<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 MARCH 31, 1999 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
PART 1. FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEETS, MARCH 31, 1999 AND
DECEMBER 31, 1998.....................................................1
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED
MARCH 31, 1999 AND 1998..............................................2
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998....................3
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ....................................4
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS ............................................9
PART II. OTHER INFORMATION............................................14
(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>
MARCH 31, DECEMBER 31,
1999 1998
------------- ------------
(UNAUDITED) (AUDITED)
<S> <C> <C>
ASSETS
Current
Cash and short-term deposits $ 79,256 $ 78,279
Accounts receivable 41,383 42,768
Inventories 13,760 10,542
Executive loans (Note 2) 2,975 2,924
Deposits and prepaids 3,254 3,357
------------- ------------
140,628 137,870
LONG-TERM INVESTMENTS (Note 3) 10,055 10,055
CAPITAL 24,818 23,677
OTHER, net 27,769 28,317
------------- ------------
$ 203,270 $ 199,919
============= ============
LIABILITIES
Current
Accounts payable $ 7,319 $ 12,244
Accrued liabilities 8,147 4,129
Income taxes payable 594 1,004
Customer prepayments 13,956 4,516
Current portion of long-term debt 733 653
------------- ------------
30,749 22,546
LONG-TERM DEBT 125,836 126,182
------------- ------------
156,585 148,728
------------- ------------
SHAREHOLDERS' EQUITY
Share capital (Note 4) 20,939 19,428
Warrants 8,244 8,244
Retained earnings 18,345 24,748
Cumulative translation adjustment (843) (1,229)
------------- ------------
46,685 51,191
------------- ------------
$ 203,270 $ 199,919
============= ============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements
1
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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,
1999 1998
----------- -----------
<S> <C> <C>
REVENUE
Product Sales $ 12,562 $ 11,467
Research and development
6,717 7,844
Royalty and licensing 8,952 2,578
----------- -----------
28,231 21,889
----------- -----------
EXPENSES
Cost of goods sold 5,039 5,142
Research and development 5,324 4,029
Selling, general and administrative 6,245 4,311
----------- -----------
16,608 13,482
----------- -----------
OPERATING INCOME 11,623 8,407
INTEREST INCOME (EXPENSE), net (2,792) (68)
----------- -----------
INCOME BEFORE INCOME TAXES 8,831 8,339
PROVISION FOR INCOME TAXES 533 491
----------- -----------
NET INCOME $ 8,298 $ 7,848
=========== ===========
EARNINGS PER SHARE (Note 7) $ 0.34 $ 0.29
=========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 24,603,400 26,736,000
=========== ===========
</TABLE>
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>
THREE MONTHS ENDED
MARCH 31,
1999 1998
------------ ------------
<S> <C> <C>
NET INFLOW (OUTFLOW) OF CASH RELATED
TO THE FOLLOWING ACTIVITIES
OPERATING
Net income for the period $ 8,298 $ 7,848
Depreciation and amortization 1,489 1,164
----------- -----------
9,787 9,012
----------- -----------
Changes in non-cash operating items:
(Increase) decrease accounts receivable 1,466 (3,191)
(Increase) decrease inventory (3,030) (2,332)
(Increase) decrease deposits and prepaid expenses 103 (78)
Increase (decrease) accounts payable and accrued liabilities (383) 339
Increase (decrease) income taxes payable (386) 135
Increase (decrease) customer prepayments 9,440 4,511
----------- -----------
7,210 (616)
----------- -----------
16,997 8,396
----------- -----------
INVESTING
Additions to fixed assets, net (1,611) (1,207)
Executive stock purchase plan loans (Note 2) (52) 213
Acquisition of royalty interest - (15,000)
Long-term investments - (7,500)
----------- -----------
(1,663) (23,494)
----------- -----------
FINANCING
Acquisition of share capital (Note 4) (14,933) -
Issuance of share capital 1,424 3,660
Reduction in other long-term debt (300) (597)
Repayment of other long-term debt - 15,000
----------- -----------
(13,809) 18,063
----------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (548) 8
----------- -----------
INCREASE (DECREASE) IN CASH 977 2,973
----------- -----------
CASH, AND SHORT TERM DEPOSITS,
BEGINNING OF PERIOD 78,279 8,275
=========== ===========
CASH, AND SHORT TERM DEPOSITS,
END OF PERIOD $ 79,256 $ 11,248
=========== ===========
</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 7.
1998 Figures
Certain of the 1998 figures have been reclassified to conform to the
1999 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, 1998.
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. EXECUTIVE LOANS
Executive loans as at March 31, 1999 consist of Executive Stock
Purchase Plan ("ESPP") loans of $2,975,407 made to finance the
acquisition of shares of the Company on the open market by executive
officers. The loans which are due on December 1, 1999, are secured by
the 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 borrowing.
3. LONG-TERM INVESTMENTS
In March, 1998, the Company made a $7,543,127 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 March 31,
1999, was $5,152,658.
In July, 1998, in connection with the acquisition from Celgene
Corporation ("Celgene") of Canadian marketing and distribution rights
in respect to immediate release and pulse release formulations of
products containing d-methylphenidate hydrochloride, the
4
<PAGE> 7
Company made a $2,500,000 investment in common shares of Celgene, the
supplier of the product. The fair value of the investment at March 31,
1999 was $3,195,008.
4. SHARE CAPITAL
From January 1, 1999 to March 31, 1999, in accordance with the
Company's stock repurchase program, the Company has repurchased an
additional 371,500 common shares at a cost of $14,933,000. The excess
of the cost of the common shares acquired over the stated capital
thereof, totalling$14,701,000 has been charged to retained earnings.
5. 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 a number of such actions and the
Company is vigorously defending these suits by denying infringement of
the patents and has or will be asserting counterclaims seeking damages
for violation of the anti-trust laws of the U.S. and for tortious
interference with the Company's prospective business advantage. 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 aggregate, will have a material adverse
effect on its financial position, results of operations or cash flows.
6. SEGMENTED INFORMATION AND MAJOR CUSTOMERS
Biovail's operations consist of three segments - Product Sales,
Research and Development, and Royalty and Licensing. The segments are
determined based on several factors including customer base, the nature
of the product or service provided, delivery channels and other
factors.
The PRODUCT SALES segment covers sales of production from the Company's
Puerto Rico and Steinbach, Manitoba, facilities and sales by the
Crystaal Division.
The RESEARCH AND DEVELOPMENT segment covers all revenues generated by
the Company's integrated research and development facilities, and
comprises research and development services provided to third parties,
including IPL, and product development milestone fees.
5
<PAGE> 8
The ROYALTY AND LICENSING segment covers royalty revenues received from
licensees in respect of products for which the Company has
manufacturing, marketing and/or intellectual property rights.
The following table sets forth information regarding segment operating
income and segment assets:
<TABLE>
<CAPTION>
RESEARCH ROYALTY
THREE MONTHS ENDED PRODUCT AND DEVELOPMENT AND
MARCH 31, 1999 SALES LICENSING TOTAL
----------------------- ------------- --------------- -------------- ---------
<S> <C> <C> <C> <C>
Revenues from external
customers $ 12,562 $ 6,717 $ 6,952 $ 28,231
--------- ---------- ------- --------
Segment operating
income 3,147 942 8,753 12,842
Unallocated amounts
Selling, general and
administrative expenses
Interest (expense) income, net (1,219)
(2,792)
--------
Income before income taxes $ 8,831
========
</TABLE>
<TABLE>
<CAPTION>
RESEARCH ROYALTY
THREE MONTHS ENDED PRODUCT AND DEVELOPMENT AND
MARCH 31, 1998 SALES LICENSING TOTAL
-------------- ---------- --------------- ---------- -----
<S> <C> <C> <C> <C>
Revenues from external
customers $ 11,467 $ 7,844 $ 2,578 $ 21,889
---------- ---------- -------- --------
Segment operating
income 3,618 3,367 2,423 9,408
Unallocated amounts
Selling, general and
administrative expenses (1,001)
Interest (expense) income, net (68)
--------
Income before income taxes $ 8,339
========
</TABLE>
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
("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:
6
<PAGE> 9
a) Reconciliation of net income under Cdn. and U.S. GAAP
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31
(IN THOUSANDS EXCEPT PER SHARE DATA)
1999 1998
---- ----
<S> <C> <C>
Net income under Cdn. GAAP.................. $ 8,298 $ 7,848
U.S GAAP adjustments:
Collection of warrant subscription
receivable (i).................... (640) (147)
Reversal of previously expensed product
launch advertising costs (ii)..... 58 -
Compensation cost for employee stock
options (iii)..................... (281) (559)
--------- --------
$ 7,435 $ 7,142
========= ========
Earnings per share under U.S. GAAP
Basic.................................. $ 0.30 $ 0.27
Diluted................................ $ 0.29 $ 0.25
Weighted average number of common shares
Outstanding under U.S. GAAP
Basic.................................. 24,603 26,736
Diluted................................ 25,194 28,386
</TABLE>
(i) For the purposes of reporting under U.S. GAAP, companies are required
to write off certain product launch and advertising costs
incurred during the year. This adjustment represents the portion
of product launch and advertising costs deferred under Canadian
GAAP required to be written off under U.S. GAAP.
(ii) See Note 7 (c)
(iii) For the purposes of reporting under the U.S. GAAP, the Company
accounts for compensation expense for certain employee stock
option plans under the provisions of Accounting Principles Board
Opinion 25. No such expense is required to be determined under
Cdn. GAAP.
7
<PAGE> 10
b) Comprehensive income
Under U.S. GAAP, the following additional disclosure would be provided
pursuant to the requirements of SFAS No. 130 "Reporting Comprehensive
Income" which establishes standards for the reporting of comprehensive
income and its components:
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31
--------------------------------
Statement of comprehensive income (loss) 1999 1998
---- ----
<S> <C> <C>
Net income according to U.S. GAAP............................. $ 7,435 $ 7,142
------- -------
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment................... 386 94
Unrealized holding losses on long-term
investments............................................ (818) 0
------- -------
Other comprehensive loss...................................... (432) 94
------- -------
Comprehensive income under U.S. GAAP.......................... $ 7,003 $ 7,236
======= =======
Accumulated other
comprehensive
loss balances
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 1999 MARCH 31, 1998
------------------------------------------- -------------------------------------------
FOREIGN UNREALIZED FOREIGN UNREALIZED
CURRENCY LOSSES ON CURRENCY LOSSES ON
TRANSLATION INVESTMENTS TOTAL TRANSLATION INVESTMENTS TOTAL
----------- ----------- --------- ---------------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
Balance, beginning
of year $ (1,229) $ (877) $(2,106) $(960) $ - $(960)
Current year change 386 (818) (432) 94 94
-
-------- --------- ------- ----- ------ -----
Balance, end of year $ (843) $ (1,695) $(2,538) $(866) $ - $(866)
========= ========= ======= ===== ====== =====
</TABLE>
c) The components of shareholders' equity under U.S. GAAP are as follows:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
---------- ------------
<S> <C> <C>
Share Capital........................................ $ 20,939 $ 19,428
Warrants............................................. 8,244 8,244
Warrants subscription receivable, net................ (5,675) (6,315)
Retained earnings.................................... 17,845 26,111
Other comprehensive (loss) .......................... (2,538) (2,106)
---------- ----------
$ 38,815 $ 45,362
========== ==========
</TABLE>
8
<PAGE> 11
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 quarter of 1999 were $28,231,000 compared with
$21,889,000 in 1998. The increase was primarily due to an increase in product
sales and royalty and licensing revenues. Net income increased 5.7% to
$8,298,000 or $0.34 per share in the first quarter of 1999 compared with net
increase of $7,848,000 or $0.29 per share in 1998.
REVENUE
Product sales for the first quarter of 1999 were $12,562,000 compared to
$11,467,000 in 1998. In 1999 revenues were generated primarily on sales of
Tiazac(R) to Forest Laboratories ("Forest") for the US market, Canadian market
sales of Tiazac(R) by the Company's Crystaal Division ("Crystaal") and the
shipment of product to distributors in Canada of Crystaal's two new products
Brexidol and Retavase.
Research and development revenue from third party customers was $6,717,000 in
the first quarter of 1999, compared to $7,844,000 in the first quarter of 1998.
In 1998 the majority of revenue was based on product development activities on
behalf of Intelligent Polymers Limited ("IPL"). The decrease in research and
development revenues in 1999 compared with 1998 reflects the fact that 1998
includes milestone payments of $5,000,000 from Teva Pharmaceutical Industries
Ltd. ("Teva").
Royalty and licensing revenue, net of related expenses totaled $8,952,000 in the
first quarter of 1999 compared to $2,578,000 in 1998. The first quarter of 1999
was favorably impacted by licensing fees that relate to an undisclosed product.
COST OF GOODS SOLD AND GROSS MARGINS
The cost of goods sold as a percentage of product sales was 40% in the first
quarter of 1999 as compared to 45% in 1998. The Company's gross margins are
impacted by product sales price, product mix, manufacturing volumes and
manufacturing costs.
Gross margins of 1999 on product sales for the first quarter were 60% as
compared to 55% of for the first quarter of 1998. The increase in gross margins
is due to the impact of higher margins on new products and a higher level of
Tiazac(R) trade product shipments.
9
<PAGE> 12
RESEARCH AND DEVELOPMENT
Research and Development expenses for the first quarter of 1999 were $5,324,000
as compared to $4,029,000 in 1998. The increased spending relates to the
increased level of activity in respect to branded generic products being
developed on behalf of IPL and other activities for third party contract
development customers.
SELLING, GENERAL AND ADMINISTRATIVE
Selling general and administrative expenses increased to $6,245,000 in the first
quarter of 1999 compared to $4,311,000 in 1998. The increase is primarily a
result of increased sales and marketing expenses related to the launch of
Brexidol and Retavase by Crystaal in Canada and increased legal costs.
OPERATING INCOME
Operating income for the first quarter of 1999 was $11,623,000 compared to
$8,407,000 for the comparable period in 1998. Segment operating income for the
first quarter of 1999, before unallocated selling, general and administrative
expenses, was $12,842,000 compared to $9,408,000 in 1998. Of the 1999 total,
product sales accounted for $3,147,000 compared to $3,618,000 in the previous
year. The income relates primarily to the increased sales relating to new
product launches for the Canadian market. The research and development segment
accounted for $942,000 in 1999 compared to $3,367,000 in 1998, which included
contribution to margins in respect of milestones attained under the Teva
development agreement. Royalty and licensing activities generated segment
operating income of $8,753,000 in 1999, compared with $2,423,000 in 1998. The
increase relates to the licensing of a product developed by the Company.
INTEREST
Net interest expense was $2,793,000 in the first quarter of 1999 compared to
$68,000 in 1998. The increase is due to the interest expense associated with the
issuance in November, 1998 of the $125,000,000 US Dollar Senior Notes bearing
interest at 10 7/8%.
INCOME TAXES
Income taxes in the first quarter of 1999 were $533,000 compared to $491,000 in
1998. The Company's tax provision is reflective of the geographic sources of
income at the appropriate rates within each tax jurisdiction.
LIQUIDITY AND CAPITAL RESOURCES
The Company had cash and short-term deposits of $79,256,000 at March 31, 1999,
as compared to $78,279,000 at December 31, 1998. As at March 31, 1999 the
Company's working capital was $109,879,000 compared to $115,324,000 at December
31, 1998 which represented a working capital ratio of 4.6: 1 as compared
to 6.1: 1.
10
<PAGE> 13
Cash flow from operating activities (after adding back non-cash charges) was
$16,997,000 and $8,396,000 in 1999 and 1998 respectively. Cash requirements for
non-cash operating items increased in the first quarter of 1999 mainly due to an
increase in customer prepayments from IPL and Forest.
Investing activities in the first quarter of 1999 related primarily to fixed
asset additions of $1,611,000. In the comparable 1998 period investing
activities included the acquisition of the royalty interest from Galephar of
$15,000,000, long term investments of $7,500,000 and additions to fixed assets
of $1,207,000, offset in part by a net prepayment of executive loans of
$213,000.
Net cash used in financing activities of $13,809,000 in the first quarter of
1999 compared to net cash generated from financing activities of $18,063,000 in
1998. The 1999 cash requirement reflects the repurchase of common shares in the
amount of $14,933,000 and the repayment of long term debt of $300,000, offset in
part by the issuance of share capital on the exercise of stock options of
$1,424,000. Financing activities in the comparable 1997 period generated cash of
$18,063,000. This amount comprised of an increase of $15,000,000 in long-term
debt, $3,660,000 from the issuance of shares on the exercise of stock options
offset by prepayments of long-term debt of $597,000.
Exchange rate changes in foreign cash balances resulted in a decrease in
cash of $548,000 in the first quarter of 1999 compared to an increase in cash of
$8,000 in 1998.
Overall the company had positive cash flow of $977,000 for the three months
ended March 31, 1999 compared with $2,973,000 in 1998.
The Company's total long-term debt (including current portions thereof) was
$126,569,000 as at March 31, 1999 compared to $127,350,000 at December 31, 1998.
Long term debt is comprised of $125,000,000 U.S. Senior Notes and the balance of
a non-interest bearing government loan.
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 three months of 1999, revenue was
generated in the following proportions: 88% in U.S. dollars, 12% in Canadian
dollars. In addition, expenses were incurred in the following proportions: 63%
in U.S. dollars, and 37% 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 instruments.
Inflation has not had a material impact on the Company's operations.
11
<PAGE> 14
YEAR 2000 COMPLIANCE
The "Year 2000 issue" arises because many computer hardware and software systems
use only two digits to represent the year. As a result, these systems and
programs may not process dates beyond 1999. The Company is reliant upon
information technology primarily in the areas of financial management and
manufacturing. The Year 2000 issue has potential implications for the Company's
business applications and for its automated pharmaceutical manufacturing
processes, which may be reliant on process controllers and electronic measuring
devices.
Responsibility for overseeing the Company's response to the Year 2000 issue has
been assigned to the Chief Financial Officer. A Year 2000 project team has been
assembled and management of the project has been assigned to the Manager of
Information Technology.
As part of its Year 2000 preparedness program, the Company purchased and is now
in the final stages of installing an enterprise-wide business system to handle
financial and manufacturing applications at all of its locations. The Company
expects the system to be fully functional in mid-1999. Although the system was
represented by the vendor to be Year 2000 compliant, the Company is performing
detailed analysis of all applications to ensure compliance.
The Company's approach to Year 2000 readiness has focused on:
1 Business system hardware and software, including interfaces with third
party systems.
2. Embedded technologies related to equipment that controls laboratory
testing, pharmaceutical manufacturing, environmental and communication
equipment.
3. Business relationships with vendors and customers.
After initial identification of all areas that might be affected by the Year
2000 issue, the Company performed an impact analysis to assess the relative risk
potential for the Company's operations. Based on this, priorities for detailed
system analysis were established and planning for appropriate remedial action
was undertaken. The project team has been working with consultants and other
third parties to implement this remedial plan. The plan includes testing for the
business system and other ancillary systems and equipment, including facility
environmental systems, phone, fax and desktop computers. Testing of all systems
includes simulation of dates prior to, during and after the century change. This
effort is expected to be completed by mid-1999.
Costs.
The Company estimates that the cost of achieving Year 2000 compliance (excluding
the cost of purchasing the new business system) will be approximately $500,000.
All costs which are not deemed material, will be expensed.
12
<PAGE> 15
Risks and contingency plans.
Examples of the risks that the Year 2000 issue could pose, are as follows:
1. Business applications such as payroll, accounts payable and purchasing
could be disrupted until the systems can be corrected.
2. Manufacturing operations could be disrupted and product quality affected
through failure of environmental systems.
3. Manufacturing operations could be adversely affected through disruptions
in the provision of critical supplies and services by vendors.
4. Non-compliance on the part of a major customer might adversely effect that
customer's ability to pay for the Company's products.
The Company is in the process of developing a contingency plan, which it expects
to complete by mid-1999, to address the possibility of the Company and/or its
suppliers not being Year 2000 compliant. The plan will specifically address the
risks presented to manufacturing and product quality.
The Company believes that it is taking the necessary steps to resolve Year 2000
issues; however, there can be no assurance that one or more such failures would
not have a material adverse effect on the Company.
FORWARD-LOOKING STATEMENTS
To the extent any statements made in this annual report contain information that
is not historical, these statements are essentially forward-looking. As such,
they are subject to risks and uncertainties, including the difficulty of
predicting FDA and TPP 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 U.S.
Securities and Exchange Commission and Canadian securities authorities.
13
<PAGE> 16
BIOVAIL CORPORATION INTERNATIONAL
PART II - OTHER INFORMATION
1. OPERATIONAL INFORMATION
The press releases issued by the Company from January 1, 1999 to
filing of the SEC form 6-K are attached as the following exhibits:
a) On January 5, 1999, the Company announced that Tiazac(R) received
Ontario approval.
b) On January 19, 1999, the Company and H. Lundbeck A/S sign
agreements on Celexa, Biovail to develop controlled
release Citalopram for worldwide markets, Companies to
co-promote Celexa in Canada.
c) On February 10, 1999, the Company announced that Celexa
has been approved in Canada by Health Canada's Therapeutic
Products Program.
d) On February 25, 1999, the Company reported record 1998
fourth quarter and year end financial results.
e) On March 4, 1999, the Company announced Brexidol marketing
approval in Canada.
f) On April 28, 1999 the Company reported record 1999 first quarter
financial results.
g) On May 6, 1999, the Company announced the
re-implementation of Stock Repurchase Program
h) On May 19, 1999, the Company announced signing of an
agreement with Mylan Laboratories Inc. and a subsidiary of Teva
Pharmaceutical Industries Ltd. for the marketing of a generic
version of Verelan(R).
2. LEGAL PROCEEDINGS
For detailed information concerning legal proceedings, reference is
made to Note 16 in the financial statement contained as part hereof and
to the Annual Report on Form-20F for the year ended December 31, 1998.
14
<PAGE> 17
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
May 27, 1999 By /s/ Kenneth G. Howling
----------------------
Kenneth G. Howling
Vice President, Finance and
Chief Financial Officer
15
<PAGE> 1
EXHIBIT "A"
CONTACT: Robert Podruzny
President
Kenneth Howling
Chief Financial Officer
FOR IMMEDIATE RELEASE: (416) 285-6000
* BIOVAIL'S TIAZAC(R) RECEIVES ONTARIO FORMULARY APPROVAL *
TORONTO, Canada, January 5, 1999 - Biovail Corporation International (NYSE,
TSE:BVF) today announced through its Crystaal division that the Ontario
government has accepted Tiazac(R), its once daily extended release formulation
of diltiazem, for inclusion into the Ontario Drug Benefit Formulary ("ODBF")
reimbursement list effective December 31, 1998. The ODBF list covers full
payment of Tiazac(R) for seniors and social assistance patients in the province
of Ontario. Crystaal previously had restricted access to this market segment
which is valued at US$52 million, and represents 42% of the US$123 million
diltiazem market in Canada.
Biovail's President, Robert Podruzny, commented, "Despite having limited access
to the single largest diltiazem market segment in Canada, Tiazac(R) achieved 8%
in prescription market share since being launched in Canada in May, 1997. In
addition to the ODBF listing, Crystaal's recent in-licensing of Retavase for the
treatment of acute myocardial infarction should propel Tiazac(R)'s growth due to
the synergies of the two products and the increased marketing resources which
will be directed toward cardiologists who are the key influencers for both of
these products."
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"
CONTACT: Eugene Melnyk
Chairman of the Board
Kenneth Howling
Chief Financial Officer
FOR IMMEDIATE RELEASE (416) 285-6000
* BIOVAIL AND LUNDBECK SIGN AGREEMENTS ON CELEXA*
- BIOVAIL TO DEVELOP CONTROLLED RELEASE CITALOPRAM FOR WORLDWIDE MARKETS -
- COMPANIES TO CO-PROMOTE CELEXA IN CANADA -
Toronto, Canada, January 19, 1999 - Biovail Corporation International (NYSE,
TSE: BVF) today announced that it has entered into a multi-facetted agreement
with H. Lundbeck A/S of Copenhagen, Denmark for the development of a novel
controlled-release formulation of the anti-depressant Citalopram, marketed under
the trade mark Celexa in the U.S.A. Under the terms of the agreement, Biovail
will develop, manufacture and supply a controlled-release ("CR") version of
Citalopram for commercial exploitation by Lundbeck or its licensees worldwide.
Lundbeck will pay Biovail product development fees and an agreed supply price
upon commercialization of the Citalopram CR formulation.
In addition, Biovail and Lundbeck have entered into an agreement
whereby Crystaal, Biovail's marketing division in Canada, will co-promote the
immediate release version of Citalopram ("Celexa") in collaboration with
Lundbeck Canada Inc. Crystaal will promote Celexa to primary care physicians and
will receive co-promotion fees for contributing to the marketing of Celexa in
Canada. Regulatory approval of Celexa in Canada is expected shortly.
Citalopram, an anti-depressant, belongs to a class of drugs known as
SSRIs ("Selective Serotonin Reuptake Inhibitors"). A highly selective serotonin
reuptake inhibitor, Citalopram is the best selling anti-depressant in 13
countries, including eight in Europe, and has been introduced in more than 60
countries worldwide under several trade names including Celexa, Cipramil and
Seropram. The worldwide market for such anti-depressants is estimated to be in
excess of U.S. $7 billion annually, growing at a rate of 17%. Citalopram is a
leading anti-depressant in Europe, growing at a rate of 28% annually. Compared
to many other SSRIs, Citalopram has an improved side effect profile and a lower
incidence of drug interactions when taken concurrently with other medications.
<PAGE> 2
Eugene Melnyk, Chairman of the Board commented: "These agreements
between Lundbeck and Biovail are very significant. H. Lundbeck A/S is a premier
company involved in the development and marketing of products for the treatment
of psychiatric disorders. Biovail's novel drug delivery technologies combined
with a leading anti-depressant such as Citalopram will help position Lundbeck's
Citalopram as one of the leading anti-depressants worldwide. In addition, the
co-promotion of Celexa by Crystaal, in collaboration with Lundbeck Canada Inc.,
will significantly increase Celexa's growth and market penetration in the
Canadian market."
Clinical depression is a biologically based illness that affects more
than one in 10 Americans, and is associated with greater levels of physical and
social impairment than other chronic conditions such as asthma and heart
disease. Citalopram has been proven effective and well tolerated in clinical
trials involving more than 23,000 Citalopram-treated patients as well as by a
decade of clinical use during which more than eight million people in 64
countries have been treated with Citalopram.
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.
Crystaal, a division of Biovail Corporation International, is engaged
in the registration, marketing and distribution of branded pharmaceutical
products developed by Biovail or acquired from third parties worldwide. Crystaal
is currently marketing Tiazac(R), Biovail's once daily diltiazem formulation and
Retavase(R), for the treatment of heart attacks and has secured the exclusive
marketing rights to Brexidol(TM), a once-daily analgesic product, Corlopam(TM),
an antihypertensive agent for in-hospital use and d-methylphenidate, a chiral
preparation for the treatment of Attention Deficit Hyperactivity Disorder.
"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 "C"
CONTACT: Eugene Melnyk
Chairman of the Board
Kenneth Howling
Chief Financial Officer
FOR IMMEDIATE RELEASE (416) 285-6000
* CELEXA APPROVED IN CANADA *
Toronto, Canada, February 10, 1999 - Biovail Corporation International (NYSE,
TSE: BVF) today announced that Lundbeck's Celexa has been approved for marketing
by Health Canada's Therapeutic Products Program (TPP) for the symptomatic relief
of depression.
Biovail's Canadian marketing division, Crystaal, will co-promote Celexa
in collaboration with Lundbeck Canada Inc. Crystaal will promote Celexa to
primary care physicians.
The anti-depressant market in Canada is valued at approximately Cdn.
$430 million annually. Depression is a chronic, recurrent illness, which
afflicts about 20 to 25% of Canadians, and it is estimated that only a third of
them receive appropriate treatment.
Celexa has been proven effective and well tolerated in clinical trials
involving over 23,000 patients and has been used by over 8 million people
worldwide. Celexa is marketed in 68 countries and is currently the market leader
in 7 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.
Crystaal, a division of Biovail, is engaged in the registration,
marketing and distribution of branded pharmaceutical products developed by
Biovail or acquired from third parties worldwide. Crystaal is currently
marketing Tiazac(R) and Retavase(R), and has secured marketing rights to
Brexidol(TM), Corlopam(TM), d-methylphenidate and Celexa(R).
"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 "D"
CONTACT: Eugene Melnyk
Chairman of the Board
Kenneth G. Howling
Chief Financial Officer
(416) 285-6000
FOR IMMEDIATE RELEASE:
BIOVAIL REPORTS RECORD 1998 FOURTH QUARTER AND YEAR END
FINANCIAL RESULTS
TORONTO, Canada, February 25, 1999 - Biovail Corporation International (NYSE,
TSE:BVF) today reported record fourth quarter and year end financial results for
the period ended December 31, 1998.
Revenue for the fourth quarter of 1998 increased 40% to $36.7
million compared with $26.3 million reported for the fourth quarter of 1997. Net
income for the fourth quarter of 1998 was $14.8 million, or $0.56 per share,
compared with net income of $13.2 million, or $0.52 per share in the comparable
period of 1997.
Revenues for the year ended December 31, 1998 increased 37% to $112.8
million compared with $82.4 million in 1997. Net income increased 29% for the
year ended December 31, 1998 to $45.4 million, or $1.70 per share, compared with
net income of $35.2 million, or $1.38 per share, in 1997.
Eugene Melnyk, Chairman of the Board, commented, "Biovail made enormous progress
during 1998 in the Company's transition into a fully integrated pharmaceutical
company. Numerous product in-licensing agreements including Celexa from H.
Lundbeck A/S, Retavase from Centocor, Inc., Brexidol from the Chiesi Group,
Corlopam from Elan PLC's Neurex organization and d-methylphenidate from Celgene
Corporation will diversify and strengthen our revenue drivers for 1999 and
beyond. The approval of our first Abbreviated New Drug Application for
pentoxifylline and significant product filings with the Food and Drug
Administration including generic versions of Procardia XL, Adalat CC, Voltaren
XR and Dilacor XR during 1998, confirms the Company's ability to meet strategic
objectives and will allow the Company to significantly build upon our existing
business."
- more -
<PAGE> 2
"Our base business experienced significant growth in 1998 including
record production and shipment levels of Tiazac(R) which was fuelled by
Tiazac(R)'s approval by the FDA for the treatment of angina and a Tiazac(R)
420mg dosage strength, Ontario formulary approval for Tiazac(R) and record third
party through-put at our Contract Research Division. This tremendous year was
capped off with a development agreement including world-wide manufacturing
rights for a controlled-release version of Lundbeck's Celexa and the successful
debt offering which raised $125 million and provides Biovail with the necessary
capital to meet its corporate objectives."
The Company also announced that it had completed its Share Repurchase
Program Company purchasing a total of 2.6 million shares. The Company currently
has 24.5 million shares outstanding.
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> 3
BIOVAIL CORPORATION INTERNATIONAL
CONSOLIDATED BALANCE SHEETS
(All dollar amounts are expressed in thousands of U.S. dollars)
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1998 1997
------------- ------------
<S> <C> <C>
ASSETS
Current
Cash and short-term deposits $ 78,279 $ 8,275
Accounts receivable 42,768 33,114
Inventories 10,542 16,609
Executive loans 2,924 2,933
Deposits and prepaids 3,357 2,053
------------- ------------
137,870 62,984
Long-term investments 10,055 -
Fixed assets, net 23,677 24,172
Other assets, net 28,317 6,583
------------- ------------
$ 199,919 $ 93,739
============= ============
LIABILITIES
Current
Accounts payable 12,244 4,579
Accrued liabilities 4,129 6,002
Income taxes payable 1,004 1,013
Customer prepayments 4,516 1,840
Current portion of long-term debt 653 1,887
------------- ------------
22,546 15,321
Long-term debt 126,182 2,960
Unamortized foreign exchange gains 514 -
------------- ------------
149,242 18,281
------------- ------------
SHAREHOLDERS' EQUITY
Share capital 19,428 18,465
Warrants 8,244 8,244
Retained earnings 24,748 49,709
Cumulative translation adjustment (1,743) (960)
------------- ------------
50,677 75,458
------------- ------------
$ 199,919 $ 93,739
============= ============
</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)
<TABLE>
<CAPTION>
3 MONTHS ENDED 12 MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUE
Research and development $ 11,143 $ 12,513 $ 32,070 $ 19,559
Manufacturing 23,851 11,429 69,154 50,333
Royalty and licensing 1,707 2,363 11,612 12,487
---------- ---------- ---------- ----------
36,701 26,305 112,836 82,379
---------- ---------- ---------- ----------
EXPENSES
Research and development 5,311 2,934 17,490 14,386
Cost of manufactured goods sold 9,637 5,343 28,593 16,471
Selling, general and administrative 5,087 3,914 17,608 13,989
---------- ---------- ---------- ----------
20,035 12,191 63,691 44,846
---------- ---------- ---------- ----------
OPERATING INCOME 16,666 14,114 49,145 37,533
INTEREST EXPENSE, net (1,448) (143) (1,702) (351)
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES 15,218 13,971 47,443 37,182
PROVISION FOR INCOME TAXES 395 767 2,024 1,941
---------- ---------- ---------- ----------
NET INCOME $ 14,823 $ 13,204 $ 45,419 $ 35,241
========== ========== ========== ==========
EARNINGS PER SHARE $ 0.56 $ 0.52 $ 1.70 $ 1.38
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING
26,641,000 25,606,000 26,641,000 25,606,000
========== ========== ========== ==========
</TABLE>
<PAGE> 1
EXHIBIT "E"
CONTACT: Eugene Melnyk
Chairman of the Board
Kenneth Howling
Chief Financial Officer
(416) 285-6000
FOR IMMEDIATE RELEASE:
*BIOVAIL RECEIVES BREXIDOL(R) MARKETING APPROVAL IN CANADA*
TORONTO, Canada, March 4, 1999 - Biovail Corporation International (NYSE,
TSE:BVF) today announced that it has received marketing approval in Canada for
Brexidol(R) (piroxicam-beta-cyclodextrin) a product indicated for the treatment
of mild to severe acute pain. Brexidol will compete in the pain and
anti-inflammatory market in Canada which is valued at U.S. $150 million.
Brexidol utilizes Host-Guest chemistry, or supermolecular chemistry, whose
researchers were awarded the Nobel Prize in chemistry in 1987. Host-Guest
technology (cyclodextrin) "encapsulates" the drug molecule, thereby ensuring
rapid absorption while protecting the gastrointestinal track from any direct
exposure to the drug. Brexidol will be marketed by Biovail's Canadian marketing
division, Crystaal.
Eugene Melnyk, Chairman of the Board, commented, "Brexidol will be
launched in the near future and detailed coast to coast by our fine sales
organization. Brexidol has been marketed throughout Europe for nearly 10 years
and has an excellent safety record in over 20 million patients. Brexidol is an
excellent medication for the short-term treatment of ailments such as acute
musculoskeletal pain from sports injuries, post-operative pain, primary
dysmenorrhea, dental pain and headache."
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 their 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 "F"
CONTACT: Eugene Melnyk
Chairman of the Board
Ken Howling
Chief Financial Officer
(416) 285-6000
FOR IMMEDIATE RELEASE:
* BIOVAIL REPORTS RECORD 1999 FIRST QUARTER FINANCIAL RESULTS *
TORONTO, Canada, April 28, 1999 - Biovail Corporation International
(NYSE,TSE:BVF) today reported record first quarter financial results for the
period ended March 31, 1999.
Revenue for the first quarter of 1999 increased 29% to $28.2 million,
compared with $21.9 million reported for the first quarter of 1998. Operating
income for the quarter increased to $11.6 million, a 38% improvement over the
$8.4 million earned in the first quarter of 1998. Net income for the first
quarter of 1999 was $8.3 million, or $0.34 per share, compared to net income of
$7.8 million or $0.29 per share in 1998.
Eugene Melnyk, Chairman of the Board, commented, "We are very pleased
to have accomplished significant growth over last year in revenues and net
income. All segments of our business performed very well in contributing to our
strong financial results. As well, significant progress has been made in
furthering our product development milestones."
Mr. Melnyk concluded, "We are currently well positioned, scientifically,
operationally and financially, to leverage our business to take advantage of
accretive opportunities as they arise."
- more -
<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)
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
------------- -------------
<S> <C> <C>
ASSETS
Current
Cash and short-term deposits $ 79,256 $ 78,279
Accounts receivable 41,383 42,768
Inventories 13,760 10,542
Executive loans 2,975 2,924
Deposits and prepaids 3,254 3,357
------------- -------------
140,628 137,870
LONG-TERM INVESTMENTS 10,055 10,055
CAPITAL ASSETS, net 24,818 23,677
OTHER ASSETS, net 27,769 28,317
------------- -------------
$ 203,270 $ 199,919
============= =============
LIABILITIES
Current
Accounts payable $ 7,319 $ 12,244
Accrued liabilities 8,147 4,129
Income taxes payable 594 1,004
Customer prepayments 13,956 4,516
Current portion of long-term debt 733 653
------------- -------------
30,749 22,546
LONG-TERM DEBT 125,836 126,182
------------- -------------
156,585 148,728
------------- -------------
SHAREHOLDERS' EQUITY
Share capital 20,939 19,428
Warrants 8,244 8,244
Retained earnings 18,345 24,748
Cumulative translation adjustment (843) (1,229)
------------- -------------
46,685 51,191
------------- -------------
$ 203,270 $ 199,919
============= =============
</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
MARCH 31,
1999 1998
----------- -----------
<S> <C> <C>
REVENUE
Product Sales $ 12,562 $ 11,467
Research and development 6,717 7,844
Royalty and licensing 8,952 2,578
----------- -----------
28,231 21,889
----------- -----------
EXPENSES
Cost of goods sold 5,039 5,142
Research and development 5,324 4,029
Selling, general and administrative 6,245 4,311
----------- -----------
16,608 13,482
----------- -----------
OPERATING INCOME 11,623 8,407
INTEREST INCOME (EXPENSE), net (2,792) (68)
----------- -----------
INCOME BEFORE INCOME TAXES 8,831 8,339
PROVISION FOR INCOME TAXES 533 491
----------- -----------
NET INCOME $ 8,298 $ 7,848
=========== ===========
EARNINGS PER SHARE $ 0.34 $ 0.29
=========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 24,603,400 26,736,000
=========== ===========
</TABLE>
<PAGE> 5
BIOVAIL CORPORATION INTERNATIONAL
CONSOLIDATED STATEMENTS OF CASH FLOWS
(ALL DOLLAR AMOUNTS DATA ARE EXPRESSED IN THOUSANDS OF U.S. DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1999 1998
--------- -----------
<S> <C> <C>
NET INFLOW (OUTFLOW) OF CASH RELATED
TO THE FOLLOWING ACTIVITIES
OPERATING
Net income for the period $ 8,298 $ 7,848
Depreciation and amortization 1,489 1,164
--------- -----------
9,787 9,012
Changes in non-cash operating items 7,210 (616)
--------- -----------
16,997 8,396
--------- -----------
INVESTING
Additions to fixed assets, net (1,611) (1,207)
Executive stock purchase plan loans (52) 213
Acquisition of royalty interest - (15,000)
Long-term investments - (7,500)
--------- -----------
(1,663) (23,494)
--------- -----------
FINANCING
Acquisition of share capital (14,933) -
Issuance of share capital 1,424 3,660
Repayment of other long-term debt (300) (597)
Increase in other long-term debt - 15,000
--------- -----------
(13,809) 18,063
--------- -----------
Effect Of Exchange Rate Changes On Cash (548) 8
--------- -----------
INCREASE (DECREASE) IN CASH 977 2,973
--------- -----------
CASH AND SHORT TERM DEPOSITS,
BEGINNING OF PERIOD 78,279 8,275
--------- -----------
CASH AND SHORT TERM DEPOSITS,
END OF PERIOD $ 79,256 $ 11,248
=========== ===========
</TABLE>
<PAGE> 1
EXHIBIT "G"
CONTACT: Eugene Melnyk
Chairman of the Board
John Miszuk
Vice President, Controller
(416) 285-6000
FOR IMMEDIATE RELEASE:
TORONTO, Canada, May 6, 1999 - Biovail Corporation International (NYSE,TSE:BVF)
today announced that its Board of Directors has authorized the Company to
re-implement its Stock-Repurchase Program pursuant to which the Company will
repurchase up to 500,000 of its issued and outstanding common stock, depending
upon market conditions and other factors. The common stock will be purchased
through open market transactions on the New York Stock Exchange in accordance
with applicable rules and regulations.
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 "H"
CONTACT: Eugene Melnyk
Chairman of the Board
Robert Podruzny
President
(416) 285-6000
FOR IMMEDIATE RELEASE:
*BIOVAIL AND MYLAN SIGN GENERIC VERELAN(R) CO-MARKETING AGREEMENT*
- PRODUCT BEING SHIPPED IMMEDIATELY -
TORONTO, Canada, May 19th, 1999 - Biovail Corporation International
(NYSE,TSE:BVF) today announced that its subsidiary has entered into an
arrangement with Mylan Laboratories Inc. (NYSE:MYL) and a subsidiary of Teva
Pharmaceutical Industries Ltd. (NASDAQ: TEVIY), for the marketing of all dosages
of a generic version of Verelan(R), a calcium channel blocker used for the
treatment of hypertension. Current sales of Verelan(R) in the United States
market exceed $90 million.
The product is to be shipped immediately as a result of the parties'
agreement to take advantage of Biovail's first ANDA filer status and Mylan's
product approval on April 28, 1999. As a result of this Agreement, Teva and
Mylan will each enter the market with a generic product at an earlier date than
they would have otherwise, which will be of benefit to the patient population
who are on this medication. Each company will market and price the product
independently.
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 Companys' filings with the Securities and
Exchange commission.
