A tale of two Biovails

At last week's 28th Annual J.P. Morgan Healthcare Conference, Biovail Corp. CEO William Wells told investors his company ranks first among its specialty pharma peer group on three key metrics: net income margins, EBITDA margins, and operating cash flow as a percentage of sales. The question going forward is whether Biovail (TSX:BVF; NYSE:BVF) can maintain those margins given Wells' expectation that "R&D expenses will be up significantly in 2010 versus 2009."

In 3Q09, Biovail reported revenues of US$213 million and adjusted cash flow from operations of $114 million. Wells said the company's net income margin in 3Q09 was 24%, EBITDA as a percent of sales was 53% and operating cash as a percent of sales was 53.6%...