Company News

SAC Capital turns the tables on Biovail

* Hedge fund seeks damages from Biovail

* Cohen’s hedge fund says Biovail lawsuit “vexatious”

* Biovail’s lawsuit against SAC dismissed last year

NEW YORK, Feb 19 (Reuters) - It is round two in the long-running legal battle between drug company Biovail Corp BVF.TO and hedge fund giant SAC Capital Advisors.

Nearly six-months after a New Jersey judge dismissed a lawsuit filed by Biovail against SAC, the $12 billion hedge fund led by Steven A. Cohen has returned the favor by suing the Canadian-based pharmaceutical company.

On Wednesday, Connecticut-based SAC filed a lawsuit in federal court in Connecticut seeking damages from Biovail for having filed a “vexatious” lawsuit against it in 2006. Cohen’s hedge fund seeks to recoup its legal expenses plus treble damages.

In the complaint, SAC said it incurred “tens of millions of dollars in unnecessary legal fees” and “incalculable damage to its reputation.”

A similar lawsuit was filed this week by research firm Gradient Analytics in federal court in Arizona.

In 2006, Biovail sued SAC, Gradient and several other hedge funds, alleging they conspired to drive down its share price. A group of Biovail shareholders filed a similar lawsuit against SAC in New Jersey federal court.

The shareholder lawsuit was dismissed several months before Biovail’s own suit was tossed out.

Biovail issued a press release on Friday calling the lawsuits by SAC and Gradient “unfortunate.” Biovail Chief Executive Officer Bill Wells said the lawsuits “will not distract us from the ongoing execution of our business strategy.”

An SAC spokesman declined to comment on the hedge fund’s lawsuit.

The lawsuit is SAC Capital Advisors vs. Biovail, 810 CV 237, District of Connecticut. (Reported by Matthew Goldstein; editing by Andre Grenon)