BIOVAIL NOT WELL
Banadian drug maker Biovail disclosed that federal prosecutors from the Eastern District of New York are investigating issues related to its accounting and stock trading going back to 2001.
Biovail, maker of antidepressant drug Wellbutrin, disclosed the investigation deep within an earnings release.
While the Toronto-based company did not elaborate on what the feds are seeking, it did note the Securities and Exchange Commission focused the federal probe on the same issues that are part of an ongoing investigation.
A Biovail spokesman said the company “continues to cooperate fully with the U.S. Securities and Exchange Commission, Ontario Securities Commission and other regulatory agencies.”
Another company official has said the company, which has been under investigation for three years, was expecting the current probes to conclude shortly.
According to Biovail’s 10-K last year, the SEC was seeking information on “the company’s accounting and financial disclosure practices.”
The filing also noted that the SEC is examining Biovail’s 2002 purchase of “a corporate entity.”
That is a reference to Pharma Tech, a Barbados-based research and development company that The Post last year reported had a very light footprint in the world of drug research.
Purchased by Biovail for $18.8 million, Pharma Tech has almost no paper trail of products, research and development, or staff. It shared the same Barbados address as Biovail.
Biovail and its chairman and founder, Eugene Melnyk, are also facing depressing news from the Ontario Securities Commission, which accused him last summer of a variety of insider trading violations stemming from trades he made between 2002 and 2004.
Biovail also drew attention in February 2006 for lashing out at research analysts and hedge funds, suing 22 separate analysts and funds and accusing them of collaborating to drive its stock price down.
Meanwhile, the company also reported fourth-quarter profit of $115.3 million, or 72 cents a share, for the period ended Dec. 31, down from $119.7 million, or 75 cents a share, for the same time a year earlier. The results included a $15.1 million charge related to the restructuring of its U.S. commercial operations and an $11.7 million payment in litigation costs.
The company also reiterated its 2007 financial forecast of diluted earnings per share of $1.70 to $1.80, and cash flow from operations of $320 million to $340 million, or $2.00 to $2.12 a share.