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Pharma & Bio Ingredients
Given these changes, BPI will cease co-promotional efforts for Ultram ER. With respect to Zovirax, Biovail is in active discussions with multiple potential partners to maintain promotional support for the product line. The Company anticipates an announcement with respect to these discussions in the near term.
In addition, after a comprehensive analysis of each of Biovail's corporate and functional areas, overhead and infrastructure costs will be reduced to improve operating efficiencies, without sacrificing effectiveness.
"The changes to our business model will improve our operating efficiencies and margins, and will allow us to further focus on our core competency - the development and large-scale manufacture of novel medicines employing our drug-delivery technologies," said Biovail chief executive officer Dr. Douglas Squires. "While restructuring initiatives are never easy, Biovail strongly believes that this 'back-to-basics' approach is consistent with its heritage and commitment to maximize shareholder value."
In Canada, Biovail will maintain its direct-selling commercial presence through Biovail Pharmaceuticals Canada (BPC), which has an enviable track record of success in promoting products to health-care practitioners across the country. The relative size of the Canadian market makes a direct-selling presence more feasible within the Company's current infrastructure. The 100-member BPC sales force currently promotes Tiazac XC, Wellbutrin XL, Glumetza and the Lescol franchise to Canadian physicians. Business development efforts to identify new products for BPC will continue.
The cost-cutting measures are expected to result in restructuring charges (primarily related to severance costs), the majority of which will be booked in the fourth quarter of 2006. See the separate news release issued December 6, 2006, Biovail Provides Financial Update, 2007 Guidance.
Focus on Research and Development
Biovail intends to materially increase its investment in research and development over the next several years. The Company will focus its efforts on three core segments: (1) enhanced formulations of existing products, (2) combination products incorporating different classes of drugs, and (3) difficult-to-manufacture generic pharmaceuticals.
"Beginning with the launch of Tiazac 10 years ago, Biovail's growth has been driven by the successful application of our drug-delivery technologies. Since then, we've developed over 15 pharmaceutical products and have generated over $4.6 billion in Biovail product revenues," said Eugene Melnyk, Biovail's Chairman. "Biovail's new strategy, which was unanimously approved by the Board, is consistent with our heritage. Going forward, we will drive business growth through a renewed focus on internal research-and-development efforts."
With respect to previously disclosed pipeline products, Biovail remains in partnership discussions with several pharmaceutical companies for commercialization rights. Given the inherent development risk with any pharmaceutical product, engaging strategic partners earlier in the product-development cycle may allow programs to be progressed in a more cost-effective manner, while maximizing the available number of pipeline opportunities and their potential for success.
Additionally, Biovail has amended its April 2002 agreement with Ethypharm S.A. to now include the development of four undisclosed products. Among these are BVF-087 and BVF-065, which target large markets in central nervous system disorders; BVF-239, a cardiovascular product; and BVF-300, a product targeting the gastrointestinal-disease market. In aggregate, these novel formulations target brands with U.S. sales in excess of $9 billion, according to IMS Health.
