TORONTO (CP) -- Drug developer Biovail Corp. is undergoing a major shift in focus and will concentrate on developing products to treat central nervous system disorders, a strategy the company hopes will restore its flagging growth.

The Toronto-based company said Thursday its new direction, following a strategic review, aims to capitalize on a US$70-billion global market for treatments targeting diseases such as Parkinson's disease and multiple sclerosis.

''Biovail's historic business model focused on reformulating existing drugs is under stress in the current pharmaceutical environment,'' chief executive officer Bill Wells said on a conference call.

''Focusing on the development of products that primarily provide convenience and compliance benefits is not a winning long-terms strategy. To be successful, our focus had to change.''

''More specifically, we'll be targeting high-growth niche markets within central nervous system disorder, such as ALS, MS, Alzheimer's and epilepsy.''

Biovail reported Thursday a first-quarter profit of US$56.4 million, 35 cents per share, down from year-ago earnings of $93.8 million, 58 cents per share, as revenues dropped to $208.5 million from a prior-year $247 million a year before.

The company said it plans to close its two Puerto Rico factories over the next 18 to 24 months, affecting about 250 employees. Some production from the shuttered plants will be moved to a Steinbach, Man., facility.

It will also invest more than $600 million in research and development through 2012, ''exploring niche in-licensed and acquired late-stage new chemical entities, new indications and in-house reformulation opportunities.''

''Transitioning our business to include new chemical entities is a natural evolution for a specialty pharmaceutical company,'' Wells said.

''Many other companies within the industry have been successful in this regard.''

The new strategic plan is expected to result in charges of about $80 million to $100 million in the next few quarters, with potential annual savings of between $30 million and $40 million.

''However, we will need to build and strengthen additional capabilities,'' Wells said, which will include the recruitment of a new chief scientific officer and the setup of a new scientific advisory board.

Some of Biovail's non-core assets will be sold, generating possibly more than $100 million in proceeds.

Shares in Biovail gained 84 cents, more than seven per cent, to $12.68 in morning trading at the Toronto Stock Exchange.