE ACT OF
1934.
YES ___ NO _X_
<PAGE> 2
BIOVAIL CORPORATION INTERNATIONAL
QUARTERLY REPORT
INDEX
<TABLE>
<S> <C>
PART 1. FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEETS, JUNE 30, 1998 AND
DECEMBER 31, 1997 ................................ 1
CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997 .. 2
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997 .. 3
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ................ 4
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS ........................ 7
PART II. OTHER INFORMATION......................... 10
</TABLE>
(ALL DOLLAR AMOUNTS IN THIS DOCUMENT ARE EXPRESSED IN U.S. DOLLARS
UNLESS OTHERWISE STATED.)
<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,
1998 1997
--------- --------
(UNAUDITED)
ASSETS
<S> <C> <C>
Current
Cash and short-term deposits .... $ 20,882 $ 8,275
Accounts receivable ............. 28,983 33,114
Inventories ..................... 18,423 16,609
Executive loans ................. 2,818 2,933
Deposits and prepaids ........... 2,302 2,053
--------- --------
73,408 62,984
Long-term investments ........... 7,500 --
Fixed Assets, net ............... 24,423 24,172
Other Assets, net ............... 20,899 6,583
--------- --------
$ 126,230 $ 93,739
========= ========
LIABILITIES
Current
Accounts payable ................ $ 5,392 $ 4,579
Accrued liabilities ............. 4,267 6,002
Income taxes payable ............ 1,470 1,013
Customer prepayments ............ 7,080 1,840
Current portion of long-term debt 1,739 1,887
--------- --------
19,948 15,321
Long-Term Debt ..................... 9,857 2,960
--------- --------
29,805 18,281
--------- --------
SHAREHOLDERS' EQUITY
Share capital ................... 21,869 18,465
Warrants ........................ 8,244 8,244
Retained earnings ............... 67,099 49,709
Cumulative translation
Adjustment ................... (787) (960)
--------- --------
96,425 75,458
--------- --------
$ 126,230 $ 93,739
========= ========
</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 SIX MONTHS ENDED
JUNE 30, JUNE 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
REVENUE
Research and development $4,109 $1,419 $11,953 $2,159
Manufacturing 17,296 15,247 28,763 28,537
Royalty and licensing 3,850 1,784 6,428 4,146
------ ------ ------- ------
25,255 18,450 47,144 34,842
------ ------ ------- ------
EXPENSES
Research and development 4,103 3,010 8,132 6,559
Cost of manufactured goods sold 6,867 3,858 12,009 8,181
Selling, general and administrative 4,143 4,078 8,454 6,725
------ ------ ------- ------
15,113 10,946 28,595 21,465
------ ------ ------- ------
OPERATING INCOME 10,142 7,504 18,549 13,377
INTEREST INCOME (EXPENSE), net (89) (51) (157) (66)
INCOME BEFORE INCOME TAXES 10,053 7,453 18,392 13,311
PROVISION FOR INCOME TAXES 510 375 1,001 683
------ ------ ------- -------
NET INCOME $9,543 $7,078 $17,391 $12,628
====== ====== ======= =======
EARNINGS PER SHARE (Note 8 ) $0.36 $0.28 $0.65 $0.50
====== ====== ======= =======
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 26,849,900 25,435,000 26,849,900 25,435,000
========== ========== ========== ==========
</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>
SIX MONTHS ENDED
JUNE 30,
1998 1997
<S> <C> <C>
NET INFLOW (OUTFLOW) OF CASH RELATED
TO THE FOLLOWING ACTIVITIES
OPERATING
Net income for the period $17,391 $12,628
Depreciation and amortization 2,346 1,431
------- --------
19,737 14,059
Change in non-cash operating items (Note 2) 6,966 (17,883)
------- --------
26,703 (3,824)
------- --------
INVESTING
Acquisition of royalty interest (Note 5) (15,000) -
Long-term investments (Note 4) (7,500) -
Additions to fixed assets, net (2,235) (1,703)
Increase in other assets (170) (495)
Executive loans (Note 3) 116 (63)
-------- --------
(24,789) (2,261)
-------- --------
FINANCING
Increase in long-term debt (Note 6) 14,706 -
Issuance of share capital 3,858 337
Reduction in long-term debt (7,840) (1,304)
-------- --------
10,724 (967)
-------- --------
EFFECT OF EXCHANGE RATE
CHANGES ON CASH (31) (32)
-------- --------
INCREASE (DECREASE) IN CASH 12,607 (7,084)
CASH, BEGINNING OF PERIOD 8,275 4,526
-------- --------
CASH, END OF PERIOD $20,882 $(2,558)
======== ========
REPRESENTED BY
Cash and short-term deposits $20,882 $6,774
Bank indebtedness - (9,332)
-------- --------
$20,882 $(2,558)
======== ========
</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 except for those described in Note 8.
1997 Figures
Certain of the 1997 figures have been reclassified to conform to the 1998
presentation.
For a full description of the other accounting policies of the Company,
reference is made to the Annual Report on Form 20-F for the year ended
December 31, 1997.
In the opinion of management, all adjustments necessary for a fair
presentation of the financial position, results of operations and cash
flows for the period presented have been made and all such adjustments are
of a normal recurring nature.
2. CHANGE IN NON-CASH OPERATING WORKING CAPITAL
<TABLE>
<CAPTION>
Six Months ended June 30,
(In Thousands)
------------------------------
1998 1997
------------- ------------
<S> <C> <C>
Accounts receivable $4,311 $(11,089)
Inventories (1,893) (834)
Deposits and prepaid expenses (249) (2,106)
Accounts payable and accrued liabilities (880) 1,615
Income taxes payable 437 38
Customer prepayments 5,240 (5,507)
------- ---------
$6,966 $(17,883)
======= =========
</TABLE>
3. EXECUTIVE LOANS
Executive loans as at June 30, 1998 consist of Executive Stock Purchase
Plan ("ESPP") loans of $2,818,000 made to finance the acquisition of
shares of the Company on the open market by executive officers. The
loans are secured by shares of the Company owned by the executive
officers, bear interest at 1/4% over the bank prime rate, which is
equal to the Company's rate for borrowings, and are due on December 1,
1998.
4
<PAGE> 7
4. LONG-TERM INVESTMENTS
In March, 1998, the Company made a $7,500,000 investment in a marketable
securities fund for a term of two years. The investment is carried at
cost, less provision to recognize any decline in value that is other than
temporary. The fair value of the investment at June 30, 1998, was
$7,543,000.
5. OTHER ASSETS
In March, 1998, the Company completed the acquisition of the royalty
interest of Galephar Puerto Rico, Inc., Limited ("Galephar") in certain
of the Company's products. The Company paid $15,000,000 to Galephar in
full satisfaction of the Company's royalty obligation on the sales of
Tiazac(R) and the Company's generic controlled release version of
Cardizem CD in the United States and Canada.
6. LONG-TERM DEBT
In March, 1998, the Company utilized a $15,000,000 revolving term bank
loan to acquire the royalty interest of Galephar (See Note 5). The loan
is secured by a general security agreement bearing interest at the bank's
London Interbank Offer Rate ("LIBOR"), plus 1 1/2% The Company may make
repayments on the loan at any time and in June, 1998, repaid $7,000,000.
7. LITIGATION
From time to time, the Company becomes involved in various legal
proceedings which it considers to be in the ordinary course of business.
The vast majority of these proceedings involve intellectual property
issues that often result in patent infringement suits brought by patent
holders upon the Company's filing of its ANDA applications. The timing of
these actions is mandated by statute and may result in a delay of FDA's
approval for such filed ANDAs until the final resolution of such actions
or the expiry of 30 months, whichever occurs earlier. The Company is
currently litigating two separate actions for alleged infringement of the
applicable patents related to the Company's filing of ANDAs for the
generic equivalent of Adalat CC and Procardia XL products. Both actions
make a technical claim of infringement and, by virtue of applicable
statutory provisions, the filing of these suits may delay approval of the
Company's ANDAs for a period of 30 months or resolutions of these patent
infringement questions, whichever occurs sooner. The Company is vigorously
defending these suits by denying infringement of the patents. In addition,
the Company has brought an action against the patent holders seeking
declaratory judgement and invalidity of the relevant patent and seeking
damages for violation of the anti-trust laws and for tortious interference
with the Company's prospective business advantage.
8. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
The financial statements of the Company have been prepared in accordance
with generally accepted accounting principles in Canada ("Cdn. GAAP") which
differ in certain respects from those applicable in the United States
("U.S. GAAP"). The material differences as they apply to the Company's
financial statements are as follows:
5
<PAGE> 8
a) Reconciliation of net income under Cdn. and U.S. GAAP
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30
(IN THOUSANDS EXCEPT PER SHARE DATA)
1998 1997
--------- -------
<S> <C> <C> <C>
Net income under Cdn. GAAP................ $17,391 $12,628
U.S GAAP adjustments:
Collection of warrant subscription
Receivable................................ (537) -
------- -------
$16,854 $12,628
------- -------
Earnings per share under U.S. GAAP
Basic $0.63 $0.50
Diluted $0.62 $0.47
Weighted average number of common shares
Outstanding under U.S. GAAP
Basic..................................... 26,850 25,435
Diluted................................... 27,189 26,891
</TABLE>
b) The components of shareholders' equity under U.S. GAAP are as follows:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
---------- ------------
<S> <C> <C>
Share Capital........................ $21,869 $18,465
Warrants............................. 8,244 8,244
Warrants subscription receivable, net (6,957) (7,494)
Retained earnings.................... 74,056 57,203
Cumulative translation adjustment.... (787) (960)
Unrealized holding gain -- long term
investment (Note 4).................. 43 0
------- -------
$96,468 $75,458
------- -------
</TABLE>
6
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(ALL DOLLAR AMOUNTS ARE EXPRESSED IN U.S. DOLLARS)
OVERVIEW
Biovail Corporation International ("Biovail" or the "Company") derives its
revenues from (i) developing and licensing oral controlled release products
using its proprietary drug delivery technologies; (ii) manufacturing such
products for sale to licensees and wholesalers; and (iii) providing
pharmaceutical contract research services to third parties.
RESULTS OF OPERATIONS
Revenues for the first six months of 1998 were $47,144,000 compared with
$34,842,000 in 1997. The increase was primarily due to increased research and
development and royalty and licensing revenues. Net income increased 38% to
$17,391,000, or $0.65 per share, in the first six months of 1998 compared with
net income of $12,628,000 or $0.50 per share in 1997.
Research and development revenue from third-party customers was $11,953,000 in
the first six months of 1998, compared to $2,159,000 in 1997. The increase in
revenue was due to product development activities undertaken on behalf of Teva
Pharmaceuticals ("Teva") and Intelligent Polymers Limited ("IPL"). Research
and development expenses for the first six months of 1998 were $8,132,000 as
compared to $6,559,000 in 1997. The increased spending over 1997 reflects the
Company's higher level of research and development activity for third party
customers.
Manufacturing revenues for the first six months of 1998 were $28,763,000
compared to $28,537,000 in 1997. In 1998 revenues were generated primarily on
sales of Tiazac(R) to Forest Laboratories ("Forest") for the U.S. market,
Canadian market sales of Tiazac(R) by the Company's subsidiary, Crystaal
Corporation ("Crystaal"), and the shipment of prelaunch product to Teva in the
first quarter. The cost of manufactured goods increased to 42% of revenue in the
first six months of 1998 as compared to 29% in 1997. This cost increase is
primarily from the one time contractual price reduction to Forest of
approximately 25% which occurred in the second quarter of 1997.
Royalty and licensing revenue, net of related expenses, totaled $6,428,000 in
the first six months of 1998, compared to $4,146,000 in 1997. Net royalties
increased 55% in 1998 as compared to 1997 as a result of increased Tiazac(R)
sales in the U.S. market and the elimination of royalty obligations of Biovail
to Galephar on sales of Tiazac(R) in the U.S. and Canada.
Selling, general and administrative expenses increased to $8,454,000 in the
first six months of 1998, compared to $6,725,000 in 1997. The increase
primarily stems from increased sales and marketing expenses related to the
launch of Tiazac(R) in Canada, the registration costs associated with Tiazac(R)
in European markets, and the hiring of key management personnel.
7
<PAGE> 10
Operating income of $18,549,000 was achieved in the first six months of 1998
compared to operating income of $13,377,000 in 1997. Canadian operations
(including Crystaal, manufacturing and contract research facilities, research
and development and corporate administrative functions), incurred operating
losses of $6,698,000 in the first six months of 1998 compared to $141,000 in
1997. The lower level of Canadian losses for the first half of 1997 was due
primarily to the significant revenues generated from Canadian launch shipments
of Tiazac(R) in May, 1997. Operating income of $2,161,000 and $2,619,000 in
each of the 1998 and 1997 periods respectively was earned by the Company's
subsidiary in Switzerland through royalties earned on Biovail products excluding
Tiazac(R). Operations in Barbados and Puerto Rico contributed operating income
of $23,086,000 in the first six months of 1998 compared to $10,899,000 in 1997.
The increase in operating income in Barbados and Puerto Rico was due primarily
to third party product development and manufacturing sales activities.
Net interest expense was $157,000 in the first six months of 1998 compared to
$66,000 in 1997.
Income taxes in the first six months of 1998 were $1,001,000 compared to
$683,000 in 1997. The tax provisions are reflective of the geographic sources
of income at appropriate rates.
LIQUIDITY AND CAPITAL RESOURCES
As at June 30, 1998, the Company's working capital was $53,460,000 compared to
$47,663,000 at December 31, 1997 which represented a working capital ratio of
3.7:1 as compared to 4.1:1 respectively.
The Company had positive cash flow from operations of $26,703,000 for the six
months ended June 30, 1998 compared to a cash flow deficiency of $3,824,000 in
1997.
Net income before non-cash charges generated $19,737,000 for the six month
period in 1998 compared with $14,059,000 in 1997. A further $6,966,000 was
generated in 1998 by a reduction in non-cash working capital items during the
period, primarily attributable to a reduction in accounts receivable and an
increase in customer prepayments. In the comparable period in 1997 an increase
in accounts receivable and a decrease in customer prepayments was responsible
for cash utilization of $17,883,000.
Investing activities in the first six months of 1998 related to the acquisition
of the royalty interest from Galephar for $15,000,000, long-term investments of
$7,500,000, and additions to fixed assets of $2,235,000. In the comparable 1997
period investing activities totalled $2,261,000 of which the majority related to
fixed assets.
Net cash was generated from financing activities of $10,724,000 in the first
six months of 1998 compared to net cash used in financing activities of
$967,000 in 1997. The 1998 cash generated was as a result of a net increase in
long-term debt of $6,866,000 and $3,858,000 received from the issuance of
common shares on the exercise of stock options. In the comparable period in
1997, cash utilization was as a result of net long-term debt repayments of
$1,304,000 offset by proceeds of $337,000 received from the issuance of common
shares on the exercise of stock options.
8
<PAGE> 11
Exchange rate changes on foreign cash balances resulted in a decrease in cash
of $31,000 in the first six months of 1998 compared to a reduction of cash of
$32,000 in 1997.
As a result of the foregoing, the Company's cash position as at June 30, 1998
was $20,882,000 compared to a cash flow deficit of $2,558,000 at June 30, 1997.
The Company's total long-term debt (including current portions thereof) was
$11,596,000 as at June 30, 1998 compared to $4,847,000 at December 31, 1997.
The Company has available lines of credit aggregating $45,000,000. As of June
30, 1998, $8,000,000, related to the acquisition of the Galephar royalty
obligation buy back, was outstanding under these lines of credit.
The Company believes it has adequate capital and sources of short-term
financing to support its ongoing operational requirements. Furthermore, the
Company believes it will be able to obtain long-term capital, if necessary, to
support its growth objectives. There can be no assurance, however, that these
financial resources will be available on acceptable terms and will be
sufficient to sustain the Company's longer term growth objectives.
The Company and its subsidiaries generate revenue and expenses primarily in
U.S. and Canadian dollars. In the first six months of 1998, revenue was
generated in the following proportions: 89% in U.S. dollars, 10% in Canadian
dollars and 1% in other currencies. In addition expenses were incurred in the
following proportions: 70% in U.S. dollars, and 30% in Canadian dollars. The
Company does not believe that its exposure to foreign currency exchange risk is
significant because of the relatively minor, and diminishing, proportion of
Canadian dollar to U.S. dollar denominated transactions. The Company has not
historically utilized foreign currency hedging instructions.
Inflation has not had a material impact on the Company's operations.
9
<PAGE> 12
BIOVAIL CORPORATION INTERNATIONAL
PART II - OTHER INFORMATION
1. OPERATIONAL INFORMATION
The press releases issued by the Company in the 1998 second quarter are
attached as the following exhibits:
a) On April 6, 1998, the Company commented on recent
court proceedings with respect to a recent ruling dissimilar
from Biovail's factual circumstances in critical aspects.
Company confirms it has intervened in relevant related
litigation.
b) On April 15, 1998, the Company applauded Court
Ruling. The Opinions in the Mova Decision support the Company
Position.
c) On April 23, 1998, the Company's subsidiary,
Crystaal Corporation, in-licensed Canadian Rights to Corlopam
from Neurex.
d) On April 29, 1998, Biovail reported record 1998
First Quarter Financial Results.
e) On May 5, 1998, the Company signed Latin American
Marketing Agreement with Glaxo Wellcome.
f) On June 23, 1998, the Company in-licenced
Canadian rights to D-Methylphenidate from Celgene.
2. LEGAL PROCEEDINGS
For detailed information concerning legal proceedings, reference is made
to Note 7 in the financial statement contained as part hereof.
10
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Biovail Corporation International
August 14, 1998 By /s/Kenneth G. Howling
Kenneth G. Howling
Vice President, Finance
and
Chief Financial Officer
11
<PAGE> 1
EXHIBIT "A"
[BIOVAIL LETTERHEAD]
FOR: Biovail Corporation International
APPROVED BY: Eugene Melnyk
Chairman of the Board
Kenneth C. Cancellara, Q.C
General Counsel
(416) 285-6000
FOR IMMEDIATE RELEASE:
* BIOVAIL COMMENTS ON RECENT COURT PROCEEDINGS *
-RECENT RULING DISSIMILAR FROM COMPANY'S FACTUAL
CIRCUMSTANCES IN CRITICAL ASPECTS-
- COMPANY CONFIRMS IT HAS INTERVENED IN RELEVANT RELATED LITIGATION -
TORONTO, Canada, April 6, 1998 - Biovail Corporation International (NYSE,
TSE: BVF) today commented on two court proceedings dealing with issues
concerning the exclusivity provisions of the Food Drug and Cosmetic Act
("FD&C") relating to generic products. The two relevant court proceedings are
Granutec vs. Genpharm et. al. and Mova vs. FDA et. al.
Biovail confirmed that the Fourth Circuit Court of Appeal's decision released
today in Granutec overturned the decision of the District Court which had
upheld FDA's "successful defense" interpretation of the exclusivity provision
of the FD&C Act. The Company confirmed its position that the facts applicable
to the parties in the Granutec case are dissimilar from Biovail's factual
circumstances in a number of critical and key aspects as they relate to
Biovail's version of its generic Cardizem CD. As a result, the Company
commented that the decision does not squarely rule on the applicability of the
exclusivity provisions relating to its filed generic Cardizem CD.
[RECYCLE LOGO]
[BIOVAIL LETTERFOOT]
<PAGE> 2
Biovail also confirmed today that on March 20, 1998, in a related Court Case it
became an Intervenor amicus curiae in Mova v. FDA et. al. at the District of
Columbia Court of Appeal level. The Court of Appeal in Mova has accepted for
filing Biovail's submission, as it specifically relates to the filing of its
generic version of Cardizem CD, is considering Biovail's position, and is
expected ultimately to rule on Biovail's specific circumstances in the context
of determining all the issues in that Appeal. The most crucial and
differentiating fact is that, unlike other ANDA submissions, Biovail was not
sued for patent infringement.
Biovail reaffirmed its position that any interpretation that does not take into
account the built-in abuses and unfairness to legitimate ANDA non-infringing
filers when determining the applicability or otherwise of the 180-day
exclusivity set forth in the FD&C Act is inappropriate and will be litigated
vigorously by the Company.
Biovail Corporation International is an international full-service
pharmaceutical company, engaged in the formulation, clinical testing,
registration and manufacture of drug products utilizing advanced drug delivery
technologies.
"Safe Harbor" statement under the Private Securities Litigation Reform Act
of 1995.
To the extent any statements made in this release contain information that
is not historical, these statements are essentially forward looking and are
subject to risks and uncertainties, including the difficulty of predicting FDA
and TPD approvals, acceptance and demand for new pharmaceutical products, the
impact of competitive products and pricing, new product development and launch,
reliance on key strategic alliances, availability of raw materials, the
regulatory environment, fluctuations in operating results and other risks
detailed from time to time in the company's filings with the Securities and
Exchange Commission.
<PAGE> 1
EXHIBIT "B"
[BIOVAIL LETTERHEAD]
CONTACT: Kenneth C. Cancellara Q.C.
Senior Vice President
General Counsel
Eugene Melnyk
Chairman of the Board
FOR IMMEDIATE RELEASE: (416) 285-6000
* BIOVAIL APPLAUDS COURT RULING*
OPINIONS IN MOVA DECISION SUPPORT COMPANY POSITION
TORONTO, Canada, April 15, 1998 - Biovail Corporation International (NYSE,
TSE: BVF) commented on yesterday's decision and opinions expressed by the
District of Columbia Court of Appeal on Mova vs. FDA et al dealing with the
exclusivity provisions of the Food, Drug and Cosmetic Act relating to generic
products.
The Court of Appeal opined on Biovail's specific circumstances, the most
crucial of which, unlike other applicants in Mova vs. FDA et al and Granutec
vs. Genpharm et al, is that Biovail was not sued for patent infringement when
it submitted its Paragraph IV Certification related to its generic version of
Cardizem CD. Biovail, who intervened in the Mova litigation and submitted an
amicus curiae brief, confirmed that the Court of Appeals' decision upholding
the lower court decision relates only to those applicants who have been sued
after Certification. In the opinion of the Court, the FDA is encouraged to
address the issue of a meritorious or non-litigated subsequent applicant
through appropriate regulations or otherwise. The Company therefore
anticipates that the FDA review of Biovail's ANDA for a generic version of
Cardizem CD will proceed pursuant to the mandate provided in Section 505 (j)
(B) (5) (iii) of the Food, Drug and Cosmetic Act.
Biovail Corporation International is an international full-service
pharmaceutical company, engaged in the formulation, clinical testing,
registration and manufacture of drug products utilizing advanced drug delivery
technologies.
"Safe Harbor" statement under the Private Securities Litigation Reform Act
of 1995.
To the extent any statements made in this release contain information that
is not historical, these statements are essentially forward looking and are
subject to risks and uncertainties, including the difficulty of predicting FDA
and TPD approvals, acceptance and demand for new pharmaceutical products, the
impact of competitive products and pricing, new product development and launch,
reliance on key strategic alliances, availability of raw materials, the
regulatory environment, fluctuations in operating results and other risks
detailed from time to time in the company's filings with the Securities and
Exchange Commission.
[RECYCLE LOGO]
[BIOVAIL LETTERFOOT]
<PAGE> 1
EXHIBIT "C"
[BIOVAIL LETTERHEAD]
CONTACT: Eugene Melnyk
Chairman of the Board
Kenneth Howling
Chief Financial Officer
Rolf Reininghaus
President
Crystaal Corporation
FOR IMMEDIATE RELEASE: (416) 285-6000
* BIOVAIL'S CRYSTAAL IN-LICENSES CANADIAN RIGHTS TO CORLOPAM FROM NEUREX *
TORONTO, Canada, April 23, 1998 - Biovail Corporation International (NYSE,
TSE: BVF) today announced that its wholly owned subsidiary, Crystaal
Corporation ("Crystaal"), has entered into a licensing agreement with Neurex
for the marketing of Corlopam (fenoldopan) in Canada. Corlopam is indicated for
the in-hospital management of hypertension when emergency reduction in blood
pressure is required. Corlopam is the first of a new pharmacological class of
acute care cardiovascular drugs with a novel mechanism of action.
Corlopam has been approved by the FDA and was launched commercially in the
United States in January, 1998. Crystaal anticipates filing a New Drug
Submission with the Therapeutic Products Directorate (T.P.D.) in the second
half of this year, with approval expected in late 1999 or early 2000.
Rolf Reininghaus, President of Crystaal, commented "Corlopam is the first
in a series of acute care products Crystaal is contemplating to in-license.
Corlopam will enhance the visibility of Crystaal in hospitals and with leading
and influential cardiologists in Canada. It will also provide a positive
contribution to earnings. In addition, Corlopam is currently being
investigated for additional indications which could provide opportunities for
the further use of this medication."
Biovail Corporation International is an international full-service
pharmaceutical company, engaged in the formulation, clinical testing,
registration and manufacture of drug products utilizing advanced drug delivery
technologies.
"Safe Harbor" statement under the Private Securities Litigation Reform Act of
1995.
To the extent any statements made in this release contain information that
is not historical, these statements are essentially forward looking and are
subject to risks and uncertainties, including the difficulty of predicting FDA
and TPD approvals, acceptance and demand for new pharmaceutical products, the
impact of competitive products and pricing, new product development and launch,
reliance on key strategic alliances, availability of raw materials, the
regulatory environment, fluctuations in operating results and other risks
detailed from time to time in the company's filings with the Securities and
Exchange Commission.
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<PAGE> 1
EXHIBIT "D"
[BIOVAIL LETTERHEAD]
CONTACT: Eugene Melnyk
Chairman of the Board
Ken Howling
Chief Financial Officer
(416) 285-6000
FOR IMMEDIATE RELEASE:
* BIOVAIL REPORTS RECORD 1998 FIRST QUARTER FINANCIAL RESULTS *
TORONTO, Canada, April 29, 1998 - Biovail Corporation International
(NYSE,TSE:BVF) today reported record first quarter financial results for the
period ended March 31, 1998.
Revenue for the first quarter of 1998 increased 34% to $21.9 million,
compared with $16.4 million reported for the first quarter of 1997. Net income
for the first quarter of 1998 was $7.9 million, or $0.29 per share, a 41%
increase over net income of $5.6 million or $0.22 per share in the comparable
period of 1997.
Eugene Melnyk, Chairman of the Board, commented, "Our first quarter
results demonstrate the Company's focus on continually growing its business,
both scientifically and financially. A number of important milestones were
achieved in the quarter including the ANDA filings with the FDA of controlled
release generic versions of Adalat CC and Procardia XL; the buyout of royalty
obligations related to future U.S. and Canadian sales of Tiazac and the
Company's generic version of Cardizem CD; and four new licensing agreements for
the distribution of Tiazac in Italy, Argentina, Brazil and Australia. Crystaal
Corporation, Biovail's wholly-owned Canadian subsidiary, in-licensed two new
products for Canada including Brexidol, used in the treatment of pain commonly
associated with sports injuries and dysmenorrhea, and Corlopam, used for the
in-hospital management of hypertension. Finally, Tiazac, currently holding
approximately 14 1/2% market share of once-daily diltiazem new prescriptions,
was approved by the FDA for chronic stable angina in the quarter, positioning
the Company to further improve its diltiazem market share, particularly in the
managed care segment.
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<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.
"Safe Harbor" statement under the Private Securities Litigation Reform Act of
1995.
To the extent any statements made in this release contain information that
is not historical, these statements are essentially forward looking and are
subject to risks and uncertainties, including the difficulty of predicting FDA
and TPD approvals, acceptance and demand for new pharmaceutical products, the
impact of competitive products and pricing, new product development and launch,
reliance on key strategic alliances, availability of raw materials, the
regulatory environment, fluctuations in operating results and other risks
detailed from time to time in the Company's filings with the Securities and
Exchange Commission.
- Tables Follow -
<PAGE> 3
BIOVAIL CORPORATION INTERNATIONAL
CONSOLIDATED BALANCE SHEETS
(ALL DOLLAR AMOUNTS ARE EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
----------- ------------
(UNAUDITED)
ASSETS
<S> <C> <C>
Current
Cash and short-term deposits $11,248 $8,275
Accounts receivable 36,359 33,114
Inventories 18,981 16,609
Executive loans (Note 3) 2,720 2,933
Deposits and prepaids 2,132 2,053
-------- -------
71,440 62,984
Long-term investments (Note 4) 7,500 -
Fixed Assets, net 24,680 24,172
Other Assets, net (Note 5) 21,215 6,583
-------- -------
$124,835 $93,739
======== =======
LIABILITIES
Current
Accounts payable 7,189 4,579
Accrued liabilities 3,724 6,002
Income taxes payable 1,146 1,013
Customer prepayments 6,352 1,840
Current portion of long-term debt 1,791 1,887
-------- -------
20,202 15,321
Long-term Debt (Note 6) 17,483 2,960
-------- -------
37,685 18,281
-------- -------
SHAREHOLDERS' EQUITY
Share capital 22,215 18,465
Warrants 8,244 8,244
Retained earnings 57,557 49,709
Cumulative translation adjustment (866) (960)
-------- -------
87,150 75,458
-------- -------
$124,835 $93,739
======== =======
</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
MARCH 31,
1998 1997
-------- --------
<S> <C> <C>
REVENUE
Research and development $ 7,844 $ 740
Manufacturing 11,467 13,290
Royalty and licensing 2,578 2,362
------ ------
21,889 16,392
------ ------
EXPENSES
Research and development 4,029 3,549
Cost of manufactured goods sold 5,142 4,323
Selling, general and administrative 4,311 2,647
------ ------
13,482 10,519
------ ------
OPERATING INCOME 8,407 5,873
INTEREST INCOME (EXPENSE), net (68) (15)
------ ------
INCOME BEFORE INCOME TAXES 8,339 5,858
PROVISION FOR INCOME TAXES 491 308
------ ------
NET INCOME $ 7,848 $ 5,550
====== ======
EARNINGS PER SHARE (Note 8) $0.29 $0.22
====== ======
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 26,736,000 25,430,000
========== ==========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE> 1
EXHIBIT "E"
[BIOVAIL LETTERHEAD]
CONTACT: Eugene Melnyk
Chairman of the Board
Kenneth Howling
Chief Financial Officer
(416) 285-6000
FOR IMMEDIATE RELEASE:
* BIOVAIL SIGNS LATIN AMERICAN MARKETING AGREEMENT WITH
GLAXO WELLCOME *
TORONTO, Canada, May 5, 1998 - Biovail Corporation International (NYSE,
TSE: BVF) today announced that it has signed a licensing agreement with Glaxo
Wellcome S.A. for the marketing of Biovail's controlled release generic version
of Trental(R), (Pentoxifylline) in Argentina, Brazil and Mexico. Trental(R) is
prescribed for the treatment of chronic peripheral arterial disease and
generates annual sales in excess of $52 million in Latin America. Glaxo
Wellcome has an option to market the product in seven additional Latin American
markets.
Eugene Melnyk, Chairman of the Board, commented, "Biovail continues to
exploit its capability of successfully licensing its products in International
markets. Latin America is currently one of the fastest growing pharmaceutical
markets and Glaxo Wellcome's presence in Latin America is strong. The market
dynamics are favorable and launch of the product is anticipated in the first
half of 1999."
Glaxo Wellcome is a research based company whose people are committed to
fighting disease by bringing innovative medicines and services to patients
throughout the world and the healthcare providers that serve them.
Biovail Corporation International is an international full-service
pharmaceutical company, engaged in the formulation, clinical testing,
registration and manufacture of drug products utilizing advanced drug delivery
technologies.
"Safe Harbor" statement under the Private Securities Litigation Reform Act of
1995.
To the extent any statements made in this release contain information that
is not historical, these statements are essentially forward looking and are
subject to risks and uncertainties, including the difficulty of predicting FDA
and TPD approvals, acceptance and demand for new pharmaceutical products, the
impact of competitive products and pricing, new product development and launch,
reliance on key strategic alliances, availability of raw materials, the
regulatory environment, fluctuations in operating results and other risks
detailed from time to time in the company's filings with the Securities and
Exchange Commission.
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<PAGE> 1
EXHIBIT "F"
[BIOVAIL LETTERHEAD]
CONTACT: Eugene Melnyk
Chairman of the Board
Kenneth Howling
Chief Financial Officer
Rolf Reininghaus
President
Crystaal Corporation
(416) 285-6000
FOR IMMEDIATE RELEASE:
*BIOVAIL IN-LICENCES CANADIAN RIGHTS TO D-METHYLPHENIDATE FROM CELGENE*
TORONTO, Canada, June 23, 1998 -- Biovail Corporation International (NYSE, TSE:
BVF) today announced that it has entered into a licensing agreement with
Celgene Corporation (NASDAQ: CELG) for the exclusive marketing rights to
d-methylphenidate (d-MPH) in Canada. Crystaal Corporation, a wholly owned
subsidiary of Biovail, intends to market d-MPH for use in the treatment of
Attention Deficit-Hyperactivity Disorder (ADHD).
d-MPH is the pure and active form of the marketed raecemic version of
methylphenidate, offering advantages such as reduced doses, diminished
metabolic load and the possibilities of significant reductions in adverse
effects and abuse potential that tend to be associated with the use of the
raecemic form. Crystaal Corporation ("Crystaal") anticipates filing a New Drug
Submission for d-MPH with the Therapeutic Products Directorate (TPD) during the
course of next year.
Rolf Reininghaus, President of Crystaal, commented "due to the growing
awareness and recognition of ADHD in children by the public and the medical
community, coupled with the growth of diagnoses in adults, the market for
therapies aimed at this condition is expected to grow in Canada to U.S.$50 to
$100 million by the year 2000 and beyond. Crystaal plans to become the market
leader in this segment with the introduction of d-MPH."
-- more --
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<PAGE> 2
Concurrent with the licensing agreement, Biovail has entered into a Stock
Purchase Agreement whereby Biovail will purchase U.S.$2.5 million of newly
issued Celgene Corporation stock.
Biovail Corporation International is an international full-service
pharmaceutical company, engaged in the formulation, clinical testing,
registration and manufacture of drug products utilizing advanced drug delivery
technologies.
"Safe Harbor" statement under the Private Securities Litigation Reform Act of
1995.
To the extent any statements made in this release contain information that
is not historical, these statements are essentially forward looking and are
subject to risks and uncertainties, including the difficulty of predicting FDA
and TPD approvals, acceptance and demand for new pharmaceutical products, the
impact of competitive products and pricing, new product development and launch,
reliance on key strategic alliances, availability of raw materials, the
regulatory environment, fluctuations in operating results and other risks
detailed from time to time in the company's filings with the Securities and
Exchange Commission.
