Biovail's Upbeat on Wellbutrin

The company's shares gain 5%.
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Despite strong antidepressant sales growth,

Biovail's

(BVF)

earnings took a hit in the second quarter because of restructuring charges, costs related to a supply agreement and inventory write-offs, the company reported Thursday.

The Ontario-based company's second-quarter earnings were $3.7 million, or 2 cents a share, vs. $44.2 million, or 28 cents a share, a year ago.

Biovail recorded a restructuring charge, a noncash writedown of assets, and the write-off of inventory related to a transaction with

Kos Pharmaceuticals

(KOSP)

in May. The items cut earnings by about 31 cents a share.

Revenue for the quarter was $217.4 million, compared with $206.3 million for the second quarter of 2004. The company cited strong sales of its legacy products and its generics portfolio.

Shares of Biovail were recently up 84 cents, or 5.2%, to $17.09.

Biovail's generics business brought in sales of $34.3 million, compared with $31.2 million last year. The company saw strong sales in its portfolio of generic products, including the blood pressure drug Tiazac, distributed by

Forest Laboratories

(FRX)

, and generic Procardia XL for angina.

Biovail's bestselling drug, the antidepressant Wellbutrin, showed a better-than-expected performance in the second quarter. As a result, the company increased its full-year Wellbutrin XL revenue guidance to a range of $330 million to $350 million, from its previous forecast of $320 million to $340 million.

The company is now projecting total revenue of $870 million to $940 million for the year, rather than $860 million to $930 million, and earnings of $1.75 to $1.80, up from the old range of $1.70 to $1.75. Biovail didn't changes its previously issued guidance for the third and fourth quarters.

Wellbutrin XL brought in revenue of $70.5 million during the quarter, compared with $79.1 million a year earlier.

Prescriptions for Wellbutrin XL, the extended release form of Wellbutrin, were up 34%, but revenue fell 11% in the quarter because of a reduction in safety stock levels at Biovail's marketing partner

GlaxoSmithKline

(GSK) - Get Report

and lower shipments of sample supplies.

Total prescription volume for sustained-release Wellbutrin fell 5% in the second quarter as a result of generic competition.

During the quarter, Biovail received Food and Drug Administration approval for Tramadol ODT and Glumetza, along with tentative approval for Zolpidem ODT. The company also got Canadian approval for Glumetza.

"With a new commercialization model in place, a robust development pipeline, world-leading drug-delivery technologies, and the financial strength to execute its long-term strategy, Biovail is well positioned for future growth," said Chief Executive Douglas Squires in a press release.