UPDATE 3-Biovail sent reeling as FDA rejects application

Fri Jul 20, 2007 11:30am EDT

(Adds analyst and company comments, updates stock price)

By Scott Anderson

TORONTO, July 20 (Reuters) - Biovail Corp. BVF.TO said on Friday that the U.S. Food and Drug Administration rejected its new drug application for its once-daily salt version of its antidepressant bupropion, in a move that could push back the approval date for the formula by at least a year.

The surprising news knocked Biovail shares down C$4.34, or 16.3 percent, to C$22.25 by mid-morning on the Toronto Stock Exchange. The stock was off C$4.16 at $21.35 in New York.

The FDA's concern centered on the pharmacokinetics used to support the application, or the way the body absorbs, distributes, breaks down and excretes the drug.

"Obviously the refusal by the FDA is a stronger letter than usually an approvable letter. This is a strict no," said Claude Camire, an analyst at Paradigm Capital. "Biovail has to go back and discuss what is exactly meant by the content of that letter."

Camire estimates that the FDA decision could delay the commercial launch of the drug by at least a year. Analysts had expected approval in the fourth quarter of this year, but Camire said a more realistic timeframe is now the fourth quarter of 2008.

He said a possible strategy for the company would be to launch a generic version of its blockbuster antidepressant Wellbutrin instead.

"Maybe they will launch a generic version. Maybe they will or may not forget about this drug," he said. "But this pushes out the commercial launch by a year."

Camire, who had projected revenue of $75 million for the bupropion formula in 2008, placed Biovail stock under review with a target price of $28 given the uncertainty over the timetable.

But Biovail spokesman Nelson Isabel, said the timetable should be shorter than 12 months.

"It won't be a year, but we won't know until we meet with the FDA," he told Reuters. "Until we meet with them there is no way to gauge when this product will be approved."

Biovail said it believes the studies were "appropriate" and it plans to meet with the FDA as soon as possible to discuss necessary steps to to move forward.

"We were very disappointed but we will do everything we can to get this matter resolved as quickly as possible," Isabel said.

($1=$1.04 Canadian)

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