As filed with the Securities and Exchange Commission on July 7, 2000
Registration No. 333-36256
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 2
TO
FORM F-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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Biovail Corporation
(Exact name of Registrant as specified in its charter)
Ontario Not Applicable
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or organization) Number)
2488 Dunwin Drive
Mississauga, Ontario
Canada, L5L 1J9
(Address and telephone number of Registrant's principal executive offices)
CT Corporation System
111 Eighth Avenue
New York, New York 10011
(212) 894-8940
(Name, address and telephone number of agent for service)
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Copy to:
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Kenneth C. Cancellara, Esq. Roger Andrus, Esq. Alison J. Youngman, Esq.
2488 Dunwin Drive Cahill Gordon & Reindel Stikeman Elliot
Mississauga, Ontario 80 Pine Street Commerce Court West, Suite 5300
Canada, L5L 1J9 New York, New York Toronto, Ontario
(905) 608-8008 (212) 701-3000 Canada M5L 1B9
(416) 869-5500
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box./ /
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to
Section 8(a), may determine.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
PROSPECTUS
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Biovail Corporation
88,338 Shares
Common Shares
(no par value)
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Biovail Corporation is registering the transfer by Salomon Smith Barney
("Salomon") of 88,338 common shares, no par value, that were issued by us to
Salomon in a transaction exempt from registration under the Securities Act of
1933, as amended, in connection with the exercise of certain options (the
"Options") issued by our subsidiary Fuisz Technologies Ltd. (now Biovail
Technologies Ltd.).
Our common shares are listed and traded on the NYSE and TSE under the
symbol "BVF."
This investment involves risks. See "Risk Factors" beginning on page 4.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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This prospectus is dated July 7, 2000.
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TABLE OF CONTENTS
Page
AVAILABLE INFORMATION.........................................................1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE...............................1
FORWARD LOOKING STATEMENTS....................................................2
THE COMPANY...................................................................3
RISK FACTORS..................................................................4
USE OF PROCEEDS...............................................................9
DIVIDEND POLICY...............................................................9
DESCRIPTION OF CAPITAL STOCK.................................................10
SELLING SHAREHOLDER..........................................................12
PLAN OF DISTRIBUTION.........................................................12
LEGAL MATTERS................................................................12
EXPERTS......................................................................12
INFORMATION NOT REQUIRED IN THE PROSPECTUS.................................II-1
SIGNATURES.................................................................II-4
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell the common shares only in
jurisdictions where offers and sales are permitted. The information contained in
this prospectus is accurate only as of the date of this prospectus, regardless
of the time of delivery of this prospectus or of any sale of the common shares.
In this prospectus, "Biovail," the "Company," the "Registrant," "we," "us,"
and "our" refer to Biovail Corporation, an Ontario, Canada corporation.
CURRENCY TRANSLATION
We report our financial statements in U.S. dollars, while the currency of
measurement for our operations varies depending upon location. Unless otherwise
indicated, references to dollars or "$" are to U.S. dollars and references to
"Cdn$" are to Canadian dollars.
TRADEMARKS
Biovail, the Biovail word logo, Tiazac(R), Viazem and Crystaal are all
trademarks of Biovail which are registered in Canada, the United States and/or
other jurisdictions. Intelligent Polymers is a trademark of Intelligent Polymers
Limited, a Bermuda corporation.
All other product names referred to in this document are the property of
their respective owners.
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AVAILABLE INFORMATION
We are subject to the informational requirements of the 1934 Act, and in
accordance therewith we file reports and other information with the Commission.
Reports, proxy and information statements, and other information filed by us,
can be inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at certain of
its Regional Offices at Seven World Trade Center, 13th Floor, New York, N.Y.
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL
60661. Copies of such material can be obtained at prescribed rates from the
Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549 and by accessing the Commission's Web site, http://www.sec.gov. The
public may obtain information on the operation of the Public Reference Room by
calling the Commission at (800) SEC-0330. Certain of our securities are listed
on the New York Stock Exchange (the "NYSE"), and reports, proxy statements and
other information concerning us can be inspected at the offices of such
Exchange, 20 Broad Street, New York, N.Y. 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by us with the Securities and Exchange
Commission are incorporated herein by reference as of their respective dates of
filing and shall be deemed to be a part hereof:
1. Our annual report on Form 20-F for the year ended December 31, 1999,
filed with the Commission on April 19, 2000, and our amended annual
report on Form 20-F/A, filed with the Commission on May 3, 2000;
2. Our report of foreign issuer on Form 6-K, filed with the Commission on
April 19, 2000;
3. Our report of foreign issuer on Form 6-K, filed with the Commission on
May 3, 2000;
4. Our report of foreign issuer on Form 6-K, filed with the Commission on
May 25, 2000;
5. Our report of foreign issuer on Form 6-K, filed with the Commission on
May 30, 2000; and
6. Our report of foreign issuer on Form 6-K, filed with the Commission on
June 6, 2000.
All documents filed by us pursuant to Sections 13(a), 13(c), 14, or 15(d)
of the Securities Exchange Act of 1934, as amended (the "1934 Act") subsequent
to the date of this prospectus and before the termination of the offering shall
be deemed to be incorporated by reference and a part of this prospectus from the
date such documents are filed. We may incorporate by reference any reports filed
by us on Form 6-K by identifying on such forms that they are being incorporated
by reference into this Registration Statement.
For purposes of this prospectus, any statement in a document incorporated
or deemed incorporated by reference is modified or superseded to the extent that
a statement in this prospectus, or in any subsequently filed document which is
or is deemed to be incorporated by reference, modifies or supersedes it. Any
statement so modified or superseded is not, except as so modified or superseded,
to constitute a part of this prospectus.
We will provide without charge to each person, including any beneficial
owner, to whom a copy of this prospectus has been delivered, on the written or
oral request of any such person, a copy of any or all documents referred to
above which have been or may be incorporated by reference in this prospectus
(not including exhibits to such incorporated information that are not
specifically incorporated by reference into such information). Requests for such
copies should be directed to us at the following address: Biovail Corporation,
2488 Dunwin Drive, Mississauga, Ontario, L5L 1J9, Attention: Kenneth Howling,
Vice President and Chief Financial Officer, telephone number: (416) 285-6000.
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FORWARD LOOKING STATEMENTS
In this prospectus, we have made forward-looking statements that are
subject to risks and uncertainties. Forward looking statements include
statements concerning possible or assumed future results of operations included:
o in statements about the benefits that we may achieve as a result of
the merger with Biovail Technologies Ltd. (formerly Fuisz Technologies
Ltd.), or about other effects of the merger or the future development
of Biovail;
o in statements before, after or including the words "may," "will,"
"could," "should," "believe," "expect," "future," "anticipate,"
"intend," "plan," "estimate," or "continue" or similar expressions;
and
o in other statements about matters that are not historical facts.
Various risks and uncertainties may cause actual results to differ
materially from the results that these statements express or imply. For
instance, some of the important factors that could cause our actual results to
differ materially include:
o costs or difficulties in integrating Biovail Technologies are greater
than expected or involve the loss of key personnel resulting in an
inability to capitalize on Biovail Technologies' research, development
and marketing capabilities to the degree contemplated by us;
o the failure to successfully develop, commercialize and launch new
products in a timely manner;
o the difficulty of predicting FDA and TPD approvals;
o fluctuations in operating results;
o competitive pressures and pricing in the health care industry;
o risks associated with technology and product development;
o availability of raw materials;
o risks relating to clinical development and medical acceptance of new
pharmaceutical products;
o changes in the health care marketplace;
o reliance on key strategic alliances; and
o patent and intellectual property matters, regulatory and manufacturing
issues.
Please do not place undue reliance on these forward-looking statements,
which speak only as of the date of this prospectus.
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THE COMPANY
We are an international, fully-integrated pharmaceutical company
specializing in the development of drugs utilizing advanced controlled-release,
rapid dissolve, enhanced absorption and taste masking technologies. Our
proprietary technologies are used to develop products which are either (1)
generically equivalent to existing once-daily branded products or (2) branded
products that improve upon conventional multiple daily dose immediate-release
forms of existing products by providing the therapeutic benefits of
controlled-release drug delivery. As a fully-integrated company, we control all
facets of the drug development process from formulation development to clinical
testing, manufacturing and obtaining regulatory approval. This integrated
approach results in operational synergies, flexibility and cost efficiencies. In
Canada, we market our products directly, while in the rest of the world we
market our products through strategic licensing partners. We develop
controlled-release formulations which are manufactured by us or by others under
license for the branded and generic market segments. We do not engage in basic
research to discover new chemical entities. We are based in Ontario, Canada and
our common shares are listed and traded on the New York Stock Exchange and The
Toronto Stock Exchange under the symbol "BVF." On July 6, 2000, our closing
price was $58.875 per common share.
Biovail was established under the Business Corporations Act (Ontario) on
March 29, 1994 as a result of the amalgamation of Trimel Corporation and our
then subsidiary, Biovail Corporation International. Our head and principal
office is located at 2488 Dunwin Drive, Mississauga, Ontario, L5L 1J9, and our
telephone number is (416) 285-6000.
Enforceability of Civil Liabilities Under United States Federal Securities
Laws
We are a corporation in Ontario, Canada. Most of our directors, officers
and controlling persons, as well as certain of the experts named herein, reside
outside the United States and all or a substantial portion of the assets of such
persons and of Biovail are located outside the United States. Consequently, it
may be difficult or impossible for investors to effect service of process within
the United States upon us or such persons, or to realize against them upon
judgments of courts of the United States predicated upon civil liabilities under
the federal securities laws of the United States. There is doubt as to the
enforceability in Canada against us or any of our directors and officers or
experts named herein who are not residents of the United States in original
actions or in actions for enforcement of judgments rendered by United States
courts, of civil liabilities predicated solely on United States federal
securities laws. In addition, investors should not assume that courts of Canada
(1) would enforce judgments of United States courts obtained in actions against
Biovail in the United States or such persons predicated upon the civil liability
provisions of the U.S. federal securities laws or the securities or blue sky
laws of any state within the United States or (2) would enforce, in original
actions, liabilities against us or such persons predicated upon the U.S. federal
securities laws or any such state securities or blue sky laws.
We irrevocably appointed CT Corporation System as our agent to receive
service of process solely in actions against us arising out of or in connection
with the U.S. federal securities laws or out of violations of such laws in any
federal court or state court in New York, New York, relating to the transactions
covered by the offering.
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RISK FACTORS
Before you invest in the common shares, you should consider carefully the
following factors, in addition to the other information contained in this
prospectus.
The pharmaceutical industry is highly competitive and is subject to rapid and
significant technological change which could render our technologies and
products obsolete and uncompetitive.
Our products face intense competition from conventional forms of drug
delivery and from controlled-release drug delivery systems developed, or under
development, by other pharmaceutical companies. We compete with companies in the
United States and abroad, including major pharmaceutical and chemical companies,
specialised contract research organisations, research and development firms,
universities and other research institutions. Some of our competitors are also
licensees (or potential licensees) of our products. Many of our competitors have
greater financial resources and marketing capabilities than we do, and they may
be less leveraged. Some of our competitors have greater experience than we do in
clinical testing and human clinical trials of pharmaceutical products and in
obtaining FDA and other regulatory approvals. Our competitors may succeed in
developing technologies and products that are more effective or cheaper to use
than any which we may develop or license. These developments could render our
technologies and products obsolete or uncompetitive, which would have a material
adverse effect on our business and financial results.
Our business is subject to limitations imposed by government regulations.
The cost of complying with governmental regulation can be substantial.
Governmental authorities in the United States and Canada and comparable
authorities in foreign countries also regulate the research and development,
manufacture, testing and safety of controlled-release products. The regulations
applicable to our existing and future products may change. There can be long
delays in obtaining required clearances from regulatory authorities in any
country after applications are filed. Government agencies in the United States,
Canada and other countries in which we carry on business regulate pharmaceutical
products intended for human use. Regulations require extensive clinical trials
and other testing and government review and final approval before we can market
these products.
Requirements for approval vary widely from country to country outside of
the United States and Canada. Whether or not approved in the United States or
Canada, regulatory authorities in other countries must approve a product prior
to the commencement of marketing the product in those countries. The time
required to obtain any such approval may be longer or shorter than in the United
States or Canada.
Any failure or delay in obtaining regulatory approvals could adversely
affect the marketing of any products we develop and therefore our business,
results of operations, financial condition and cash flows.
We are currently dependent on a particular product and several customers.
If a new drug were developed that was significantly more effective in the
treatment of hypertension or angina than Tiazac(R), currently our most
significant product, or if the medical industry determined that another
pre-existing product was significantly more effective in the treatment of
hypertension or angina, the result could be a significant reduction in Tiazac(R)
sales. This could have a material adverse effect on our business, results of
operations, financial condition and cash flows. Furthermore, the three-year
marketing exclusivity period for Tiazac(R) has expired and one generic drug
manufacturer has submitted an Abbreviated New Drug Application ("ANDA") for a
generic version of Tiazac(R). Under current law, if its ANDA is approved, the
generic manufacturer may be able to begin marketing in the first quarter of 2001
or earlier in the event that such generic manufacturer should be found
ultimately not to have infringed upon our patent. This may adversely affect
Tiazac(R)'s market share and may reduce the price at which Tiazac(R) could be
sold and could therefore have a
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material adverse effect on our business, results of operations, financial
condition and cash flows. Sales of Tiazac(R) pursuant to agreements with Forest
Laboratories, Inc. ("Forest") accounted for approximately 41.7% of our total
revenues for the year ended December 31, 1999. Our total revenues from
Tiazac(R), including sales by Crystaal in Canada, accounted for approximately
43.8% of our total revenues in the year ended December 31, 1999.
Research and development services rendered to Intelligent Polymers and Teva
Pharmaceutical Industries Ltd. (together with its affiliates "Teva") accounted
for approximately 21.4% of our total revenues for the year ended December 31,
1999.
There is uncertainty regarding our patents and proprietary technology and patent
protection is unpredictable.
Competitors may have filed patent applications, or hold issued patents,
relating to products or processes competitive with those we are developing. Our
patent applications for a product may not be approved. The patents of our
competitors may impair our ability to do business in a particular area. Others
may independently develop similar products or duplicate any of our unpatented
products. While we have not routinely sought patents on our controlled-release
technology, we do have the exclusive right to the patented technology for
Tiazac(R). Our success will depend, in part, on our ability in the future to
obtain patents, protect trade secrets and other proprietary information and
operate without infringing on the proprietary rights of others.
Historically, we have relied on trade secrets, know-how and other
proprietary information as well as requiring our employees and other vendors and
suppliers to sign confidentiality agreements. However, these confidentiality
agreements may be breached, and we may not have adequate remedies for any
breach. Others may independently develop substantially equivalent proprietary
information. Third parties may otherwise gain access to our proprietary
information.
There has been substantial litigation in the pharmaceutical industry
concerning the manufacture, use and sale of new products that are the subject of
conflicting patent rights. When we file an ANDA for a generic drug, we are
required to certify to the FDA that any patent which has been listed with the
FDA as covering the branded product has expired, the date any such patent will
expire, or that any such patent is invalid or will not be infringed by the
manufacture, sale or use of the new drug for which the application is submitted.
Approval of an ANDA is not effective until each listed patent expires, unless
the applicant certifies that the patents at issue are not infringed or are
invalid and so notifies the patent holder and the holder of the branded product
New Drug Application ("NDA"). A patent holder may challenge a notice of
non-infringement or invalidity by suing for patent infringement within 45 days
of receiving notice. Such a challenge would prevent FDA approval for a period
which ends 30 months after the receipt of notice, or sooner if an appropriate
court rules that the patent is invalid or not infringed. From time to time, in
the ordinary course of business, we face such challenges.
The expense of litigation, whether or not we are successful, could have a
material adverse effect on our business, results of operations, financial
condition and cash flows. Such lawsuits may be brought and the ultimate outcome
of such litigation, if commenced, could have a material adverse effect on our
business, results of operations, financial condition and cash flows. Regardless
of FDA approval, should anyone commence a lawsuit with respect to any alleged
patent infringement by us, whether because of the filing of an ANDA or
otherwise, the uncertainties inherent in patent litigation make the outcome of
such litigation difficult to predict.
There is no assurance that we will continue to be successful in our licensing
and marketing operations.
Except in Canada, our products are marketed by third parties by way of
license agreements or otherwise. Such third-party arrangements may not be
successfully negotiated in the future. Any such arrangements may not be
available on commercially reasonable terms. Even if acceptable and timely
marketing arrangements are
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available, the products we develop may not be accepted in the marketplace. Even
if such products are initially accepted, sales may thereafter decline.
Additionally, our clients or marketing partners may make important marketing and
other commercialisation decisions with respect to products which we develop,
without our input. As a result, many of the variables that may affect revenues
and net income are not exclusively within our control.
We are not assured of successful development of our product pipeline.
We have nineteen products at various stages of development or which are not
yet marketed and have filed ANDAs relating to four of these products with the
FDA, one of which (Adalat CC) has been tentatively approved. FDA approval may
not be granted for all or any of these products and we may not be successful in
filing NDAs or ANDAs for the remaining fifteen products with the FDA.
We depend on key scientific and managerial personnel for our continued success.
Much of our success to date has resulted from the particular scientific and
management skills of personnel available to us. If these individuals were not
available, we might not be able to attract or retain employees with similar
skills. In particular, our success to date in developing new products has
resulted from the activities of a core group of research scientists. The
continued availability of this group is important to our ongoing success.
We must successfully integrate Fuisz and any business or products we acquire in
the future.
On November 12, 1999 we completed the acquisition of Fuisz, which we have
renamed Biovail Technologies Ltd. Our combination with Fuisz involves the
integration of separate companies that have previously operated independently.
The process of combining the companies may be disruptive to our businesses.
In addition, we may pursue product or business acquisitions that could
complement or expand our business. However, there can be no assurance that we
will be able to identify appropriate acquisition candidates in the future. If an
acquisition candidate is identified, there can be no assurance that we will be
able to successfully negotiate the terms of any such acquisition, finance such
acquisition or integrate such acquired product or business into our existing
products and business. Furthermore, the negotiation of potential acquisitions
could divert management's time and resources, and require significant resources
to consummate. If we consummate one or more significant acquisitions through the
issuance of common shares, holders of our common shares could suffer significant
dilution of their ownership interests.
The success of the strategic investments we make depends upon the performance of
the companies we invest in, which is uncertain.
Economic, governmental, industry and internal company factors outside our
control affect each of the companies we may invest in. If these companies do not
succeed, the value of our assets and the market price of our common shares could
decline. Some of the material risks relating to the companies we may invest in
include:
o the ability of these companies to successfully develop and obtain
necessary governmental approvals for the products which serve as the
basis for our investments,
o the ability of competitors to develop similar or more effective
products, making the drugs developed by the companies we invest in
difficult or impossible to market,
o the ability of the companies we invest in to adequately secure patents
for their products and protect their proprietary information,
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o the ability of these companies to enter the marketplace without
infringing upon competitors' patents,
o the ability of these companies to remain technologically competitive,
and
o the dependence of these companies upon key scientific and managerial
personnel.
We will have limited or no control over the resources that any company we
invest in may devote to developing the products we collaborate with them for.
Any company that we invest in may not perform as expected. These companies may
breach or terminate their agreements with us or otherwise fail to conduct
product discovery and development activities successfully or in a timely manner.
If any of these events occurs, it could have a material adverse effect on our
business.
Our business may be adversely affected by environmental laws and regulations.
We may incur substantial costs to comply with such requirements. In
addition, we may discover currently unknown environmental problems or
conditions. We are subject to extensive federal, state, provincial and local
environmental laws and regulations which govern the discharge, emission,
storage, handling and disposal of a variety of substances that may be used in or
result from our operations. Environmental laws or regulations (or their
interpretation) may become more stringent in the future. Any such event could
have a material adverse effect on our business. We believe we are not currently
using any hazardous materials in the manufacture of our products.
Our common shares are subject to market price volatility.
Market prices for the securities of pharmaceutical and biotechnology
companies, including our own, have historically been highly volatile, and the
market has from time to time experienced significant price and volume
fluctuations that are unrelated to the operating performance of particular
companies. Factors such as fluctuations in our operating results, the aftermath
of our public announcements, concern as to safety of drugs, and general market
conditions, can have an adverse effect on the market price of our common shares.
Our ability to obtain third-party reimbursement for the cost of products and
related treatment may not be adequate.
Our ability to successfully commercialise our products and product
candidates, if FDA approval is obtained, depends in part on whether appropriate
reimbursement levels for the cost of the products and related treatments are
obtained from government authorities and private health insurers and other
organizations, such as HMOs and MCOs.
Third-party payors increasingly challenge pricing of pharmaceutical
products. In addition, the trend toward managed health care in the United
States, the growth of organisations such as HMOs and MCOs and legislative
proposals to reform health care and government insurance programs could
significantly influence the purchase of pharmaceutical products, resulting in
lower prices and a reduction in product demand. Such cost containment measures
and health care reform could affect our ability to sell our products and may
have a material adverse effect on our business, results of operations and
financial condition.
Uncertainty exists about the reimbursement status of newly approved
pharmaceutical products. Reimbursement in the United States or foreign countries
may not be available for some of our products. Any reimbursement granted may not
be maintained or limits on reimbursement available from third-party payors may
reduce the demand for, or negatively affect the price of, those products. These
issues could have a material adverse effect on our business, results of
operations and financial condition. We are unable to predict if
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additional legislation or regulation impacting the health care industry or
third-party coverage and reimbursement may be enacted in the future, or what
effect such legislation or regulation would have on our business.
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USE OF PROCEEDS
We did not receive any of the proceeds from the issuance of the common
shares in connection with the exercise of the Options. Biovail Technologies Ltd.
will receive $3,050,098 in connection with the exercise of Options. These
proceeds will be used for working capital and general corporate purposes, which
may include the acquisition of additional products or technologies or other
strategic investments.
PRICE RANGE OF COMMON SHARES
Our common shares are traded on the NYSE under the symbol "BVF" and on The
Toronto Stock Exchange ("TSE") under the symbol "BVF." The table below sets
forth the high and low sale prices for our common shares on the NYSE and the TSE
during the periods indicated. All sales prices below have been adjusted to
reflect our two-for-one stock split effected December 31, 1999. The reported
last sale price of the common shares on July 6, 2000 on the NYSE was $58.875 and
on the TSE was Cdn$87.35.
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Price Range of Common Shares
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New York Stock Exchange The Toronto Stock Exchange
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High Low High Low
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Year Ending 2000:
1st Quarter.......................... $71.50 $38.50 Cdn$104.00 Cdn$ 55.00
2nd Quarter.......................... 56.875 39.13 84.35 56.55
3rd Quarter (through July 6, 2000)... 60.69 55.38 90.50 81.40
Year Ending 1999:
1st Quarter.......................... $21.66 $17.28 Cdn$ 33.00 Cdn$ 25.53
2nd Quarter.......................... 25.56 16.19 37.25 23.93
3rd Quarter.......................... 29.50 23.91 44.25 34.85
4th Quarter.......................... 46.88 25.44 67.90 37.35
Year Ended 1998:
1st Quarter.......................... $24.47 $16.75 Cdn$ 34.83 Cdn$ 23.88
2nd Quarter.......................... 23.45 15.00 33.50 22.38
3rd Quarter.......................... 17.38 12.13 26.50 18.48
4th Quarter.......................... 18.91 10.88 29.00 16.13
Year Ended 1997:
1st Quarter.......................... $14.94 $10.62 Cdn$ 20.13 Cdn$ 14.23
2nd Quarter.......................... 16.31 10.44 23.00 14.50
3rd Quarter.......................... 15.06 12.72 21.50 17.73
4th Quarter.......................... 19.53 13.31 28.23 16.73
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DIVIDEND POLICY
We have not paid cash dividends on our common shares, and at this time we
intend to continue this policy for the foreseeable future in order to retain
earnings for the development and growth of our business. Our dividend policy
will be reviewed periodically depending on our financial position, capital
requirements, general business conditions and on other factors.
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DESCRIPTION OF CAPITAL STOCK
The following includes information concerning our common shares, based on
Canadian law and a summary of certain provisions of our Articles of Amalgamation
("Articles") and by-laws, each as amended. This information and summary do not
purport to be complete and are qualified in their entirety by reference to the
full Articles of Amalgamation.
General
As a result of the filing of articles of amendment on December 31, 1999,
our authorized capital stock now consists of an unlimited number of common
shares and an unlimited number of class A special shares (the "Class A Special
Shares"). As of the close of business on December 31, 1999, there were no Class
A Special Shares issued or outstanding. As of the close of business on December
31, 1999, there were 62,107,474 common shares issued, of which none were owned
by us or our wholly-owned subsidiaries. As of December 31, 1999, there were
options outstanding for 5,223,400 common shares under our stock option plan. As
of December 31, 1999, there were outstanding warrants exercisable for 7,475,000
common shares which we issued in connection with the initial public offering of
Intelligent Polymers. The exercise price for the common shares under these
warrants is $20.00 per share and they are exercisable until September 30, 2002.
As of December 31, 1999, there were also outstanding rights to acquire 88,310
common shares as a result of our acquisition of Fuisz.
Capital Stock
Each holder of common shares is entitled to one vote per share, which may
be given in person or by proxy, in the election of directors of the Company and
on all other matters submitted to a vote of our shareholders. The holders of
common shares are entitled to share pro rata in any dividends declared by our
board of directors out of funds legally available therefor, subject to
preferential rights of the Class A Special Shares. In the event of liquidation,
dissolution or winding up, whether voluntary or involuntary, of the Company, the
holders of common shares are entitled to receive all of our assets remaining
after the payment of all of our liabilities, subject to the preferential right
of Class A Special Shares or any other shares which may rank prior to the common
shares. There are no preemptive or conversion rights, and the common shares are
not subject to redemption. All common shares now outstanding and to be
outstanding upon exercise of the outstanding options and warrants are, or will
be, fully paid and non-assessable.
Our by-laws provide for certain rights of our shareholders in accordance
with the provisions of the Business Corporations Act (Ontario). Such by-laws may
be amended either by a majority vote of the shareholders or by a majority vote
of the board of directors. Any amendment of the by-laws by action of the board
of directors must be submitted to the next meeting of the shareholders whereupon
the by-law amendment must be confirmed, confirmed as amended or repealed by a
majority vote of the shareholders voting on such matter.
Shareholders do not have cumulative voting rights for the election of
directors. Therefore, the holders of more than 50% of the shares voting for the
election of directors could, if they choose to do so, elect all of the directors
and, in such event, the holders of the remaining shares would not be able to
elect any director.
While the payment of dividends rests within the discretion of the board of
directors, we presently intend to retain all earnings, if any, in the
foreseeable future for use in the development of our business. See "Dividend
Policy".
ChaseMellon Shareholder Services, LLC and CIBC Mellon Trust Company are the
principal transfer agents and registrars for the common shares in the United
States and Canada, respectively.
-10-
<PAGE>
There is no provision in our Articles or by-laws that would have the effect
of delaying, deferring or preventing a change in control in the Company or that
would operate only with respect to an extraordinary corporate transaction
involving the Company, such as a merger, reorganization, tender offer, sale or
transfer of substantially all of our assets or liquidation. However, certain
special requirements apply to the acquisition by a non-Canadian of control of a
Canadian business.
Class A Special Shares
The Class A Special Shares may be issued from time to time in one or more
series, each series comprising the number of shares, designation, rights,
privileges, restrictions and conditions, including, without limitation, the rate
or amount of dividends or the method of calculating dividends, the dates of
payment, the redemption, purchase and/or conversion, and any sinking fund or
other provisions, subject to regulatory approval, if applicable, which the board
of directors determines by resolution. The Class A Special Shares rank prior to
the common shares with respect to payment of dividends and distributions in the
event of the liquidation, dissolution or winding-up, whether voluntary or
involuntary, of the Company. The Class A Special Shares of any series may also
be given such other preferences, not inconsistent with our Articles, over the
common shares and any other shares ranking junior to such Class A Special Shares
as may be fixed by the directors. The Class A Special Shares of any series may
be made convertible into common shares. Unless the directors otherwise
determine, or except as otherwise required by law, the holder of each share of a
series of Class A Special Shares shall not be entitled to vote at any meeting of
shareholders of the Company. No Class A Special Shares have been issued to date.
-11-
<PAGE>
SELLING SHAREHOLDER
The following table sets forth certain information as to the ownership of
our common shares as of June 30, 2000 by Salomon, adjusted to reflect the sale
of 88,338 shares to be transferred by the selling shareholder.
Shares Beneficially Shares Beneficially
Owned Prior Owned After
to Transfer (1) Shares Transfer (1)
------------------------------- Being --------------------------------
Number Percent Transferred Number Percent
------ ------- ----------- ------ -------
402,927 * 88,338 314,589 *
* Represents less than 1% beneficial ownership.
(1) Unless otherwise indicated, beneficial ownership means sole voting and
investment power.
PLAN OF DISTRIBUTION
Salomon has advised the Company that the common shares will be delivered to
certain parties which lent shares of Fuisz Technologies Ltd. to Salomon in
connection with the exercise of Options.
We have agreed to indemnify Salomon against certain liabilities, including
liabilities under the Securities Act, or to contribute to payments which Salomon
may be required to make in respect of any such liabilities.
LEGAL MATTERS
Certain Canadian legal matters relating to the common shares will be passed
upon on behalf of the Company by Stikeman Elliot, Toronto, Ontario, Canada.
EXPERTS
Our financial statements incorporated by reference in this prospectus and
elsewhere in the Registration Statement have been audited by Deloitte & Touche
LLP and Ernst & Young LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
-12-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection with
the issuance and distribution of the securities registered hereby, which will be
borne by the Company:
Securities and Exchange Commission registration fee ... $ 1,870
NYSE fee .............................................. 1,500
Legal fees and expenses ............................... 25,000
Accounting fees and expenses .......................... 10,000
Miscellaneous ......................................... 130
--------------
Total ................................................. $38,500
==============
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Section 136 of the Business Corporations Act (Ontario), a director or
officer of a corporation, a former director or officer of the corporation or a
person who acts or acted at the corporation's request as a director or officer
of a body corporate of which the corporation is or was a shareholder or
creditor, and his or her heirs and legal representatives:
1. may be indemnified by the corporation against all costs, charges and
expenses, including an amount paid to settle an action or satisfy a
judgement, reasonably incurred by him or her in respect of any civil,
criminal or administrative action or proceeding to which he or she is
made a party by reason of being or having been a director or officer
of such corporation or body corporate;
2. may be indemnified by the corporation, with the approval of a court,
against all costs, charges and expenses reasonably incurred by the
person in connection with an action by or on behalf of the corporation
or body corporate to procure a judgement in its favor, to which the
person is made a party by reason of being or having been a director or
officer of the corporation or body corporate; and
3. is entitled to indemnity from the corporation in respect of all costs,
charges and expenses reasonably incurred by him or her in connection
with the defence of any civil, criminal or administrative action or
proceeding to which he or she is made a party by reason of being or
having been a director or officer of the corporation or body
corporate, if the person seeking indemnity was substantially
successful on the merits of his defence of the action or proceeding;
provided, in all cases, such person fulfills the conditions that (a) he or she
acted honestly and in good faith with a view to the best interests of the
corporation, and (b) in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, he or she had reasonable
grounds for believing that his or her conduct was lawful.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed that in the opinion of the U.S. Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
<PAGE>
As contemplated by Section 136 of the Business Corporations Act(Ontario),
Biovail Corporation has purchased insurance against potential claims against the
directors and officers of the Registrant and against loss for which the
Registrant may be required or permitted by law to indemnify such directors and
officers.
ITEM 16. EXHIBITS.
(a) Exhibits.
Exhibit
Number Exhibit
-------- -------
*5 Opinion of Stikeman Elliot with respect to the legality of the
securities registered hereby.
*23.1 Consent of Stikeman Elliot (included as part of Exhibit 5).
*23.2 Consent of Deloitte & Touche LLP.
*23.3 Consent of PricewaterhouseCoopers LLP.
*23.4 Consent of Ernst & Young LLP.
*24 Powers of Attorney.
*99.1 Acknowledgment of Ernst & Young LLP
----------
* Previously filed.
(b) Financial Statement Schedules.
Not applicable.
(c) Reports, Opinions or Appraisals.
Not applicable.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section13(a) or section15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling
<PAGE>
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form F-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunder duly
authorized, in the City of Mississauga, Province of Ontario, Canada on the 7th
of July, 2000.
BIOVAIL CORPORATION
(Registrant)
By: /s/ KENNETH C. CANCELLARA
----------------------------------------
Name: Kenneth C. Cancellara, Q.C.
Title: Senior Vice President and
General Counsel
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons, in the
capacities and on the dates indicated,
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
* Chairman of the Board and Director July 7, 2000
-----------------------------------------
Eugene N. Melnyk
* Chief Executive Officer and Director July 7, 2000
-----------------------------------------
Bruce D. Brydon
* President, Chief Operating Officer and July 7, 2000
----------------------------------------- Director
Robert A. Podruzny
* Senior Vice President, General Counsel, July 7, 2000
----------------------------------------- Secretary and Director
Kenneth C. Cancellara
* Senior Vice President and Director July 7, 2000
-----------------------------------------
Rolf K. Reininghaus
* Vice President, Chief Financial Officer July 7, 2000
-----------------------------------------
Kenneth G. Howling
* Director July 7, 2000
-----------------------------------------
Wilfred G. Bristow
* Director July 7, 2000
-----------------------------------------
Roger Rowan
* Director July 7, 2000
-----------------------------------------
Robert Vujea
</TABLE>
*By: /s/ KENNETH C. CANCELLARA
-------------------------
Attorney in Fact
<PAGE>
AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of Section 6(a) of the Securities Act of 1933,
the Authorized Representative has duly signed this Registration Statement below:
By: /s/ EUGENE N. MELNYK July 7, 2000
-------------------------------------
Eugene N. Melnyk
Chairman of the Board
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit
*5 Opinion of Stikeman Elliot with respect to the legality of the
securities registered hereby.
*23.1 Consent of Stikeman Elliot (included as part of Exhibit 5).
*23.2 Consent of Deloitte & Touche LLP.
*23.3 Consent of PricewaterhouseCoopers LLP.
*23.4 Consent of Ernst & Young LLP.
*24 Powers of Attorney.
*99.1 Acknowledgment of Ernst & Young LLP
----------
* Previously filed.
