After the almost 12% drop in its stock price yesterday, Biovail
It's been a rough second half of the year for Biovail, as its stock price has fallen by more than 40%. The most recent drop was because the FDA decided to take six months to review data from its response to a July non-approvable letter for a reformulation of the company's depression medication, Wellbutrin. The company -- and apparently most investors -- was expecting a two-month delay.
Revenue from sales of Wellbutrin, which is marketed by GlaxoSmithKline
Superficially, Biovail may look like a steal, but there's obviously more to its valuation. The continuing drop in revenue of its most lucrative product means that its P/E will shoot up even without the share price changing, and that aforementioned dividend certainly isn't guaranteed. Even taking that into consideration, the drop yesterday -- which occurred because of the delay of at least four months in the planned launch of a product that will probably only have a modest effect on Wellbutrin sales -- seems a bit overblown. Investors who think Biovail can right the ship may have gotten a serious Black Friday discount a few days early.
Extended Foolishness about extended-release drugs: