Drug maker

Biovail

(BVF)

, which has been in the midst of a proxy battle with its founder and former chief executive, says its time for a change.

As sales of the company's top products continue to diminish, resulting in a 31% decline in first-quarter earnings, Biovail is refocusing its energy on developing treatments for central nervous-system disorders.

Shares of the company plummeted 14% to $9.86 after the company said earnings fell to $39 million, or 25 cents a share, from $56.4 million, or 35 cents a share a year earlier. Analysts expected earnings of 30 cents a share.

Revenue declined 20% to $173.3 million from $208.5 million.

The company cut its quarterly dividend to 9 cents from 37.5 cents, which it said will save $180 million in cash a year. This move, on top of the purchase of the U.S. rights to the antidepressant Wellbutrin XL from

GlaxoSmithKline

(GSK) - Get Report

, will reel in $480 million in cash by 2010.

Product revenue declined 16%, to $165.4 million from $196.9 million. Revenue from Zovirax, an antiviral cream, dropped to $32.9 million from $37.1 million, and sales of the long-acting blood pressure drug Cardizem LA slid to $8.2 million from $10.2 million. Generic versions of 150 mg Wellbutrin XL reached the market in May 2008, and in the first quarter its sales dropped to $20.1 million from $58.9 million. Sales of Ultram ER, an extended-release pain drug, sank to $20.6 million from $24.1 million due to decreased prescriptions and a lower supply price.

As a result of declining sales of top drugs, the company is looking to new outlets, and on Monday purchased the U.S. rights to

Acadia Pharmaceuticals

'

(ACAD) - Get Report

drug, pimavanserin, which is being developed as a treatment for Parkinson's disease. Biovail will pay as much as $395 million plus sales royalties to Acadia.

But founder and former chief executive Eugene Melnyk has argued that the strategy is too risky and the biotech company should instead focus on its generic drug business. To Melnyk's point, during the quarter sales of Biovail's generic unit grew 22% to $40.6 million from $33.1 million.

Melnyk is Biovail's largest shareholder and, according to the company, he is seeking to nominate two new directors to the board.

Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.