TORONTO (Reuters) - Biovail Corp shareholders approved the company’s incumbent slate of directors on Friday, ending an ugly proxy fight that included two shareholder meetings and a brief courtroom battle.
Shareholders, who were forced to recast their votes after an Ontario court deemed Biovail’s June 25 meeting was improperly held, approved the slate with what the company said was a “clear and unequivocal majority.”
The official numbers were expected to be released later in the day.
“We’re glad it’s over. It has been a distracting and expensive process, but I think we have the mandate to move forward and implement a real fundamental change in the business model under great leadership,” Chairman Douglas Squires told reporters after the meeting.
Last month an Ontario court judge ordered Biovail to reconvene its shareholder meeting and vote on a new slate of directors being proposed by founder Eugene Melnyk to replace the incumbent board.
Melnyk, who is Biovail’s biggest shareholder, argued that the original meeting was held improperly because it lacked a quorum. Just moments before it started, the company had changed the quorum requirement that 51 percent of shares be represented to 25 percent so that the meeting could proceed.
Melnyk, the millionaire owner of the Ottawa Senators National Hockey League team, had pulled his own block of about 18.8 million shares in advance of the meeting in attempt to have it postponed so that he could build more support for his directors and business plan.
He has proposed a new emphasis on the company’s product pipeline, including a return to “difficult to manufacture” generic drugs, as well as acquiring more products and technologies.
Melnyk chose to challenge the company, claiming he lost confidence in the board. The current management wants to shut operations in Puerto Rico and shift to new treatments for disorders of the central nervous system.
Late last month Melnyk withdrew his dissident slate of directors making Friday’s vote a formality.
Biovail shares, which have dropped more than 60 percent in the past year, were up 18 Canadian cents at C$10.71 on the Toronto Stock Exchange on Friday. The shares were up 3 cents at C$10.04 in New York.
The stock has plunged on concerns over competition from generic versions of key Biovail products and a string of disappointing regulatory and legal rulings.
Melnyk spokesman Duncan Fulton said the outcome of Friday’s vote was not surprising, but said Melnyk would remain vigilant in trying to force changes at the company he founded almost 20 years ago.
“The bottom line is Eugene disagrees with the plan that is being put forward by the current management, but they have said they can deliver, so he is saying ‘go deliver’,” Fulton told Reuters.
“He continues to watch, and expects big execution because that is what they promised.”
But Fulton cautioned that, as a shareholder with more than 5 percent of outstanding shares, Melnyk can request a shareholder meeting at any time.
“It’s not an automatic given that it’s another year before we are back here again,” he said.
Meantime, Melnyk is moving ahead with plans for his own start-up company, to be called Trimel Pharmaceuticals, using the same strategy he proposed for Biovail.
Reporting by Scott Anderson; editing by Rob Wilson