Vote Your BLUE Proxy Now
TORONTO--(BUSINESS WIRE)--June 16, 2008--Biovail Corporation (NYSE:BVF)(TSX:BVF) today issued a second letter to shareholders, reminding them of the impending deadline to vote for the Biovail nominees to the Board of Directors at the Company's June 25, 2008 Annual Meeting. It recommended that shareholders consider four key questions and vote their BLUE proxies for an independent Board that will continue the Company's progress away from the past mistakes and position Biovail for enhanced shareholder value.
The full text of the letter follows:
June 16, 2008
Dear Fellow Shareholder of Biovail Corporation,
It is now time for you to determine the future direction of
Biovail.
Your Company can move forward, guided by an independent, capable
and knowledgeable Board of Directors. Or it can be dragged backward by
Eugene Melnyk, the former Chairman and CEO who wants to gain control
of your Board through his own nominees.
You have received a lot of information to consider as you make
this crucial decision. Essentially, however, there are four key
questions:
THE BOARD: As a Biovail shareholder, are you better served by an
independent, capable and experienced Board of Directors... or by
Eugene Melnyk's less-experienced and hand-picked nominees?
THE RECORD: Do you want Biovail to move forward with an enhanced
Board and strong new management ... or relive the history of lost
value, lost opportunities, litigation and regulatory investigation
when Eugene Melnyk was Chairman and CEO of Biovail?
THE STRATEGY: Is there more potential value for you in Biovail's
forward-looking New Strategic Focus, designed for a changing
pharmaceutical market ... or in Eugene Melnyk's ill-considered
return to an outdated business model?
THE VALUE POTENTIAL: Are you more likely to benefit from a
disciplined Board and management dedicated to stewardship of your
investment and returning capital to all shareholders ... or from
individuals installed by Eugene Melnyk for his own purposes?
In each case, we believe your interests are best served by
supporting the Biovail nominees to the Board. Objective review
confirms our recommendation:
RiskMetrics Group (formerly Institutional Shareholder Services or
ISS), which is widely recognized as one of the leading independent
corporate governance and proxy advisory firms, recommends that Biovail
shareholders VOTE FOR BIOVAIL'S SLATE OF NOMINEES. Their analysis and
recommendations are relied upon by many major financial institutions,
investment firms, mutual funds and fiduciaries throughout North
America. We have enclosed a news release describing the RiskMetrics
recommendations.
Your Board of Directors unanimously recommends that you:
-- Vote FOR Biovail's Nominees to the Board
-- Reject the Dissident Melnyk Nominees
Vote only the BLUE proxy: Do NOT use the Yellow Melnyk proxy
THE BOARD
-- Biovail has added to the strength of the existing Board with
five new independent and experienced nominees. Together with
the returning Directors, these nominees bring decades of
combined service on public company boards --and the corporate
governance expertise that goes with it--as well as extensive
pharmaceutical and financial expertise. The Biovail nominees
share a commitment to enhancing value for all 56,000 Biovail
shareholders.
-- Eugene Melnyk has nominated individuals who have past or
current business and personal relationships with him. Only one
currently serves on the board of a Canadian public company.
The nominees include Mr. Melnyk's proposed figurehead CEO,
Bruce Brydon, who previously had that title, despite working
only part-time and submitting his resignation twice, citing
lack of operational accountability.
-- Even if he remains ''retired'', Mr. Melnyk--if
successful--could exercise far greater control over Biovail
than his investment would warrant through his influence over
these nominees. His Board could, for example, reject the
Company's recent settlement with the United States Department
of Justice, which could expose Biovail to criminal
indictments. If found guilty, the Company would be excluded
from doing business with any health program sponsored by the
U.S. federal government for a minimum of five years. These
programs represent a material proportion of Biovail's
business.
-- Eugene Melnyk is attempting to take control of your Company
without paying you for it.
Your interests are best served by an independent and capable Board
representing all shareholders. Vote the BLUE proxy for the Biovail
nominees. Reject the Melnyk nominees.
THE RECORD
-- Your Board has moved your Company forward significantly in the
short time since Mr. Melnyk stepped down as Chairman and was
banned from acting as a Biovail director by his settlement
with the Ontario Securities Commission. Your Board has
completed the first review of strategic alternatives that was
independent of Mr. Melnyk. It has developed and begun to
implement a New Strategic Focus that repositions Biovail to be
a stronger, and more profitable, competitor in a rapidly
evolving industry. Your Board has further strengthened senior
management with the appointment of Bill Wells as CEO--a
seasoned business leader with years of experience at Biovail
and other global companies.
-- Biovail's record under Eugene Melnyk is far less positive.
While Mr. Melnyk was CEO, between 2001 and 2004--the Lost
Years--the Company's share price fell by approximately 64%. As
a senior executive until late February 2008, he was
responsible for the product development pipeline, which
suffered under his management, the effects of which are being
felt today. The Company became embroiled in civil, criminal
and regulatory investigations and proceedings which damaged
the Company's reputation and has --so far--cost shareholders
more than $175 million in legal fees and settlement expenses
and consumed vast amounts of management time.
-- Prior to that, beginning under the nominal leadership of Mr.
Brydon in 2000, Mr. Melnyk led Biovail into its disastrous
foray into the United States primary care market; a
short-sighted commercial strategy that resulted in more than
$300 million in write-downs.
Your interests are best served by a Board and management that are
already taking steps to correct and move beyond the mistakes of the
past. Vote the BLUE proxy for the Biovail nominees. Reject the Melnyk
nominees.
THE STRATEGY
-- The right strategy under the right management will be
fundamental to the return on your investment. That strategy
has been developed by your Board working with Biovail's
experienced management team and leading external advisors. The
New Strategic Focus will reposition the Company for greater
profitability in a changing competitive landscape, while
leveraging its existing strengths. The other choice is the
Melnyk proposal which is based on an antiquated and
unsuccessful business model that fails to reflect today's
marketplace.
-- Biovail's New Strategic Focus is described at length in the
May 9 Management Proxy Circular. In the short-term, it aligns
the Company's cost base with its revenues. For example, it
includes the closing of the underused and unprofitable Puerto
Rico facilities -a step that will reduce expenses and has
created no issues with our key commercial partners. The
Board's strategy builds on the Company's core capabilities in
drug delivery, formulation and manufacturing excellence. It
also creates new opportunities for higher margins, a range of
commercialization options, longer product exclusivity, and
improved prescription reimbursement.
-- Significantly, Biovail intends to focus on developing products
to fill the large unmet needs in specific niches of the
growing specialty central nervous system (CNS) market. This
niche focus presents outstanding opportunities and mitigates
risk: the investment in clinical trials is much lower since
patient numbers required for these trials are much lower and
the measure of success of those trials is clear and
well-defined. More information on the New Strategic Focus and
the CNS initiative is available at www.biovail.com by clicking
on the 2008 Annual Meeting button at the top of Biovail's
homepage.
-- The New Strategic Focus holds far greater prospects for value
enhancement and far less developmental, regulatory and
commercial risk than the notions proposed by Mr. Melnyk.
-- Eugene Melnyk's proposal appears to be based on a failing
model that would keep Biovail as a ''middleman'' pursuing a
wide range of undifferentiated, convenience and
compliance-based products that compete with intensely
competitive generic manufacturers. At its best, this is a
low-margin business where few high-quality opportunities
exist. At the same time, he proposes to pursue
''bio-similars'' which is a high-risk, high cost and unproven
segment of the industry. It is also a complete departure from
Biovail's existing business. Illogically, Mr. Melnyk would
pursue a strategy that is simultaneously low-reward and
high-risk.
Your interests are best served by a Board and management that are
implementing an effective new strategy designed for the direction the
market is moving, not by a broken model from the past. Vote the BLUE
proxy for the Biovail nominees. Reject the Melnyk nominees.
THE VALUE POTENTIAL
-- Your Board is committed to delivering significant and
sustainable value to Biovail shareholders. While no one can
predict the market price of your shares, your Board has taken
important steps to improve the reputation, performance and the
prospects for the Company by correcting the errors and
omissions of the Melnyk Lost Years and by setting a promising
new direction for Biovail.
-- Your Board believes strongly in the importance of returning
capital to shareholders. We are increasing efficiencies and
reducing costs to create additional sources of capital. We
intend to return excess capital to shareholders.
-- Your Board has recently confirmed its intention to maintain
Biovail's dividend of $1.50 per share annually, and has
launched a successful share repurchase program, under which
over 1 million shares have already been purchased.
-- Delivering the potential value in Biovail requires the focused
strategy, the disciplined management and the dedicated
oversight of an independent Board of Directors.
Your interests are best served by electing a Board that has both
the commitment and the capability to build long-term value and return
capital to you. Vote the BLUE proxy for the Biovail nominees. Reject
the Melnyk nominees.
Time is short. Your vote will make a difference to the outcome of
this critical decision.
We recommend that you vote today for an independent, capable and
effective Biovail Board that is in a stronger position to deliver
sustainable long-term value for all shareholders. We urge you act in
your own best interests by rejecting the Melnyk slate and electing the
Biovail nominees who can represent you on your Board of Directors.
Yours sincerely,
Dr. Douglas J.P Squires William M. Wells
Chairman of the Board Chief Executive Officer
Note: An independent leading proxy advisory firm, RiskMetrics
Group, recommends that Biovail shareholders vote for Biovail's slate
of nominees. Shareholders can read an investor presentation based on
what Biovail presented to RiskMetrics at www.biovail.com by clicking
on the 2008 Annual Meeting button at the top of Biovail's homepage.
Biovail Shareholders: The Proxy to Vote is Blue
Your vote is important, regardless of how many shares you own.
Submit your BLUE proxy today in favour of the election of the slate of
director nominees set out in the Management Proxy Circular and BLUE
proxy.
Voting is a quick and simple process. To be sure your vote is
counted completed BLUE proxies must be received by 10:00 a.m. on June
23, 2008. Due to the limited time available, we recommend voting by
internet, telephone or fax today or no later than 24 hours before the
deadline.
Shareholders with questions or needing assistance in voting their
BLUE proxy are encouraged to call Biovail's Proxy Solicitation Agent,
Georgeson at:
North American Toll-Free: 1-866-676-3028
Bank and Broker and collect calls accepted: 1 -212-440- 9800
Even if you have already voted using the dissident proxy, you have
every right to change your vote simply by executing the BLUE form of
proxy: It is the later-dated proxy that will be counted.
Please discard any proxy or related materials you may have
received from the Dissidents and vote using only the control number on
the BLUE form of proxy.
Caution Regarding Forward-Looking Information and "Safe Harbor"
Statement
To the extent any statements made in this release contain
information that is not historical, these statements are
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, and may be forward-looking
information under applicable Canadian provincial securities
legislation (collectively, "forward-looking statements"). These
forward-looking statements relate to, among other things, the
Company's objectives, goals, targets, strategies, intentions, plans,
beliefs, estimates, outlook and guidance, including, without
limitation, statements concerning the Company's New Strategic Focus,
including the Company's intention and ability to implement and
effectively execute elements of its New Strategic Focus, the
anticipated impact of the Company's New Strategic Focus, the Company's
intentions regarding its dividend policy, and the Company's intention
to repurchase its common shares, and can generally be identified by
the use of words such as "targets", "guidance", "believe",
"anticipate", "expect", "intend", "plan", "will", "may" and other
similar expressions. In addition, any statements that refer to
expectations, projections or other characterizations of future events
or circumstances are forward-looking statements.
Although Biovail believes that the expectations reflected in such
forward-looking statements are reasonable, such statements involve
risks and uncertainties, and undue reliance should not be placed on
such statements. Certain material factors or assumptions are applied
in making forward-looking statements, including, but not limited to,
factors and assumptions regarding the election of Biovail's slate of
directors at its upcoming shareholders meeting, prescription trends,
pricing and reimbursement in the therapeutic area of focus the Company
selects, timelines associated with the development of, and receipt of
regulatory approval for, the Company's products, the competitive
landscape in the markets in which the Company competes, and actual
results may differ materially from those expressed or implied in such
statements. Important factors that could cause actual results to
differ materially from these expectations include, among other things:
the difficulty of predicting U.S. Food and Drug Administration,
Canadian Therapeutic Products Directorate and European regulatory
approvals, acceptance and demand for new pharmaceutical products, the
impact of competitive products and pricing, new product development
and launch, reliance on key strategic alliances, availability of raw
materials and finished products, the regulatory environment, tax rate
assumptions, the outcome of legal proceedings and settlements thereof,
fluctuations in operating results, the availability of capital and
satisfaction of applicable laws for dividend payments, the market
liquidity of Biovail's common shares and the satisfaction by the
Company of applicable laws for the acquisition of such common shares,
the proxy contest in connection with the election of the board of
directors at the upcoming shareholders meeting and other risks
detailed from time to time in the Company's filings with the U.S.
Securities and Exchange Commission and the Canadian Securities
Administrators, as well as the Company's ability to anticipate and
manage the risks associated with the foregoing. Additional information
about these factors and about the material factors or assumptions
underlying such forward-looking statements may be found in the body of
this news release, as well as under the heading "Risk Factors"
contained in Item 3(D) of Biovail's most recent Annual Report on Form
20-F.
The Company cautions that the foregoing list of important factors
that may affect future results is not exhaustive. When relying on
Biovail's forward-looking statements to make decisions with respect to
the Company, investors and others should carefully consider the
foregoing factors and other uncertainties and potential events.
Biovail undertakes no obligation to update or revise any
forward-looking statement.
About Biovail Corporation
Biovail Corporation is a specialty pharmaceutical company, engaged
in the formulation, clinical testing, registration, manufacture, and
commercialization of pharmaceutical products utilizing advanced
drug-delivery technologies. For more information about Biovail, visit
the Company's Web site at www.biovail.com.
For further information, please contact Nelson F. Isabel at
905-286-3000 or send inquiries to [email protected].
CONTACT: Biovail Corporation
Nelson F. Isabel, (905) 286-3000
Vice-President, Investor Relations &
Corporate Communications
SOURCE: Biovail Corporation
