Biovail declares its first dividend

Biovail Corp. chairman Eugene Melnyk will receive an $11.3 million (U.S.) cheque in time for Christmas after the drug maker initiated a dividend policy yesterday.

Biovail also said it will spin off its offpatent drugs into a separate company intended to pass their residual value to investors through dividends. Melnyk is the owner of the Ottawa Senators National Hockey League team, has a formal residence in the tax haven of Barbados and currently is a target of an Ontario Securities Commission insider-trading probe. He owns almost 22.7 million Biovail shares, or about 14 per cent of the company.

Biovail is based in Mississauga but handles its corporate finances in U. S. currency. Last week, the company reported a doubling of third-quarter profit to $ 101.7 million as revenue rose 21 per cent to $ 258.1 million. The dividend declared yesterday will be the company’s first and will amount to 50 cents a share, payable Dec. 14 to shareholders of record on Nov. 30. The directors also adopted a policy of paying a quarterly dividend of 12.5 cents per share.

Biovail said it gets about $ 137 million a year in revenue from the branded offproduct “ legacy” products to be spun off into the new company, which is to be named Crystaal Pharmaceuticals Corp. Those drugs include Cardizem CD, Ativan, Vaseretic, Vasotec, Isordil and Tiazac in the United States and Cardizem CD in Canada.

Crystaal Pharmaceuticals is intended to return “ a significant portion” of corporate cash flow to shareholders in dividends.