DOW JONES NEWSWIRES
Though Biovail Corp.'s (BVF) first-quarter earnings came in below year-earlier results, they were ahead of analyst expectations on stronger revenue.
Biovail's profit was $39.0 million or 25 cents a share, down from $56.4 million or 35 cents a year earlier.
Excluding items, it earned 42 cents a share versus the mean analyst estimate of 31 cents and 46 cents a year earlier.
Revenue fell to $173 million from $208 million. Analyst were expecting revenue of $180 million. Product revenue totaled $165 million, down from $197 million a year earlier, due to lower revenue from Wellbutrin XL, the Zovirax line, Ultram ER, Cardizem LA and the impact of a weaker Canadian dollar.
Biovail also said that, in consideration of its shift in its research and development focus, it will close its Mississauga, Ont. research and development site and streamline its research and development operations in Chantilly, Va., resulting in the loss of about 50 jobs. The moves are expected to reduce research and development overhead by about $8 million a year and result in restructuring and other charges of about $6.2 million in the second quarter.
The company has increased its cost-reduction target to $40-$60 million annually, starting in 2010, with total write-offs and restructuring charges associated with this effort projected at $100-$120 million, up from its previous estimate of $80-$100 million. To date, $75.6 million of these charges have been incurred.
A year ago, when it released its first-quarter results, Biovail announced plans to focus on developing products for central-nervous-system, or CNS, disorders, which represented a departure from its traditional focus on drug delivery and reformulation. Chief Executive Bill Wells, who was new to the job at that time, said the business restructuring could take up to two years, with the benefits starting to show in later 2009. Meaningful benefits from Biovail's new-product focus would take longer, he said at the time. However, last September Biovail acquired Prestwick Pharmaceuticals, a move which put it ahead of schedule in its bid to generate revenue from a CNS drug.
And just this week, Biovail announced an agreement with ACADIA Pharmaceuticals Inc. (ACAD) to co-develop and commercialize pimavanserin, a new chemical entity in Phase III development as a treatment for Parkinson's disease psychosis.
Earlier Wednesday, Biovail announced the acquisition of the U.S. commercial rights of antidepressant Wellbutrin XL for $510 million. Biovail expects the purchase to add $200-$220 million to cash flows through 2010.
Tuesday in New York, Biovail closed at $11.40, off 0.8%.
-Carolyn King; 416-306-2100; AskNewswires@dowjones.com