Biovail Corp International · 6-K · For 3/31/01 · EX-99.2

Filed On 5/30/01 4:48pm ET   ·   SEC File 1-14956   ·   Accession Number 912057-1-518024

Report of a Foreign Private Issuer   ·   Form 6-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 6-K         Report of a Foreign Private Issuer                    17     97K 
 2: EX-99.1     Miscellaneous Exhibit                                 17     94K 
 3: EX-99.2     Miscellaneous Exhibit                                  7     40K 

EX-99.2   ·   Miscellaneous Exhibit

EX-99.2
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                                                                    EXHIBIT 99.2

BIOVAIL CORPORATION 2001 INTERIM REPORT 

Q1
FIRST QUARTER REPORT

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DEAR FELLOW SHAREHOLDERS:                                                       

 I am pleased to report that Biovail has started the year 2001 with record
first quarter financial results. These results reflect a major product line     
acquisition along with a number of additional milestones as the Company         
continues to evolve into a major fully-integrated North American pharmaceutical 
operation.                                                                      

CARDIZEM-REGISTERED TRADEMARK- ACQUISITION                              

   At the beginning of the quarter, Biovail acquired the North American rights
to the entire Cardizem-Registered Trademark- line of diltiazem products from    
Aventis Pharmaceuticals Inc. Cardizem-Registered Trademark- is a market leading 
brand of calcium channel blockers for the treatment of hypertension and angina. 
Total U.S. sales of calcium channel blockers in 2000 exceeded $3.5 billion.     
Cardizem-Registered Trademark- CD was the best selling diltiazem product in the 
U.S. last year with over 13 million prescriptions. Other products in the line   
include Cardizem-Registered Trademark-, Cardizem-Registered Trademark- SR and   
Cardizem-Registered Trademark- injectables. The acquisition of this significant 
product line is expected to add over $150 million in incremental revenue in     
2001.                                                                           

The acquisition of the Cardizem-Registered Trademark- line also allows  
Biovail to add value to its new improved once-daily diltiazem product, currently
undergoing studies to support superior marketing claims. This new product, which
has already received FDA approval, will likely be launched as                   
Cardizem-Registered Trademark- XL. This new product will offer measurable       
therapeutic advantages. Biovail expects to launch Cardizem-Registered Trademark-
XL mid 2002.                                                                    

U.S. SALES OPERATIONS                                                   

  The integration of DJ Pharma, the U.S. sales operation acquired by Biovail
in 2000, was completed during the quarter. The Company's new U.S. sales         
operation, renamed Biovail Pharmaceuticals, will be based in Raleigh, North     
Carolina. Biovail is currently investigating several product acquisition        
opportunities that would enable the Company to further leverage the U.S. sales  
organization and enjoy a higher level of product revenues from the sale of      
products directly prompted by Biovail.                                          

   Biovail intends to add approximately 500 sales professionals to the current
team of 300 to increase the Company's presence in the lucrative U.S. market and 
support new product launches and the ongoing expansion of the Company's product 
development portfolio. Funding of this expansion will be undertaken through     
marketing and/or strategic arrangements.                                        

PRODUCT SALES                                                           

   Sales continued to grow in the first quarter of 2001. Sales revenue for the
quarter was more than double first quarter 2000 sales revenue. U.S. sales of    
Tiazac-Registered Trademark- by the Company's marketing partner, Forest         
Laboratories, increased and now hold market share in excess of 20% of total     
once-daily diltiazem prescriptions, up from 17% for the same period last year.  

   Crystaal, Biovail's Canadian marketing division also had an excellent first
quarter, showing significant gains over the first three months of last year.    
This was driven by continued market penetration by numerous products in         
Crystaal's portfolio, including Tiazac-Registered Trademark-, Celexa, Retavase  
and Cardizem-Registered Trademark- CD. This strong performance is expected to   
continue throughout the year and will be bolstered by the anticipated inclusion 
of Monocor on major provincial drug formularies.                                

NEW PRODUCTS                                                            

  The first quarter of 2001 saw a number of major new product announcements.
In February, Biovail received FDA approval for its generic version of Procardia 
XL 30mg. Teva Pharmaceuticals, Biovail's U.S. generic marketing partner,        
announced an immediate launch of the new product. Total brand sales for this    
treatment for hypertension and angina in 30mg and 60mg dosage strengths were    
$299 million. Biovail has already received approval for its 60mg Procardia XL   
product.                                                                        

Nutravail, an operating unit of Biovail specializing in nutraceuticals  
launched a new product during the quarter -- a soft, chewable calcium tablet    
marketed under WalMart's Spring Valley brand.                                   

PRODUCT PIPELINE                                                        

 Biovail's product pipeline remains strong, with several major products in
late stage development.                                                         

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   Three Abbreviated New Drug Applications (ANDA's) were filed with the FDA in
the quarter. These include generic controlled-release versions of Procardia XL  
90mg, Adalat CC 90mg and Tegretol 400mg. The first two products are indicated   
for angina and hypertension, while the third, Tegretol, is indicated for the    
treatment of epilepsy. Total annual brand sales of these products exceed        
$220 million.                                                                   

Other products under late stage development include once-daily          
controlled-release versions of Buspirone, a treatment for anxiety and depression
with annual branded sales of $675 million and Tramadol, a chronic pain          
medication with branded sales of $500 million, both of which are currently      
undergoing Phase III clinical trials. Also under development are once-daily     
controlled-release versions of Metformin and Bupropion. Biovail's partner, H.   
Lundbeck A/S, has also initiated Phase III clinical trials on a                 
second-generation modified release formulation of citalopram (Celexa) for the   
Canadian marketplace.                                                           

 Substantial progress continues to be made on products utilizing Biovail's
proprietary FlashDose technology. Development is on track for a novel FlashDose 
version of Paxil. This leading antidepressant currently has annual U.S. sales of
$1.7 billion and continues to show rapid growth. Biovail anticipates filing this
product with the FDA by the end of 2001.                                        

The Company is also working on a FlashDose version of the sleep disorder
medication Ambien -- a $1 billion plus product.                                 

  In total, Biovail currently has five controlled-release products and eight
FlashDose products in various stages of development, representing over          
$10 billion in current branded product sales.                                   

MANUFACTURING AND CRD                                                   

In January, Biovail assumed control of its new Dorado, Puerto Rico      
manufacturing facility acquired from Ortho McNeil. Integration of manufacturing 
with Biovail's Carolina, Puerto Rico plant will be implemented over the next 18 
to 24 months. The Dorado facility is capable of producing 15 billion units per  
year without expansion. Plans include modifying the new facility for the        
manufacture of FlashDose products for world markets.                            

  The Company's Contract Research Division completed a significant expansion
in the first quarter. The expansion includes additional state-of-the-art        
laboratory space and a new clinical facility to support advanced clinical trials
for New Drug Application (NDA) submissions.                                     

RECORD RESULTS                                                          

Biovail reported record financial reports for the three months ended    
March 31, 2001. Total revenue for the period increased 135% to $119.2 million,  
compared with $50.8 million for the same period last year. Operating income for 
the first quarter was $44.4 million, a 177% increase over the $16.0 million     
reported for the first quarter 2000. Earnings before interest, taxes,           
depreciation and amortization for the three month period ended March 31, 2001   
increased 168% to $57.8 million, compared to $21.6 million for the same period  
last year.                                                                      

Net income for the first quarter was $29.2 million, compared to first   
quarter 2000 net income, excluding certain charges, of $15.0 million. Earnings  
per share on a diluted basis for the first quarter 2001 were $0.20, an 82%      
increase over earnings per share on a diluted basis of $0.11, excluding certain 
charges, for the first three months of 2000. Items excluded from first quarter  
2000 financial results are the cumulative effect of a change in accounting      
principle and an extraordinary item related to the early retirement of the      
Company's U.S. Dollar Senior Notes.                                             

    On behalf of the Board of Directors, I would like to express my appreciation
to Biovail's employees and to our shareholders for their continued commitment   
and support.                                                                    

[SIGNATURE]                                                                     

Eugene Melnyk                                                                   
Chairman of the Board                                                           

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BIOVAIL CORPORATION 

CONSOLIDATED BALANCE SHEETS 

IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(ALL DOLLAR AMOUNTS ARE EXPRESSED IN THOUSANDS OF U.S. DOLLARS) 

                                                        [Enlarge/Download Table]

                                                              MARCH 31    DECEMBER 31 
                                                                2001          2000    
                                                             ----------   ------------
                                                                                      
                                                                    (Unaudited)       
ASSETS                                                                                
CURRENT                                                                               
Cash and cash equivalents................................... $   49,566    $  125,144 
Accounts receivable.........................................     87,178       105,850 
Inventories.................................................     31,845        24,108 
Deposits and prepaid expenses...............................     10,727         5,347 
                                                             ----------    ---------- 
                                                                179,316       260,449 
Long-term investments.......................................      1,674         1,561 
Property, plant and equipment, net..........................     62,025        52,541 
Goodwill, net...............................................    100,168       103,105 
Intangible assets, net......................................    659,545       667,431 
Other assets, net...........................................     22,014        22,180 
                                                             ----------    ---------- 
                                                             $1,024,742    $1,107,267 
                                                             ==========    ========== 
LIABILITIES                                                                           
CURRENT                                                                               
Accounts payable............................................ $   28,871    $   34,683 
Accrued liabilities.........................................     46,896        35,452 
Income taxes payable........................................      6,151         6,711 
Deferred revenue............................................     29,632        26,334 
Current portion of long-term obligations....................    136,500       182,564 
                                                             ----------    ---------- 
                                                                248,050       285,744 
Deferred revenue............................................     26,700        27,900 
Long-term obligations.......................................    177,021       256,180 
Convertible Subordinated Preferred Equivalent Debentures....    299,985       299,985 
                                                             ----------    ---------- 
                                                                751,756       869,809 
                                                             ----------    ---------- 
SHAREHOLDERS' EQUITY                                                                  
Common shares, no par value, unlimited shares authorized,                             
  132,142,000 and 131,461,000 issued and outstanding at                               
  March 31, 2001 and December 31, 2000, respectively........    500,648       492,733 
Warrants....................................................      7,912         7,912 
Deficit.....................................................   (232,653)     (261,819)
Accumulated other comprehensive loss........................     (2,921)       (1,368)
                                                             ----------    ---------- 
                                                                272,986       237,458 
                                                             ----------    ---------- 
                                                             $1,024,742    $1,107,267 
                                                             ==========    ========== 

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BIOVAIL CORPORATION 

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(ALL DOLLAR AMOUNTS EXCEPT PER SHARE DATA ARE EXPRESSED IN THOUSANDS OF 
U.S. DOLLARS) 

                                                                [Download Table]

                                                             THREE MONTHS ENDED  
                                                                  MARCH 31       
                                                             ------------------- 
                                                               2001       2000   
                                                             --------   -------- 
                                                                                 
                                                                 (Unaudited)     
REVENUE                                                                          
Product sales............................................... $111,927   $ 35,853 
Research and development....................................    1,566     11,651 
Royalty and licensing.......................................    5,734      3,278 
                                                             --------   -------- 
                                                              119,227     50,782 
                                                             --------   -------- 
EXPENSES                                                                         
Cost of goods sold..........................................   26,554     11,035 
Research and development....................................   11,407     11,766 
Selling, general and administrative.........................   36,878     11,936 
                                                             --------   -------- 
                                                               74,839     34,737 
                                                             --------   -------- 
OPERATING INCOME............................................   44,388     16,045 
Interest expense, net.......................................  (12,472)      (266)
                                                             --------   -------- 
INCOME BEFORE INCOME TAXES..................................   31,916     15,779 
Provision for income taxes..................................    2,750        813 
                                                             --------   -------- 
INCOME BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT OF                        
  CHANGE IN ACCOUNTING PRINCIPLE............................   29,166     14,966 
Extraordinary item..........................................    --       (20,039)
                                                             --------   -------- 
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF CHANGE IN                              
  ACCOUNTING PRINCIPLE......................................   29,166     (5,073)
Cumulative effect of change in accounting principle.........    --       (43,500)
                                                             --------   -------- 
NET INCOME (LOSS)........................................... $ 29,166   $(48,573)
                                                             ========   ======== 
BASIC EARNINGS (LOSS) PER SHARE                                                  
Income before extraordinary item and cumulative effect of                        
  change in accounting principle............................ $   0.22   $   0.12 
Extraordinary item..........................................    --         (0.16)
Cumulative effect of change in accounting principle.........    --         (0.35)
                                                             --------   -------- 
Net income (loss)........................................... $   0.22   $  (0.39)
                                                             ========   ======== 
DILUTED EARNINGS (LOSS) PER SHARE                                                
Income before extraordinary item and cumulative effect of                        
  change in accounting principle............................ $   0.20   $   0.11 
Extraordinary item..........................................    --         (0.15)
Cumulative effect of change in accounting principle.........    --         (0.31)
                                                             --------   -------- 
Net income (loss)........................................... $   0.20   $  (0.35)
                                                             ========   ======== 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (000S)                      
Basic.......................................................  131,773    125,584 
                                                             ========   ======== 
Diluted.....................................................  148,084    140,522 
                                                             ========   ======== 

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BIOVAIL CORPORATION 

CONSOLIDATED STATEMENTS OF CASH FLOWS 

IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(ALL DOLLAR AMOUNTS ARE EXPRESSED IN THOUSANDS OF U.S. DOLLARS) 

                                                                [Download Table]

                                                              THREE MONTHS ENDED   
                                                                   MARCH 31        
                                                             --------------------- 
                                                               2001        2000    
                                                             ---------   --------- 
                                                                                   
                                                                  (Unaudited)      
CASH FLOWS FROM OPERATING ACTIVITIES                                               
Net income (loss)........................................... $  29,166   $ (48,573)
Depreciation and amortization...............................    13,403       5,540 
Amortization of discount on long-term obligations...........     3,954      --     
Deferred income taxes.......................................     1,450      --     
Compensation cost for employee stock options................       500      --     
Extraordinary item..........................................    --          20,039 
Cumulative effect of change in accounting principle.........    --          43,500 
                                                             ---------   --------- 
                                                                48,473      20,506 
Change in non-cash operating items..........................    16,857     (22,518)
                                                             ---------   --------- 
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES.............    65,330      (2,012)
                                                             ---------   --------- 
CASH FLOWS FROM INVESTING ACTIVITIES                                               
Additions to property, plant and equipment, net.............   (12,987)     (3,929)
Additions to intangible assets..............................   (14,002)     --     
Reduction in intangible assets..............................     8,750         261 
Acquisition of long-term investments........................       (42)     (2,285)
Maturity of short-term investments, net.....................    --          46,346 
Proceeds from sale of assets held for disposal..............    --          17,000 
                                                             ---------   --------- 
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES.............   (18,281)     57,393 
                                                             ---------   --------- 
CASH FLOWS FROM FINANCING ACTIVITIES                                               
Issuance of common shares...................................     7,415     102,298 
Repayments under revolving term credit facility.............   (76,095)     --     
Reduction in other long-term obligations....................   (53,820)    (10,651)
Issuance of Convertible Subordinated Preferred Equivalent                          
Debentures, net of financing costs..........................    --         290,312 
Repurchase of U.S. Dollar Senior Notes......................    --        (141,017)
Collection of warrant subscription receivable...............    --           1,282 
                                                             ---------   --------- 
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES.............  (122,500)    242,224 
                                                             ---------   --------- 
Effect of exchange rate changes on cash and cash                                   
  equivalents...............................................      (127)        (21)
                                                             ---------   --------- 
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS............   (75,578)    297,584 
Cash and cash equivalents, beginning of period..............   125,144     178,086 
                                                             ---------   --------- 
CASH AND CASH EQUIVALENTS, END OF PERIOD.................... $  49,566   $ 475,670 
                                                             =========   ========= 

Presentation for the three months ended March 31, 2001 and 2000, reflects the   
retroactive adoption of SAB 101, and the reclassification of certain figures.   

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SHAREHOLDER INFORMATION 

HEAD OFFICE                                                                     

Biovail Corporation                                                             
2488 Dunwin Drive                                                               
Mississauga, Ontario                                                            
Canada L5L 1J9                                                                  

HOW TO REACH US FOR MORE INFORMATION                                            

For additional copies of this report, the annual report on form 20-F as 
filed with the United States Securities and Exchange Commission, for quarterly  
reports or for further information, please contact Investor Relations.          

THE ANNUAL MEETING OF SHAREHOLDERS                                              

The annual meeting of shareholders will be held at:                     

2:00 p.m.                                                                       
Monday, June 25, 2001                                                           
Metro Toronto Convention Centre                                                 
Room 206 DF                                                                     
255 Front Street West                                                           
Toronto, Ontario M5V 2W6                                                        

CORPORATE INFORMATION 

TRADING SYMBOLS                                                                 

Common Shares:  BVF                                                             
Common Share Warrants:  BVF_w                                                   
Convertible Subordinated Preferred Equivalent Debentures:  BVF_p                

REGISTRARS AND TRANSFER AGENTS                                                  

CIBC Mellon Trust Company                                                       
Toronto, Canada                                                                 
ChaseMellon Shareholder Services                                                
New York, New York                                                              

The following words and logos are trademarks for the company and may be 
registered in Canada, the United States and certain other jurisdictions:        
Biovail, Cardizem-Registered Trademark-, Tiazac-Registered Trademark-, Viazem,  
CEFORM -Registered Trademark-, Flash Dose-Registered Trademark-,                
Shearform-Registered Trademark- and Crystaal.                                   

  To the extent any statements made in this report contains 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.    

    Financial Statements prepared in accordance with Canadian Generally Accepted
Accounting Principles are made available to all shareholders.                   

[LOGO]                                                                          

Biovail Corporation                                                             
2488 Dunwin Drive                                                               
Mississauga, Ontario                                                            
Canada L5L 1J9                                                                  

T: (416) 285-6000                                                               
F: (416) 285-6499                                                               
E: ir@biovail.com                                                               
W: www.biovail.com                                                              

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This 6-K Filing		Date		First		Last			Other Filings
		3/31/00		6					6-K
		12/31/00		4					20-F
For The Period Ended		3/31/01		3		6
Filed On / Filed As Of		5/30/01
		6/25/01		7
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