Bloomberg News

Biovail Reaches Settlement Over Generic Wellbutrin XL

March 05, 2007

Biovail Corp. reached a settlement with four generic-drug makers that delays sales of cheaper copies of one form of its antidepressant Wellbutrin XL until next year.

The agreement resolves complaints against Anchen Pharmaceuticals LLP, Impax Laboratories Inc. (IPXL:US), Teva Pharmaceutical Industries Ltd. (TEVA) and Watson Pharmaceuticals Inc. (WPI:US), Mississauga, Ontario-based Biovail said today in a statement.

Biovail reported $302.2 million in Wellbutrin XL sales for the first nine months of 2006, or 42 percent of the company's product revenue. Under the settlement, the generic drug-makers won't be able to market copies of the 150-milligram dose of Wellbutrin XL until 2008, and Teva, Anchen and Impax will have an exclusive license for 180 days after entering the market.

``If the 150 milligram dose were not launched in 2007 or 2008, annual earnings per share would climb by 12 cents and 51 cents, respectively,'' Douglas Miehm, an RBC Capital Markets analyst, said in a note to clients.

Shares of Biovail rose 4 cents to $20.54 at 4:01 p.m. in New York Stock Exchange composite trading. Teva American depositary receipts, each worth one ordinary share, rose 3 cents to $34.73 in Nasdaq Stock Market trading.

Teva, with partners Anchen and Impax, will continue to sell the 300-milligram form of the drug without any other generic competitors, including a so-called authorized generic or unbranded version by Biovail. That exclusivity term ends June 13.

Biovail Forecast

Watson, which also was involved in litigation over the drug, can enter the market after both exclusivity periods end.

Biovail will announce new 2007 forecasts on March 15, when its fourth-quarter earnings are reported, the company said. Biovail and GlaxoSmithKline Plc (GSK), which introduced the original version of Wellbutrin, split the revenue from the drug because of Biovail's patent on the extended-release form. London-based Glaxo sells the drug in the U.S.

Teva began selling the 300-milligram form of the drug in December. Teva pays Anchen Pharmaceuticals Inc. after a court said Anchen's Wellbutrin XL copy didn't infringe the Biovail patent. Teva splits profits with marketing partner Impax.

Biovail won't receive any royalties from the companies, Isabel said. The agreement was approved by the U.S. Federal Trade Commission.

Andrx Corp., bought by Watson last year, claimed that it owned a patent on the 150-milligram form of the drug. GlaxoSmithKline last month agreed to pay Andrx $35 million plus royalties to resolve that case. Biovail said it agreed to pay one-third of the licensing costs, and the agreement resolves all ``impediments'' to the drug.

A lawsuit is pending in which closely held Abrika Pharmaceuticals Inc. is challenging Biovail's Wellbutrin XL patent. It doesn't have regulatory approval.

Separately, Biovail ended an agreement in which it paid Watson for access to toxicity data for the compound diltiazem, the key ingredient in Biovail's Tiazac and Cardizem.

To contact the reporters on this story: Lisa Rapaport in New York at; Susan Decker in Washington at

To contact the editors responsible for this story: Robert Simison at; To contact the editor responsible for this story: Patrick Oster at

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