Biovail Corporation

Biovail Corporation

March 10, 2005 07:30 ET

Biovail Reports Fourth Quarter, Year-End 2004 Financial Results


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: BIOVAIL CORPORATION

NYSE, TSX SYMBOL: BVF

MARCH 10, 2005 - 07:30 ET

Biovail Reports Fourth Quarter, Year-End 2004
Financial Results

TORONTO--(CCNMatthews - Mar 10, 2005) -


Company Achieves Record Revenues of $277.9 Million for Fourth Quarter
and $886.5 Million for Year Ended December 31, 2004; Fourth-Quarter GAAP
EPS of $0.29

Biovail Corporation (NYSE:BVF)(TSX:BVF) today announced financial
results for the three-month and 12-month periods ending December 31,
2004.

Total revenues for the three months ended December 31, 2004 were $277.9
million, compared with $199.7 million for the fourth quarter of 2003, an
increase of 39%. Total revenues for the 12 months ended December 31,
2004 were $886.5 million, compared with $823.7 million for 2003, an
increase of 8%.

Fourth-quarter 2004 net income, in accordance with United States
Generally Accepted Accounting Principles (GAAP), was $46.0 million,
compared with a net loss of $96.0-million for the corresponding 2003
period. Net income for the year ended December 31, 2004 was $161.0
million, compared with a $27.3-million net loss in 2003. GAAP diluted
earnings per share (EPS) for the fourth quarter of 2004 were $0.29,
versus a $0.60 diluted loss per share for the fourth quarter of 2003. In
2004, GAAP diluted EPS was $1.01, compared with a diluted loss per share
of $0.17 for the full year of 2003.

"Biovail's record fourth-quarter revenues reflect the continued strength
in Wellbutrin XL, and strong performance for Biovail's promoted
products," said Biovail Chairman Eugene Melnyk. "With a significantly
de-leveraged balance sheet and a new Strategic Plan close to
implementation, Biovail will be better positioned to capitalize on its
value-creating technologies and capabilities."

Dr. Douglas Squires, Chief Executive Officer, said, "Our goal is to
maximize shareholder value - more specifically, to increase the
profitability of our U.S. business while maintaining a direct commercial
presence that allows us both the flexibility and opportunity to create
sustainable growth. At this time, we are actively evaluating various
alternatives to better leverage our U.S. commercial organization. This
is a top priority for Biovail. While it is difficult to predict the
exact timing, we are working toward implementation in the next 30 to 60
days."

Biovail today announced its revenues and earnings guidance for 2005 (see
separate news release). The financial guidance presented today reflects
the Company's strength in capitalizing on its drug-delivery technologies
to develop and commercialize medications that offer clinically
meaningful enhancements to existing medications.

On March 3, 2005, the United States Securities and Exchange Commission
(SEC) served a subpoena on the Company pursuant to a formal order of
investigation related to an informal inquiry initiated in November 2003.
The investigation relates primarily to a number of accounting and
disclosure practices. Biovail has been fully co-operating with the SEC,
and will continue to do so, in an effort to bring the investigation to a
conclusion in an expeditious manner.

Fourth-Quarter 2004, 2004 Full-Year Financial Performance

Product sales for the fourth quarter of 2004 were a record $265.7
million, compared with $168.3 million in the fourth quarter of 2003, an
increase of 58%. This solid performance is largely attributable to the
ongoing success of Wellbutrin XL, Biovail's extended-release formulation
of bupropion hydrochloride for the treatment of depression. In August,
rapidly increasing sales for Wellbutrin XL moved Biovail into the third
and highest tier of its pricing agreement with GlaxoSmithKline. Also
contributing to the positive fourth-quarter performance was Biovail
Pharmaceuticals Canada (BPC) and Biovail's portfolio of generic
products.

Product sales for the full year 2004 were $841.4 million, compared with
$632.9 million for the comparable 12-month period in 2003, an increase
of 33%. As a percentage of total corporate revenue, product sales were
96% and 95% in the fourth quarter and all of 2004, respectively,
compared with 84% and 77% in the fourth quarter and full year 2003,
respectively.

Core products - more specifically, those that Biovail, or a distribution
partner, is actively promoting (Cardizem LA, the Teveten line, the
Zovirax line, BPC products and Wellbutrin XL) - generated revenues of
$185.7 million in the fourth quarter of 2004 and $565.8 million for the
full year, compared with $105.9 million and $322.5 million in the
corresponding periods in 2003, an increase of 75% in both cases. Core
products represented 67% of overall revenues in the fourth quarter of
2004, compared with 53% in the corresponding 2003 period, demonstrating
continued organic growth in Biovail's core business. For the full year,
core products represented 64% of overall revenues, compared with 39% for
the full year 2003.

Revenues for Wellbutrin XL were $109.7 million in the fourth quarter of
2004, compared with $48.6 million in the fourth quarter of 2003, as
Wellbutrin XL continues to gain share in the U.S. anti-depressant
market. For the full year 2004, Wellbutrin XL revenues were $317.3
million, compared with $64.9 million for 2003 (Wellbutrin XL was
launched in September 2003). In December 2004, Wellbutrin XL captured
54.8% of the new prescriptions written for the Wellbutrin brand
(including generics). During 2004, GlaxoSmithKline built its safety
stock levels of Wellbutrin XL - both from a strategic perspective and in
anticipation of Biovail shifting its manufacturing attention to
once-daily tramadol in 2005.

Revenues from Biovail's promoted products (Cardizem LA, Teveten, Teveten
HCT, Zovirax Ointment and Zovirax Cream) were $46.3 million in the
fourth quarter of 2004, compared with $33.8 million in the corresponding
period in 2003, an increase of 37% largely attributable to Zovirax. For
2004, revenues from promoted products were $146.7 million, compared with
$172.4 million for the corresponding period in 2003. This 15% decrease
primarily reflects the impact of reduced wholesaler inventory levels in
2004. Importantly, Biovail has signed distribution service agreements
(DSAs) with the three largest U.S. pharmaceutical wholesalers. Going
forward, this initiative should allow for reported revenues to more
closely track prescription trends. Total prescriptions for Biovail's
promoted products increased 12% in the fourth quarter of 2004, compared
with the fourth quarter of 2003, and increased 34% for 2004, compared
with 2003.

Cardizem LA generated revenues of $10.3 million in the fourth quarter of
2004, compared with $20.0 million for the corresponding period in 2003.
The decrease reflects a reduction in wholesaler inventories for the
product. For the 12 months ended December 31, 2004, revenues for
Cardizem LA were $53.6 million, up 12% from the $47.7 million recorded
in the same period in 2003 (Cardizem LA was launched in April 2003).
Cardizem LA total prescription volume increased 30% for the fourth
quarter of 2004 and 108% for the full year 2004, versus the comparable
periods in 2003, as Cardizem LA continues to gain market share in the
once-daily diltiazem market. Cardizem LA captured 8.2% of total
prescription volume for the class in the fourth quarter of 2004,
compared with 6.1% in the fourth quarter of 2003. In 2004, Cardizem LA's
share of the once-daily diltiazem market increased 30.6%.

Biovail's Teveten franchise (Teveten, Teveten HCT) generated revenues of
$5.2 million in the fourth quarter of 2004, compared with $2.1 million
in the prior year period. For 2004, revenues for the Teveten line were
$17.6 million, compared with $22.2 million for the full year 2003. Total
prescriptions for Biovail's Teveten line of products increased 21% in
the fourth quarter of 2004 and 27% in the 2004, compared with the
corresponding periods in 2003.

Fourth-quarter 2004 revenues for Biovail's Zovirax line (Zovirax Cream
and Zovirax Ointment) were $30.8 million, compared with $11.7 million in
the prior-year period. Zovirax revenues for the year ended December 31,
2004, were $75.5 million, compared with $102.4 million for the
comparable period in 2003. Total prescriptions for Zovirax decreased 4%
in the fourth quarter of 2004 and 2% in the full year 2004, compared
with the corresponding periods in 2003. In the fourth quarter of 2004,
Zovirax Ointment and Zovirax Cream held a combined 64.8% share of the
topical herpes market, an increase of 4.2 percentage points in market
share versus fourth-quarter 2003 levels. However, the topical herpes
market continued to lose share to oral formulations.

Biovail Pharmaceuticals Canada (BPC) revenues were $29.7 million in the
fourth quarter of 2004 and $101.9 million for the full year 2004,
compared with $23.4 million and $85.2 million in the fourth quarter and
full year 2003, respectively. The key performance drivers for BPC were
Wellbutrin SR and Tiazac. Total prescription volume for Wellbutrin SR
increased 22% in the fourth quarter of 2004, versus the comparable 2003
period. Total prescription volume for Tiazac increased 16% in the fourth
quarter of 2004, compared with the same period in 2003. During the
fourth quarter of 2004, Biovail started to ship quantities of Tiazac XC,
its once-daily extended-release formulation of diltiazem for the
treatment of hypertension. Tiazac XC was formally launched in Canada on
January 25, 2005.

Legacy products generated revenues of $36.9 million for the fourth
quarter of 2004, compared with $36.4 million for the corresponding
period in 2003. For the full-year 2004, Legacy products generated
revenues of $125.9 million, compared with $208.9 million in the year-ago
period. The decrease in 2004 revenues can be primarily attributed to
expected year-over-year declines in total prescription volumes for these
mature products. Other factors contributing to the decline include a
reduction in wholesaler inventory levels, the genericization of Tiazac
in April 2003 and the termination in August 2004 of the sub-licensing
agreement for Cedax. In the fourth quarter of 2004, total prescription
volume decreased 32%, relative to 2003 levels, which is generally in
line with Biovail's expectations. Biovail also announced today that the
Company's Board of Directors is in the process of evaluating a number of
options to maximize the value of Biovail's Legacy products (see separate
news release).

Sales revenue for Biovail's generic products was $43.1 million in the
fourth quarter of 2004, compared with $25.9 million in the fourth
quarter of 2003, an increase of 66%. Generic product sales for the 12
months ended December 31, 2004, were $149.7 million, compared with
$101.5 million for the comparable period in 2003, an increase of 47%.
The increase in generic product sales was mainly due to strong sales of
generic Adalat CC and Cardizem CD, the renegotiated agreement with our
distribution partner Teva Pharmaceutical Inc., and the normalization of
inventory levels at Teva.

Product Sales Performance Summary

The following table summarizes Biovail's product sales performance in
the fourth quarter and full-year 2004 and 2003:



($000s) Q4/04 Q4/03 Growth 2004 2003 Growth
Sales Sales Rate Sales Sales Rate
----------------------------------------------------------------------
Promoted Products 46,334 33,847 37% 146,676 172,418 (15%)
Wellbutrin XL 109,715 48,636 126% 317,298 64,932 N/M
Biovail
Pharmaceuticals
Canada 29,673 23,427 27% 101,865 85,197 20%
----------------------------------------------------------------------
Total Core Products 185,722 105,910 75% 565,839 322,547 75%
Legacy Products 36,853 36,413 1% 125,932 208,860 (40%)
Generics 43,104 25,946 66% 149,675 101,491 47%
----------------------------------------------------------------------
Total Product Sales 265,679 168,269 58% 841,446 632,898 33%
----------------------------------------------------------------------



Total Prescription Volume Summary

The following table summarizes total prescription volume in the fourth
quarter and full-year 2004 and 2003:



(000s) Q4/04 Q4/03 Growth 2004 2003 Growth
Total Rx Total Rx Rate Total Rx Total Rx Rate
----------------------------------------------------------------------
Promoted
Products 872,796 776,592 12% 3,264,282 2,439,446 34%
Wellbutrin XL 2,791,719 951,436 193% 9,450,855 984,498 N/M
Biovail
Pharmaceuticals
Canada 804,341 763,808 5% 3,095,195 2,955,372 5%
----------------------------------------------------------------------
Total Core
Products 4,468,856 2,491,836 79% 15,810,332 6,379,316 148%
----------------------------------------------------------------------
Legacy Products 688,129 1,012,040 (32%) 3,068,578 5,473,544 (44%)
Generics 1,865,437 1,980,827 (6%) 7,600,178 8,290,023 (8%)
----------------------------------------------------------------------
Total
Prescriptions 7,022,422 5,484,703 28% 26,479,088 20,142,883 31%
----------------------------------------------------------------------
Source: IMS



Co-promotion, royalty and licensing revenue was $4.6 million and $24.6
million for the fourth quarter and full year 2004, compared with $28.0
million and $176.6 million in the corresponding periods in 2003,
representing decreases of 84% and 86%, respectively. These declines
primarily reflect the conclusion of Biovail's economic interest in the
sales of a generic formulation of Prilosec (omeprazole), in addition to
the termination of the co-promotion agreements for Wellbutrin SR in the
United States in March 2003, and Celexa in Canada in December 2003.

Cost of goods sold for the fourth quarter of 2004 was $65.3 million,
compared with $50.6 million in the fourth quarter of 2003, an increase
of 29%. Cost of goods sold for full-year 2004 was $228.3 million,
compared with $139.5 million for the comparable 12-month period in 2003,
an increase of 64%. The increase in cost of goods sold is primarily
related to an increase in product sales revenues.

Gross margins on product sales were 75% in the fourth quarter of 2004,
compared with 70% in the fourth quarter of 2003, an increase that
largely reflects the impact of higher volumes and supply pricing for
Wellbutrin XL in the fourth quarter of 2004. Gross margins for full-year
2004 were 73%, down from the 78% realized in 2003, which was favorably
impacted by the recognition of a $25.5-million cumulative reduction in
the Zovirax supply price.

Research-and-development expenditures for the fourth quarter of 2004
were $19.0 million, compared with $26.1 million for the fourth quarter
of 2003. Research and development expenditures for all of 2004 were
$70.5 million, compared with $86.6 million for the comparable 12-month
period in 2003. The decreases in 2004 reflect the culmination of certain
high-cost clinical trials that were ongoing during 2003, versus
conducting numerous earlier-stage, lower-cost programs during 2004.

Selling, General and Administrative Expenses

Selling, general and administrative (SG&A) expenses for the fourth
quarter of 2004 were $73.0 million, compared with $66.3 million in the
fourth quarter of 2003, an increase of 10%. For 2004, SG&A expenses were
$257.4 million, compared with $242.8 million for the comparable 2003
period, an increase of 6%. The increases reflect higher headcount
numbers in Biovail's U.S. sales force and the initiation of marketing
programs in support of the Company's promoted products. As a percentage
of total revenue, SG&A expenses were 26% in the fourth quarter and 29%
for full-year 2004, compared with 33% and 29%, respectively, for the
corresponding periods in 2003.

Amortization expense in the fourth quarter of 2004 was $15.8 million,
compared with $26.2 million in the fourth quarter of 2003, a decrease of
40%. Amortization expense for the full year 2004 was $65.0 million, down
54% from $140.9 million for the same period a year earlier. The
significant decrease in this expense item primarily reflects the
conclusion of Biovail's participating interest in generic omeprazole in
early 2004.

Specific Items Affecting Operations

In the fourth quarter of 2004, Biovail recorded $42.2-million in
non-cash charges (which impacted EPS by $0.26), related to the
write-down of the remaining carrying value of the Rondec product rights
($4.4 million), and an other-than-temporary decline in the value of the
Company's equity investment in Ethypharm ($37.8 million). In the fourth
quarter and full-year 2004, Biovail recorded a $4.1 million and $4.2
million, respectively, non-cash equity loss (which impacted EPS by
$0.03) related to the Company's investment in the Western Life Sciences
Venture Fund. Financial results for the 12-month period ended December
31, 2004, also include a $1.5-million gain (which positively impacted
EPS by $0.01), related to the disposal of the Cedax product rights in
the third-quarter of 2004, and an $8.6-million acquired R&D charge
(which impacted EPS by $0.05), related to the acquisition of the
remaining interest in BNC-PHARMAPASS in the first quarter of 2004.

Strengthened Balance Sheet

Biovail continues to strengthen its balance sheet. In 2004, Biovail made
$280 million in payments against the Company's revolving-term credit
facility, completely eliminating the debt outstanding under this
facility. With respect to long-term obligations, Biovail made payments
of $66.3 million in 2004. The Company's debt-to-equity ratio stood at
0.5 at the end of the fourth quarter of 2004, compared with 0.9 at
December 31, 2003. As at the end of February 2005, Biovail's cash
balance was just under $100 million.

Cash flows from operations were $111.7 million for the fourth quarter of
2004 and $277.1 million for the 12 months ended December 31, 2004.
Capital expenditures in the fourth quarter and full year 2004 amounted
to $7.8 million and $28.0 million, respectively.

Product-Development Pipeline Progress

In October 2004, Biovail received an Approvable Letter from the U.S.
Food and Drug Administration (FDA) for a once-daily extended-release
formulation of the analgesic tramadol. Earlier this week, Biovail
submitted a Complete Response to the FDA's Approvable Letter. Biovail
anticipates a response from the FDA in May 2005.

In January 2005, Biovail received an Approvable Letter from the FDA for
its NDA for an orally disintegrating tablet (ODT) formulation of the
analgesic tramadol hydrochloride. The Approvable Letter involves the
resolution of routine matters; final approval is anticipated mid-2005. A
Complete Response was filed March 19, 2005 and we anticipate a response
by the FDA in May 2005.

In February 2005, the FDA issued an Approvable Letter for Biovail's ODT
formulation of citalopram for depression. The Approvable Letter involves
the clarification of a number of chemistry and manufacturing issues.
Biovail anticipates rapidly providing this information and working with
the FDA over the coming weeks and months to resolve these issues. In
addition, the Letter provides revised package-insert language to reflect
recent changes in the FDA's mandated labeling for the class of selective
serotonin reuptake inhibitors (SSRIs) and other anti-depressants.

In late-February 2005, Biovail, and partner Depomed, Inc. of Menlo Park,
CA, received an Approvable Letter from the FDA related to the New Drug
Application (NDA) for Glumetza™, an extended-release formulation of
metformin for the treatment of Type II diabetes. The Approvable Letter
indicated that Glumetza™ is approvable, pending the completion of
discussions with regard to an issue related to finalizing one
manufacturing specification. Biovail anticipates submitting a response
to the FDA in the coming weeks. No clinical or labeling issues were
identified in the letter.

In other pipeline programs, Biovail expects to file a New Drug
Submission (NDS) with the Therapeutic Products Directorate (TPD) in
Canada before the end of March for Wellbutrin XL for the treatment of
depression in adults. The application contained the results of two
adequate and well-controlled trials in Major Depressive Disorder, as
well as other supporting clinical data. In addition, development efforts
continue for novel formulations of several products, including
venlafaxine, bupropion, zolpidem, eprosartan, enalapril, and metoprolol,
including combination products with application in cardiovascular
medicine and metabolic diseases.

Late last week, Flamel Technologies announced that it had ended its
licensing agreement with Biovail for Genvir, a development-stage product
for herpes and shingles. In April 2003, Biovail acquired the exclusive
North American rights to Flamel's oral, controlled-release formulation
of Acyclovir. Since that time, Biovail has had numerous interactions
with the FDA concerning the clinical program that the FDA is requiring
as a basis for their approval. This process culminated in a formal
Special Protocol Assessment, which was received from the FDA in
September 2004.

"The hurdles that the FDA established for this program were significant,
patient numbers have quadrupled, and the resultant costs for the
clinical program have more than doubled relative to our estimates at the
time the product was licensed," said Dr. Squires. "For these and other
reasons, Biovail was in the process of discussing a separation when
Flamel decided to terminate the agreement."

In 2004, Biovail achieved several research-and-development milestones.
These included the completion of four NDA filings, one NDS submission in
Canada, and a supplemental NDS filing for the angina indication for
Tiazac XC. With respect to approvals, Biovail received FDA approval for
Cardizem LA in the treatment of angina and TPD approval for Tiazac XC in
the treatment of hypertension in Canada. Biovail commercialized Tiazac
XC on January 25, 2005.

Steinbach Expansion

In late February 2005, Biovail announced a $27.6-million expansion
project to further enhance the manufacturing capability of the Company's
largest manufacturing facility located in Steinbach, Manitoba, 70
kilometres southeast of Winnipeg. The expansion at Steinbach will enable
Biovail to optimize the current capacity with a focus on world-class
manufacturing performance, as well as to meet growing demand and
opportunities. In 2004, Steinbach produced more than 1.4 billion of the
over 1.6 billion dosage units made by the Company's manufacturing
facilities; the others are in Dorado and Carolina, Puerto Rico. In 2003,
Steinbach produced just over 600 million dosage units.

Enhanced Corporate Governance

Biovail's Board of Directors is actively engaged with management in a
comprehensive review of Biovail's corporate-governance practices. This
action reflects a commitment made by Chairman Eugene Melnyk in June 2004
to enhance investor confidence in the Company. To this end, Biovail has
engaged the services of renowned corporate-governance expert Carol
Hansell of the law firm Davies Ward Phillips & Vineberg LLP. Among the
initiatives announced to date include the separation of roles of
Chairman and Chief Executive Officer; a review of Board structure, its
composition, processes, practices and recruitment; a succession process
designed to ensure the ongoing renewal of its Board; and the adoption of
voting to elect individual directors, thereby eliminating traditional
'slate voting'. Additional initiatives reflecting the governance
priorities of Biovail's shareholders will be announced shortly.

Conference Call

Biovail management will host a conference call and Webcast on Thursday,
March 10, 2005, at 8:30 a.m. EST for Company executives to discuss
fourth-quarter and 2004 year-end financial results. Following the
discussion, Biovail executives will address inquiries from research
analysts.

A live Webcast of this call will be available through the Investor
Relations section of the Biovail Web site at www.biovail.com. To access
the call live, please dial 416-405-9310 (Toronto and International
callers) and 1-877-211-7911 (U.S. and Canada). Listeners are encouraged
to dial in 10 minutes before the call begins to avoid delays.

A replay of the conference call will be available until 7 p.m. EST on
Thursday, March 17, 2005, by dialing 416-695-5800 (Toronto and
International callers) and 1-800-408-3053 (U.S. and Canada), using
access code, 3140863.

About Biovail Corporation

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.

For further information, please contact Ken Howling at 905-286-3000 or
send inquiries to ir@biovail.com.

"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 forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. We have based these forward-looking statements on our current
expectations and projections about future events. Our actual results
could differ materially from those discussed in, or implied by, these
forward-looking statements. Forward-looking statements are identified by
words such as "believe", "anticipate", "expect", "intend", "plan",
"will", "may" and other similar expressions. In addition, any statements
that refer to expectations, projections or other characterizations of
future events or circumstances are forward-looking statements.
Forward-looking statements include, but are not necessarily limited to,
risks and uncertainties, including the difficulty of predicting U.S.
Food and Drug Administration and Canadian Therapeutic Products
Directorate 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 and finished products, the regulatory
environment, the outcome of legal proceedings, fluctuations in operating
results and other risks detailed from time to time in the Company's
filings with the Securities and Exchange Commission and the Ontario
Securities Commission. Biovail undertakes no obligation to update or
revise any forward-looking statement.



BIOVAIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(All dollar amounts are expressed in thousands of
U.S. dollars, except per share data)
(Unaudited)

Three Months Ended Twelve Months Ended
December 31 December 31
-------------------- --------------------
2004 2003 2004 2003
--------- ---------- --------- ----------

REVENUE
Product sales $265,679 $ 168,269 $841,446 $ 632,898
Research and development 7,621 3,424 20,452 14,239
Co-promotion, royalty and
licensing 4,579 28,042 24,645 176,585
--------- ---------- --------- ----------
277,879 199,735 886,543 823,722
--------- ---------- --------- ----------
EXPENSES
Cost of goods sold 65,250 50,633 228,278 139,456
Research and development 19,024 26,143 70,493 86,570
Selling, general and
administrative 73,029 66,335 257,407 242,771
Amortization 15,807 26,245 64,976 140,895
Write-down of assets, net of
gain on disposal 42,156 45,081 40,685 45,081
Acquired research and
development - 22,111 8,640 124,720
Extinguishment of royalty
obligation - 61,348 - 61,348
Settlements - - - (34,055)
--------- ---------- --------- ----------
215,266 297,896 670,479 806,786
--------- ---------- --------- ----------
Operating income (loss) 62,613 (98,161) 216,064 16,936
Interest income 277 1,272 1,034 7,165
Interest expense (9,637) (10,392) (40,104) (40,421)
Foreign exchange gain (loss) 594 (4,413) (564) (14,007)
Other expense (4,052) (1,644) (6,486) (938)
--------- ---------- --------- ----------
Income (loss) before
provision for (recovery of)
income taxes 49,795 (113,338) 169,944 (31,265)
Provision for (recovery of)
income taxes 3,750 (17,300) 8,950 (4,000)
--------- ---------- --------- ----------
Net income (loss) $ 46,045 $ (96,038) $160,994 $ (27,265)
--------- ---------- --------- ----------
--------- ---------- --------- ----------

Diluted earnings (loss) per
share $ 0.29 $ (0.60) $ 1.01 $ (0.17)
--------- ---------- --------- ----------
--------- ---------- --------- ----------

Diluted weighted average
number of common shares
outstanding (000s) 159,349 158,768 159,258 158,516
--------- ---------- --------- ----------
--------- ---------- --------- ----------


BIOVAIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)

December 31
-----------------------
2004 2003
----------- -----------
ASSETS
Cash and cash equivalents $ 34,324 $ 133,261
Other current assets 280,327 279,191
Long-term investments 68,046 113,546
Property, plant and equipment, net 186,556 173,804
Goodwill 100,294 100,814
Intangible assets, net 978,073 1,049,475
Other assets, net 63,440 72,683
----------- -----------
$1,711,060 $1,922,774
----------- -----------
----------- -----------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 190,237 $ 262,568
Long-term obligations 445,471 764,111
Other long-term liabilities 21,439 14,500
Shareholders' equity 1,053,913 881,595
----------- -----------
$1,711,060 $1,922,774
----------- -----------
----------- -----------


BIOVAIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(All dollar amounts are expressed in thousands of U.S. dollars)
(Unaudited)

Twelve Months Ended
December 31
-----------------------
2004 2003
----------- -----------

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 160,994 $ (27,265)
Adjustments to reconcile net income (loss) to
net cash provided by
operating activities
Depreciation and amortization 88,307 157,317
Amortization of deferred financing costs 4,322 2,975
Amortization of discounts on long-term
obligations 3,218 6,562
Write-down of assets, net of gain on disposal 40,685 45,081
Acquired research and development 8,640 124,720
Equity loss 4,179 1,010
Other 6,920 4,883
Changes in operating assets and liabilities (40,175) (33,304)
----------- -----------
Net cash provided by operating activities 277,090 281,979
CASH FLOWS FROM INVESTING ACTIVITIES (42,263) (278,446)
CASH FLOWS FROM FINANCING ACTIVITIES (334,526) 72,523
Effect of exchange rate changes on cash and
cash equivalents 762 1,125
----------- -----------
Net increase (decrease) in cash and cash
equivalents (98,937) 77,181
Cash and cash equivalents, beginning of period 133,261 56,080
----------- -----------
Cash and cash equivalents, end of period $ 34,324 $ 133,261
----------- -----------
----------- -----------



-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Biovail Corporation
    Kenneth G. Howling, 905-286-3000