June 24, 2008 / 8:51 PM / in 9 years

Melnyk loses bid to replace Biovail board: report

TORONTO (Reuters) - Biovail Corp BVF.TO BVF.N founder Eugene Melnyk has lost his bid to install a hand-picked slate of directors at the struggling drug company, the Globe and Mail newspaper reported on its website on Tuesday.

<p>The U.S. and Canadian flags fly in front of the futuristic looking Biovail Corporation Head Office in Mississauaga, a Toronto suburb, March 4, 2005. Biovail Corp's shareholders will know later this week whether they have plotted a course that could dramatically change the future of Canada's biggest publicly traded drugmaker. REUTERS/J.P. Moczulski JPM</p>

Citing unnamed sources, the Globe reported Melnyk was not able to get enough votes to replace the company’s directors with his own nominees. The results of the proxy fight between Melnyk and Biovail’s current management were not expected to be released until the company’s annual meeting on Wednesday.

A Biovail spokesman was not immediately available for comment. A spokesman for Melnyk’s group could not be reached immediately.

Melnyk, who founded the company almost 20 years ago and held numerous posts before stepping down last year, decided to oppose the board, he says, after losing confidence in Biovail’s corporate strategy and the board’s abilities earlier this year.

Biovail, Canada’s biggest publicly traded drugmaker, has seen its stock price plunge 45 percent in the past four years.

Under Melnyk’s plan, a development committee headed by Bruce Brydon - who was CEO from 1995 to 2001 - would have emphasized the drug pipeline, including a return to so-called “difficult to manufacture” generic pharmaceuticals and acquiring more products and technologies.

Meanwhile, the present board under the newly appointed chief executive, Bill Wells, stands behind strategic changes unveiled last month, including shutting down operations in Puerto Rico and shifting to new treatments for disorders of the central nervous system.

Biovail’s shares rose 1 Canadian cent to close at C$10.80 on the Toronto Stock Exchange.

($1=$1.01 Canadian)

Reporting by Wojtek Dabrowski and Frank Pingue; editing by Frank McGurty

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