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Biovail Optimistic On Approval For Depression Drug Launch

by FP Trading Desk


Biovail Corp. (BVF) remains optimistic that approval of its once daily treatment option for depression – affectionately known as BVF-033 or Wellbutrin Salt – is just around the corner, despite not yet hearing back from the FDA regarding the classification of Biovail's response to a non-approval letter received on Oct. 24, 2007.

According to RBC Capital analyst Douglas Miehm, Biovail said they had expected to hear back from the FDA already, but based on discussions with the agency, the company still fully expects to receive a class I review very shortly.

"In the event of a class I, approval would be expected with 60 days of submission or by the end of the year. Mr. Miehm informed clients in a note that adding a class II review would mean approval within six months or by the end of April 2008.

The company indicated it continues to negotiate with potential partners and expects to sign a deal before approval or shortly after in order to get the product on the market as quickly as possible.

Mr. Miehm said the difference between a class I and class II review in terms of the company's earnings per share in 2008 is only US2¢. More impactful to earnings would be the January launch of a generic 150mg Wellbutrin XL.

Currently, a conditional agreement is in place that states generic versions can not be launched until May 30, 2008, however an appeal made by generic drug maker, Anchen Pharmaceuticals, to the US appellate court could result in an earlier launch if successful.

A January launch compared to June would cost the company US32¢ to US34¢ in EPS, Mr. Miehm told clients, however, he added that the company's cost containment initiatives would more than offset this decrease.

Mr. Miehm's 2008 EPS remains unchanged at $1.47 as a result, while his 2007 EPS increases from $1.76 to $1.82.

His "outperform" rating and C$24 price target on the stock remain unchanged.


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