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  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 5/30/03  Biovail Corp International        6-K         3/31/03    4:58                                     Merrill Corp/New/- FA

Document/Exhibit                   Description                      Pages   Size 

 1: 6-K         Report of a Foreign Private Issuer                  HTML    201K 
 2: EX-99.1     Exhibit 99.1 First Quarter 2003 03tor1705           HTML    168K 
 3: EX-99.2     Exhibit 99.2 First Quarter Report 2003              HTML     73K 
 4: EX-99.3     Exhibit 99.3 Cert. of Ceo/Cfo                       HTML     11K 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2003

Commission File Number 001-11145

BIOVAIL CORPORATION

(Translation of Registrant's name into English)

7150 Mississauga Road, Mississauga, Ontario, CANADA, L5N 8M5

(Address of principal executive office and zip code)

Registrant's telephone number, including area code: (905) 286-3000

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1).

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7).

Indicate by check mark whether by furnishing the information contained in this form the registrant is also hereby furnishing the information to the Commission pursuant to Rule 12g 3-2(b) under the Securities Exchange Act of 1934.

   
BIOVAIL CORPORATION

QUARTERLY REPORT

        This Report of Foreign Private Issuer on Form 6-K is incorporated by reference into the registration statements on Form S-8 (Registration No. 333-92229) and on Form F-10 (Registration No. 333-14048) of Biovail Corporation.

   
INDEX

PART I — FINANCIAL INFORMATION

   
PART II — OTHER INFORMATION

         All dollar amounts in this report are expressed in U.S. dollars.

        As used in this report, unless the context otherwise indicates, the terms "we", "us", "our" and similar terms, as well as references to "Biovail" or the "Company", mean Biovail Corporation together with its subsidiaries.

        The following words and logos are trademarks of the Company and may be registered in Canada, the United States and certain other jurisdictions: Biovail, Cardizem®, Tiazac®, Teveten®, Vasotec®, Vaseretic®, CEFORM™, Shearform™, FlashDose®, Instatab™, SportSafe™, DrinkUp™ and Cardisense®.

1

     
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)

The accompanying notes are an integral part of the consolidated financial statements.

2

     
BIOVAIL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME
In accordance with U.S. generally accepted accounting principles

(All dollar amounts are expressed in thousands of U.S. dollars, except per share data)
(Unaudited)

The accompanying notes are an integral part of the consolidated financial statements.

3

     
BIOVAIL CORPORATION

CONSOLIDATED STATEMENTS OF DEFICIT
In accordance with U.S. generally accepted accounting principles

(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)

The accompanying notes are an integral part of the consolidated financial statements.

4

     
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)
(Unaudited)

The accompanying notes are an integral part of the consolidated financial statements.

5

  BIOVAIL CORPORATION

CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

In accordance with U.S. generally accepted accounting principles
(Tabular amounts are expressed in thousands of U.S. dollars, except number of shares and per share data)
(Unaudited)

1.     GOVERNING STATUTE AND NATURE OF OPERATIONS

Biovail is incorporated under the laws of the Province of Ontario, Canada. The Company is a full-service pharmaceutical company engaged in the formulation of pharmaceutical products utilizing advanced oral drug delivery technologies, clinical testing, registration, manufacturing, sale and promotion of pharmaceutical products targeting the cardiovascular (including Type II diabetes), central nervous system, pain management and niche therapeutic areas. The Company's common shares trade on the New York Stock Exchange and the Toronto Stock Exchange.

2.     SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying unaudited consolidated financial statements have been prepared by the Company in U.S. dollars and in accordance with U.S. generally accepted accounting principles. The interim financial statements have been prepared using accounting policies that are consistent with policies used in preparing the Company's 2002 annual audited consolidated financial statements. Accordingly, these unaudited condensed notes to the consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2002.

In preparing the Company's consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and the operating results for the interim periods presented are not necessarily indicative of the results expected for the full year.

Stock-based compensation

Under the provisions of the Financial Accounting Standards Board's ("FASB") Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation", companies can either measure the compensation cost of equity instruments issued under employee compensation plans using a fair value-based method or can continue to recognize compensation cost using the intrinsic value-based method under the provisions of Accounting Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to Employees" and related interpretations. However, if the provisions of APB No. 25 are applied, pro forma disclosure of net income and earnings per share must be presented in the financial statements as if the fair value-based method had been applied.

The Company recognizes employee stock-based compensation costs under the intrinsic value-based method of APB No. 25. Accordingly, no compensation expense for stock options granted to employees at fair market value has been included in the determination of net income for the three months ended March 31, 2003 and 2002. For the three months ended March 31, 2003 and 2002, the Company recorded $500,000 of compensation expense in each period for stock options granted to employees of DJ Pharma, Inc. on acquisition. The following table presents the Company's pro forma net income and earnings per share as if the fair value-based method of SFAS No. 123 had been applied for all options granted:

6

The fair values of all stock options granted during the three months ended March 31, 2003 and 2002 were estimated as of the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

The Black-Scholes option-pricing model used by the Company to calculate option values, as well as other currently accepted option valuation models, were developed to estimate the fair value of freely tradeable, fully transferable options without vesting restrictions, which significantly differ from the Company's stock option awards. These models also require highly subjective assumptions, including future stock price volatility and expected time until exercise, which greatly affect the calculated values. Accordingly, the Company does not believe that these models necessarily provide a reliable single measure of the fair value of the Company's stock option awards.

Recent accounting pronouncements

In November 2002, the FASB issued FASB Interpretation ("FIN") No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others". FIN No. 45 clarifies and expands on existing disclosure requirements for a guarantor regarding its obligations under certain guarantees it has issued. FIN No. 45 also requires that the guarantor must recognize a liability for the fair value of its obligations under certain guarantees. The provisions of FIN No. 45 are effective for guarantees entered into after December 31, 2002. At March 31, 2003, the Company had no outstanding guarantees.

In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest Entities". FIN No. 46 requires consolidation of a variable interest entity by the primary beneficiary of the entity's expected results of operations. FIN No. 46 also requires certain disclosures by all holders of a significant variable interest in a variable interest entity that are not the primary beneficiary. FIN No. 46 is effective immediately for variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to February 1, 2003, FIN No. 46 is effective in the first interim or annual period beginning after June 15, 2003. The adoption of FIN No. 46 is not expected to have a material effect on the Company's financial position or results of operations.

In May 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities". SFAS No. 149 amends and clarifies the accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities". SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. The Company has not determined what effect, if any, the adoption of SFAS No. 149 will have on its financial position or results of operations.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity". SFAS No. 150 establishes standards for the measurement and classification of certain financial instruments with characteristics of both liabilities and equity. SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003. Effective June 1, 2003, the Company will account for financial instruments in accordance with SFAS No. 150.

3.     INVENTORIES

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4.     INTANGIBLE ASSETS

Amortization expense amounted to $40,521,000 and $12,777,000 for the three months ended March 31, 2003 and 2002, respectively.

5.     LONG-TERM OBLIGATIONS

Interest expense on long-term obligations amounted to $9,284,000 and $1,396,000 for the three months ended March 31, 2003 and 2002, respectively. Interest expense included the amortization of the discounts on long-term obligations of $2,091,000 and $693,000 for the three months ended March 31, 2003 and 2002, respectively.

Revolving term credit facility

At March 31, 2003, the Company had advances of $10,000,000 borrowed under the credit facility and a letter of credit of $93,170,000 issued under the credit facility. The letter of credit secures the remaining semi-annual payments the Company is required to make under the Vasotec® and Vaseretic® agreement. The Company had a remaining balance of $496,830,000 available to borrow under the credit facility.

Interest rate swap contracts

The fair value of the fixed rate 7⁷/8% Senior Subordinated Notes due April 1, 2010 ("Notes") is affected by changes in interest rates. The Company manages this exposure to interest rate changes through the use of interest rate swap contracts, which are recorded at fair value in the Company's consolidated balance sheets. In June 2002, the Company entered into three interest rate swap contracts of aggregate $200,000,000 notional amount, which have been designated as a hedge of the Notes. The interest rate swaps effectively modify the Company's exposure to interest rate fluctuations by converting the interest payable on one-half of the fixed rate Notes to a floating rate. The contracts involve the receipt of amounts based on a fixed rate of 7⁷/8% in exchange for floating rate interest payments, based on six-month London Interbank Offering Rate plus a spread of 2.69% to 2.99%, without an exchange of the underlying principal amount. Net receipts or payments relating to the interest rate swaps are recorded as an adjustment to interest expense.

8

At March 31, 2003, the fair value of the interest rate swap contracts of $19,044,000 was included in other assets with a respective offsetting $15,129,000 fair value adjustment added to the carrying value of the Notes in long-term obligations. For the three months ended March 31, 2003, the Company recognized other income of $507,000 related to the ineffective portion of the interest rate swaps.

6.     COMMON SHARES

During the three months ended March 31, 2003, the Company issued 131,227 common shares on the exercise of stock options for proceeds of $1,689,000. The number of stock options outstanding at March 31, 2003 and December 31, 2002 were 6,882,265 and 5,924,615, respectively. During the three months ended March 31, 2003, 1,134,020 stock options were granted, 131,227 stock options were exercised and 45,143 stock options were forfeited.

7.     RECOVERY FROM PRODUCT SUPPLY AGREEMENTS

During the three months ended March 31, 2003, the Company reached settlements under previously disputed product supply agreements with: (i) Eli Lilly and Company ("Lilly"), with respect to Lilly's breach of contract due to its inability to supply Keftab to the Company, and (ii) Mylan Pharmaceuticals, Inc. ("Mylan"), with respect to Mylan's breach of contract relating to its supply to the Company of its bioequivalent version of Verelan ("Verapamil").

Lilly

In March 2003, the Company negotiated a full and final settlement with Lilly with respect to Lilly's failure to supply Keftab and, as a result, the Company returned all of its right, title and interest in Keftab to Lilly. The settlement payment included the following amounts: (i) the recoverable value of the Keftab product right recorded in intangible assets, (ii) compensation for the value of the destroyed Keftab inventory recorded as a long-term receivable from Lilly, (iii) a reimbursement for legal and other expenses incurred by the Company during the three months ended March 31, 2003, and (iv) interest. The remaining amount of the settlement payment was recorded as a recovery from product supply agreements and represented the gross profit lost by the Company on account of Lilly's recall of Keftab and a share of the value of the Keftab product right that was written-off by the Company in December 2001.

Mylan

In March 2003, an arbitration tribunal awarded the Company damages with respect to Mylan's failure to supply Verapamil. The settlement payment included the following amounts: (i) a reimbursement for legal expenses incurred by the Company during the three months ended March 31, 2003, and (ii) interest. The remaining amount of the settlement payment was recorded as a recovery from product supply agreements and represented the profit lost by the Company on sales of Verapamil.

8.     EARNINGS PER SHARE

Earnings per share were computed as follows:

9

9.     COMPREHENSIVE INCOME

Comprehensive income comprised the following:

10.   CASH FLOW INFORMATION

Net change in non-cash operating items