Biovail Corporation U.S.$300,000,000 6.75% Convertible Subordinated Preferred Equivalent Debentures Due March 31, 2025 (U.S.$50 Principal Amount Per Security)
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Prospectus March 17, 2000 Biovail Corporation U.S.$300,000,000 6.75% Convertible Subordinated Preferred Equivalent Debentures due March 31, 2025 (U.S.$50 principal amount per security) The Company: · Interest Deferral Option: we have the right, at any time · We are an international, fully-integrated pharmaceutical and from time to time, to defer payment of interest on company that specializes in the development, the Securities by extending the interest payment period manufacture, marketing and licensing of drugs utilizing up to 20 consecutive quarters. advanced controlled-release, rapid dissolve, enhanced · Conversion Price: U.S.$60.675 per common share (equal absorption and taste masking technologies. to an initial conversion ratio of .8241 common shares per Security, subject to adjustment). · Biovail Corporation 2488 Dunwin Drive · Conversion Right: convertible at any time into our Mississauga, Ontario common shares at the applicable conversion price. Canada L5L 1J9 · Optional Redemption: beginning on March 31, 2003, we (416) 285-6000 may redeem the Securities, in whole or in part, at any time (except during an interest deferral period) at the · NYSE and TSE symbol for our common shares: BVF redemption prices stated herein, plus accrued and unpaid The Offering: interest. · Special Redemption: we may redeem the Securities, in · The Convertible Subordinated Preferred Equivalent whole or in part, at a redemption price of 106.75%, plus Debentures (the ``Securities'') are convertible accrued and unpaid interest, at any time and from time subordinated debentures bearing an interest rate, payable to time (except during an interest deferral period) prior in U.S. dollars, of 6.75% per year. to March 31, 2003, if the trading price for our common · The underwriters have the option to purchase an shares equals or exceeds U.S.$91.01 per share on the additional U.S.$45,000,000 aggregate principal amount of NYSE for a specified period. Additional payments will Securities to cover over-allotments, if any. also be made by us to the holders if we exercise our redemption rights under the foregoing circumstances, · There is no existing trading market for the Securities. whether or not the holders convert. The Securities have been approved for listing on the NYSE under the symbol ``BVF Pr'', subject to official · Tax Redemption: we may redeem the Securities, in whole notice of issuance. and not in part, at any time (except during an interest deferral period) upon the occurrence of certain tax events · Closing: March 22, 2000. at a redemption price equal to 100% of the principal · We plan to use the proceeds of this offering and a amount of the Securities plus accrued and unpaid concurrent offering of our common shares to repurchase interest. our outstanding 107¤8% Senior Notes due 2005. We will · Concurrently with this offering and by a separate use the remaining proceeds for working capital and other prospectus, we are offering 2,000,000 of our common general corporate purposes, which may include the shares. Completion of the common share offering is not a acquisition of products or technologies. condition to the completion of this offering. Per Security Total Public offering price: ................................................... U.S.$50.00 U.S.$300,000,000 Underwriting fees: .................................................... U.S.$ 1.50 U.S.$ 9,000,000 Proceeds to Company: .................................................. U.S.$48.50 U.S.$291,000,000 This investment involves risk. See ``Risk Factors'' beginning on page 10. These securities have not been approved or disapproved by the Securities and Exchange Commission or any state securities commission nor has the Commission or any state securities commission passed on the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. We are permitted to prepare this prospectus in accordance with Canadian disclosure requirements, which are different from those of the United States. We prepare our financial statements in accordance with Canadian generally accepted accounting principles. As a result, they may be subject to Canadian auditing and auditor independence standards and may not be comparable to financial statements of United States companies. Owning the Securities may subject you to tax consequences both in the United States and in Canada. You should read the section entitled ``Taxation.'' This prospectus may not fully describe these tax consequences. Your ability to enforce civil liabilities under the United States federal securities laws may be affected adversely because (1) we are organized under the laws of Canada, (2) some or all of our officers and directors and some or all of the underwriters or experts named in this prospectus may be residents of a foreign country, and (3) all or a substantial portion of our assets and the assets of our officers and directors and the underwriters and experts may be located outside the United States. Donaldson, Lufkin & Jenrette Merrill Lynch & Co. Morgan Stanley Dean Witter TABLE OF CONTENTS Page Page Currency Translation .................. i Management ........................ 49 Trademarks ......................... i Principal Shareholders ................. 51 Summary .......................... 1 Description of the Securities ............ 52 Risk Factors ........................ 10 Interest Coverage .................... 71 Use of Proceeds ..................... 16 Credit Ratings ....................... 72 Description of Capital Stock ............ 73 Dividend Policy ...................... 16 Taxation ........................... 75 Consolidated Capitalization ............. 17 Underwriting ....................... 80 Price Range of Common Shares .......... 18 Legal Matters ....................... 81 Selected Consolidated Financial Data ...... 19 Experts ............................ 82 Management's Discussion and Analysis of Financial Condition and Results of Documents Incorporated by Reference ..... 82 Operations ....................... 20 Documents Filed as Part of the Registration Business ........................... 25 Statement ........................ 83 Regulation ......................... 45 Index to Financial Statements ........... F-1 The Securities have not been and will not be qualified for public distribution under the securities laws of any province or territory of Canada. The Securities are not being, and may not be, offered or sold, directly or indirectly, in Canada or to or for the benefit of any resident of Canada in violation of the securities laws of Canada or any province or territory of Canada. CURRENCY TRANSLATION We report our financial statements in U.S. dollars, while the currency of measurement for our operations varies depending upon location. Unless otherwise indicated, references to dollars, ``U.S.$'' or ``$'' are to U.S. dollars and references to ``Cdn$'' are to Canadian dollars. TRADEMARKS Biovail, the Biovail word logo, Tiazacs, Viazem and Crystaal are all trademarks of Biovail which are registered in Canada, the United States and/or other jurisdictions. Intelligent Polymers is a trademark of Intelligent Polymers Limited, a Bermuda corporation (``Intelligent Polymers''). CEFORMs, Shearforms and Flash Doses are registered trademarks of Biovail Technologies Ltd. (``Biovail Technologies''). All other product names referred to in this document are the property of their respective owners. i SUMMARY The following is a summary of the more detailed information appearing elsewhere in this prospectus and in the documents incorporated herein by reference. You should read the entire prospectus, including ``Risk Factors'' and the financial statements (including all of the notes). Unless the context otherwise requires, ``we,'' ``us,'' ``our'' and similar terms, as well as references to ``Biovail'' or the ``Company,'' include all of our predecessor companies and all of our consolidated subsidiaries. Unless we indicate otherwise, the information contained in this prospectus assumes the underwriters will not exercise their over-allotment option. Unless we state otherwise, information in this prospectus has been adjusted to give retroactive effect to a two-for-one stock split that was effected by articles of amendment dated December 31, 1999. Unless we state otherwise, we have used reports from IMS America, Ltd., a widely accepted provider of on-line database information services specializing in medical research information, as our source for all market and market share data. BIOVAIL We are an international, fully-integrated pharmaceutical company specializing in the development of drugs utilizing advanced controlled-release, rapid dissolve, enhanced absorption and taste masking technologies. Our proprietary technologies are used to develop products which are either (1) generically equivalent to existing once-daily branded products or (2) branded products that improve upon conventional multiple daily dose immediate-release forms of existing products by providing the therapeutic benefits of controlled-release drug delivery. As a fully-integrated company, we control all facets of the drug development process from formulation development to clinical testing, manufacturing and obtaining regulatory approval. This integrated approach results in operational synergies, flexibility and cost efficiencies. In Canada, we market our products directly, while in the rest of the world we market our products through strategic licensing partners. We do not engage in basic research to discover new chemical