The battle for control of Canadian drugmaker Biovail is not over despite the failure of Biovail founder and former chief executive Eugene Melnyk to shift the firm’s board.
A shareholder vote last week rejected Mr Melnyk’s list of 10 nominees in favour of the current board but he plans to challenge the result in court on July 8. The ex-CEO is arguing that the stockholder meeting lacked a quorum, after he withdrew his shares from the vote. Biovail then passed a bylaw to allow voting to proceed.
Should he lose the court case, Mr Melnyk has said he intends to establish a new company, to be called Trimel Pharmaceuticals, which would have start-up costs of C$50-C$100 million. Biovail is standing firm, however, emboldened by the vote which saw over 97% of voters back the company’s slate of nominees.
The results “speak for themselves and serve as a clear mandate to move forward” with a change in strategy, said Biovail. This change will see the firm focus on developing new treatments for disorders of the central nervous system rather than its previous business of reformulated drugs.
The Toronto-based firm also claimed that after putting the firm through “this expensive and distracting proxy contest”, Mr Melnyk “has now shown a deliberate intent to circumvent the democratic process by which shareholders rejected his nominees”. The board added that the court case is “a further waste of shareholder money”, saying that Mr Melnyk is “putting his own self interests above those of Biovail’s other 56,000 shareholders”.
