Biovail Corporation is a specialty pharmaceutical company engaged in the formulation, clinical testing, registration, manufacture, and commercialization of pharmaceutical products utilizing advanced drug-delivery technologies.

The original Complaint charges Biovail and certain of its officers and directors with violations of the Securities Exchange Act of 1934. According to the Complaint, Biovail consistently reported "record" growth throughout the Class Period, and Defendants issued positive earnings and income growth forecasts of 30% throughout this period. Unbeknownst to investors, however, Biovail allegedly used hundreds of millions of dollars in proceeds from previously issued stock to make acquisitions and thereby create the illusion of increasing revenue and demand for Biovail products. This scheme also allowed certain Defendants to obtain more than $40 million in performance-based stock grants and options. The Complaint also alleges that Defendants failed to disclose that during the Class Period Defendants could not maintain the Company's historical profit margins and revenue growth at or above 30% amidst growing competition; that earnings forecasts were not based on reasonable assumptions, especially given the fact that Defendants knew that the Company was experiencing an overall slow-down in internal growth and that the Company could not control the production and sales costs of Biovail's expensive products; and that such growth could not possibly keep pace with the Company's historical performance, much less exceed it. According to the Complaint, Defendants knew throughout the Class Period that its earnings forecasts for Biovail could not be met as evidenced by the fact that the Company was considering emergency plans for bolstering its business through essential acquisitions which were designed to replace foreseeable declining revenues.

The Complaint further alleges that on October 30, 2003, Biovail shocked the market by announcing revised guidance for 2004 and its financial results for the third quarter of 2003, which were substantially below prior guidance -- (net income down 83% for the quarter and with revenue growth of 10% versus prior guidance of more than 30%). Defendants issued a series of releases which revealed rising expenses which far outpaced any prior guidance or plan and lower revenues which far underperformed plan. Immediately following this disclosure, Biovail's shares plummeted, 20% or $5.38 per share, from the prior day's high, in the single day's trading session to a new 52 week trading low.

As summarized by the Company’s FORM 20-F/A for the fiscal year ended December 31, 2006, in late 2003 and early 2004, a number of securities class action Complaints were filed in the United States District Court for the Southern District of New York naming Biovail and certain officers and directors as Defendants. On or about June 18, 2004, the Plaintiffs filed a Consolidated Amended Complaint, alleging among other matters, that the Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Company responded to the Complaint by filing a motion to dismiss, which the Court denied. Thereafter, the Company filed its Answer denying the allegations in the Complaint. On August 25, 2006, the Plaintiffs filed a Consolidated Second Amended Class Action Complaint under seal. The Second Amended Complaint alleges, among other matters, that the Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. More specifically, the Second Amended Complaint alleges that the Defendants made materially false and misleading statements that inflated the price of the Company's stock between February 7, 2003 and March 2, 2004. The Plaintiffs seek to represent a class consisting of all persons, other than the Defendants and their affiliates, who purchased the Company's stock during that period. On October 16, 2006, the Company filed its Answer denying the allegations in the Second Amended Complaint. On February 28, 2006, the Plaintiffs filed a motion for class certification. The Company has opposed that motion. That motion was expected to be heard in the near future. Discovery in this case was ongoing, and the action proceeded on its merits through normal legal process.

In a press release dated December 11, 2007, Biovail (NYSE:BVF)(TSX:BVF) announced that the Company and the named individual Defendants have entered into an agreement in principle to settle the class-action shareholder litigation in the case In Re Biovail Corporation Securities Litigation, Case No. 03-CV-8917 (RO). Once completed, the proposed settlement will be subject to approval by the United States District Court for the Southern District of New York. The proposed settlement class includes, with certain exceptions, all persons or entities that purchased the common stock of Biovail during the period from February 7, 2003 to March 2, 2004. Under the terms of the proposed agreement, the total settlement amount payable is $138 million. Biovail estimates that it will ultimately pay approximately $85 million after resolution of all insurance claims.

According to a press release dated May 16, 2008, pursuant to Rule 23 of the Federal Rules of Civil Procedure and an Order of the Court, that the U.S. Action has been certified as a class action and that a Settlement for U.S.$138 million in cash has been proposed. A hearing was scheduled before the Honorable Gerald E. Lynch in the United States District Court in New York for August 8, 2008 to determine (i) whether the proposed Settlement should be approved by the Court as fair, reasonable, and adequate; (ii) whether the proposed Plan of Allocation of the net proceeds of the Settlement should be approved by the Court as fair and reasonable; and (iii) to consider the application of Plaintiffs’ co-lead Counsel for attorneys’ fees and reimbursement of expenses.

The settlement was finalized on August 8, 2008 and the case was closed. The judge awarded Attorneys' Fees of 16.0145% or roughly $22.1 million. Expenses were reimbursed in the amount of $2,986,098.14.