Biovail calls Melnyk's latest effort to garner shareholder support a 'desperate publicity stunt'

By Lisa Kerner

Charlotte, N.C., June 17 - Biovail Corp. said it will not participate in the "latest desperate publicly stunt" by former chief executive officer Eugene Melnyk in his effort to gain control of the company's board of directors.

"The staged 'debate,' as proposed by Mr. Melnyk, involving management, current and imagined, who would report to that board, is not appropriate or helpful," a Biovail news release said.

Instead, Biovail said it will "rely on shareholders' ability to consider the facts" and once again urged shareholders to vote for Biovail's director nominees.

According to Melnyk's group, the Concerned Shareholders of Biovail, the company's chief executive officer William Wells refused to participate in a debate with Bruce Brydon, another former Biovail CEO and one of the group's director nominees.

The refusal sends a "chilling message" to Biovail shareholders, the group's news release said.

"Mr. Wells has limited experience in the pharmaceutical industry, and we believe his refusal to participate in a debate demonstrates ... he is afraid to show - one-on-one - his lack of knowledge," a spokesperson for the Concerned Shareholders stated in the release.

Brydon has 30 years of experience, the release said.

The group also cited an analysis by Glass Lewis & Co. that calls Wells' appointment as CEO "inappropriate from a corporate governance standpoint" and suggests that there was an appearance of a conflict of interest when it came to compensation.

It was previously reported that according to Biovail, RiskMetrics/ISS recommended shareholders vote for the company's slate of director nominees at the annual meeting on June 25.

Melnyk recently reached out to shareholders through the betterbiovail.com web site, accusing Biovail's CEO of trying to distract shareholders from the real issues, which he said are the track record of the incumbent director nominees and their "lack of experience and lack of a thoughtful plan."

The dissident shareholder went on to highlight the benefits he believes a new board of directors would bring as well as a new management team led by Brydon, it was previously reported.

Biovail, in two prior letters, asked shareholders to ignore what it described as Melnyk's latest efforts to take control of the company and to vote for Biovail's "experienced and independent" board members.

It was previously reported that Wells and Biovail chairman Dr. Douglas Squires said Melnyk was the problem the Toronto pharmaceutical company is trying to solve.

On June 2, Melnyk and EM Holdings BV filed a dissident proxy circular in connection with their solicitation of proxies in support of their nominees.

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