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Biovail left gasping after FDA rejects Wellbutrin XL

Biovail loses approximately 20 per cent of its market value after it fails to secure FDA approval for Wellbutrin XL timed-release anti-depressant

Canada-headquartered Biovail has lost approximately 20 per cent of its market value after it failed to secure FDA approval for its Wellbutrin XL (bupropion) timed-release anti-depressant drug, a successor to the firm's existing formulation.

Shares in the company plummeted to their lowest level since December 2007 and reduced the market value of Canada's largest traded drug company by nearly CAD 900m (USD 862.2m) in one day, with nearly 3.8m shares traded on the Toronto Stock Exchange (TSE). Biovail dropped CAD 5.64 (USD 5.40), or 21.2 per cent, to rest at CAD 20.95 (USD 20.06) on the news.

Biovail was relying on its new drug to make up some of the loss expected when patent exclusivity expires on Wellbutrin XL, a time-release antidepressant that accounts for a substantial portion of its revenue.

Paradigm Capital analysts said that Wellbutrin XL contributed CAD 420m (USD 402.3m) to Biovail's CAD 1.1bn (USD 1.1bn) in total sales in FY06. They added that the firm was expected to launch its once-daily formulation of bupropion, a component to be used in a new anti-smoking drug and antidepressant, in Q4 2007, but will now have to wait until Q4 2008

According to reports, the FDA's decision was unconnected with the safety or the efficacy of the drug, but was based on a technical disagreement over the methodology used in Biovail's pharmacokinetic studies, according to the company's vice-president of investor relations and corporate communications, Nelson Isabel.

Isabel added: "We're going to request a meeting with the FDA, hopefully in the very near term, to discuss the non-approval letter and determine the next step to get the product approved as quickly as possible. The setback is disappointing but the programme is not dead."

18th July 2007

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