By Scott Anderson
TORONTO (Reuters) - Biovail Corp
But Canada's biggest publicly traded pharmaceutical company said that would not slow its hunt for acquisitions as it continues its efforts to transform itself into a company focused on treatments for central nervous system disorders.
Since announcing the new focus last year, Biovail has struck five acquisition deals and said on Thursday that it is eyeing another 10 to 20 deals of varying sizes and shapes as it sits on a war chest of about $500 million.
Chief Executive Bill Wells said the deals would most likely focus on products that are in the market or close to market, giving the company quicker access to revenue and cash flow than if it waited for drugs to develop in its own pipeline.
"We have got it moving in the right direction and I would love to keep that momentum going," Wells told Reuters in an interview. "But in order to do that, we are probably going to have to do some additional deals because it's going to take a while for revenues to kick in from the pipeline."
One of the major deals struck by Biovail since it announced its central nervous system strategy was the $100 million purchase of U.S.-based Prestwick, which holds Canadian and U.S. rights to Xenazine, a drug used to treat chorea, an ailment associated with Huntington's disease.
Earlier this year, Biovail spent $510 million to buy U.S. rights to antidepressant Wellbutrin XL. The drug was developed originally by Biovail and had been distributed by GlaxoSmithKline
It also struck a deal with Swiss biotech Santhera
"They've been aggressive over the last 18 months and I think they have established a track record and I think that they should continue doing that," said Neil Maruoka, an analyst at Canaccord Adams.
"I liked what (CEO Bill Wells) had to say about not waiting for products in the pipeline and currently in development to come to fruition and that there's a good likelihood that they are going to move on the M&A front and continue to grow revenue and earnings in the near term."
Biovail's shares, which have risen more than 40 percent in the past year, were down 1.3 percent at C$13.95 on the Toronto Stock Exchange on Thursday morning.
The Santhera deal cut into Biovail's third-quarter results, as it was forced to absorb $8.1 million in research and development costs.
Biovail said it earned $40.4 million, or 25 cents a share, in the quarter, down from $48.4 million, or 31 cents a share, a year earlier.
The 2009 quarter also included $2.4 million in restructuring charges related to the closure of Biovail's manufacturing facilities in Puerto Rico. The 2008 quarter included $7.6 million in restructuring charges.
Third-quarter revenue rose 17 percent to $212.5 million.
($1=$1.06 Canadian)
(Reporting by Scott Anderson; editing by Peter Galloway)
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