Weighing Biovail's Claims

Return to the Accident Scene

On Sept. 30, the last day of Biovail's third quarter, a truck carrying a shipment of Wellbutrin XL left the drugmaker's manufacturing facility in Steinbach, Manitoba, en route to a GlaxoSmithKline (GSK Quote) facility in the U.S.

Biovail makes Wellbutrin XL for GlaxoSmithKline, the U.K.-based pharmaceutical giant. Biovail's Wellbutrin XL revenue comes from royalty payments made by Glaxo, based on a percentage of net end-user sales.

On Oct. 1, around 4 p.m. EST, the Biovail truck was one of five vehicles involved in a fatal traffic accident on I-90, outside Chicago. Although only minimally involved in the accident, the Biovail truck was damaged, a gaping hole torn in the rear of its cargo trailer. As a result, Biovail couldn't deliver the Wellbutrin XL pills, forcing the drugmaker to return the cargo to its manufacturing facility for reinspection.

On Oct. 3, Biovail issued its third-quarter revenue and profit warning, which it blamed on the truck accident. "Revenue associated with this shipment is in the range of $10 million to $20 million," the company said at the time.

On a subsequent conference call to discuss the earnings miss, Biovail CFO Brian Crombie said the $10 million to $20 million revenue shortfall for Biovail equated to about $50 million to $60 million in end-user sales of the drug.

The accident was investigated by the Illinois State Police District 15, which issued its report on Nov. 4. The Traffic Crash Reconstruction Report, crash number 15-03-8014R, was obtained by RealMoney.com. Handwritten inspection reports on each of the five vehicles involved in the accident are included in the overall report. Vehicle inspection report No. 1352399, conducted by Illinois State Trooper Francesca Sciuto, involves the Biovail delivery truck.