Biovail Reports Third Quarter 2003 Financial Results

Biovail Reports Third Quarter 2003 Financial Results
- Total revenue increased 3% for Q3 2003 versus Q3 2002 - - Total revenues
increase 14% for the nine month 2003 period versus the comparable 2002 period -
- EBITDA margins were 27% for Q3 2003 - - Slides to facilitate the earnings call
may be accessed at www.biovail.com - 


TORONTO, Oct. 30  /PRNewswire-FirstCall/ -- Biovail Corporation (NYSE/TSX: BVF)
announced today its financial results for the three month and nine month periods
ending September 30, 2003. Total revenues for the three months ended September
30, 2003 increased 3% to $215.3 million versus the prior year comparable period.
Total revenues for the nine months ended September 30, 2003 were $624.0 million
reflecting an increase of 14% versus the prior year comparable period.

"Third quarter results reflect a series of decisions we made to remain
consistent with our conservative approach to our financial reporting", commented
Eugene Melnyk, Chairman and CEO of Biovail.

Third quarter 2003 revenue growth was favorably impacted by a 3% increase in
Product Sales revenue versus the prior year comparable period primarily due to
Biovail's launch of Cardizem LA, Teveten HCT and Zovirax Cream as well as the
approval and recent commercialization of Wellbutrin XL in the U.S. marketplace.
Total revenue growth of 14% for the nine-month period ended September 30, 2003
is primarily due to the product launches described above, as well from Biovail's
economic interest in the sales of a generic version of Prilosec.

"Third quarter 2003 validates the value that Biovail's technologies can bring to
established compounds while at the same time highlights the difficulties in
transitioning into a fully integrated pharmaceutical company rapidly while
maintaining an exceptional growth rate", commented Mr. Melnyk. "Biovail has
transitioned very rapidly towards full integration and has experienced many of
the associated growing pains. Expense controls, operational efficiencies,
logistics management and materials management are now key elements of Biovail's
internal Success Metrics. The senior executives hired over the past several
months are now in place and can contribute to successfully completing the
integration of commercial and product development groups. During the quarter,
Biovail's Wellbutrin XL received Food and Drug Administration (FDA) approval
resulting in one of the industry's most successful pharmaceutical product
launches. Cardizem LA achieved its phase one penetration level earlier than
expected and is well positioned in the managed care segment going forward."

Net income and diluted earnings per share for the three month and nine month
periods ending September 30, 2003 in accordance with U.S. generally accepted
accounting principles (GAAP) are as follows:

                                   Three Months Ended    Nine Months Ended
                                      September 30         September 30
                                  -------------------  --------------------
  In $millions, except
  per share data                     2003      2002      2003        2002
  --------------------------------  --------  -------  --------   ---------

  Net income - US GAAP              $ 13.0    $ 75.0    $ 75.0     $ 190.6
                                    --------  -------   -------    --------
                                    --------  -------   -------    --------
  Diluted earnings per share -
   US GAAP                          $ 0.08    $ 0.49    $ 0.47     $  1.18
                                    --------  -------   -------    --------
                                    --------  -------   -------    --------

  Net income - US GAAP              $ 13.0    $ 75.0    $ 75.0     $ 190.6
  Add (deduct) certain items
  Restructuring costs                  3.2         -       3.2           -
  Acquired research and development   18.4         -     102.6           -
  Other income                           -      (3.3)        -        (3.2)
  Write-down of assets                   -       1.4         -         1.4
                                    --------  -------   -------    --------
  Net income excluding
   certain items                    $ 34.6    $ 73.1    $180.8     $ 188.8
                                    --------  -------   -------    --------
                                    --------  -------   -------    --------
  Diluted earnings per share
   excluding certain items          $ 0.22    $ 0.47    $ 1.13     $ 1.17
                                    --------  -------   -------    --------
                                    --------  -------   -------    --------
  -------------------------------------------------------------------------



In accordance with U.S. GAAP, third quarter 2003 net income was $13.0 million
and diluted earnings per share of $0.08 compared to net income was $75.0 million
and diluted earnings per share of $0.49 for third quarter 2002. In accordance
with U.S. GAAP for the nine month period ended September 30, 2003, net income
was $75.0 million and diluted earnings per share was $0.47 compared to net
income of $190.6 million and earnings per share of $1.18 for the nine-month
period ended September 30, 2002.

Excluding certain items, third quarter 2003 net income of $34.6 million and
diluted earnings per share of $0.22 both declined by 53% versus third quarter
2002 net income and earnings per share of $73.0 million and $0.47 per share
excluding the expense related to the ineffective portion of interest rate swaps.
Excluding certain items, net income of $180.8 million and diluted earnings per
share of $1.13 for the nine months ended September 30, 2003 and decreased 4% and
3% respectively compared to net income of $188.7 million and earnings per share
of $1.17 for the comparable 2002 excluding the ineffective portion of interest
rate swaps and a write-down of assets related to a decline in the value of the
Company's investment in Hemispherx Biopharma Inc.

Excluded acquired research and development expenses of $18.4 million for third
quarter 2003 includes a $3.1 million net charge related to a multifaceted
transaction with Ethypharm S.A. (Ethypharm) (see below) and Biovail's $15.3
million share (49%) of the fair value of the in-process super- bioavailable
research and development programs under development with Pharma Pass II, LLC. In
addition to the third quarter 2003 excluded acquired research and development
expense items just described, the nine month period ended September 30, 2003
also included expenses related to the second quarter 2003 acquisition of four
developmental cardiovascular products from Athpharma Limited and the acquisition
of a sublingual Ativan product and related technologies from Wyeth
Pharmaceuticals Inc.

Third quarter and nine months ended September 30, 2003 U.S. GAAP calculations of
net income and fully diluted earnings per share include the write-off of
acquired research and development reorganization costs associated with Biovail's
U.S. operation, expenses associated with the ineffective portion of interest
rate swaps and the write-down of assets. Management utilizes a measure of net
income and earnings per share on a basis that excludes certain items to better
assess operating performance. Each of the items excluded is considered to be of
a non-operational nature in the applicable period. Management has consistently
applied this measure when discussing earnings or earnings guidance and will
continue to do so going forward. Management believes that most of the Company's
shareholders prefer to analyze the Company's results based on this measure, as
it is consistent with industry practice. Earnings excluding certain items are
also disclosed to give investors the ability to further analyze the Company's
results.

2003 Third Quarter Activities

On August 28, 2003, Biovail received final approval from the FDA for Wellbutrin
XL, the once daily anti-depression product manufactured by Biovail for
commercialization in the U.S. by GlaxoSmithKline (GSK). GSK's marketing
initiatives began the first week of September with pharmacy calls and the
product began shipping to wholesalers a week later. Recent tracking data shows
Wellbutrin XL capturing approximately 49,500 prescriptions for the week ending
October 24, 2003 and a New Prescription capture rate of approximately 33% for
October 23, 2003.

During third quarter 2003, Biovail and Pharma Pass II, LLC established a joint
venture to develop a number of super-bioavailable products. Biovail invested
$30.6 million to acquire a 49% interest in the joint venture and Pharma Pass II,
LLC contributed all of its intellectual property, formulations and scientific
know-how related to the super-bioavailable products to acquire its 51% interest.
Given that it has an option to purchase the joint venture, Biovail has
determined that it will be fully consolidating this entity in its financial
statements, recording 100% of the research related expenses on its income
statement, reflecting Pharma Pass II, LLC's ownership interest (51%) as minority
interest on its income statement and reflecting any cash held by the entity as
restricted cash on its balance sheet.

In April 2002, Biovail licensed the rights to Ethypharm's tramadol Flashtab
product. Tramadol Flashtab is an orally-disintegrating tablet (ODT) offering
ease of administration. Biovail is in the process of completing relevant studies
and expects to file a New Drug Application (NDA) immediately. Biovail believes
this product complements its parallel research activity on its tramadol
controlled-release product (tramadol XL) for which recently completed clinical
results are being analyzed. Filing for tramadol XL is expected by year-end.

In September 2003, Biovail paid $21 million to eliminate any future milestone
and royalty obligation related to this product. Biovail has also agreed, subject
to certain conditions, to subscribe to a maximum of $20 million of convertible
and/or exchangeable bonds of Ethypharm during the fourth quarter 2003. In
addition, Biovail entered into a multifaceted transaction with Ethypharm
including the licensing to Ethypharm of the international rights to Diltiazem LA
and provided the initial $15 million supply of Diltiazem LA to Ethypharm.
Furthermore, Biovail has substantially improved its rights in the shareholder
agreement to better protect its investment. Lastly, Biovail granted Ethypharm a
right of first offer to market Wellbutrin XL in all countries outside of North
America that are not optioned by GlaxoSmithKline (Glaxo).

Biovail entered into a lease for 110,000 square foot of office space in
Bridgewater, New Jersey during third quarter 2003. This facility will
accommodate Biovail's U.S. Sales and Marketing Division, formerly located in
Raleigh, North Carolina, as well as select functions within the Research and
Development Division currently residing in Chantilly, Virginia. The objective of
integrating sales and marketing with R&D is streamlining the product development
process and ensuring that developed products will satisfy patient needs. Hiring
continues and approximately 100 staff should be located in the new facility
towards the end of 2003. The addition of seven senior executives earlier this
year complements the final step in Biovail's transition to a fully integrated
pharmaceutical company.

While the facility in Virginia will be maintained, Biovail will be closing the
North Carolina facility as a result of the integration of these two groups.
Transitional and restructuring costs associated with this program are on-going
and will be included within Biovail's Selling, General and Administrative
expenses.

A late third quarter 2003 shipment of Wellbutrin XL involved in an accident
outside of Chicago was returned to Biovail's facility on October 8, 2003 for
inspection. No revenue was recognized from this shipment in Q3 2003. The
shipment included both bulk and fully packaged material. All bulk tablets, which
are packaged in plastic drums, were salvaged and have already been shipped to
GSK. A small portion of the packaged goods (less than 1,000 bottles) was
effected in the accident and could not be re-shipped.

The Company has an economic interest in the Gross Margin of a generic version of
Prilosec that is distributed under license in the U.S. In the third quarter,
additional generic competition entered the market. Due to the additional
competition, the licensee offered rebates to wholesalers. These rebates have the
affect of reducing Gross Margin and had a negative impact to Biovail's third
quarter 2003 relative to Biovail's prior expectations. Biovail does not know if
further rebates will be offered or if the licensee has processed all rebates.

Biovail was able to secure additional quantities of branded Cardizem CD during
the 2003 third quarter from Aventis Pharmaceuticals Inc. (Aventis). Aventis
manufactures and supplies Cardizem CD to Biovail for distribution in the U.S.
Backorders were approximately $20 million at the end of September 2003. Based on
current production schedules, Biovail believes backorders for this product will
be less than $1 million.

Financial performance

To provide greater financial clarity and ease in measuring areas of organic
growth, Biovail will be describing its Product Sales revenue in the following
categories:

    Core Products - includes Cardizem LA, Zovirax products and Teveten
    products.

    Wellbutrin XL

    Biovail Pharmaceuticals Canada (BPC)

    Legacy Products - includes Tiazac (brand and generic), Cardizem CD
    (brand), controlled-release generics, Ativan/Isordil,
    Vasotec/Vaseretic, Rondec and Cedax



Biovail details Core Products (in the U.S) and BPC Products (in Canada) directly
to physicians through its own network of integrated sales represents. Both of
these categories, as well as Wellbutrin XL are growing and are expected to
experience significant future growth. Legacy Products are not promoted as most
of these products have been genericized. As anticipated, these products are
declining marginally quarter over quarter. However, there are several products
in this group that continue to have substantial patient utilization and
excellent brand awareness. These products/brands may create future growth
opportunities given on-going clinical programs designed to meaningfully enhance
the product's performance. In a separate press release today, Biovail has
provided financial guidance in the same format, which should provide ease in
monitoring Biovail's future financial performance.

Product sales performance

Product sales increased 3% for the third quarter to $178.0 million and 1% to
$464.6 million for the nine months ended September 30, 2003. Core Product sales
revenue was $60.1 million or 37% of total Product Sales revenue for third
quarter 2003 versus $18.1 million or 10% of total Product Sales revenue for the
comparable 2002 period. The increase in Core Product sales revenue reflects the
launch of Cardizem LA, Teveten HCT and Zovirax Cream during 2003.

Wellbutrin XL product sales revenue was $8.2 million for third quarter 2003 and
$16.3 million for the nine months ended September 30, 2003. Biovail receives a
percentage of Glaxo's net sales as revenue for supplying trade supplies of
Wellbutrin XL. Biovail also is paid for bulk sample product that is produces and
supplies to Glaxo. Samples are sold at a contractually agreed price at
approximately Biovail's manufacturing cost.

Product sales revenue by Biovail Pharmaceuticals Canada (BPC) during the 2003
third quarter of $23.1 million reflected 154% growth versus the third quarter
2002 level of $9.1 million. Product sales revenue by BPC represented 13% of
total Product Sales and were $61.8 million for the nine months ended September
30, 2003. The primary growth drivers are Tiazac as well as revenues from
Wellbutrin SR and Zyban, which were acquired at the end of 2002.

Product sales revenue from Legacy Products was $68.2 million and $172.4 million
for the third quarter and nine months ended September 30, 2003 respectively and
represented 49% and 53% of total Product Sales for the same respective periods.
Legacy Product revenue for the nine months ended September 30, 2003 reflected
period over comparable 2002 period reductions of 58% for Tiazac, 34% for
Cardizem CD and 66% for generics. These declines were partially offset by a 26%
increase in Other Legacy Products due to the acquisition of Ativan/Isordil such
that decline in total Legacy Products for the comparable 2003 and 2002 nine
month periods was 37%.

  In summary:
  -------------------------------------------------------------------------
  ($ Millions)        Q3 2003 Sales    Percent of total    Growth Rate
                                                           vs Q3 2002
  -------------------------------------------------------------------------
  Core Products            $60.1             33%               232%
  -------------------------------------------------------------------------
  Wellbutrin XL             $8.2              5%                N/A
  -------------------------------------------------------------------------
  BPC Products             $23.1             12%               154%
  -------------------------------------------------------------------------
  Legacy Products          $68.2             38%               (22%)
  -------------------------------------------------------------------------
  Generics                 $20.4             11%               (66%)
  -------------------------------------------------------------------------
  Total Product Sales     $180.0            100%                 3%
  -------------------------------------------------------------------------



Research and development (R&D) revenues were $4.5 million and $10.8 million for
the three months and nine months ended September 30, 2003 and compared to $7.7
million and $19.2 million for the comparable 2002 periods. The 2003 decline in
R&D revenues is primarily due to R&D revenue in 2002 that was received from GSK
related to the development of Wellbutrin XL.

Co-promotion, royalty and licensing revenue was $30.7 million for third quarter
2003 and compared to $26.8 million for the comparable 2002 period. Co-promotion,
royalty and licensing revenue of $148.5 million for the nine months ended
September 30, 2003 compared to $68.0 million for the 2002 comparable period. The
increase in these revenues primarily relates to the Company's economic interest
in the sales of a generic version of Prilosec. The Company earned $15.3 million
and $91.8 million during the three and nine month periods ended September 30,
2003 from this economic interest.

Gross margins on total Product Sales were 79% and 81% for the three and nine
month periods ended September 30, 2003 and compared to 75% and 74% for the prior
year comparable period. Gross margins were favorably impacted by sales mix of
higher margin products (Cardizem LA and Zovirax) offset partially by the lower
margins associated with the Wellbutrin line due to mix (trade versus sample) and
initial inefficiencies that are expected to improve both due to yield increases
and recently approved larger batch sizes.

Research and development expenses increased by 41% and 53% to $20.6 million and
$60.4 million for the three and nine month periods ended September 30, 2003. The
increase in Research and development expenses primarily relates to a significant
increase in the number of on-going developmental programs (venlafaxine,
fenofibrate, acyclovir, simvastatin, sumatriptan, Hepacol, lorazepam and four
chrono-therapeutic cardiovascular products) as well as two recently completed
Phase III clinical trials on tramadol XL.

Selling, general and administrative expenses were $76.7 million for the third
quarter 2003 versus $56.9 million for the second quarter 2003 and versus $44.9
million for third quarter 2002. Selling, general and administrative expenses
were $179.8 million for the nine month period ended September 30, 2003 versus
$123.2 million for the comparable 2002 period. The significant increase in
selling, general and administrative expenses is due to a number of factors.
During the 2003 third quarter, Biovail incurred initial expenses related to the
transition of its commercial operations group from Raleigh to Bridgewater, New
Jersey. This initiative also includes transitioning the research and development
executive leadership and select research and development functions from
Chantilly Virginia to the Bridgewater facility as well. Costs associated with
this initiative were in excess of $3.0 million during Q3 2003 and were primarily
due to employee relocation and severance costs. There will be further costs
associated with these activities. On-going U.S. salary and benefit costs have
risen by 50% for the comparable nine month 2003 and 2002 periods. Sales force
bonus Advertising and promotion costs have also increased significantly given
the launches of Cardizem LA, Teveten HCT and Zovirax Cream. Previously deferred
advertising and promotional expenses related to Zovirax Cream were expensed in
third quarter 2003 given the launch of this product in July 2003. At the end of
the third quarter, the Company did not have any deferred advertising and
promotional expenses. Biovail recorded significant expenses related to the
co-promotional efforts of Reliant Pharmaceuticals, LLP (Reliant). During the
initial launch phase of Cardizem LA, Reliant provided an additional 250 sales
representatives. As Biovail pays Reliant a percentage on the sales of basket of
products, including Cardizem LA, these costs are escalating given the rising
level of Cardizem LA revenue. As the initial launch phase for Cardizem LA has
past, Biovail is evaluating the costs, benefits and its options related to this
arrangement.

Amortization expense was $28.2 million and $114.7 million for the three and nine
month periods ending September 30, 2003 respectively versus $16.0 million and
$42.5 million for the three and nine month periods ending September 30, 2002.
The increases primarily reflect the incremental amortization related to our
economic interest in a generic version of Prilosec.

On June 30, 2003, it was determined that Biovail's interest rate swaps no longer
qualified as highly effective hedges. Subsequent to September 30, 2003, Biovail
believed that the interest rate swaps could qualify as highly effective hedges
and anticipated reinstating the application of hedge accounting effective July
1, 2003. However, though the swap was believed to be effective at July 1, it was
subsequently determined that the reinstatement date used must be October 1,
2003. This resulted in recording a $4.7 million loss of fair value on the swaps
that would otherwise have been offset by a reduction on the fair value of the
loans.

Cash flow from operations increased 36% at September 30, 2003 to $237.1 million
versus $174.2 million at June 30, 2003. Earnings before interest, tax,
depreciation and amortization (EBITDA) excluding certain items increased to
$363.0 million for the nine month period ending September 30, 2003 reflecting an
increase 33% versus the comparable 2002 period.

Biovail management will host a conference call and webcast on Thursday, October
30th, 2003 at 8:00 a.m. EST for company executives to discuss 2003 third quarter
earnings. Following the discussion, Biovail executives will address inquiries
from research analysts.

A presentation will be used to facilitate today's call, which can be accessed
through the Investor Relations section of the Biovail web site. A live webcast
of this call will also be available through the Investor Relations section of
the Biovail web site at http://www.biovail.com/. Alternatively, please dial
1-800-299-7635 (North America.) or 1-617-786-2901 for International callers,
with passcode 96026666, to access the conference call. A replay of the
conference call will be available until 7:00 p.m. EST on Thursday, November 6th,
2003 by dialing 1-888-286-8010 (North America) or

1-617-801-6888 for International callers, using access code, 32225542.

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 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. We have based these
forward-looking statements on our current expectations and projections about
future events. Our actual results could differ materially from those discussed
in, or implied by, these forward-looking statements. Forward-looking statements
are identified by words such as "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. Forward-looking
statements include, but are not necessarily limited 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 and finished products, third parties, 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
               CONDENSED CONSOLIDATED STATEMENTS OF INCOME
     (All dollar amounts are expressed in thousands of U.S. dollars,
                         except per share data)
                               (Unaudited)

                                Three Months Ended     Nine Months Ended
                                   September 30           September 30
                            ----------------------- -----------------------
                                2003        2002        2003        2002
                            ----------- ----------- ----------- -----------
  REVENUE
  Product sales              $ 179,985   $ 174,508   $ 464,629   $ 462,150
  Research and development       4,542       7,653      10,815      19,168
  Co-promotion, royalty
   and licensing                30,787      26,783     148,543      68,010
                            ----------- ----------- ----------- -----------
                               215,314     208,944     623,987     549,328
                            ----------- ----------- ----------- -----------
  EXPENSES
  Cost of goods sold            40,079      44,007      88,823     121,014
  Research and development      20,608      14,626      60,427      39,547
  Selling, general and
   administrative               76,733      44,922     179,839     123,240
  Amortization                  28,243      15,994     114,650      42,522
  Acquired research and
   development                  18,409           -     102,609           -
  Settlements                        -           -     (34,055)          -
  Write-down of assets               -       1,369           -       1,369
                            ----------- ----------- ----------- -----------
                               184,072     120,918     512,293     327,692
                            ----------- ----------- ----------- -----------
  Operating income              31,242      88,026     111,694     221,636
  Interest income                1,191         298       5,893       2,859
  Interest expense             (10,540)    (10,956)    (30,029)    (22,753)
  Other income (expense)        (5,958)      3,309         706       3,243
                            ----------- ----------- ----------- -----------
  Income before provision
   for income taxes             15,935      80,677      88,264     204,985
  Provision for income taxes     2,950       5,700      13,300      14,400
                            ----------- ----------- ----------- -----------
  Net income                 $  12,985   $  74,977   $  74,964   $ 190,585
                            ----------- ----------- ----------- -----------
                            ----------- ----------- ----------- -----------

  Diluted earnings per share $    0.08   $    0.49   $    0.47   $    1.18
                            ----------- ----------- ----------- -----------
                            ----------- ----------- ----------- -----------

  Net income                 $  12,985   $  74,977   $  74,964   $ 190,585
  Add (deduct) certain items
  Restructuring costs            3,156           -       3,156           -
  Acquired research and
   development                  18,409           -     102,609           -
  Other income                       -      (3,309)          -      (3,243)
  Write-down of assets               -       1,369           -       1,369
                            ----------- ----------- ----------- -----------
  Net income excluding
   certain items (Note)      $  34,550   $  73,037   $ 180,729   $ 188,711
                            ----------- ----------- ----------- -----------
                            ----------- ----------- ----------- -----------

  Diluted earnings per share
   excluding certain items
   (Note)                    $    0.22   $    0.47   $    1.13   $    1.17
                            ----------- ----------- ----------- -----------
                            ----------- ----------- ----------- -----------

  Weighted average number
   of common shares
   outstanding (000s)          160,426     154,016     160,115     161,235
                            ----------- ----------- ----------- -----------
                            ----------- ----------- ----------- -----------


  Note
  Management utilizes a measure of net income and diluted earnings per
  share that excludes certain items. This measure is a non-GAAP measure
  that does not have a standardized meaning and, as such, is not
  necessarily comparable to similarly titled measures presented by other
  companies. Management has consistently applied this measure when
  discussing earnings or earnings guidance and will continue to do so going
  forward. This measure is provided to assist our investors in assessing
  the Company's operating performance. Management understands that many of
  our investors prefer to analyze the Company's results based on this
  measure, as it is consistent with industry practice. Investors should
  consider this non-GAAP measure in the context of the Company's U.S. GAAP
  results.



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

                                                September 30   December 31
                                                    2003          2002
                                                ------------- -------------
  ASSETS
  Cash and cash equivalents                      $    43,289   $    56,080
  Other current assets                               359,536       265,551
  Long-term investments                              102,035        79,324
  Property, plant and equipment, net                 165,551       136,784
  Goodwill, net                                      102,448       102,212
  Intangible assets, net                           1,116,580     1,080,503
  Other assets, net                                  147,080       113,350
                                                ------------- -------------
                                                 $ 2,036,519   $ 1,833,804
                                                ------------- -------------
                                                ------------- -------------

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities                            $   341,598   $   345,158
  Deferred revenue                                    15,350        18,200
  Minority interest                                   15,346             -
  Long-term obligations                              701,605       624,760
  Shareholders' equity                               962,620       845,686
                                                ------------- -------------
                                                 $ 2,036,519   $ 1,833,804
                                                ------------- -------------
                                                ------------- -------------

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

                                                     Nine Months Ended
                                                       September 30
                                                ---------------------------
                                                    2003          2002
                                                ------------- -------------
  CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                     $    74,964   $   190,585
  Add (deduct) items not involving cash
  Depreciation and amortization                      126,645        50,385
  Amortization of deferred financing costs             2,103         2,016
  Amortization of discounts on
   long-term obligations                               5,461         3,928
  Acquired research and development                  102,609             -
  Other items not involving cash                        (622)         (375)
                                                ------------- -------------
                                                     311,160       246,539
  Net change in non-cash operating items             (67,100)       (4,638)
                                                ------------- -------------
  Cash provided by operating activities              244,060       241,901
  CASH FLOWS FROM INVESTING ACTIVITIES              (295,931)     (498,123)
  CASH FLOWS FROM FINANCING ACTIVITIES                37,958       (33,654)
  Effect of exchange rate changes on cash
   and cash equivalents                                1,122            36
                                                ------------- -------------
  Decrease in cash and cash equivalents              (12,791)     (289,840)
  Cash and cash equivalents, beginning of period      56,080       434,891
                                                ------------- -------------
  Cash and cash equivalents, end of period       $    43,289   $   145,051
                                                ------------- -------------
                                                ------------- -------------


DATASOURCE: Biovail Corporation



CONTACT: Ken Howling at (905)-286-3000 or send inquiries to

.

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