UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 6-K REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13a - 16 AND 15d - 16 OF THE SECURITIES EXCHANGE ACT OF 1934 AUGUST 7, 2001 COMMISSION FILE NUMBER 001-11145 BIOVAIL CORPORATION (TRANSLATION OF REGISTRANT'S NAME INTO ENGLISH) 2488 DUNWIN DRIVE, MISSISSAUGA, ONTARIO L5L 1J9, CANADA (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (416) 285-6000 INDICATE BY CHECK MARK WHETHER THE REGISTRANT FILES OR WILL FILE ANNUAL REPORTS UNDER COVER OF FORM 20-F OR FORM 40-F Form 20-F X Form 40-F ___ --- INDICATE BY CHECK MARK WHETHER FOR REGISTRANT BY FURNISHING THE INFORMATION CONTAINED IN THIS FORM IS ALSO THEREBY FURNISHING THE INFORMATION TO THE COMMISSION PURSUANT TO RULE 12g 3-2 (b) UNDER THE SECURITIES EXCHANGE ACT OF 1934. Yes ___ No X --- 1 BIOVAIL CORPORATION INTERNATIONAL QUARTERLY REPORT THIS REPORT OF FOREIGN ISSUER ON FORM 6-K IS INCORPORATED BY REFERENCES INTO THE REGISTRATION STATEMENT ON FORM S-8 OF BIOVAIL CORPORATION (REGISTRATION NO. 333-92229). PART II - Other Information 99. A ON JULY 31, 2001, THE COMPANY ANNOUNCED SECOND QUARTER 2001 FINANCIAL RESULTS. THE PRESS RELEASE ISSUED BY THE COMPANY AND FILED WITH THE CANADIAN SECURITY ADMINISTRATORS AND STOCK EXCHANGES (NYSE / TSE) ATTACHED AS REFERENCE. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Biovail Corporation August 7, 2001 By /s/John R. Miszuk ----------------- John R. Miszuk Vice President, Controller 3 [GRAPHIC OMITTED] CONTACT: Ken Howling Vice President Finance (416) 285-6000 FOR IMMEDIATE RELEASE: * BIOVAIL REPORTS RECORD SECOND QUARTER 2001 RESULTS * - Product sales revenue increased 176% for the quarter - - Second quarter diluted EPS of $0.30 increased 76% versus prior year adjusted EPS of $0.17 - - Raising 2001 revenue and earnings guidance - - Cardizem(R)XL study analyzed and highly statistically significant results achieved - TORONTO, Canada, July 31, 2001 - Biovail Corporation (NYSE, TSE:BVF) today reported record financial results for the three-month and six-month periods ending June 30, 2001. Total revenues for the second quarter of 2001 increased 105% to $133.5 million, compared with $65.2 million reported for the second quarter of 2000. Total revenues for the six months ended June 30, 2001 were $252.7 million reflecting an increase of $136.8 million or 118% over the six months ended June 30, 2000. Results were ahead of expectations primarily due to the resilience of the Cardizem(R) brands in the marketplace and strong sales of the Company's controlled-release generic product portfolio. Net income increased 82% and was $44.1 million for the second quarter 2001 versus second quarter 2000 net income of $24.2 million. Net income for the six months ended June 30, 2001 of $73.3 million increased 87% versus $39.1 million for the prior year equivalent period excluding charges for an extraordinary item related to the early retirement of Senior Notes and the cumulative effect from the adoption of SAB 101. Second quarter 2001 diluted earnings per share increased 76% to $0.30 per share versus $0.17 per share for the second quarter 2000. For the six months ended June 30, diluted earnings per share increased 79% to $0.50 per share for 2001 versus $0.28 per share for 2000, excluding the charges outlined above. Due to the resilience demonstrated by the Cardizem(R) brands, and the strong level of sales of the Company's controlled-release generic product portfolio, Biovail is revising upwards its previous level of revenue and earnings guidance. Biovail currently forecasts the following revenue and earnings per share ranges, excluding charges, for the balance of 2001. -------------------------------------------------------------------------------------------- Q3 2001 Q4 2001 2001 -------------------------------------------------------------------------------------------- Revised Previous Revised Previous Revised Previous --------------------------------------------------------------------------------------------------------------- Total Revenues $145 - $160 $135 - $150 $160 - $180 $150 - 170 $560 - $590 $540 - $570 ($US Millions) --------------------------------------------------------------------------------------------------------------- Diluted EPS $0.35-$0.40 $0.30-$0.40 $0.45-$0.50 $0.40-$0.50 $1.25-$1.33 $1.23-$1.30 --------------------------------------------------------------------------------------------------------------- Also completed during the quarter were significant Phase III clinical trials involving Biovail's novel once-daily chronotherapeutic formulation of diltiazem. The results have demonstrated that the product, named Cardizem(R) XL, dosed at night, results in a highly significant statistical reduction in both diastolic blood pressure (DBP) and systolic blood pressure (SBP) between 6 a.m. and 12 noon compared to equivalent morning dosing. Dr. Joel Neutel, lead investigator for the Cardizem(R) XL Study and Chief of Clinical Pharmacology and Hypertension at the VA Medical Center in Long Beach California, commented, "This is the first time a study has demonstrated that a chronotherapeutic agent given at night results in clinically meaningfully and highly statistically significant reductions in blood pressure during the early morning period than the identical agent dosed in the morning. Cardizem(R) XL was shown to achieve peak efficacy between the hours of 6 a.m. and 12 noon which is desirable since this is when the greatest incidence of non-embolic strokes and myocardial infarctions occur." Financial Results Product sales revenue of $125.4 million increased 176% during the second quarter 2001 versus second quarter 2000 and increased 192% to $237.3 million for the first half of 2001 versus first half 2000 primarily due to sales of the Cardizem(R) line in North America, Tiazac sales in the US and sales of a number of branded products by Biovail Pharmaceuticals, Inc., the Company's US sales and marketing organization. Excluding product sales revenue associated with the acquisition of the Cardizem(R) brands and Biovail Pharmaceuticals, Inc., product sales revenue increased over 60% for the three months ended June 30, 2001. Research and development revenues were approximately $2 million and $3.5 million for the second quarter and first half of 2001 respectively compared to 2000 levels of $16.6 million and $28.3 million respectively. The reduction in research and development revenues is due to the termination of Biovail's research and development arrangement with Intelligent Polymers Limited (IPL) at the end of September 2000. Royalty and licensing revenue of $6.1 million and $11.9 million for the second quarter and first half of 2001 reflect increases in excess of 85% versus comparable 2000 levels primarily due to royalties associated with the sale of a Cardizem(R) product by a third party. Gross margins were approximately 78% for the second quarter and first half of 2001 versus approximately 70% for the comparable 2000 periods. The improvement in gross margins was primarily due to sales of higher margin products such as the Cardizem(R) brands and a favourable sales mix. Sales of branded pharmaceutical products accounted for more than 60% of product sales revenue for both the second quarter and first half of 2001. Research and development expenses were $13.9 million and $25.3 million for the second quarter and first half of 2001. Selling, general and administrative expenses for the second quarter and first half of 2001 of $34.9 million and $71.8 million reflect increases of 142% and 172% versus 2000 levels primarily due to the selling and marketing expenses associated with Biovail Pharmaceuticals, Inc. acquired in the fourth quarter 2000 and the amortization expenses associated with the acquisition of Biovail Pharmaceuticals, Inc. and the Cardizem(R) brands. Operating income for second quarter 2001 increased to $57.1 million versus $23.2 million earned in the second quarter of 2000. Operating income was $101.5 million for the first half of 2001 versus $39.3 million for the first half of 2000. Net interest expense was $9.7 million for the second quarter 2001 and approximately $22.2 million for the first half of 2001. The increase in net interest expense for the second quarter and first half of 2001 versus 2000 levels was primarily due to the convertible preferred securities issued in March of 2000 and advances made against the Company's revolving term credit facility established at the end of 2000. This facility was recently syndicated and was increased from $300 million to $400 million due to the favourable response received from the debt capital markets. The revolving term credit facility has received a BB- rating from Standard & Poors and a Ba3 rating from Moody's Investor Services. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 157% to $71.1 million for the quarter ended June 30, 2001 versus $27.7 million for the equivalent prior year period. EBITDA increased 161% to $128.9 million for the first half 2001 versus $49.3 million for the first half of 2000 and operating cash flow was $137.4 million for the first half of 2001. Eugene Melnyk, Chairman of the Board, commented, "Biovail continues to implement its strategic initiatives and therefore expand its business base. We currently enjoy excellent growth from the sales of our Tiazac brands, sales of our once-daily generic products, sales from the Cardizem(R) brands in North America, sales of branded pharmaceutical products in the Canadian market and sales from the recently acquired Biovail Pharmaceuticals, Inc. brands. Our focus continues to be on the execution of our revenue diversification and multi-stage growth strategies. We will continue to expand in the area of directly promoted branded pharmaceutical products that are both acquired and internally developed. The Cardizem(R) XL studies have been analyzed and we are excited by these results and the opportunity to bring this innovative, chronotherapeutic cardiovascular medication to the market next year." The Company's conference call to review the second quarter and first half 2001 results will be broadcast live at 8:30 a.m. E.S.T. on the world wide web at www.biovail.com and a replay of the conference call will be available on this website shortly after the call. Biovail Corporation is an international full-service pharmaceutical company, engaged in the formulation, clinical testing, registration, manufacture, sale and promotion of pharmaceutical products utilizing advanced drug delivery technologies. "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 ESSENTIALLY FORWARD LOOKING AND ARE SUBJECT TO RISKS AND UNCERTAINTIES, INCLUDING THE DIFFICULTY OF PREDICTING FDA 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, THE REGULATORY ENVIRONMENT, FLUCTUATIONS IN OPERATING RESULTS AND OTHER RISKS DETAILED FROM TIME TO TIME IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. BIOVAIL CORPORATION CONSOLIDATED BALANCE SHEETS IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (All dollar amounts are expressed in thousands of U.S. dollars) (Unaudited) JUNE 30 December 31 2001 2000 ----------- ----------- ASSETS CURRENT Cash and cash equivalents $ 68,276 $ 125,144 Accounts receivable 88,377 105,850 Inventories 39,156 24,108 Deposits and prepaid expenses 4,565 5,347 ----------- ----------- 200,374 260,449 Long-term investments 2,413 1,561 Property, plant and equipment, net 76,712 52,541 Goodwill, net 98,823 103,105 Intangible assets, net 647,945 667,431 Other assets, net 20,900 22,180 ----------- ----------- $ 1,047,167 $ 1,107,267 ----------- ----------- ----------- ----------- LIABILITIES CURRENT Accounts payable $ 30,425 $ 34,683 Accrued liabilities 46,778 35,452 Income taxes payable 9,899 6,711 Deferred revenue 38,413 26,334 Current portion of long-term obligations 95,923 182,564 ----------- ----------- 221,438 285,744 Deferred revenue 25,500 27,900 Long-term obligations 174,487 256,180 Convertible Subordinated Preferred Equivalent Debentures 299,985 299,985 ----------- ----------- 721,410 869,809 ----------- ----------- SHAREHOLDERS' EQUITY Common shares 507,369 492,733 Warrants 7,912 7,912 Deficit (188,550) (261,819) Accumulated other comprehensive loss (974) (1,368) ----------- ----------- 325,757 237,458 ----------- ----------- $ 1,047,167 $ 1,107,267 ----------- ----------- ----------- ----------- BIOVAIL CORPORATION CONSOLIDATED STATEMENTS OF INCOME (LOSS) IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (All dollar amounts except per share data are expressed in thousands of U.S. dollars) (Unaudited) THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30 JUNE 30 ----------------------- ----------------------- 2001 2000 2001 2000 --------- --------- --------- --------- REVENUE Product sales $ 125,398 $ 45,384 $ 237,325 $ 81,237 Research and development 1,963 16,645 3,529 28,296 Royalty and licensing 6,143 3,135 11,877 6,413 --------- --------- --------- --------- 133,504 65,164 252,731 115,946 --------- --------- --------- --------- EXPENSES Cost of goods sold 27,534 13,538 54,088 24,573 Research and development 13,913 13,942 25,320 25,708 Selling, general and administrative 34,925 14,456 71,803 26,392 --------- --------- --------- --------- 76,372 41,936 151,211 76,673 --------- --------- --------- --------- OPERATING INCOME 57,132 23,228 101,520 39,273 Interest income (expense), net (9,719) 2,383 (22,191) 2,117 --------- --------- --------- --------- Income before income taxes 47,413 25,611 79,329 41,390 Provision for income taxes 3,310 1,444 6,060 2,257 --------- --------- --------- --------- INCOME BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 44,103 24,167 73,269 39,133 Extraordinary item - - - (20,039) --------- --------- --------- --------- INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 44,103 24,167 73,269 19,094 Cumulative effect of change in accounting principle - - - (43,500) --------- --------- --------- --------- NET INCOME (LOSS) $ 44,103 $ 24,167 $ 73,269 $ (24,406) --------- --------- --------- --------- --------- --------- --------- --------- BASIC EARNINGS (LOSS) PER SHARE Income before extraordinary item and cumulative effect of change in accounting principle $ 0.33 $ 0.19 $ 0.55 $ 0.31 Extraordinary - - - (0.16) Cumulative effect of change in accounting principle - - - (0.34) --------- --------- --------- --------- Net income (loss) $ 0.33 $ 0.19 $ 0.55 $ (0.19) --------- --------- --------- --------- --------- --------- --------- --------- DILUTED EARNINGS (LOSS) PER SHARE Income before extraordinary item and cumulative effect of change in accounting principle $ 0.30 $ 0.17 $ 0.50 $ 0.28 Extraordinary item - - - (0.14) Cumulative effect of change in accounting principle - - - (0.31) --------- --------- --------- --------- Net income (loss) $ 0.30 $ 0.17 $ 0.50 $ (0.17) --------- --------- --------- --------- --------- --------- --------- --------- WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (000s) Basic 132,297 129,530 132,037 127,550 --------- --------- --------- --------- --------- --------- --------- --------- Diluted 147,933 143,118 147,735 141,850 --------- --------- --------- --------- --------- --------- --------- --------- BIOVAIL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (All dollar amounts are expressed in thousands of U.S. dollars) (Unaudited) SIX MONTHS ENDED JUNE 30 --------------------------- 2001 2000 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 73,269 $ (24,406) Depreciation and amortization 27,357 10,018 Amortization of discount on long-term obligations 7,115 - Deferred income taxes 1,450 - Compensation cost for employee stock options 999 - Extraordinary item - 20,039 Cumulative effect of change in accounting principle - 43,500 ----------- ----------- 110,190 49,151 Change in non-cash operating items 27,222 (38,959) ----------- ----------- CASH PROVIDED BY OPERATING ACTIVITIES 137,412 10,192 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Additions to property, plant and equipment, net (28,939) (5,791) Additions to intangible assets (13,954) - Reduction in intangible assets 11,352 261 Acquisition of long-term investments (209) (2,285) Maturity of short-term investments, net - 4,218 Proceeds from sale of assets held for disposal - 20,000 ----------- ----------- CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (31,750) 16,403 ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Issuance of common shares 13,617 102,822 Proceeds from the exercise of warrants 20 - Repayments under revolving term credit facility (75,790) - Reduction in other long-term obligations (100,365) (10,657) Issuance of Convertible Subordinated Preferred Equivalent Debentures, net of financing costs - 289,410 Repurchase of U.S. Dollar Senior Notes - (141,017) Collection of warrant subscription receivable - 2,287 ----------- ----------- CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (162,518) 242,845 ----------- ----------- Effect of exchange rate changes on cash and cash equivalents (12) (73) ----------- ----------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (56,868) 269,367 Cash and cash equivalents, beginning of period 125,144 178,086 ----------- ----------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 68,276 $ 447,453 ----------- ----------- ----------- -----------