The pending arbitration between Teva Pharmaceutical Industries Ltd and Biovail Corporation relating to a dispute over their existing agreement has been amicably resolved in its entirety, with each side granting a full release to the other in respect of the subject matter of that arbitration. In addition, the companies have expanded their business relationship for controlled release generic products and active raw materials, both the companies announced here.

Under agreements entered into by their respective subsidiaries, Biovail has granted Teva a four-year extension to the ten year product-by-product supply terms for each of the currently marketed products covered by the exclusive marketing and product development agreement that was originally established in 1997, granted Teva an option on one additional bioequivalent product under development by Biovail, and transferred in their entirety Biovail's product development files and related intellectual property for two extended release generic products, which Teva will now continue to develop and ultimately manufacture on its own, release from Teva pharma said.

In consideration for these agreements, Teva has agreed to make up-front and milestone based payments and has also agreed to an increase in the gross margin percentage shared with Biovail under the exclusive marketing agreement for the balance of its extended term. Teva and Biovail affiliates have also entered into a long-term API supply agreement under which Biovail will increase its purchases for raw material from Teva's API division. These transactions confer financial benefits to both parties. Additional details were not disclosed.

Eugene Melnyk, chairman and CEO of Biovail commented: "Our arbitration has resulted in an expansion of our relationship with Teva on different fronts, providing mutual benefits to both parties. We look forward to continuing our productive relationship with Teva."

Israel Makov, CEO of Teva said: "These new agreements allow both parties to benefit from our mutual strengths and should provide Teva with the opportunity to further expand its portfolio of controlled release generic products."