BIOVAIL CORPORATION
---------------------
NOTICE TO STOCKHOLDERS OF
INTELLIGENT POLYMERS LIMITED
---------------------
This information is disseminated pursuant to Rule 13e-3 of the
Securities Exchange Act of 1934, as amended.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF
SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED
IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THE TRANSACTION
---------------
Biovail Corporation, an Ontario corporation ("Biovail"), wishes to
advise holders of Common Stock, par value $0.01 of Intelligent Polymers Limited,
a Bermuda corporation ("Intelligent Polymers") that Biovail filed a Schedule
13e-3 Transaction Statement (the "Statement") with the Securities and Exchange
Commission on August 31, 2000. The statement relates to the exercise by Biovail
of its option to purchase all issued and outstanding shares of Common Stock of
Intelligent Polymers.
The filing of the Statement and the receipt and of this notice do not
constitute an exercise of the option described above. Exercise of such option
must be done pursuant to the Bye-Laws of Intelligent Polymer.
The Statement is being filed by Biovail. Notwithstanding this
Statement, Biovail does not believe that the transaction reported herein is
subject to Rule 13e-3 under the Securities Exchange Act of 1934, as amended.
<PAGE>
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SUMMARY TERM SHEET
This Summary Term Sheet highlights selected information
contained in this Notice to Stockholders and may not contain all of the
information that is most important to you. We urge you to read this entire
Notice to Stockholders carefully.
o Biovail Corporation has filed a Schedule 13-e-3 Transaction Statement
with the Securities and Exchange Commission which relates to the
exercise of its option to purchase all the Common Stock of Intelligent
Polymers Limited. The Bye-laws of Intelligent Polymers provide that
the holder of a majority of the Special Shares of Intelligent Polymers
has an option to purchase all the issued and outstanding Common Stock.
Biovail is the holder of a majority of the Special Shares of
Intelligent Polymers. See ("Background and summary of Transaction")
o Biovail would pay $39.06 per share of Intelligent Polymers Common
Stock. (See "Background and summary of Transaction Terms of
Transaction.")
o The transaction would close on September 29, 2000. (See "Background
and summary of Transaction Terms of Transaction.")
o Biovail may exercise its option to purchase all the Common Stock of
Intelligent Polymers without seeking the prior approval of the
Intelligent Polymers shareholders. As such, shareholders are not being
asked to vote to approve this purchase. (See "Special Factors -
Fairness of the Transaction.")
o The exercise of the Purchase Option will be a fully taxable
transaction to the Intelligent Polymers Shareholders. See "Certain
Material U.S. Federal Income Tax Consequences". (See "Special Factors
- Certain U.S. Federal Income Tax Matters.")
o Following the purchase of the Intelligent Polymers Common Stock,
Intelligent Polymers Common Stock would be de-listed from the American
Stock Exchange and Intelligent Polymers will have its public reporting
obligations suspended. (See "Special Factors - Alternatives, Reasons
and Effects of the Transaction.")
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SPECIAL FACTORS
---------------
Alternatives, Reasons and Effects of the Transaction.
----------------------------------------------------
The purpose of the Transaction is to acquire the rights to all products
and product candidates developed or under development by Biovail and Intelligent
Polymers pursuant to the Development Contract dated September 30, 1997 between
Biovail and Intelligent Polymers. Biovail believes that it is in the best
interest of Biovail and Biovail's stockholders to exercise the Purchase Option
at this time.
As Biovail is exercising certain previously granted rights, no other
options were considered.
The Transaction is structured pursuant to the terms of the previously
granted Purchase Option as set forth in the Bye-Laws. The Purchase Option would
be exercised at this time because Biovail believes that exercise at this time is
in the best interest of its shareholders. Additionally, Biovail wishes to avoid
a 25% increase in the Purchase option price which occurs after September 30,
2000.
Subsequent to the transaction, Intelligent Polymers would become
wholly-owned by Biovail. Biovail anticipates de-listing Intelligent Polymers
from the AMEX and suspending its reporting requirements with the Securities and
Exchange Commission by filing a Form 15.
The Transaction would cause each Shareholder to dispose of his or her
Common Shares for the Purchase Option Consideration. This consideration is the
amount specified in the Bye-Laws.
Certain Material U.S. Federal Income Tax Consequences
-----------------------------------------------------
The following discussion is a summary of certain material U.S. federal
income tax consequences to "U.S. Shareholders" (generally a U.S. citizen or
resident, a corporation under U.S. law or a trust or estate that is considered a
"United States person") of Biovail's exercise of the Purchase Option. This
discussion is based upon laws, regulations, rulings and decisions currently in
effect, all of which are subject to change, retroactively or prospectively.
This discussion does not apply to persons other than U.S. Shareholders
and may not apply to certain categories of U.S. Shareholders subject to special
treatment under the Internal Revenue Code of 1986, as amended (the "Code"), such
as passthrough entities, dealers or traders in securities or currencies, banks,
insurance companies, U.S. Shareholders that do not hold the Common Shares as
capital assets, persons whose "functional currency" is not the U.S. dollar,
tax-exempt entities, and persons that hold Common Shares as a position in a
straddle or as part of a "hedging", "integrated", "constructive sale" or
"conversion" transaction. Moreover, the discussion summarizes only federal
income tax consequences and does not address any state, local or other tax
consequences.
SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE
SPECIFIC TAX CONSEQUENCES OF THE TRANSACTION TO THEM.
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Upon Biovail's exercise of the Purchase Option, a U.S. Shareholder will
recognize a capital gain or loss on each Common Share disposed of equal to the
difference between the amount of (a) the cash received for the Common Share and
(b) his basis in the Common Share. Gain or loss upon the disposition of a Common
Share generally should be long-term if the Common Share has been held for more
than one year at the time of the exercise of the Purchase Option.
To the extent that a U.S. Shareholder has not provided an appropriate
taxpayer identification number on IRS Form W-9 or a substitute therefor, such
U.S. Shareholder may be subject to backup withholding by Biovail.
Fairness of the Transaction
---------------------------
Biovail reasonably believes that the Transaction would be fair to
Shareholders.
The material factors upon which the belief stated in above is based is
set forth below.
The Purchase Option was a feature of the Common Shares from the time of
Intelligent Polymers' inception. The Purchase Option and the Purchase
Option Consideration were set forth in the Bye-Laws and described in
the prospectus dated October 10, 1997, distributed in connection with
the initial public offering of the Common Shares (the "Prospectus").
Both the Bye-Laws and the Prospectus were publicly filed with the
Securities and Exchange Commission. Pursuant to the Bye-Laws, the stock
certificates for the Common Shares were legended to put the holders
thereof on further notice about the Purchase Option. Intelligent
Polymers' Annual Reports on Form 20-F have described the Purchase
Option and the Purchase Option Consideration. As a result of the
foregoing, Biovail believes that Shareholders received adequate notice
as to the terms of the Purchase Option prior to making any investment
decision with respect to the Common Shares.
The exercise of the Purchase Option and consummation of the Transaction
do not require the approval of Shareholders.
After making reasonable inquiry of management of Intelligent Polymers,
Biovail believes that no directors of Intelligent Polymers have retained an
unaffiliated representative to act solely on behalf of any Shareholders, as no
action is required by Shareholders to effect the Purchase Option.
The exercise of the Purchase Option and the consummation of the
Transaction do not require the approval of Board of Directors of Intelligent
Polymers.
Reports, Opinions, Appraisals and Negotiations
----------------------------------------------
Neither Biovail nor, to the best of Biovail's knowledge after
reasonable inquiry of management of Intelligent Polymers, Intelligent Polymers,
has received any report, opinion (other than an opinion of counsel) or appraisal
from an outside party which is materially related to the Transaction.
<PAGE>
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BACKGROUND AND SUMMARY OF TRANSACTION
-------------------------------------
Identification of Intelligent Polymers
--------------------------------------
The issuer of the class of equity security which is the subject of this
filing and the address of its principal executive offices is:
Intelligent Polymers Limited
c/o Conyers Dill & Pearman
Clarendon House
2 Church Street
Hamilton HM 11, Bermuda
The exact title of the class of security which is the subject of this
filing is Common Stock, par value $0.01, of Intelligent Polymers Limited (the
"Common Shares"). The number of Common Shares outstanding as of August 30, 2000,
the most recent practicable date, is 3,737,500. The approximate number of
holders of record of the Common Shares as of August 1, 2000, the most recent
practicable date, is 521.
Until September 30, 1999 (the "Separation Date"), the Common Shares
were part of a Unit (the "Units") consisting of one Common Share and one warrant
to purchase common shares of Biovail. The Units were traded on the American
Stock Exchange (the "AMEX") under the symbol IXP.u. On the Separation Date, the
Units separated into the two underlying securities. The IPL Common Shares now
trade on the AMEX under the symbol IXP, and the Biovail Warrants now trade on
the New York Stock Exchange under the symbol BVFw. The following table sets
forth the high and low prices on the AMEX for the Units until the Separation
Date and for the Common Shares after the Separation Date, as reported by the
AMEX.
<TABLE>
<CAPTION>
On September 30, 1999 the closing price of the Units was $46.50.
Units High Low
----- ---- ---
<S> <C> <C>
Fiscal 1998:
2nd Quarter........................................ 22.18 17.75
3rd Quarter........................................ 31.38 20.75
4th Quarter........................................ 30.38 19.75
</TABLE>
<PAGE>
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<TABLE>
<S> <C> <C>
Fiscal 1999:
-----------
1st Quarter........................................ 23.13 16.63
Common Shares
-------------
2nd Quarter........................................ 28.00 16.50
3rd Quarter........................................ 30.88 25.63
4th Quarter........................................ 41.88 28.00
Fiscal 2000:
-----------
1st Quarter........................................ 53.13 42.25
2nd Quarter (1).................................... 33.50 30.00
3rd Quarter........................................ 34.625 31.50
4th Quarter........................................ 37.50 34.00
</TABLE>
(1) The Units separated in 2nd Quarter Fiscal 2000.
On August 30, 2000 the Common Shares closed at $37.625.
Intelligent Polymers has not paid any dividends on the Common Shares in
the past two years.
Pursuant to Section 3.9(E) of the Bye-Laws of Intelligent Polymers (the
"Bye-Laws"), until the expiration date of the Purchase Option (as defined
below), no resolution or act of Intelligent Polymers to authorize or permit the
declaration or payment of dividends or the making of another distribution to
shareholders, will be effective without the prior written approval of the
holders of a majority of the Special Shares (as defined below).
Identification of Biovail
-------------------------
This filing is being made by Biovail. Biovail's business address and
telephone number are:
Biovail Corporation
2488 Dunwin Drive
Mississauga, Ontario
Canada L5L 1J9
(415) 285-6000
Biovail is the holder of all the issued and outstanding special shares
(the "Special Shares"), par value $1.00 per share, of Intelligent Polymers. The
Special Shares confer on Biovail certain limited rights, including the right to
appoint one director to the Board of Directors of Intelligent Polymers and the
right to purchase all, but not less than all, of the outstanding Common Shares
of Intelligent Polymers at the time such right is exercised (the "Purchase
Option"). The Special Shares do not entitle Biovail to vote at any meeting of
holders of Common Shares ("Shareholders") and do not entitle Biovail to receive
any dividend or any other distribution, or any right or interest in the profits
of assets of Intelligent Polymers.
<PAGE>
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Pursuant to the Bye-Laws, until the expiration of the Purchase Option,
no resolution or act of Intelligent Polymers to authorize or permit any of the
following will be effective without the prior written approval of the holder of
the majority of the Special Shares: (i) the allotment or issue of shares or
other securities of Intelligent Polymers or the creation of any right to such
allotment or issue; (ii) the reduction of Intelligent Polymers' authorized share
capital; (iii) outstanding borrowings by Intelligent Polymers in excess of an
aggregate of $1.0 million; (iv) the sale or other disposition of, or the
creation of any lien or liens on, the whole or a part of Intelligent Polymers'
undertaking or assets; (v) the declaration or payment of dividends or the making
of any other distributions to shareholders; (vi) the amalgamation of Intelligent
Polymers; and (vii) any alteration of the Purchase Option. Biovail, as the
holder of a majority of the outstanding Special Shares, could preclude the
holders of a majority of the outstanding Common Shares and the Board of
Directors of Intelligent Polymers from taking any of the forgoing actions during
such period.
Biovail is an international, fully-integrated pharmaceutical company
that specializes in the development, manufacture, marketing and licensing of
drugs, utilizing advanced controlled-release, rapid dissolve, enhanced
absorption and taste masking technologies.
During the past five years Biovail has not been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors). During the
past five years Biovail has not been a party to any judicial or administrative
proceeding (except for matters that were dismissed without sanction or
settlement) that resulted in a judgment, decree or final order enjoining further
violations of, or prohibiting activities, subject to, federal or state
securities laws or finding any violation of such laws.
Information Regarding Biovail's Officers and Directors
Eugene N. Melnyk
Chelston Park Building 2
Colleymore Rock
St. Michael BH1
Barbados, West Indies
Mr. Melnyk has been the Chairman of the Board and a Director since
March 29, 1994, the effective date of the amalgamation (the "Amalgamation") of
our predecessor entities, Biovail Corporation International ("BCI") and Trimel
Corporation ("Trimel"). Prior to that time, he had been the Chairman of the
Board of BCI since October 1991 and was instrumental in acquiring, financing and
organizing the companies or businesses that comprised BCI. Mr. Melnyk also
founded Trimel and served as its President and Chief Executive Officer from 1983
through July 1991. Mr. Melnyk is Chairman of the Board of Directors of
Intelligent Polymers. Mr. Melnyk is a citizen of Canada.
Bruce D. Brydon
2488 Dunwin Drive
Mississauga, Ontario
Canada, L5L 1J9
<PAGE>
-8-
Mr. Brydon has been the Chief Executive Officer since November 1997. He
joined Biovail as the Chief Executive Officer and President in January 1995 and
has been a Director since May 1995. Prior to that time and since 1990 he had
been President, Managing Director and Chairman of the Board of the Canadian
Operations of Boehringer Mannheim. In the late 1980s, Mr. Brydon served as
President and CEO of Beiersdorf Canada.. Mr. Brydon is a citizen of Canada.
Robert A. Podruzny
2488 Dunwin Drive
Mississauga, Ontario
Canada, L5L 1J9
Mr. Podruzny has been the President and Chief Operating Officer since
November 1997. He joined Biovail as Vice President, Finance and Chief Financial
Officer in January 1996. Mr. Podruzny came to Biovail from Browning-Ferris
Industries Ltd. where he served as the Chief Financial Officer and as a Director
of the Canadian operations from 1993 to 1995. From 1987 to 1992, Mr. Podruzny
served as General Manager of the U.S. Health Promotion Division of MDS Health
Group, a Toronto-based medical services company. Mr. Podruzny is a citizen of
Canada.
Kenneth C. Cancellara, Q.C.
2488 Dunwin Drive
Mississauga, Ontario
Canada, L5L 1J9
Mr. Cancellara joined Biovail as Senior Vice President and General
Counsel in March 1996, was appointed Secretary in April 1996, and has been a
Director since May 1995. Prior to that time, Mr. Cancellara was a partner with
the law firm of Cassels, Brock and Blackwell since 1980 where he held many
positions including Chairman of the Executive Committee and managing partner.
Mr. Cancellara is a citizen of Canada.
Rolf K. Reininghaus
2488 Dunwin Drive
Mississauga, Ontario
Canada, L5L 1J9
Mr. Reininghaus has been a Senior Vice President and a Director since
the Amalgamation and has been President of Crystaal since November 1997. Prior
to that time, he had been the President, Chief Operating Officer and a Director
of BCI since October 1991 and Executive Vice President and a Director of Trimel
or its affiliates since November 1987. Prior to his employment by Trimel, Mr.
Reininghaus was the Marketing Manager of the Canadian operations of Miles
Pharmaceuticals, a division of Bayer AG. Mr. Reininghaus is a citizen of Canada.
Brian H. Crombie
2488 Dunwin Drive
Mississauga, Ontario
Canada, L5L 1J9
<PAGE>
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Mr. Crombie joined Biovail as Senior Vice President, and Chief
Financial Officer in May 2000. Mr. Crombie came to Biovail from The Jim Pattison
Group, one of Canada's largest private holding companies where he served as
Managing Director Corporate Finance from 1998 to 2000 where he was responsible
for corporate development and treasury. Prior to that time, he spent 7 years in
finance and general management positions with The Molson Companies most recently
as SVP Corporate Finance and Treasurer responsible for planning, accounting and
control, corporate development, treasury and investor relations. Mr. Crombie is
a graduate of The Harvard School of Business where he received his Masters in
Business Administration. Mr. Crombie is a citizen of Canada.
Kenneth S. Albert, Ph.D.
3701 Concorde Parkway
Chantilly, VA 20151
Dr. Albert joined Biovail as Vice President, Chief Scientific Officer
in January 1999. Dr. Albert came to Biovail from Schein Pharmaceutical Inc.,
where he had been the Vice President, Research and Development from 1995 to
1998. Prior to his tenure at Schein, Dr. Albert was Corporate Director, Research
and Development at Forest from 1988 to 1995 and prior to that time he spent 14
years in senior Research and Development positions at the Upjohn Company and
Merck, Sharp and Dohme. Dr. Albert is a citizen of U.S.
Wilfred G. Bistrow
467 Mountsberg Rd
RR#2
Campbellville, ONT
Canada, LOP IRO
Mr. Bristow has been a Director since the Amalgamation. Prior to that
time, he was a Director of BCI since January 1993. Mr. Bristow is and has been a
senior investment advisor at Nesbitt Burns Inc., a Canadian investment banking
firm, since December 1991. From September 1975 to December 1991, he served as
vice president and director of Richardson Greenshields of Canada, an investment
banking firm. Mr. Bristow is a citizen of Canada.
Paul W. Haddy
68 Durants
"Daydreams Christ Church" Building
Barbados, West Indies
Mr. Haddy was elected to the Board of Directors in June 2000.
Mr. Haddy has been Chairman and Chief Executive Officer of London Life Bank and
Trust Company since 1991. Mr. Haddy is a citizen of Canada.
<PAGE>
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Roger Rowan
53 Buckingham Avenue
Toronto, ONT
Canada M4N 1R3
Mr. Rowan was elected to the Board of Directors in June 1997.
Mr. Rowan has been President and Chief Operating Officer of Watt Charmichael
Inc., a private investment firm, since May 1994. Prior thereto, Mr. Rowan was
the Executive Vice President and Chief Operating Officer of Watt Charmichael
Inc. since 1991. Mr. Rowan is a citizen of Canada.
Robert Vujea
1030 Carpenter Ave.
Grand Rapids, Michigan 49504-3727
Mr. Vujea was elected to the Board of Directors in June 1997.
Mr. Vujea has been President of R & D Chemical Corporation, a chemical
manufacturer and distributor, since 1974. Prior thereto, Mr. Vujea has held
senior management positions within a number of companies including American
Greeting Card Corporation, Cole National Corporation and Diverco Incorporated.
Mr. Vujea is a citizen of the United States.
During the past five years, none of the foregoing individuals has been
convicted in a criminal proceeding and has not been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction which
resulted in a judgment, decree, or final order enjoining further violations of,
or prohibiting activities, subject to, federal or state securities laws or
finding any violation of such laws.
Terms of Transaction
--------------------
In order for Biovail to purchase the Common Shares pursuant to the
Purchase Option prior to October 1, 2000, it must exercise the Purchase Option
by delivering an exercise notice to the Board of Directors of Intelligent
Polymers. The terms of the Purchase Option are set forth in the Bye-Laws.
Pursuant to the Bye-Laws, if the Common Shares are acquired for cash pursuant to
the Purchase Option before October 1, 2000, the cash purchase price (the
"Purchase Option Consideration") will be $39.06 per share. The closing date of
the purchase (the "Closing Date") would be September 29, 2000, and the Purchase
Option Consideration would be deposited with ChaseMellon Shareholder Services
LLC, as payment agent (the "Payment Agent"), on or prior to the Closing Date.
Promptly following the Closing Date, and upon receipt of stock certificates for
the Common Shares, as instructed by the Payment Agent, the Payment Agent would
distribute the Purchase Option Consideration to each person or entity who was a
holder of the Common Shares at the close of business on the Closing Date.
The purpose of the Transaction is to acquire the rights to all products
and product candidates developed or under development by Biovail and Intelligent
Polymers pursuant to the Development Contract dated September 30, 1997 between
Biovail and Intelligent Polymers. Biovail believes that it
<PAGE>
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is in the best interest of Biovail and Biovail's stockholders to exercise the
Purchase Option at this time.
In accordance with the terms of the Bye-Laws, Shareholders do not need
to take any steps to approve the purchase. Title to the Common Shares would
automatically vest in Biovail on the Closing Date and the Purchase Option
Consideration would be paid to Shareholders, upon tender of the stock
certificates directly or through their brokers, in accordance with their
respective interests.
Subsequent to the purchase of the Common Shares, Intelligent Polymers
would become a wholly-owned subsidiary of Biovail. The transaction reported
herein (the "Transaction") would cause each Shareholder to dispose of his or her
Common Shares for the Purchase Option Consideration.
Biovail expects to follow purchasing accounting for the Transaction.
The federal income tax consequences of the Transaction are discussed in
paragraph (d) of Item 7 of the Statement and such discussion is incorporated
herein by reference.
The terms of the Transaction would be the same for all Shareholders.
Appraisal rights are not afforded under either applicable law or the
Bye-Laws to Shareholders in respect of the exercise of the Purchase Option and
none will be afforded by either Biovail or Intelligent Polymers. Biovail is not
aware of any rights available to objecting Shareholders under applicable law.
Biovail is unaware, after making reasonable inquiry of management of
Intelligent Polymers, of any grant of access to unaffiliated security holders to
the corporate files of either Biovail or Intelligent Polymers or the appointment
of counsel or appraisal services for unaffiliated security holders at the
expense of either Biovail or Intelligent Polymers.
Plans or Proposals
------------------
While Biovail has no committment or definitive plans, Biovail may
explore possibilities of restructuring the capitalization of, selling some of
its equity interest in, reorganizing or restructuring Intelligent Polymers after
the Closing Date.
Subsequent to the Closing Date, Intelligent Polymers will be
wholly-owned by Biovail. Biovail anticipates de-listing Intelligent Polymers
from the AMEX and suspending its reporting requirements with the Securities and
Exchange Commission by filing a Form 15. Biovail intends to replace Intelligent
Polymers' officers and Board of Directors with Biovail employees.
Source and Amounts of Funds
---------------------------
The total consideration that would be paid by Biovail for the purchase
of the Common Shares pursuant to the Transaction is, in the aggregate,
$145,986,750. The source of these funds would be Biovail's cash.
<PAGE>
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Biovail has no alternative financing arrangements or plans to those
discussed above.
The following table sets forth an estimate (except for the filing fee)
of expenses for the Transaction
Filing fee............................ $ 29,198
Accounting fees and expenses.......... 50,000
Legal fees and expenses............... 250,000
Printing expenses..................... 75,000
------
Total............... 404,198
The expenses set forth in the table above will be paid by Biovail.
Interest in Securities of Intelligent Polymers
----------------------------------------------
As of August 30, 2000, no Common Shares are beneficially owned by
Biovail, by any pension, profit sharing or similar plan of Biovail or, to
Biovail's knowledge after reasonable inquiry of management of Intelligent
Polymers, by Intelligent Polymers, by each executive officer and director of
either Biovail, Intelligent Polymers, any person controlling either Biovail or
Intelligent Polymers or any executive officer of any corporation ultimately in
control of either Biovail or Intelligent Polymers, or by any associate or
majority owned subsidiary of either Biovail or Intelligent Polymers except as
set out on the following table:
<TABLE>
<CAPTION>
Direct Indirect
Name Position Ownership Ownership
---- -------- --------- ---------
<S> <C> <C> <C>
Eugene Melnyk Chairman of the Board and 17,500 20,000(1)
Director
Roger Rowan Director 16,500
Wilfred Bistrow Director - 10,000(1)
</TABLE>
(1) owned by spouse
Financial Statement
Enclosed please find Intelligent Polymers' Annual Report on Form 20-F
for the year ended June 30, 1999 and Transition Report of Form 20-F for the
period ended June 30, 1998. Financial statements for that period are contained
therein.
Intelligent Polymers is not required to file quarterly reports.
Intelligent Polymers has no material fixed charges for the two most
recent fiscal years and the appropriate interim period.
Intelligent Polymers' book value per share as of June 30, 1999 was
$6.31.
<PAGE>
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No pro forma disclosure has been provided because Intelligent Polymers
would terminate upon giving effect to the Transaction.
CONCLUSION
----------
If you have any questions with respect to this transaction, please
contact Biovail Corporate and Investor Relations at (905) 608-8008.
