Canada’s Biovail has posted a solid set of results for the second quarter of the year, and has stuck by its initial forecast for full-year performance despite the looming threat of generic competition to one of its key growth drivers.
Total sales for the quarter hit $252.8 million, up nearly 17% over the $216.2 million booked for the year-earlier period. Growth was driven by a strong performance by Wellbutrin XL (bupropion), which leapt to $114.0 million from $70.5 million, and the Zovirax franchise, which jumped 59% to $29.1 million.
This helped propel net income to $80.6 million, or $0.50 a share, compared with $3.7 million, or $0.02 a share, for the second quarter of 2005, which was hit by the restructuring of Biovail’s US commercial operations.
As a result of its performance during the quarter, the company has reiterated its 2006 revenue guidance of $990 million to $1.07 billion, with diluted earnings per share targeted at $2.30 to $2.40.
“Biovail has again delivered a financially strong quarter, and has ended the period with over $570 million in cash on hand,” remarked Biovail Chief Executive, Douglas Squires. “Although we are disappointed by recent litigation developments,” he continued, “we remain committed to vigorously defending Wellbutrin XL. The filing of a Motion for Reconsideration with the Court is the likely first step; however, we will pursue any and all appropriate means to defend the integrity of our intellectual property.”
Earlier this month, shares in Biovail plunged after it emerged that its Wellbutrin XL antidepressant would soon face generic competition. A judge in a Toronto court ruled that, although Biovail's patents on the sustained release formulation of GSK's bupropion generic were valid, a copycat version developed by Anchen Pharmaceuticals did not infringe upon them.
Under an agreement with GlaxoSmithKline, which licensed global rights to the drug from Biovail last year, Biovail gets an approximate 30% royalty rate on Wellbutrin XL sales and the drug accounts for 40% of its total revenues. Anchen will be able to launch its version as soon as it received approval from the US Food and Drug Administration.
Meantime, Biovail says it is no longer considering a spin-off of its off-patent branded medicines, electing to use the funds from these products for strategic growth initiatives instead.