It’s all over the news, Biovail said today it would cut its quarterly dividend payment to 9 cents/share from 37.5 cents/share (steep cut!!!). It also said it bought the U.S. rights to antidepressant Wellbutrin XL from GlaxoSmithKline for $510M. The move comes as Biovail tries to re-identify (we coined that) itself as an “in-licens(or) and develop(er) of specialty CNS programs” rather than an R&D company focusing on reformulated drugs.

Good idea, finally.

Deep, way way deep, in Biovail’s earnings statement, you’ll also see that the move comes with pink slips! Surprise!

Biovail says it has decided to close its R&D site in Mississauga, Ontario, and to streamline its R&D operations in Chantilly, Virginia. The Chantilly division, currently housed in two buildings, will be consolidated into a single building and will assume the Pharmaceutical Science and Technology Transfer functions currently performed at Biovail’s Mississauga R&D site.

The realignment will end up costing 50 people their jobs. Biovail also said it will save $8M/year as a result of the axes and take a $4-6.2M hit on the walking papers. Here’s our rough estimates:

A. Employees axed = 50

B. Restructuring charge = severance charge = $4M

C. Severance/employee = B/A = $80,000

That’s definitely not right, that’s too much. We put it more at $20K if any at all and attribute the rest to shutting down the operation, lease and legal fees, etc.

The bad times continue…

Image from citizen

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