Biovail faces lawsuits from hedge fund and analysts it sued
This article was originally published in Scrip
Two separate complaints have been filed against Biovail by a hedge fund and an analyst firm that allege the Canadian company committed malicious prosecution in filing lawsuits against them in 2006. Biovail's case against the hedge fund was thrown out of court in New Jersey in August 2009 by a judge who said the court lacked jurisdiction.
Hedge fund SAC Capital Advisors and equity research firm Gradient Analytics have filed complaints in the US district courts for Connecticut and Arizona, respectively. Biovail said that the complaints were without merit and that it would defend itself.
Biovail's CEO Bill Wells said: "After tremendous effort to move Biovail forward from all legacy litigation and regulatory matters, it is unfortunate that we now must deal with these complaints. However, this will not distract us from the ongoing execution of our business stratetgy, or from our goal of moving Biovail to high growth."
Biovail sued SAC Capital Advisors, Gradient Analytics and others in 2006, accusing a total of 22 defendants of colluding to drive the share price down and benefit through shorting the stock (scripnews.com, March 3rd, 2006).
revenue growth
Separately, Biovail has reported its results for the fourth quarter and full year 2009. Revenues, which are reported in US dollars, rose by 33% in the fourth quarter to $241 million, and by 8% for the full year to $820 million.
Revenues were driven by higher product revenues, notably from the antidepressant Wellbutrin XL (bupropion), for which Biovail acquired full US commercialisation rights in May. This added around $109 million in revenues for the year, partially offset by declining volumes because of generic competition. Full-year Wellbutrin revenues were up by 44%, to $173 million.
Its other major product revenue line, the Zovirax (aciclovir) franchise, contracted by 3% to $146 million as prescription volumes declined and wholesaler inventories were reduced. The company's legacy products business performed well, helped by price increases which largely offset declining prescription volumes, and supply chain interruptions at rival manufacturers boosting sales of generic Tiazac (extended-release diltiazem). Full-year legacy product revenues grew by 7% to $166 million.
Various costs associated with recent transactions, as well as impairment and legal charges and a loss linked to the sale and leaseback of its corporate headquarters in Mississauga, Ontario, as well as a lower deferred income tax benefit than in 2008, contributed to a decline in net income, from $200 million to $177 million for the full year and from $120 million to $73 million in the fourth quarter.
The company revealed that it has reduced its target proceeds from the sale and monetisation of non-core assets from $80-90 million to "in excess of $70 million", and noted that it had so far realised $63 million.
For 2010, Biovail expects modest revenue growth, driven by Wellbutrin, the tetrabenazine franchise, dilitiazem products and Biovail Pharmaceuticals Canada. It said earnings per share would be lower than in 2009, because of "significant investments being made in Biovail's future growth".
The company is signing deals to reposition itself as a speciality CNS company. "While we're well ahead of where we thought we would be at this time, we're eager to maintain momentum," said Mr Wells. He noted that the recent deal to acquire US and Canadian rights to Alexza Pharmaceuticals' antipsychotic Staccato loxapine "could provide the basis for the deployment of an internal US sales force – a key component of our long-term business strategy".