Business Wire - Biovail Reports Record Second Quarter 2002 Results
Business & Health/Medical Editors
TORONTO–(BW HealthWire)–July 25, 2002
Biovail Corporation (NYSE:BVF) (TSX:BVF)
- Revenues increased 39% for the quarter to $185.1 million -
- Second quarter diluted EPS of $0.39
increased 30% versus prior year -
- Cash flow from operations for the last twelve months
increased 19% to $273.2 million -
- Reiterates comfort with EPS growth in excess of 30% -
Biovail Corporation (NYSE, TSX:BVF) today reported record financial results for the three-month and six-month periods ending June 30, 2002. Total revenues for the second quarter of 2002 increased 39% to $185.1 million, compared with $133.5 million reported for the second quarter of 2001. Total revenues for the six months ended June 30, 2002 were $340.4 million reflecting an increase of $87.7 million or 35% over the six months ended June 30, 2001.
Net income increased 42% and was $62.6 million for the second quarter 2002 versus second quarter 2001 net income of $44.1 million. Net income for the six months ended June 30, 2002 of $115.6 million increased 58% versus $73.3 million for the prior year equivalent period. Second quarter 2002 diluted earnings per share increased 30% to $0.39 per share versus $0.30 per share for the second quarter 2001. For the six months ended June 30, diluted earnings per share increased 40% to $0.70 per share for 2002 versus $0.50 per share for 2001.
“In addition to strong financial results, Biovail’s second quarter performance again reflect significant advancements in the execution of the Company’s growth and strategic initiatives,” commented Eugene Melnyk, Chairman of the Board and CEO. Biovail’s successful sales force expansion program continues resulting in an increase of more than 300 personnel in Biovail’s U.S. sales organization since the beginning of 2002, bringing the total U.S. sales organization to over 600. Also during the quarter, the favorable Phase III clinical results for Cardizem(R) XL were presented at a leading medical conference and, after a ten-month review, Biovail received an Approvable Letter from the Food and Drug Administration (FDA) for this product, indicating acknowledgement that the FDA has reviewed the application and that Cardizem(R) XL is approvable.
Two events during the quarter contributed significantly to Biovail’s mid- to long-term growth opportunities. With the second quarter acquisition of the well-established Vasotec(R) brand, Biovail can now pursue the commercialization of its clinically differentiated enalapril formulation under the Vasotec(R) brand name. In addition, Biovail acquired the rights to numerous developmental products through the Company’s investments in Ethypharm S.A. and DepoMed, Inc.
“We expect to continue building upon existing pipeline and commercial opportunities through strategic licensing, development and acquisition initiatives,” stated Mr. Melnyk. “These initiatives are expected to be complimentary to the organic growth derived from our base business driven by our expanding sales and marketing capabilities.”
Financial Results
Product sales revenue of $157.8 million increased 29% during the second quarter 2002 versus second quarter 2001 and increased 25% to $287.6 million for the first half of 2002 versus first half 2001 primarily due to a strong sales performance by Biovail Pharmaceuticals USA and the recently acquired Zovirax(R), Teveten(R) and Vasotec(R) product lines. Gross margins were 73.8% for the second quarter ended June 30, 2002 and improved approximately 130 basis points versus the prior quarter primarily due to sales mix.
Research and development expenses for the second quarter 2002 were $14.5 million reflecting an increase of 38% versus the first quarter 2002. The increase in research and development expenses reflects the increase in developmental and clinical programs associated with the advancement of Biovail’s extensive pipeline. Selling, general and administrative expenses were $39.0 million for the second quarter 2002 reflecting an increase of 59% over the prior year second quarter. The increase in these expenses is due to additions to sales organization personnel in excess of 300 and an increase in marketing expenditures in support of the Company’s in-market products including Zovirax(R) and Teveten(R).
Amortization expense for the second quarter 2002 increased to $14.0 million from $10.8 million for the second quarter 2001 primarily due to the Company’s acquisition of a number of in-market brands including Zovirax(R), Teveten(R) and Vasotec(R). Second quarter 2002 interest income derived from cash balances was $1.0 million and second quarter 2002 interest expense was $10.2 million. The increase in second quarter 2002 interest expense versus first quarter 2002 interest expense is due to the Company’s issuance of $400 million Senior Subordinated Notes in March 2002.
Operating income for the second quarter 2002 increased by 34% versus the second quarter 2001 to $76.4 million and was 41% of total revenues. Cash flows from operations for the first half of 2002 totaled $126.5 million and totaled $273.2 million for the twelve months ended June 30, 2002.
