February 26, 2009 / 12:57 PM / in 9 years

UPDATE 3-Biovail results top expectations; Melnyk in view

* EPS $0.76 vs loss $0.20 a year earlier

* Excluding items EPS $0.34 vs $0.45

* Revenue $181.5 mln vs $203.9 mln

* Quarter included $90 mln income tax benefit

* Shares drop 2.5 pct to C$13.38 (In U.S. dollars. Adds company and analyst comments)

TORONTO, Feb 26 (Reuters) - Biovail Corp BVF.TO BVF.N reported quarterly results that topped analyst expectations on Thursday and said it is taking seriously a move by company founder Eugene Melnyk to nominate new members to the board and change some corporate governance provisions.

Biovail, Canada’s biggest publicly traded drugmaker, said its return to profit in the fourth quarter was mainly the result of a $90 million deferred income tax benefit.

But its revenue fell to $181.5 million from $203.9 million a year earlier, hurt by declining sales of key treatments. That helped spur a more than 2 percent drop in Biovail shares on the Toronto Stock Exchange to C$13.36.

Biovail earned $120.4 million, or 76 cents a share, during the quarter, compared with a loss of $32 million, or 20 cents a share, for the same period a year earlier.

Excluding items, the company said it earned $54.2 million, or 34 cents a share, down from $72.5 million, or 45 cents a share, in the year-before quarter.

Analysts were expecting earnings per share of 32 cents and revenue of $175.9 million.

“The results were very good. They were above street expectations,” said Claude Camire, an analyst at Paradigm Capital.

Last year the company announced plans to narrow the number of treatments it offers, and it to spend $600 million through to 2012 on research and development of new treatments for central nervous system (CNS) disorders.

That spurred Melnyk to launch a proxy battle that ended last August when shareholders approved the company’s incumbent slate of directors rather than an alternative slate proposed by Melnyk.

Melnyk revisited that fight earlier this week when he requested a special meeting of shareholders to vote on his two board nominees and on corporate governance changes.

“Eugene certainly likes to keep things interesting for us, it was starting to get a little too routine around here,” Biovail Chief Executive William Wells told Reuters.

“We will take the suggestions very seriously and treat them appropriately.”

Wells said Melnyk’s request for two board members “was not as strong as last year”, when he pushed for a whole new slate of directors.

Biovail said its quarterly revenue was hurt by competition from generic drugs. This included a 66 percent drop in sales of its Wellbutrin antidepressant drug and a 24 percent drop in the revenue from Ultram, its chronic pain treatment.

This was partially offset by sales for Xenazine, used for the treatment of chorea associated with Huntington’s disease.

$1=$1.24 Canadian Reporting by Scott Anderson; Editing by Peter Galloway

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