Biovail Faces Possible SEC Suit

Biovail (BVF Quote) fell 2% Monday after regulators said they might file a civil suit against the Canadian drugmaker.

The company said it got a so-called Wells notice, which gives the company an opportunity to respond to possible Securities and Exchange Commission charges before they are filed. Biovail said the charges relate to its accounting going back four years, "and whether the company provided misleading disclosure concerning the reasons for Biovail's forecast of a revenue shortfall in respect of the three-month period ending Sept. 30, 2003."

Biovail blamed its third-quarter 2003 earnings miss on a truck crash. Biovail claimed the accident was responsible for the loss of $10 million to $20 million in Wellbutrin XL sales in the quarter.

But as RealMoney.com's Adam Feuerstein reported, the truck was mostly empty, with the real value of the cargo likely more in the $2 million to $4 million range.

Biovail, which has rejected claims that the truck was mostly empty, said it continues to cooperate with the SEC.

Shares fell 54 cents to $24.19.