Accidents happen, but that's no comfort to investors. Canadian drug concern Biovail's (NYSE:BVF) stock price crashed Friday after the company announced that its third-quarter revenues will be lower than expected due to several mishaps, including a truck accident involving a shipment of antidepressant Wellbutrin XL.
We all know investing has inherent risks. After all, that's why SEC filings have an entire section devoted to risks and uncertainties for any given company. This is a good reminder that freak accidents can feed into quick reversals of fortune.
According to the company, the shipment was worth $10 million to $20 million. While it also said some of the substance involved in the accident may be salvaged, it still has to be sent back for testing.
Other snafus that sullied Biovail's outlook include reduced pricing of the company's generic version of ulcer drug omeprazole by its distributor and late shipments of its medication Cardizem CD, due to backlogs.
Wellbutrin, which is marketed in the U.S. by Biovail partner GlaxoSmithKline (NYSE:GSK), had sales of $1.6 billion in 2002. Until recently, it has been marketed in the U.S. under the Wellbutrin name as a twice-daily medication. It is also known as Zyban, a medication prescribed to help smokers quit. Biovail's newest version, Wellbutrin XL, is a once-daily version of the medication; the antidepressant boasts few side effects, an added plus. The FDA approved Wellbutrin XL in late August, and this setback occurs in the midst of an aggressive marketing campaign by Glaxo.
Due to these developments, Biovail now expects revenues for its third quarter to be $215 million to $235 million, as opposed to the $260 million to $300 million previously anticipated. The stock skidded nearly 18% in Friday's trading.
Spills and chills are better suited for action movies than watching a stock move, and investors will likely be shaken up by this news for quite some time.
Alyce Lomax welcomes your feedback at [email protected].
