Deutsche Bank: Biovail Not Necessarily a 'Sustainable Growth Story'

Despite the fact that a 37% increase in first quarter profit at Toronto-based drugmaker Biovail Corp. (BVF) led Deutsche Bank to hike its price target on the stock to US$24 from US$21, the firm left its “hold” rating unchanged.

Biovail’s main product, the Wellbutrin antidepressant drug, is facing increasing pressure from a generic competitor.

“Despite the improving outlook from a ‘bleak’ period, it is not yet clear whether a sustainable growth story will emerge past ‘07-‘08,” Deutsche Bank told clients in a note.

In addition to the threat posed by generic competitors, the firm also noted the risks associated with Biovail arranging a partnership for its Wellbutrin salt formulation.

Biovail also said it would restate its earnings as a result of net income understatements in both 2005 and 2006.

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