Pssst: Pharma execs! Want to know how to get investors excited about your company? Hike up your dividend to near double-digit yield levels rather than wasting your cash on frequently bad acquisitions. Since Biovail (NASDAQ:BVF) announced last week that it was doing just that, shares of the Canadian drug developer have been up nearly 15%.

On Wednesday, when it gave its financial guidance for 2007, Biovail announced that it was hiking its dividend to $1.50 a share annually, and also would be paying out a one-time $0.50 dividend in January. This $2 in dividends for next year amounts to an eye-popping 9.2% dividend yield, and Biovail deserves to be commended, since so many other pharmas wastefully blow their cash on acquisitions that many times don't make strategic sense or are overpriced.

With 2007 cash flows from operations guidance of $320 million to $340 million, and 160 million shares outstanding, the $1.50-per-share dividend will only drain $240 million from Biovail and shouldn't cause it to have to dip into its cash pile next year. These cash flow numbers would represent approximately a 30% reduction from its guidance for cash flows in 2006, but that's understandable, considering that Biovail's highest-selling product, Wellbutrin XL, is expected to face generic competition next year.

Biovail also guided for revenues to be in the range of $800 million to $850 million next year. This would be down about 20% compared to the $1 billion it is expecting to bring in for 2006. In conjunction with these reduced sales estimates, it decided to eliminate all U.S.-based sales and marketing staff, which makes sense considering that all its other products besides Wellbutrin XL bring in so little revenues.

Hopefully, having to farm out its smaller products won't cause Biovail's revenues to decline even faster. Regardless of the lower forward estimates, though, it's nice to see a mature biotech rewarding shareholders, and if Biovail can sustain its dividend over the long run, it will be by far the highest-yielding mid-cap pharma stock.

Where do you see Biovail going? Get in the game at Motley Fool CAPS and tell more than 16,000 fellow investors how you feel.

Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy .