Biovail Corp., makers of the popular antidepressant Wellbutrin XL, is taking steps to cut costs and improve efficiencies throughout the company, aware that its biggest drug will eventually face competition from generics. Biovail stressed, however, that spending on research and development will not suffer.
Douglas Squires, the company’s chief executive, said, “While it’s difficult to predict when generics will enter the market, or to what extent competitors can supply the market, Biovail will position its business to minimize the negative impact this could have on the company’s operating margins while continuing to invest in our pipeline programs.”
He said that all aspects of the business are being scrutinized and everything is “on the table,” acknowledging that its new products won’t entirely offset the lost sales once generics enter the market. Biovail expects to announce cost cutting measures before the end of the year.
Last summer, privately held Anchen Pharmaceuticals was surprisingly granted summary judgment in the Wellbutrin XL patent-infringement case, as the court found Anchen’s patents did not infringe on Biovail’s.
Biovail reported a third-quarter loss of 35 cents a share, compared with a profit of 64 cents one year ago. However, excluding items, it would have posted a profit of 83 cents for the quarter, well above the analyst estimate of 65 cents a share.
Results included a $147 million non-cash summarization of certain intangible assets, a $40 million charge related to a contract-loss contingency in its Wellbutrin XL agreement with GlaxoSmithKline, a $6.8 million charge related to lost-profits in its agreement with Kos Pharmaceuticals Inc., and a $4 million gain from the termination of the Athpharma pact.
Squires said the results mark the ninth consecutive quarter that the company has met or exceeded its financial objectives, and noted that the company is well-positioned to invest in strategic-growth initiatives and maintain the dividend.