Biovail Reports Record Fourth Quarter, Year-End 2006 Financial Results



    Company Achieves Record Revenues of $308 Million in Fourth Quarter, $1.07
Billion in Full-Year 2006;

    GAAP EPS of $0.72 in Fourth Quarter, $1.27 in Full-Year 2006

    EPS Excluding Specific Items of $0.93 in Fourth Quarter, $2.70 in
Full-Year 2006;

    Record Cash Flows From Operations of $236 Million in Fourth Quarter, $523
Million in Full-Year 2006;

    Year-End Cash Balances in Excess of $830 Million

    TORONTO, March 15 /CNW/ - Biovail Corporation (NYSE/TSX: BVF) today
announced financial results for the three-month and 12-month periods ending
December 31, 2006. To the extent that this press release contains
forward-looking statements, investors are cautioned that these are based on
our current views, and actual outcomes are not certain. Please see the note on
forward-looking information following the conference-call details below.

    Total revenues for the three months ended December 31, 2006 were $307.6
million, compared with $287.6 million for the fourth quarter of 2005, an
increase of 7%. Total revenues for the 12 months ended December 31, 2006 were
$1.07 billion, compared with $935.5 million for the full year of 2005, an
increase of 14%. Fourth-quarter 2006 net income, in accordance with United
States Generally Accepted Accounting Principles (GAAP), was $115.3 million,
compared with $119.7 million for the corresponding 2005 period. For the 12
months ended December 31, 2006, net income was $203.9 million, compared with
$236.2 million for the same period a year earlier. GAAP diluted earnings per
share (EPS) for the fourth quarter of 2006 were $0.72, versus $0.75 for the
fourth quarter of 2005. For the full year of 2006, GAAP EPS were $1.27, versus
EPS of $1.48 for the full year of 2005.

    Specific Items Affecting Fourth-Quarter Results

    GAAP net income and EPS figures for the fourth quarter of 2006 were
negatively impacted by a $15.1-million charge related to the December 2006
restructuring of the Company's U.S. commercial operations, an $11.7-million
payment representing the Company's share of the costs associated with a
litigation settlement between GlaxoSmithKline plc (GSK) and Watson
Pharmaceuticals, Inc. (Watson), a $2.7-million litigation settlement related
to the Company's licensing in 1999 of Adalat CC products from Elan
Corporation, plc (Elan), an additional $1.9-million provision related to a
contract-loss provision in the Wellbutrin XL(R) agreement with GSK, and an
additional $1.6-million charge related to a lost-profits provision in the
Company's agreement with Kos Pharmaceuticals, Inc. (Kos) pertaining to
Cardizem(R) LA. These items negatively impacted fourth-quarter 2006 net income
by $33.1 million, and diluted EPS by $0.21. Accordingly, Net Income Excluding
Specific Items and EPS Excluding Specific Items in the fourth quarter of 2006
were $148.4 million and $0.93, respectively. GAAP net income and EPS figures
for the fourth quarter of 2005 were negatively impacted by a net charge of
$2.6 million, primarily related to the write-down of the Company's investment
in Reliant Pharmaceuticals. For more information concerning Net Income
Excluding Specific Items and EPS Excluding Specific items, please refer below
to Table 1 - Reconciliation of U.S. GAAP Net Income and EPS to Net Income
Excluding Specific Items and EPS Excluding Specific Items, and "Use of
Non-GAAP Financial Measures".

    Specific Items Affecting Full-Year 2006 Results

    In addition to the items affecting results for the fourth quarter of
2006, GAAP net income and EPS figures for the full year of 2006 were impacted
by a $147.0-million non-cash write-down of intangible assets, an initial
$44.5-million charge related to the GSK contract-loss contingency, an initial
$6.8-million charge related to the lost-profits provision in the Kos
agreement; a $0.5-million equity loss in the Company's investment in Western
Life Sciences, and a $1.1-million asset impairment charge related to
Nutravail; partially offset by a $4.0-million gain related to the termination
of the Athpharma agreement. In aggregate, these items negatively impacted net
income and EPS in 2006 by $228.9 million and $1.43, respectively. Accordingly,
Net Income Excluding Specific Items and EPS Excluding Specific Items in 2006
were $432.9 million and $2.70, respectively. GAAP net income and EPS for the
full-year of 2005 were negatively impacted in the amount of $60.6 million and
$0.38, respectively, as a result of a restructuring charge, an equity loss, a
non-cash write-down of assets and the write-off of inventory related to the
transaction with Kos in May 2005.

    "Biovail once again performed well against its financial objectives,
surpassing the $1 billion mark in total revenues for the first time,
generating over $520 million in cash flow from operations in 2006, and ending
the year with over $830 million in cash," said Biovail Chief Executive Officer
Dr. Douglas Squires. "Despite the earlier-than-anticipated launch of a generic
formulation of Wellbutrin XL(R) 300mg tablets, the strong cash-flow generation
of the Company's business model should allow Biovail to grow its business
through focused investments in research and development, while providing the
flexibility for substantial dividend payments to our shareholders."

    Revised U.S. Commercialization Strategy

    In December 2006, Biovail announced that it would leverage strategic
partners to promote its products to specialist physicians in the United
States, which is consistent with the Company's approach to commercializing
products in the U.S. primary-care market since the May 2005 strategic alliance
with Kos. As a result, the Biovail Pharmaceuticals, Inc. (BPI) specialty sales
force and related support functions were eliminated. Given these changes, BPI
ceased co-promotional efforts for Ultram(R) ER and Zoladex 3.6mg. With respect
to Zovirax(R), in December 2006, Biovail entered into an exclusive
promotional-services agreement with Sciele Pharma, Inc. (Sciele) whereby
Sciele's Primary Care and Women's Health sales forces now promote Zovirax(R)
Ointment and Zovirax(R) Cream to U.S. physicians. Under the terms of the
agreement, which has an initial term of five years, Biovail compensates Sciele
for providing detailing and sampling support for the products. In addition,
Sciele is entitled to incentive fees if certain baseline revenue targets are
met.

    Revised Dividend Policy

    Also in December 2006, Biovail's Board of Directors adopted a new
dividend policy that contemplates the payment of an annual dividend of $1.50
per common share (paid quarterly in increments of $0.375 per common share
subject to Board approval), a 200% increase relative to the Company's former
policy. In addition, Biovail may approve the payment of future special
dividends. Biovail's dividend policy is subject to positive business trends
and the discretion of the Board, and is representative of management's
confidence in the sustainability of strong cash flows and the strength of the
Company's business model.

    Redemption of Debt

    Effective April 1, 2007, Biovail will redeem all of its outstanding 7
7/8% Senior Subordinated Notes due April 1, 2010. As per the indenture
governing the Notes, the Company will be required to pay a 1.969% premium for
the early redemption. From a cash earnings-per-share perspective in 2007, the
redemption is expected to be neutral, as the significant savings in interest
expense will be offset by the call premium and lower interest income on cash
balances.

    Wellbutrin XL(R) Settlement

    On March 5, 2007, Biovail announced that, following a review by the
Federal Trade Commission (FTC) that was requested by the parties, a
comprehensive settlement had been reached with Anchen Pharmaceuticals LLP,
Impax Laboratories, Inc., Watson and Teva Pharmaceutical Industries Ltd.
related to Wellbutrin XL(R). The settlements include, among other things, the
dismissal of Biovail's patent-infringement actions against each of Impax and
Watson related to their abbreviated new drug applications for generic
formulations of Wellbutrin XL(R). Under the terms of the agreement, with
defined exceptions, none of Teva, Anchen, Impax, and Watson may market a
generic version of the 150mg strength of Wellbutrin XL(R) until 2008. For more
information, see the news release issued March 5, 2007, Biovail Announces
Comprehensive Settlement Related to Wellbutrin XL(R).

    Fourth-Quarter 2006 Financial Performance

    Product revenues for the fourth quarter of 2006 were $296.0 million,
compared with $274.8 million in the fourth quarter of 2005, an 8% increase
that reflects the February 2006 launch of Ultram(R) ER, and the positive
performances of Wellbutrin XL(R), the Zovirax(R) line and the Company's
generic pharmaceuticals portfolio. Partially offsetting factors include
declines in revenues from Biovail Pharmaceuticals Canada (BPC), Biovail's
Legacy products and Cardizem(R) LA. Product revenues for full-year 2006 were
$1.02 billion compared with $884.3 million for 2005, an increase of 16%.

    Product revenues for Wellbutrin XL(R) were $148.1 million in the fourth
quarter of 2006, and $450.3 million in the full year of 2006, compared with
$137.7 million and $354.2 million in the corresponding periods in 2005,
respectively. In December 2006, a generic formulation of 300mg tablets of
Wellbutrin XL(R) was launched in the U.S. Pursuant to a comprehensive
settlement in March 2007, with defined exceptions, a generic formulation of
150mg tablets of Wellbutrin XL(R) will not be launched until 2008. In January
2007, Biovail's marketing partner, GSK, announced the first European approval
for the product, which will be most commonly marketed as Wellbutrin XR(R). GSK
anticipates that the regulatory agencies in various other European countries
will grant national licenses throughout 2007, and that the medicine could
begin to be available to patients starting April 2007. Pursuant to the
agreement signed in 2001 between Biovail and GSK, Biovail will manufacture and
supply the product to GSK at a fixed, contractually determined price.

    Launched in February 2006 by Biovail's strategic partner Ortho-McNeil,
Inc. (OMI), Ultram(R) ER generated revenues of $19.2 million in the fourth
quarter of 2006, and $53.7 million in the full year of 2006, which is net of a
$7.8-million return provision related to the second-quarter 2006 recall of
certain dosages of the product. In the last several months, OMI has undertaken
a number of initiatives to accelerate prescription growth for Ultram(R) ER,
including an unbranded direct-to-consumer (DTC) advertising campaign, a
discount-card program and an increase to 30 tablets (from seven) in the size
of samples to allow patients to be optimally titrated to higher dosage
strengths. In addition, in December 2006, Biovail and OMI agreed to invest
equal amounts in incremental advertising and promotional support for the
product, over and above OMI's contractual obligation. Biovail is currently
monitoring the impact of these initiatives.

    Revenues for Biovail's Zovirax(R) franchise were $31.1 million in the
fourth quarter of 2006, and $112.4 million in the full year of 2006,
representing increases of 12% and 17%, respectively, when compared with $27.7
million and $95.9 million in the prior-year periods. Revenue growth in 2006
was favorably impacted by a modest increase in total prescription volume,
price increases and a reduction in wholesaler inventory levels in 2005. In the
fourth quarter of 2006, Zovirax(R) Ointment and Zovirax(R) Cream held a
combined 71.4% share of the U.S. topical herpes market, an increase of 4.6
percentage points in market share versus fourth-quarter 2005 levels.

    Fourth-quarter 2006 revenues for BPC were $15.7 million, compared with
$27.4 million in the prior-year period. BPC revenues for the full year of 2006
were $68.7 million, compared with $99.5 million in the full year of 2005. The
year-over-year declines reflect the introduction of generic competition for
Wellbutrin(R) SR and Tiazac(R) in the Canadian market. Total prescription
volume for Wellbutrin(R) SR and Tiazac(R) decreased 87% and 32%, respectively,
in the fourth quarter of 2006, versus the comparable 2005 period. Partially
offsetting this decline was the continued growth of Tiazac(R) XC, for which
prescription volume increased 77% compared with the fourth quarter of 2005,
and the strong performance of Wellbutrin(R) XL (launched April 2006), which
captured 21.6% of bupropion prescriptions in the fourth quarter of 2006.

    In the U.S., Cardizem(R) LA generated revenues of $12.4 million in the
fourth quarter of 2006, compared with $13.4 million for the corresponding
period in 2005. In the full year of 2006, Cardizem(R) LA generated revenues of
$59.3 million, compared with $59.7 million in the full year of 2005. The
decrease primarily reflects manufacturing issues that resulted in market
shortages of the lower-strength (120mg and 180mg) tablets, partially offset by
price increases taken by Kos. The amortization of deferred revenues associated
with the May 2005 Kos transaction positively impacted Cardizem(R) LA revenues
by $3.8 million and $15.1 million in the fourth quarter and full year of 2006,
respectively, compared with $3.8 million and $10.0 million in the
corresponding periods in 2005. In the second half of 2006, Biovail recorded an
$8.4-million charge related to a lost-profits provision in the agreement with
Kos, as a result of the manufacturing issue that impacted production of 120mg
and 180mg tablets of Cardizem(R) LA. Biovail has now returned to full
production of these strengths.

    Biovail's Legacy products generated revenues of $28.9 million for the
fourth quarter of 2006, compared with $35.0 million in the fourth quarter of
2005, a decline of 17% that represents lower sales of Cardizem(R) CD and
Tiazac(R). In the full year of 2006, legacy products generated revenues of
$139.9 million, compared with $133.4 million in the full year of 2005, an
increase of 5%. This performance is largely attributable to price increases in
2006 and a reduction of wholesaler inventory levels in 2005. Partially
offsetting factors include the expected year-over-year declines in total
prescription volumes for these mature products.

    Product revenue for Biovail's portfolio of generic products (distributed
by a subsidiary of Teva) was $41.0 million in the fourth quarter of 2006,
compared with $33.7 million in the fourth quarter of 2005, a 22% increase that
is largely attributable to stronger sales of generic Cardizem(R) CD and the
January 2006 launch of an authorized generic of Tiazac(R) in Canada. Full-year
2006 revenues were $141.1 million, compared with $135.2 million in the
prior-year period, an increase of 4%. Total prescription volume for these
products increased 2% in the fourth quarter and 6% in the full year of 2006.

    Further to the May 2005 sale to Kos, Biovail no longer has an ongoing
financial interest in Teveten and Teveten HCT. However, in 2006, the Company
increased its provision for returns related to pre-May 2005 sales of these
products by $1.3 million.

    Performance Summary

    The following table summarizes Biovail's product revenue performance in
the fourth quarter and full year of 2006:

    
    ($000s)         Q4/06     Q4/05   Change     2006      2005    Change
                  Revenues  Revenues    (%)    Revenues  Revenues    (%)
    ----------------------------------------------------------------------
    Wellbutrin
     XL(R)        148,081   137,727     8      450,329   354,213     27
    Ultram(R) ER   19,152      -        NA     53,724       -        NA
    Zovirax        31,051    27,683     12     112,388    95,858     17
    BPC            15,721    27,432    (43)    68,723     99,508    (31)
    Cardizem(R)
     LA            12,378    13,401     (8)    59,316     59,672     (1)
    Legacy
     Products      28,912    34,978    (17)    139,853   133,419     5
    Generics       40,967    33,687     22     141,075   135,209     4
    Teveten         (265)     (146)     NM     (1,323)    6,388      NM
    ----------------------------------------------------------------------
    Total Product
     Revenues     295,997   274,762     8     1,024,085  884,267     16
    ----------------------------------------------------------------------
    

    NM = Not Meaningful

    Research-and-development revenue increased 5% in the fourth quarter of
2006 to $7.0 million, but decreased 23% to $21.6 million for the full year of
2006, compared with the corresponding periods of 2005. The full-year decline
in 2006 reflects reduced activity levels and pricing pressure at the Company's
Contract Research Division.

    Royalty and other revenue was $4.6 million in the fourth quarter of 2006
and $24.9 million in the full year of 2006, compared with $6.1 million and
$23.3 million in the corresponding periods in 2005, respectively. The increase
in 2006 primarily reflects $3.8 million in co-promotion revenues associated
with Ultram(R) ER, partially offset by reduced royalty revenue.

    Cost of goods sold for the fourth quarter of 2006 was $52.8 million,
compared with $53.6 million in the fourth quarter of 2005. Gross margins based
on product sales were 82% and 78% in the fourth quarter and full year of 2006,
respectively, compared with 81% and 77% in the fourth quarter and full year of
2005, respectively. The year-over-year increases reflect product mix and price
increases implemented in 2006, partially offset by manufacturing issues
primarily related to Ultram(R) ER and Cardizem(R) LA.

    Research-and-development expenditures were $28.4 million for the fourth
quarter of 2006 and $95.5 million for the full year of 2006, compared with
$26.3 million and $88.4 million for the corresponding periods in 2005,
respectively. These increases reflect the fourth-quarter 2006 initiation of
the Phase 3 program for BVF-146 (combination of once-daily tramadol with an
undisclosed non-steroidal anti-inflammatory drug, or NSAID). With respect to
other pipeline programs, a New Drug Application (NDA) was submitted to the FDA
in September 2006 for BVF-033, the Company's novel bupropion salt formulation.
The FDA action date for this application is late-July 2007. Active partnership
discussions are ongoing for these, and other, pipeline programs.

    Selling, general and administrative (SG&A) expenses for the fourth
quarter and full year of 2006 were $65.1 million and $238.4 million,
respectively, compared with $53.1 million in the fourth quarter of 2005, and
$227.4 million in the full year of 2005. The increases reflect higher legal
expenses primarily related to Wellbutrin XL(R) legal actions, and the
inclusion of stock-based compensation expenses of $11.9 million in 2006, in
addition to Biovail's contribution to incremental advertising and promotion
spending in support of Ultram(R) ER in the fourth quarter. These items were
partially offset by savings associated with the Company's May 2005
restructuring of its U.S. commercial operations group.

    Amortization expense in the fourth quarter of 2006 was $12.0 million,
compared with $15.4 million in the fourth quarter of 2005, a 22% decrease that
primarily reflects the third-quarter 2006 write-down of intangible assets
associated with Vasotec(R) and Glumetza(TM). In the full year of 2006,
amortization expense was $56.5 million, compared with $62.3 million.

    Specific Items Affecting Operations - Fourth-Quarter 2006

    In the fourth quarter of 2006, Biovail incurred a $15.1-million charge,
primarily related to severance costs, associated with the December 2006
restructuring of the Company's U.S. commercial operations; an $11.7-million
charge representing the Company's share of the costs associated with a
litigation settlement between GSK and Watson; a $2.7-million litigation
settlement of the Class Action complaint related to the Company's licensing of
Adalat CC products from Elan; an additional $1.9-million provision related to
a contract-loss provision in the Wellbutrin XL(R) agreement with GSK; and an
additional $1.6-million charge related to a lost-profits provision in the
Company's agreement with Kos as a result of the longer-than-anticipated return
to full production of the lower strength (120mg and 180mg) tablets of
Cardizem(R) LA.

    Comparatively, in the fourth quarter of 2005, Biovail recorded a
$2.7-million charge related to the write down of the Company's investment in
Reliant Pharmaceuticals and a $0.4-million equity loss, which was partially
offset by a $0.5-million adjustment to the write-down of the Company's
Nutravail assets.

    Specific Items Affecting Operations - Full-Year 2006

    In addition to the items in the fourth quarter of 2006, GAAP net income
and EPS figures for the full year of 2006 were impacted by a $147.0-million
non-cash write-down of intangible assets. This reflects a $132.0-million
write-down of the Vasotec(R) product rights as a result of Kos' decision in
September 2006 to not proceed with, and Biovail's subsequent termination of,
the development of Vasocard(TM). In addition, upon a reassessment of the
Canadian market opportunity for the product, Biovail reduced the carrying
value of the Glumetza(TM) product rights by $15.0 million. Further, in the
first nine months of 2006, Biovail incurred an initial $44.5-million charge
related to the GSK contract-loss contingency, an initial $6.8-million charge
related to the lost-profits provision in the Kos agreement, a $0.5-million
equity loss in the Company's investment in Western Life Sciences, and a
$1.1-million asset impairment charge related to Nutravail. These charges were
partially offset by a $4.0-million gain related to the July 2006 termination
of the Athpharma agreement.

    Comparatively, in the full year of 2005, Biovail incurred a $19.8-million
restructuring charge, primarily related to severance costs associated with the
May 2005 realignment of the Company's U.S. commercial operations. Biovail also
incurred $34.8 million in asset write-downs, primarily related to the disposal
of the Teveten line, and a $1.2-million equity loss. Additionally, $4.9
million of Cardizem(R) LA and Teveten inventory not purchased by Kos was
written off to cost of goods sold in 2005.

    Specific Items impacting net income and EPS in the fourth quarter and
full-year 2006 are outlined below.

    Table 1. Reconciliation of U.S. GAAP Net Income and EPS to Net Income
Excluding Specific Items and EPS Excluding Specific Items

    
     Dollar amounts expressed in thousands of U.S. dollars, except per
      share data
    ----------------------------------------------------------------------
                                   Three Months Ended  Twelve Months Ended
                                   December 31, 2006    December 31, 2006
    ----------------------------------------------------------------------
     GAAP Net Income (Loss)                  115,319              203,948
     GAAP Diluted EPS                          $0.72                $1.27
     Adjustments:
      Restructuring costs                     15,126               15,126
      Litigation settlements                  14,400               14,400
      Contract-loss provision -
       GSK                                     1,900               46,400
      Lost-profits provision - Kos             1,600                8,400
      Equity loss                                 56                  529
      Write-down of Glumetza(TM)
       product rights                                              15,000
      Write-down of Vasotec(R)
       intangible assets                                          132,000
      Gain on termination of
       Athpharma agreement                                         (4,000)
      Asset impairment -
       Discontinued operation                                       1,084
    ----------------------------------------------------------------------
     Total Adjustments                        33,082              228,939

     Diluted EPS Impact of Total
      Adjustments                              $0.21                $1.43

     Net Income Excluding Specific
      items                                  148,401              432,887
    ----------------------------------------------------------------------
     Diluted EPS Excluding
      Specific Items                           $0.93                $2.70
    ----------------------------------------------------------------------
    

    Use of Non-GAAP Financial Measures

    Net income excluding specific items ("Net Income Excluding Specific
Items") and earnings per share excluding specific items ("EPS Excluding
Specific Items") have been provided as Biovail believes they are useful
measures for investors and management that facilitate, on an aggregate and on
a per-share basis, respectively, operating comparisons between periods. Net
Income Excluding Specific Items and EPS Excluding Specific Items exclude the
effects of non-cash write downs of certain intangible assets, charges related
to contract-loss contingencies and lost-profits provisions in certain
agreements, restructuring costs, litigation settlements and gains on the
termination of certain agreements. The items are excluded in the determination
of such measures because they are either non-cash in nature, non-recurring, or
otherwise not considered to be in the ordinary course of business. Such
measures do not have any standardized meanings prescribed by GAAP, and are
therefore unlikely to be comparable to similar measures presented by other
companies. Net Income Excluding Specific Items and EPS Excluding Specific
Items are not measures of performance under GAAP, and should not be considered
in isolation of or as substitutes for net income or earnings per share
prepared in accordance with GAAP. Biovail has provided a reconciliation of Net
Income Excluding Specific Items to GAAP net income and of EPS Excluding
Specific Items to GAAP earnings per share above.

    Balance Sheet & Cash Flow

    At the end of December 2006, Biovail's cash balances were $834.5 million,
with no outstanding borrowings under its credit facility.

    Cash flows from continuing operations were $235.6 million in the fourth
quarter of 2006 and $522.5 million in full year of 2006, compared with $223.4
million and $501.9 million in the corresponding periods of 2005. Net capital
expenditures amounted to $6.1 million in the fourth quarter of 2006 and $44.8
million in the full year of 2006, compared with $13.7 million in the fourth
quarter of 2005 and $37.8 million in the full year of 2005. The increase in
2006 reflects the expansion of the Company's Steinbach manufacturing facility,
which is essentially complete.

    2007 Guidance

    As a result of the comprehensive settlement reached with a number of
generic pharmaceutical companies, and following an assessment of all aspects
of the Company's internal projections and previously issued financial
guidance, Biovail has made a number of revisions to its 2007 projections. In
particular, Biovail has reflected the positive benefit of the settlement, as
well as the negative impact of the absence of an authorized generic of
Wellbutrin XL(R) from the market for a period of six months from the first
generic entrant, and the Company's contribution to the cost of the license
that GSK acquired from Watson. Further, given prescription trends since
November 2006, among other things, and based on OMI's revisions to their
demand forecast, Biovail is reducing its internal Ultram(R) ER revenue
projections for 2007.

    The net impact of these factors is such that Biovail is reiterating its
2007 guidance for total revenues of $800 million to $850 million; diluted EPS
of $1.70 to $1.80 (excluding specific items), and cash flows from operations
of $320 million to $340 million.

    As before, Biovail's revenue guidance is based on a number of variables,
including current prescription and business trends, and the success of our
strategic marketing and distribution partners. Biovail's 2007 financial
guidance assumes that a generic formulation of the 150mg strength of
Wellbutrin XL(R) is not launched in 2007. In addition, 2007 guidance does not
include the impact of any potential acquisitions or dispositions; the
introduction of new generic formulations of the Company's other key products;
any new supply-and-distribution agreements; restructuring; settlements or
other specific charges. Further, EPS guidance does not include the impact, if
any, of the implementation of Financial Accounting Standards Board
Interpretation No. 48 (FIN 48).

    Regulatory Matters

    With respect to regulatory matters, Biovail continues to co-operate fully
with the U.S. Securities and Exchange Commission (SEC), Ontario Securities
Commission (OSC) and other regulatory agencies. Recently, the United States
Attorney's Office for the Eastern District of New York informed Biovail that
it was conducting an investigation into the same matters being investigated by
the SEC. The outcome or timing of when these matters may be resolved cannot be
predicted. The Company will provide updates as material developments in these
matters occur.

    Conference Call

    Biovail management will host a conference call and Webcast on Thursday,
March 15, 2007, at 8:30 a.m. EDT for Company executives to discuss 2006
fourth-quarter and full-year 2006 financial results. Following the discussion,
Biovail executives will address inquiries from research analysts.

    A live Webcast of this call will be available through the Investor
Relations section of the Biovail Web site, www.biovail.com. To access the call
live, please dial 416-340-8010 (Toronto and International callers) and
1-866-540-8136 (U.S. and Canada). Listeners are encouraged to dial in 10
minutes before the call begins to avoid delays.

    A replay of the conference call will be available until 7 p.m. EDT on
Thursday, March 22, 2007, by dialing 416-695-5800 (Toronto and International
callers) and 1-800-408-3053 (U.S. and Canada), using access code, 3215271#.

    Caution Regarding Forward-Looking Information and "Safe Harbor" Statement

    Under the Private Securities Litigation Reform Act of 1995

    To the extent any statements made in this release contain information
that is not historical, these statements are forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and may be
forward-looking information within the meaning of the "safe harbor" provisions
of applicable Canadian provincial securities legislation (collectively,
"forward-looking statements"). These forward-looking statements relate to,
among other things, our objectives, goals, targets, strategies, intentions,
plans, beliefs, estimates, outlook and guidance, including, without
limitation, statements concerning the Company's commitment to research and
development, the Company's ability to make dividend payments to shareholders,
the Company's expectations regarding the proposed Notes redemption and
expectations regarding the launch of Wellbutrin XR(R) in Europe, expectations
regarding the results of initiatives undertaken in respect of Ultram(R) ER,
the Company's guidance for 2007 in respect of its total revenues, EPS and cash
flows from operations, and can generally be identified by the use of words
such as "guidance", "believe," "anticipate," "expect," "intend," "plan,"
"will," "may" and other similar expressions. In addition, any statements that
refer to expectations, projections or other characterizations of future events
or circumstances are forward-looking statements.

    Although Biovail believes that the expectations reflected in such
forward-looking statements are reasonable, such statements involve risks and
uncertainties, and undue reliance should not be placed on such statements.
Certain material factors or assumptions are applied in making forward-looking
statements, and actual results may differ materially from those expressed or
implied in such statements. Important factors that could cause actual results
to differ materially from these expectations include, among other things: a
decrease in sales of Wellbutrin XL(R), the difficulty of predicting U.S. Food
and Drug Administration, Canadian Therapeutic Products Directorate and
European regulatory approvals, acceptance and demand for new pharmaceutical
products, the impact of competitive products and pricing, new product
development and launch, reliance on key strategic alliances, availability of
raw materials and finished products, the regulatory environment, tax rate
assumptions, the outcome of legal proceedings, fluctuations in operating
results and other risks detailed from time to time in the Company's filings
with the Securities and Exchange Commission and the Ontario Securities
Commission, as well as the Company's ability to anticipate and manage the
risks associated with the foregoing. Additional information about these
factors and about the material factors or assumptions underlying such
forward-looking statements may be found in the body of this news release, and
the Company's news release issued March 5, 2007 entitled "Biovail Announces
Comprehensive Settlement Related to Wellbutrin XL(R)", as well as under the
heading "Risk Factors" contained in Item 3(D) of Biovail's most recent Annual
Report on Form 20-F.

    The Company cautions that the foregoing list of important factors that
may affect future results is not exhaustive. When relying on Biovail's
forward-looking statements to make decisions with respect to the Company,
investors and others should carefully consider the foregoing factors and other
uncertainties and potential events. Biovail undertakes no obligation to update
or revise any forward-looking statement.

    About Biovail Corporation

    Biovail Corporation is a specialty pharmaceutical company, engaged in the
formulation, clinical testing, registration, manufacture and commercialization
of pharmaceutical products utilizing advanced drug-delivery technologies. For
more information about Biovail, visit the Company's Web site at
www.biovail.com.

    For further information, please contact Nelson F. Isabel at 905-286-3000
or send inquiries to ir@biovail.com.

    
                             BIOVAIL CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
    (All dollar amounts are expressed in thousands of U.S. dollars, except
                                per share data)
                                 (Unaudited)

                                  Three Months Ended  Twelve Months Ended
                                     December 31          December 31
                                 ------------------- ---------------------
                                   2006      2005       2006       2005
                                 --------- --------- ----------- ---------
    REVENUE
    Product sales                $295,997  $274,762  $1,024,085  $884,267
    Research and development        7,042     6,733      21,593    27,949
    Royalty and other               4,609     6,119      24,851    23,320
                                 --------- --------- ----------- ---------
                                  307,648   287,614   1,070,529   935,536
                                 --------- --------- ----------- ---------
    EXPENSES
    Cost of goods sold             52,801    53,567     223,281   206,531
    Research and development       28,399    26,302      95,479    88,437
    Selling, general and
     administrative                65,053    53,131     238,441   227,394
    Amortization                   11,984    15,442      56,457    62,260
    Asset impairments, net of
     gain on disposal                   -     2,670     143,000    29,230
    Restructuring costs            15,126        85      15,126    19,810
    Contract losses                 3,500         -      54,800         -
    Litigation settlements         14,400         -      14,400         -
                                 --------- --------- ----------- ---------
                                  191,263   151,197     840,984   633,662
                                 --------- --------- ----------- ---------
    Operating income              116,385   136,417     229,545   301,874
    Interest income                10,310     3,499      29,199     7,175
    Interest expense               (8,743)   (9,205)    (35,203)  (37,126)
    Foreign exchange gain (loss)   (1,277)      736        (716)   (1,417)
    Equity loss                       (56)     (356)       (529)   (1,160)
                                 --------- --------- ----------- ---------
    Income from continuing
     operations before provision
     for income taxes             116,619   131,091     222,296   269,346
    Provision for income taxes      1,300    10,575      14,500    22,550
                                 --------- --------- ----------- ---------
    Income from continuing
     operations                   115,319   120,516     207,796   246,796
    Loss from discontinued
     operation                          -      (797)     (3,848)  (10,575)
                                 --------- --------- ----------- ---------
    Net income                   $115,319  $119,719    $203,948  $236,221
                                 --------- --------- ----------- ---------

    Basic earnings (loss) per
     share
    Income from continuing
     operations                     $0.72     $0.76       $1.30     $1.55
    Loss from discontinued
     operation                          -     (0.01)      (0.03)    (0.07)
                                 --------- --------- ----------- ---------
    Net income                      $0.72     $0.75       $1.27     $1.48
                                 --------- --------- ----------- ---------

    Diluted earnings (loss) per
     share
    Income from continuing
     operations                     $0.72     $0.75       $1.30     $1.55
    Loss from discontinued
     operation                          -         -       (0.03)    (0.07)
                                 --------- --------- ----------- ---------
    Net income                      $0.72     $0.75       $1.27     $1.48
                                 --------- --------- ----------- ---------

    Weighted average number of
     common shares outstanding
     (000s)
    Basic                         160,265   159,526     160,060   159,433
                                 --------- --------- ----------- ---------
    Diluted                       160,265   160,250     160,078   159,681
                                 --------- --------- ----------- ---------
    

    
                             BIOVAIL CORPORATION
                    CONDENSED CONSOLIDATED BALANCE SHEETS
       (All dollar amounts are expressed in thousands of U.S. dollars)
                                 (Unaudited)

                                                        At December 31
                                                   -----------------------
                                                      2006        2005
                                                   ----------- -----------
    ASSETS
    Cash and cash equivalents                        $834,540    $445,289
    Other current assets                              223,084     239,493
    Long-term investments                              56,442      66,421
    Property, plant and equipment, net                211,979     199,567
    Intangible assets, net                            697,645     910,276
    Goodwill                                          100,294     100,294
    Other long-term assets                             51,128      67,472
                                                   ----------- -----------
                                                   $2,175,112  $2,028,812
                                                   ----------- -----------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities                              $410,287    $273,556
    Long-term obligations                             400,645     412,508
    Other long-term liabilities                        79,253     122,392
    Shareholders' equity                            1,284,927   1,220,356
                                                   ----------- -----------
                                                   $2,175,112  $2,028,812
                                                   ----------- -----------
    

    
                             BIOVAIL CORPORATION
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
       (All dollar amounts are expressed in thousands of U.S. dollars)
                                 (Unaudited)

                                                       Twelve Months Ended
                                                          December 31
                                                      --------------------
                                                         2006      2005
                                                      ---------- ---------
    CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                                         $203,948  $236,221
    Adjustments to reconcile net income to net cash
     provided by continuing operating activities
    Depreciation and amortization                       104,279   101,842
    Amortization and write-down of deferred financing
     costs                                                2,300     3,445
    Amortization and write-down of discounts on long-
     term obligations                                     1,291     2,420
    Stock-based compensation                             14,794         -
    Asset impairments                                   151,140    29,230
    Gain on disposal of intangible assets                (4,000)        -
    Accrued contract losses                              54,800         -
    Loss from discontinued operation                      3,848    10,575
    Other                                                   968       902
    Change in deferred revenue                          (42,319)   47,962
    Changes in other operating assets and liabilities    31,468    69,282
                                                      ---------- ---------
    Net cash provided by continuing operating
     activities                                         522,517   501,879
    Net cash provided by (used in) continuing
     investing activities                               (40,447)   31,825
    Net cash used in continuing financing activities    (92,256) (119,095)
    Net cash used in discontinued operation                (558)   (3,817)
    Effect of exchange rate changes on cash and cash
     equivalents                                             (5)      173
                                                      ---------- ---------
    Net increase in cash and cash equivalents           389,251   410,965
    Cash and cash equivalents, beginning of period      445,289    34,324
                                                      ---------- ---------
    Cash and cash equivalents, end of period           $834,540  $445,289
                                                      ---------- ---------
    




For further information:

For further information: Biovail Corporation Nelson F. Isabel,
905-286-3000 Vice-President, Investor Relations & Corporate Communications

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BIOVAIL CORPORATION

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