Wednesday, July 16, 2008

Since last we visited Biovail

What has been going on at our favorite Canadian pharma company?

When last we visited, in May, there had just been a shake-up in management, and the re-constituted board was trying to disassociate itself from the company founder, Eugene Melnyk.

Things get curioser. On June 25, the company claimed that the new board had received "overwhelming support from shareholders" at that day's annual meeting.

Mr. Melnyk, though, responded with a statement that there was no effective vote because there had been no quorum. He has brought an action in the Ontario Superior Court asking for a declaratory judgment to that effect.

The board responded that Mr. Melnyk had withdrawn his own proxies at the last minute in an effort to deprive the meeting of a quorum, showing "a deliberate intent to circumvent the democratic process by which shareholders rejected his nominees."

The stock price has held up fairly well despite such drama. There's been a some decline over the last month, from $10.50 to about $9.80. But that skill means that it has held its value better than the stocks on the TSE 300, Canada's answer to the Dow.

Best of luck to the new board in their litigation and in facing their other challenges. L'chaim.

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