Biovail to close 2 plants, incur charges of up to $100M
NEW YORK—Canadian drug developer Biovail Corp. said Thursday it will shutter two manufacturing facilities as it refocuses its business on products targeting central nervous system disorders.
The company expects to record charges of between $80 million and $100 million over the next several quarters. These actions will result in annual cost savings of $30 million to $40 million, Biovail said.
Following a strategic review of the business, Biovail has decided to invest more than $600 million in research and development activities through 2012 to explore opportunities focused on specialty pharmaceutical products targeting central nervous system disorders.
Biovail will close two Puerto Rico manufacturing facilities and transfer certain processes to a facility in Manitoba. The closures, which will take 18 to 24 months to complete, should not result in any supply disruptions, the company said.
Biovail said it is also exploring the divestiture of certain noncore assets, which could result in proceeds of more than $100 million. Biovail will use these proceeds to support its new strategic focus and to return capital to shareholders.
In March, Biovail announced plans to review its business strategy and ended development of a pain-drug candidate called BVF-146. The company had also struggled to win Food and Drug Administration approval of another drug candidate, an antidepressant called BVF-033.
Biovail said it believes central nervous system disorders represent a $70 billion global market, with growth expected in the low-to-mid double digits in niche markets targeting Parkinson's disease and multiple sclerosis.
