Biovail has decided not to spin its legacy products off into a separate entity as previously planned, as the company positions itself to face the potential loss of its top-selling product, Wellbutrin XL , CEO Douglas Squires told investors during an Aug. 10 second quarter earnings call.

"Although the timing of the entry of any generic Wellbutrin XL into the market is unknown, Biovail has multiple strategies that it will implement as required to strengthen its operational performance," he said.

An Aug. 1 decision by a California district court judge could open the door for a generic version of the antidepressant by Anchen later this year, but more likely in 2007 (see ¹ Also see "Wellbutrin XL Generic Could Launch Later This Year" - Pink Sheet, 10 August, 2006.).

Biovail, which owns the patent in question in the case, and which manufacturers bupropion for GlaxoSmithKline, said it has decided not to spin off its legacy products in order to benefit from the revenues they provide.

"Revenues from these off-patent branded pharmaceutical products continue to provide significant cash flow that the company may deploy to accelerate a number of research and development programs as well as a number of business development opportunities," Squires said.

Biovail reported revenues from Wellbutrin XL of $114 mil. in the second quarter of 2006 and $179 mil. for the first half of the year.

Biovail will also seek to accelerate research and development activities while looking for ways to "reduce clinical trial and regulatory timelines to decrease time to market for a number of our active programs," Squires said.

The company plans to undertake a pipeline review to determine which research programs to accelerate. Those of lesser value will be terminated, Squires said. The firm will explore partnering opportunities for early pipeline candidates, he added.

Biovail is on track to file an NDA for a bupropion salt formulation by the end of Q3.

Under the terms of Biovail's agreement with GSK for Wellbutrin XL, the company could be required to make a payment to the U.K. drug maker in the event that a generic does enter the market, the firm noted.

- Shirley Haley

Biovail Won't Let Generic Wellbutrin XL Get It Down

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