Biovail sinks to loss, eyes acquisitions

Wed Aug 13, 2008 3:22pm EDT
 
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By Jennifer Kwan

TORONTO (Reuters) - The cost of shutting down manufacturing and research plants pushed Canadian drugmaker Biovail Corp BVF.TO into a quarterly loss, but the company said on Wednesday that won't stop its hunt for acquisitions.

Biovail, Canada's biggest publicly traded drugmaker, said its second-quarter results were hurt by expenses totaling $84.9 million, or 53 cents a share, including costs linked to the closure of two Puerto Rico manufacturing plants and the pending closure of the Irish research and development facility.

The closures mean about 300 people, or 20 percent of the company's work force, will lose their jobs.

The cuts are not expected to reduce revenues or impact research spending, Biovail Chief Executive William Wells said on a conference call.

"While we are cutting costs across the organization, it is important to note that we intend to increase our investment in research and development projects, which will remain the lifeblood of the company," Wells said.

Biovail said it lost $25.3 million, or 16 cents a share, in the second quarter, down from a year-earlier profit of $67.8 million, or 42 cents a share.

It said results were also hurt by costs related to a U.S. Department of Justice investigation into the commercial launch of the blood-pressure drug Cardizem LA in 2003. As well, it logged charges for management changes and the recent proxy battle with the company's founder, Eugene Melnyk.

Excluding one-time items, Biovail earned 37 cents a share. Analysts, on average, had expected Biovail to earn 35 cents a share, according to Reuters Estimates.   Continued...