TORONTO, June 18 /PRNewswire/ -- The Concerned Shareholders of Biovail Corporation (TSX: BVF) said today that they welcomed a report by Glass Lewis & Co., which sharply criticized the incumbent board and recommended 'Do Not Vote' for any of the company's nominees.
Glass Lewis recommended a vote FOR two of the Concerned Shareholders nominees, Joseph J. Krivulka and Laurence W. Zeifman. It recommended withholding votes from the other eight nominees on the Concerned Shareholders' slate.
The Glass Lewis report took issue with several actions by the current board, particularly its executive appointments and compensation packages.
"While the board should be seeking to put its troubled history in the past, it has instead appointed its former CEO as chairman and a former member of an audit committee which oversaw significant restatements as its new CEO," the report says. "We believe that shareholders could benefit from the addition of new independent voices on the board with appropriate subject matter and industry expertise."
The Glass Lewis report called the appointment of Biovail's CEO, William Wells, "a curious choice at best," as well as "inappropriate from a corporate governance perspective." It concludes: "At the very least such an appointment could only further serve to damage the Company's already bruised public image."
Glass Lewis also expressed disapproval of executive compensation arrangements made by the incumbent board. It notes that Mr. Wells chaired the compensation and nominating committees, and that the retiring CEO, Douglas Squires, was awarded a package of $3.5 million, including a retroactive raise, even though the company's share price was falling.
"An outside observer would conclude that these potentially excessive compensation awards for Messrs. Squires and Wells, especially at a time of poor financial performance, may be related to the appointment of Mr. Wells," the report says. "Even if Mr. Wells' past position in overseeing the committee which determines executive pay and identified the new CEO did not affect his appointment as CEO or the generous contracts for him and his predecessor, the mere appearance of corruption could be damaging."
Bruce D. Brydon, CEO of Biovail during some of its most successful years, who will return as CEO if the Concerned Shareholders' slate is elected, said he wants to get the company back on the right track. Mr. Brydon said: "We believe that Biovail needs a complete change in its board, senior management and direction to avoid even further declines in shareholder value."
Mr. Brydon noted that:
-- In the last year the price of Biovail stock has declined nearly 50%, far worse than the drug industry stock price index.
-- In the last four years, under current management, Biovail has obtained regulatory approval for only one new drug, in sharp contrast to the 17 new drugs that were approved during Mr. Brydon's tenure as CEO from 1995 to 2001.
-- A leading financial analyst who covers Biovail and other drug companies has stated that the new strategic direction announced recently by Biovail's current management, to focus intensive research and development on new chemical entities to treat central nervous system conditions such as Alzheimer's Disease, "is just baffling to us."
All shareholders are urged to vote the YELLOW proxy in favour of the Concerned Shareholders slate of nominees. Copies of the proxy circular prepared by the Concerned Shareholders can be obtained via SEDAR (http://www.sedar.com/) and http://www.betterbiovail.com/ or by contacting in Canada, Kingsdale Shareholder Services Inc. toll-free at 1-800-775-1986 or collect at 1-416-867-2272, or in the United States, Innisfree M&A Incorporated toll-free at 1-877-717-3929.
Certain statements contained in this release constitute forward-looking statements. The words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions as they relate to the Concerned Shareholders, the Concerned Shareholders' nominees, the Company or its current or future management, are intended to identify forward-looking statements. Such statements reflect the Concerned Shareholders' or the Concerned Shareholders' nominees' current views with respect to future events and are subject to certain risks, uncertainties and assumptions. The Concerned Shareholders' nominees assume no responsibility for any such statements. Many factors could cause the company's actual results, performance or achievements that may be expressed or implied by such forward- looking statements to vary from those described herein should one or more of these risks or uncertainties materialize. Such factors include, but are not limited to, economic, business, technological, competitive and regulatory factors.
