Biovail

Biovail founder concedes defeat

Tracy Staton — Tue, 29 Jul 2008 09:55:11 -0400

Biovail founder Eugene Melnyk is giving up the fight. After dogging the company for months--and winning a court order requiring shareholders to re-vote on his proposals--Melnyk said he was abandoning his plan to kick out Biovail's board of directors to bring in his own management. Instead, he'll push forward with plans to start his own drug company.

Analysts weren't totally surprised by the move, even though it came shortly after his court victory last week. "He didn't have a lot of momentum," one said. "Even with the court's decision there wasn't a lot going in his favor and he can't have expected a huge swing in his direction."

Biovail management has to be breathing a sigh of relief. Between regulators and Melnyk, the company has had plenty to contend with lately.

- see the New York Times story

Proxy battle brewing over Biovail

Tracy Staton — Tue, 03 Jun 2008 10:15:59 -0400

Eugene Melnyk (photo) said he'd do it, and now he has. The founder of Canada's Biovail launched a proxy battle for the company, looking to sweep out its board and senior management. Melnyk has a dissident group of shareholders backing him; in a proxy circular distributed by the group, Melnyk claims that Biovail is a "broken company in desperate need of change." They say they would hire a former chief, Bruce Brydon, as CEO and install "industry leaders" as board members. Melnyk himself would not serve.

This is just the latest in a series of tumultuous--some might say unfortunate--events at Biovail, which has faced litigation and regulatory problems over the past five years. Melnyk ran afoul of securities regulators, along with three other current and former execs. The company paid $138 million last year to settle a class-action suit. And recently, Biovail agreed to pay almost $25 million to settle corruption and conspiracy charges stemming from a product launch when Melnyk ran the company.

- read the Financial Times story
- see Biovail's response in BusinessWeek

Biovail to pay $25M in doc payoff claims

Tracy Staton — Mon, 19 May 2008 10:57:12 -0400

If only this were the last bit of old business Biovail needed to clear. In a deal with the U.S. Department of Justice, the Canadian drugmaker agreed to pay almost $25 million to settle claims that it paid docs and their office managers to get patients onto its Cardizem heart drug. CEO Bill Wells sounded pleased about the deal, saying that it "eliminates the significant exposure to the corporation" and would "immediately reduce our ongoing legal expenses."

And what a bunch of legal expenses they've been. Biovail has been under investigation by various government watchdogs and plagued by an ongoing fight with its founder and ex-chief Eugene Melnyk (photo). Little by little, the company has been extricating itself from these legal snarls, but it's not finished yet: the U.S. Securities and Exchange Commission charged the company and several former and current execs with misleading investors and puffing up financial statements.

- see Biovail's release
- read the story at CNN Money
- check out the Pharmalot item

Biovail to shut plants, mull sell-offs

Thu, 08 May 2008 06:59:58 -0400

New CEOs often clean house. Biovail's Bill Wells looks like he's trying to gut and rebuild it. The company announced it would shutter two plants in Puerto Rico as it shifts focus to specialize in central nervous system meds, "a market where unmet medical needs and growth potential are high," Wells said. Making that shift will cost the company $80 million to $100 million over the next few quarters. And Biovail is considering selling off some non-core assets, expecting proceeds of more than $100 million to help pay for its strategic shift.

To shore up the stock in the meantime, Biovail plans to buy back up to 14 million shares. And the company announced five new director candidates to refill the board, which has lost members over the past few months.

As you know, there's been upheaval at Biovail for some time now as its founder fights the company. At the same time, securities regulators are scrutinizing the Biovail and some of its ex- and current officials. Whatever Wells sets out to do, he has plenty of challenges ahead.

- check out Biovail's press release
- see the story at Report on Business
- read the Forbes article

GSK accused of monopolizing Wellbutrin

Thu, 08 May 2008 06:59:57 -0400

Did GlaxoSmithKline try to monopolize the Wellbutrin market? A lawsuit now certified as class-action says so. The plaintiffs accuse GSK of artificially boosting Wellbutrin prices by fibbing to the U.S. Patent Office and engaging in "sham" patent litigation against generics makers. The patent lawsuits delayed copycat versions of the drug, the class action alleges, forcing purchasers to pay unnecessarily high prices. GSK didn't comment on the allegations, and so far its court defense has focused on class certification, rather than the lawsuit's specific claims.

Meanwhile, Glaxo is working to downgrade competitors to its Alli weight-loss med. The drugmaker filed a citizen's petition with the FDA, attempting to persuade the agency to change the rules on dietary supplements that claim to aid weight loss. Being overweight is a risk factor for disease, GSK reasons, so supplement makers should be required to get the FDA to sign off on their effectiveness claims before their products can be sold. That would be quite a change: FDA has long held that weight-loss claims don't imply disease treatment or prevention. If the FDA considers changing that, the fur will fly in the weight-loss market.

- see the story at Legal Intelligencer
- check out the Pharmalot item
- read GSK's petition
- get Pharmalot's take

ALSO: Yesterday we reported on GlaxoSmithKline's protest letter to Massachusetts officials. Today, some legislators say that letter may backfire, inspiring state lawmakers to "dig in their heels" on banning gifts to doctors, rather than leading them to reconsider the move. Report

New CEO expected to'strip' Biovail

Tue, 22 Apr 2008 06:59:56 -0400

To listen to news reports about incoming Biovail CEO Bill Wells, you'd think he was one of the horsemen of the Apocalypse. A director for three years, Wells is set to take over the helm May 1, and analysts say they're expecting him to come in swinging his sword. "I think he'll strip the company down to its bare bones and act very much like a private-equity firm," one analyst told the National Post.

Wells himself hasn't done much to quash such talk. He said Biovail needs to shrink costs to bring them into line with falling revenue. Options? The usual in pharma these days: cutting staff and closing some manufacturing facilities, he said: "Everything is on the table."

Biovail is certainly in need of help. The company has been shelling out cash on legal fees, dealing with accounting probes by both the U.S. Securities and Exchange Commission and Canadian securities watchdogs. Current and former execs have been accused of conspiring to brighten up financial results. Analysts say Biovail's pipeline looks sparse; worrisome, because generic competition is looming for Wellbutrin XL. Can Wells, a former McDonald's exec, deliver? We'll find out.

- here's the release on Wells
- read the story in the National Post
- check out the article in The Star
- get the news from the Ottawa Citizen

SPOTLIGHT: Melnyk drops suit against Biovail

Fri, 11 Apr 2008 06:59:52 -0400

Biovail founder Eugene Melnyk (photo) has withdrawn his lawsuit against the company and its current CEO after the two sides reached a tentative truce. Report