In the Pink at Biovail

Biovail (BVF ), which formulates oral, controlled-release forms of existing drugs, is flying. Trading at 20 last July, shares hit a new high of 49.30 on June 4. John Leo, managing director at Northern Trust (NTRS ) $2.9 billion growth equity funds, calls Biovail an "exciting growth play" and sees it reaching 60 in a year.

Within a month, Biovail will launch a quick-dissolving, longer-lasting version of Cardizem, dubbed Cardizem LA -- nighttime-dosed calcium for hypertension. The drug, says Leo, shows "excellent effectiveness" in controlling high blood pressure in the morning, when heart-attack risk peaks. He sees LA capturing 20% of the Cardizem market and generating $75 million in sales this year. Also coming up: Biovail's antidepressant Wellbutrin XL should get an O.K. and appear in 2003's second half. GlaxoSmithKline (GKS ), developer of the original Wellbutrin, will treat XL as a new product and put its marketing clout behind it. Biovail receives a 25%-to-30% royalty on XL. The drug could add $150 million in yearly sales to Biovail, says Leo.

Biovail is also developing improved forms of Merck's cholesterol reducer Zocor and Glaxo's anti-migraine Imitrex. Leo figures Biovail will earn $2.25 a share in 2003 and $2.85 in 2004 -- higher than consensus estimates. Herman Saftlas of Standard & Poor's rates Biovail "accumulate" and expects 2003 sales to be 30% above 2002's $788 million. He sees Cardizem LA sales easily doubling in 2004.

Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

By Gene G. Marcial

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