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How Biovail May Foil The Shorts


Inside Wall Street

HOW BIOVAIL MAY FOIL THE SHORTS

Money manager Stanley Goldring thinks he has found another Amgen or Conseco--stocks that have been bonanzas for him. Goldring, who heads the KG Securities unit at investment bank Ladenburg Thalmann, is focusing on Biovail (BVF), which the short-sellers love to hate. Now at 24 a share, Biovail reached 38 3/4 in late May--before the shorts pummeled it.

But Goldring is unfazed. Biovail makes controlled-release drugs such as Tiazac, its generic formulation of diltiazem, a hypertension remedy.

The shorts insist Tiazac sales aren't going well. But Chairman Eugene Melynk says sales are on target. He notes that a group led by George Soros owns some 20% of the stock.

Goldring says that "second-quarter earnings of $5.9 million, or 23 cents a share vs. an operating loss of $472,000 a year ago exceeded the Street's expectations." He sees Biovail making 90 cents a share this year on revenues of $75 million, and $1.65 to $1.75 next year on $110 million. What the shorts are missing, says Goldring, is the potential of Biovail's other products, including seven drugs in advanced development for which it plans to seek FDA approval in the next 6 to 18 months.

Chief among them is Biovail's generic version of Procardia XL, Pfizer's drug for angina and hypertension. He says Biovail is talking with several pharmaceutical houses about marketing a controlled-release version of Procardia and expects a deal to be signed this year. Biovail's generic Procardia "can take 30% of the current $1 billion market and add $5 a share to earnings," he adds.BY GENE G. MARCIALReturn to top

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