Both Canadian Press and The Globe and Mail cite confidential unnamed sources indicating that Melnyk, the owner of the Ottawa Senators, has been unable to gather enough proxy votes to take over Biovail at its annual general meeting being held today at 10 a.m.
Melnyk is challenging new CEO Bill Wells and the current board of directors of Biovail for control of the board after he issued public statements criticizing the newly-adopted strategy of the company — which moves away from the generic drugs on which he built the firm's reputation.
Although proxy battles for control of corporations are common, it isn't often that a high-profile company founder such as Melnyk — who is still the largest shareholder with 12 per cent of the stocks — takes on company management in such a bombastic way.
Biovail management has announced it will concentrate future strategy on creating drugs that treat the central nervous system, expected to be a large market as baby boomers age. The company also closed a production plant in Puerto Rico.
CEO Wells recently called Melnyk's plan to return to the company's generic drugs heyday as the "déja vu plan." He added that, "unfortunately, nostalgia is not a strategy."
Melnyk earlier called the new management team's plan for changes so fraught with problems that they amount to "absolute pharmaceutical suicide."
Bruce Brydon, former Biovail CEO under Melnyk, would be installed in the position again if the company founder wins his proxy battle. Earlier this week, Brydon challenged current CEO Wells to a debate on the disputed issues between the sides before the general meeting but that offer was ignored.
Melnyk has scheduled a press conference for noon today following the annual general meeting.
jstewart@mississauga.net
