UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13a - 16 AND 15d - 16 OF
THE SECURITIES EXCHANGE ACT OF 1934
AUGUST 7, 2001 COMMISSION FILE NUMBER 001-11145
BIOVAIL CORPORATION
(TRANSLATION OF REGISTRANT'S NAME INTO ENGLISH)
2488 DUNWIN DRIVE, MISSISSAUGA, ONTARIO L5L 1J9, CANADA
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (416) 285-6000
INDICATE BY CHECK MARK WHETHER THE REGISTRANT FILES OR WILL
FILE ANNUAL REPORTS UNDER COVER OF FORM 20-F OR FORM 40-F
Form 20-F X Form 40-F ___
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INDICATE BY CHECK MARK WHETHER FOR REGISTRANT BY FURNISHING THE INFORMATION
CONTAINED IN THIS FORM IS ALSO THEREBY FURNISHING THE INFORMATION TO THE
COMMISSION PURSUANT TO RULE 12g 3-2 (b) UNDER THE SECURITIES EXCHANGE ACT OF
1934.
Yes ___ No X
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BIOVAIL CORPORATION INTERNATIONAL
QUARTERLY REPORT
THIS REPORT OF FOREIGN ISSUER ON FORM 6-K IS INCORPORATED BY REFERENCES INTO THE
REGISTRATION STATEMENT ON FORM S-8 OF BIOVAIL CORPORATION (REGISTRATION NO.
333-92229).
PART II - Other Information
99. A ON JULY 31, 2001, THE COMPANY ANNOUNCED SECOND QUARTER 2001 FINANCIAL
RESULTS. THE PRESS RELEASE ISSUED BY THE COMPANY AND FILED WITH THE CANADIAN
SECURITY ADMINISTRATORS AND STOCK EXCHANGES (NYSE / TSE) ATTACHED AS REFERENCE.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Biovail Corporation
August 7, 2001 By /s/John R. Miszuk
-----------------
John R. Miszuk
Vice President, Controller
3
[GRAPHIC OMITTED]
CONTACT: Ken Howling
Vice President Finance
(416) 285-6000
FOR IMMEDIATE RELEASE:
* BIOVAIL REPORTS RECORD SECOND QUARTER 2001 RESULTS *
- Product sales revenue increased 176% for the quarter -
- Second quarter diluted EPS of $0.30 increased 76% versus prior year
adjusted EPS of $0.17 -
- Raising 2001 revenue and earnings guidance -
- Cardizem(R)XL study analyzed and highly statistically significant
results achieved -
TORONTO, Canada, July 31, 2001 - Biovail Corporation (NYSE,
TSE:BVF) today reported record financial results for the three-month
and six-month periods ending June 30, 2001. Total revenues for the
second quarter of 2001 increased 105% to $133.5 million, compared with
$65.2 million reported for the second quarter of 2000. Total revenues
for the six months ended June 30, 2001 were $252.7 million reflecting
an increase of $136.8 million or 118% over the six months ended June
30, 2000. Results were ahead of expectations primarily due to the
resilience of the Cardizem(R) brands in the marketplace and strong
sales of the Company's controlled-release generic product portfolio.
Net income increased 82% and was $44.1 million for the second
quarter 2001 versus second quarter 2000 net income of $24.2 million.
Net income for the six months ended June 30, 2001 of $73.3 million
increased 87% versus $39.1 million for the prior year equivalent period
excluding charges for an extraordinary item related to the early
retirement of Senior Notes and the cumulative effect from the adoption
of SAB 101. Second quarter 2001 diluted earnings per share increased
76% to $0.30 per share versus $0.17 per share for the second quarter
2000. For the six months ended June 30, diluted earnings per share
increased 79% to $0.50 per share for 2001 versus $0.28 per share for
2000, excluding the charges outlined above.
Due to the resilience demonstrated by the Cardizem(R) brands,
and the strong level of sales of the Company's controlled-release
generic product portfolio, Biovail is revising upwards its previous
level of revenue and earnings guidance. Biovail currently forecasts the
following revenue and earnings per share ranges, excluding charges, for
the balance of 2001.
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Q3 2001 Q4 2001 2001
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Revised Previous Revised Previous Revised Previous
---------------------------------------------------------------------------------------------------------------
Total Revenues $145 - $160 $135 - $150 $160 - $180 $150 - 170 $560 - $590 $540 - $570
($US Millions)
---------------------------------------------------------------------------------------------------------------
Diluted EPS $0.35-$0.40 $0.30-$0.40 $0.45-$0.50 $0.40-$0.50 $1.25-$1.33 $1.23-$1.30
---------------------------------------------------------------------------------------------------------------
Also completed during the quarter were significant Phase III
clinical trials involving Biovail's novel once-daily chronotherapeutic
formulation of diltiazem. The results have demonstrated that the
product, named Cardizem(R) XL, dosed at night, results in a highly
significant statistical reduction in both diastolic blood pressure
(DBP) and systolic blood pressure (SBP) between 6 a.m. and 12 noon
compared to equivalent morning dosing. Dr. Joel Neutel, lead
investigator for the Cardizem(R) XL Study and Chief of Clinical
Pharmacology and Hypertension at the VA Medical Center in Long Beach
California, commented, "This is the first time a study has demonstrated
that a chronotherapeutic agent given at night results in clinically
meaningfully and highly statistically significant reductions in blood
pressure during the early morning period than the identical agent dosed
in the morning. Cardizem(R) XL was shown to achieve peak efficacy
between the hours of 6 a.m. and 12 noon which is desirable since this
is when the greatest incidence of non-embolic strokes and myocardial
infarctions occur."
Financial Results
Product sales revenue of $125.4 million increased 176% during
the second quarter 2001 versus second quarter 2000 and increased 192%
to $237.3 million for the first half of 2001 versus first half 2000
primarily due to sales of the Cardizem(R) line in North America, Tiazac
sales in the US and sales of a number of branded products by Biovail
Pharmaceuticals, Inc., the Company's US sales and marketing
organization. Excluding product sales revenue associated
with the acquisition of the Cardizem(R) brands and Biovail
Pharmaceuticals, Inc., product sales revenue increased over 60% for the
three months ended June 30, 2001.
Research and development revenues were approximately $2
million and $3.5 million for the second quarter and first half of 2001
respectively compared to 2000 levels of $16.6 million and $28.3 million
respectively. The reduction in research and development revenues is due
to the termination of Biovail's research and development arrangement
with Intelligent Polymers Limited (IPL) at the end of September 2000.
Royalty and licensing revenue of $6.1 million and $11.9
million for the second quarter and first half of 2001 reflect increases
in excess of 85% versus comparable 2000 levels primarily due to
royalties associated with the sale of a Cardizem(R) product by a third
party.
Gross margins were approximately 78% for the second quarter
and first half of 2001 versus approximately 70% for the comparable 2000
periods. The improvement in gross margins was primarily due to sales of
higher margin products such as the Cardizem(R) brands and a favourable
sales mix. Sales of branded pharmaceutical products accounted for more
than 60% of product sales revenue for both the second quarter and first
half of 2001.
Research and development expenses were $13.9 million and $25.3
million for the second quarter and first half of 2001. Selling, general
and administrative expenses for the second quarter and first half of
2001 of $34.9 million and $71.8 million reflect increases of 142% and
172% versus 2000 levels primarily due to the selling and marketing
expenses associated with Biovail Pharmaceuticals, Inc. acquired in the
fourth quarter 2000 and the amortization expenses associated with the
acquisition of Biovail Pharmaceuticals, Inc. and the Cardizem(R)
brands.
Operating income for second quarter 2001 increased to $57.1
million versus $23.2 million earned in the second quarter of 2000.
Operating income was $101.5 million for the first half of 2001 versus
$39.3 million for the first half of 2000.
Net interest expense was $9.7 million for the second quarter
2001 and approximately $22.2 million for the first half of 2001. The
increase in net interest expense for the second quarter and first half
of 2001 versus 2000 levels was primarily due to the convertible
preferred securities issued in March of 2000 and advances made against
the Company's revolving term
credit facility established at the end of 2000. This facility was
recently syndicated and was increased from $300 million to $400 million
due to the favourable response received from the debt capital markets.
The revolving term credit facility has received a BB- rating from
Standard & Poors and a Ba3 rating from Moody's Investor Services.
Earnings before interest, taxes, depreciation and amortization
(EBITDA) increased 157% to $71.1 million for the quarter ended June 30,
2001 versus $27.7 million for the equivalent prior year period. EBITDA
increased 161% to $128.9 million for the first half 2001 versus $49.3
million for the first half of 2000 and operating cash flow was $137.4
million for the first half of 2001.
Eugene Melnyk, Chairman of the Board, commented, "Biovail
continues to implement its strategic initiatives and therefore expand
its business base. We currently enjoy excellent growth from the sales
of our Tiazac brands, sales of our once-daily generic products, sales
from the Cardizem(R) brands in North America, sales of branded
pharmaceutical products in the Canadian market and sales from the
recently acquired Biovail Pharmaceuticals, Inc. brands. Our focus
continues to be on the execution of our revenue diversification and
multi-stage growth strategies. We will continue to expand in the area
of directly promoted branded pharmaceutical products that are both
acquired and internally developed. The Cardizem(R) XL studies have been
analyzed and we are excited by these results and the opportunity to
bring this innovative, chronotherapeutic cardiovascular medication to
the market next year."
The Company's conference call to review the second quarter and
first half 2001 results will be broadcast live at 8:30 a.m. E.S.T. on
the world wide web at www.biovail.com and a replay of the conference
call will be available on this website shortly after the call.
Biovail Corporation is an international full-service
pharmaceutical company, engaged in the formulation, clinical testing,
registration, manufacture, sale and promotion of pharmaceutical
products utilizing advanced drug delivery technologies.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995.
TO THE EXTENT ANY STATEMENTS MADE IN THIS RELEASE CONTAIN
INFORMATION THAT IS NOT HISTORICAL, THESE STATEMENTS ARE ESSENTIALLY
FORWARD LOOKING AND ARE SUBJECT TO RISKS AND UNCERTAINTIES, INCLUDING
THE DIFFICULTY OF PREDICTING FDA APPROVALS, ACCEPTANCE AND DEMAND FOR
NEW PHARMACEUTICAL PRODUCTS, THE IMPACT OF COMPETITIVE PRODUCTS AND
PRICING, NEW PRODUCT DEVELOPMENT AND LAUNCH, RELIANCE ON KEY STRATEGIC
ALLIANCES, AVAILABILITY OF RAW MATERIALS, THE REGULATORY ENVIRONMENT,
FLUCTUATIONS IN OPERATING RESULTS AND OTHER RISKS DETAILED FROM TIME TO
TIME IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION.
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)
(Unaudited)
JUNE 30 December 31
2001 2000
----------- -----------
ASSETS
CURRENT
Cash and cash equivalents $ 68,276 $ 125,144
Accounts receivable 88,377 105,850
Inventories 39,156 24,108
Deposits and prepaid expenses 4,565 5,347
----------- -----------
200,374 260,449
Long-term investments 2,413 1,561
Property, plant and equipment, net 76,712 52,541
Goodwill, net 98,823 103,105
Intangible assets, net 647,945 667,431
Other assets, net 20,900 22,180
----------- -----------
$ 1,047,167 $ 1,107,267
----------- -----------
----------- -----------
LIABILITIES
CURRENT
Accounts payable $ 30,425 $ 34,683
Accrued liabilities 46,778 35,452
Income taxes payable 9,899 6,711
Deferred revenue 38,413 26,334
Current portion of long-term obligations 95,923 182,564
----------- -----------
221,438 285,744
Deferred revenue 25,500 27,900
Long-term obligations 174,487 256,180
Convertible Subordinated Preferred Equivalent Debentures 299,985 299,985
----------- -----------
721,410 869,809
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SHAREHOLDERS' EQUITY
Common shares 507,369 492,733
Warrants 7,912 7,912
Deficit (188,550) (261,819)
Accumulated other comprehensive loss (974) (1,368)
----------- -----------
325,757 237,458
----------- -----------
$ 1,047,167 $ 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)
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
----------------------- -----------------------
2001 2000 2001 2000
--------- --------- --------- ---------
REVENUE
Product sales $ 125,398 $ 45,384 $ 237,325 $ 81,237
Research and development 1,963 16,645 3,529 28,296
Royalty and licensing 6,143 3,135 11,877 6,413
--------- --------- --------- ---------
133,504 65,164 252,731 115,946
--------- --------- --------- ---------
EXPENSES
Cost of goods sold 27,534 13,538 54,088 24,573
Research and development 13,913 13,942 25,320 25,708
Selling, general and administrative 34,925 14,456 71,803 26,392
--------- --------- --------- ---------
76,372 41,936 151,211 76,673
--------- --------- --------- ---------
OPERATING INCOME 57,132 23,228 101,520 39,273
Interest income (expense), net (9,719) 2,383 (22,191) 2,117
--------- --------- --------- ---------
Income before income taxes 47,413 25,611 79,329 41,390
Provision for income taxes 3,310 1,444 6,060 2,257
--------- --------- --------- ---------
INCOME BEFORE EXTRAORDINARY ITEM AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 44,103 24,167 73,269 39,133
Extraordinary item - - - (20,039)
--------- --------- --------- ---------
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE 44,103 24,167 73,269 19,094
Cumulative effect of change in accounting principle - - - (43,500)
--------- --------- --------- ---------
NET INCOME (LOSS) $ 44,103 $ 24,167 $ 73,269 $ (24,406)
--------- --------- --------- ---------
--------- --------- --------- ---------
BASIC EARNINGS (LOSS) PER SHARE
Income before extraordinary item and cumulative
effect of change in accounting principle $ 0.33 $ 0.19 $ 0.55 $ 0.31
Extraordinary - - - (0.16)
Cumulative effect of change in accounting principle - - - (0.34)
--------- --------- --------- ---------
Net income (loss) $ 0.33 $ 0.19 $ 0.55 $ (0.19)
--------- --------- --------- ---------
--------- --------- --------- ---------
DILUTED EARNINGS (LOSS) PER SHARE
Income before extraordinary item and cumulative
effect of change in accounting principle $ 0.30 $ 0.17 $ 0.50 $ 0.28
Extraordinary item - - - (0.14)
Cumulative effect of change in accounting principle - - - (0.31)
--------- --------- --------- ---------
Net income (loss) $ 0.30 $ 0.17 $ 0.50 $ (0.17)
--------- --------- --------- ---------
--------- --------- --------- ---------
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING (000s)
Basic 132,297 129,530 132,037 127,550
--------- --------- --------- ---------
--------- --------- --------- ---------
Diluted 147,933 143,118 147,735 141,850
--------- --------- --------- ---------
--------- --------- --------- ---------
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)
SIX MONTHS ENDED
JUNE 30
---------------------------
2001 2000
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 73,269 $ (24,406)
Depreciation and amortization 27,357 10,018
Amortization of discount on long-term obligations 7,115 -
Deferred income taxes 1,450 -
Compensation cost for employee stock options 999 -
Extraordinary item - 20,039
Cumulative effect of change in accounting principle - 43,500
----------- -----------
110,190 49,151
Change in non-cash operating items 27,222 (38,959)
----------- -----------
CASH PROVIDED BY OPERATING ACTIVITIES 137,412 10,192
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment, net (28,939) (5,791)
Additions to intangible assets (13,954) -
Reduction in intangible assets 11,352 261
Acquisition of long-term investments (209) (2,285)
Maturity of short-term investments, net - 4,218
Proceeds from sale of assets held for disposal - 20,000
----------- -----------
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (31,750) 16,403
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common shares 13,617 102,822
Proceeds from the exercise of warrants 20 -
Repayments under revolving term credit facility (75,790) -
Reduction in other long-term obligations (100,365) (10,657)
Issuance of Convertible Subordinated Preferred Equivalent
Debentures, net of financing costs - 289,410
Repurchase of U.S. Dollar Senior Notes - (141,017)
Collection of warrant subscription receivable - 2,287
----------- -----------
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (162,518) 242,845
----------- -----------
Effect of exchange rate changes on cash and cash equivalents (12) (73)
----------- -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (56,868) 269,367
Cash and cash equivalents, beginning of period 125,144 178,086
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 68,276 $ 447,453
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