Biovail Corporation was a Canadian pharmaceutical company, operating internationally in all aspects of pharmaceutical products. Its major production facility was located in Steinbach, Manitoba. It merged with Valeant Pharmaceuticals International in 2010.
 | |
| Company type | Public |
|---|---|
| TSX: BVF | |
| Industry | Biotechnology Pharmaceutical |
| Founded | 1991 |
| Founder | Eugene Melnyk Rolf Reininghaus Mahmood Khan |
| Defunct | 2010 |
| Fate | Merged with Valeant Pharmaceuticals International |
| Headquarters | Mississauga, Ontario, Canada |
Area served | North America |
Key people | Dr. Douglas J.P. Squires (Chairman of the Board) William M. Wells (CEO) |
| Products | Medicine Drugs |
| Revenue |  $ 757.18 million (2008) |
| $ 114.24 million (2008) | |
 $ 199.90 million (2008) | |
| Total assets | $ 1.623 billion (2008) |
| Total equity | $ 1.201 billion (2008) |
Number of employees | 1,368 - March 2009 |
| Divisions | Biovail Pharmaceuticals Canada (BPC) Biovail Contract Research (Canada) Biovail Corporation (Canada) |
| Subsidiaries | Biovail Pharmaceuticals, Inc. (BPI) (U.S.) Biovail Technologies Ltd. (U.S.) Biovail Laboratories - Dorado (Puerto Rico) Biovail Laboratories - Carolina (Puerto Rico) Biovail Laboratories International SRL (Barbados) Biovail Technologies (Ireland) Limited |
| Website | www.biovail.com |
History
editThis section needs expansion with: details surrounding early history (1991 onwards). You can help by adding to it. (May 2023) |
As noted in the February 2009 Settlement Agreement with the Ontario Securities Commission: "Biovail admitted that [...] it violated Ontario securities law and engaged in conduct contrary to the public interest."[1]
On September 28, 2010, Biovail merged with Valeant Pharmaceuticals (Bausch Health). The company retained the Valeant name and J. Michael Pearson as CEO, but was incorporated in Canada and temporarily kept Biovail's headquarters.[2]
Legal issues
editAplenzin securities fraud class action
editA class action suit was filed against Biovail by investors who between December 14, 2006, and July 19, 2007, bought Biovail stock, alleging that the company had failed to disclose that the multi-dose study on depression drug Aplenzin would not be sufficient for the FDA to approve it.[3] The lawsuit was dismissed with prejudice in 2009, with Judge Colleen McMahon describing the complaint as "legally baseless."[4]
SAC/Gradient Analytics lawsuit and SEC complaint
editIn March 2006, CBS program 60 Minutes featured Biovail in a story about its lawsuit against hedge fund SAC Capital Partners and Camelback (now known as Gradient Analytics), among others. According to Eugene Melnyk, "there's a group of people that got together and essentially attacked the company by putting out false reports, and we're just fighting back for our shareholders."[5]
The alleged conspiracy began with Camelback, an Arizona stock-analysis firm that advertises that it publishes impartial financial reports on companies to help investors evaluate stocks. In the spring of 2003, the hedge fund SAC asked them for a report on Biovail. Darryl Smith, Mark Rosenblum, Demetrios Anifantis, and Robert Ballash, former Camelback employees, alleged that Camelback had allowed their client SAC to determine the content and timing of their reports on Biovail.[5]
Camelback said those former employees were lying and disgruntled, that Anifantis and Ballash were fired because of unethical conduct; Smith for poor performance; Rosenblum was laid off. These four say they were let go after they complained to their superiors about Camelback's practices. SAC denied all the charges in Biovail's lawsuit and said that the decline in the Biovail's stock was due to earnings shortfalls and regulatory investigations.[5]
In March 2008, the United States Securities and Exchange Commission (SEC) sued Biovail and some of its former officers, alleging that "present and former senior Biovail executives, obsessed with meeting quarterly and annual earnings guidance, repeatedly overstated earnings and hid losses in order to deceive investors and create the appearance of achieving earnings goals. When it ultimately became impossible to continue concealing the company's inability to meet its own earnings guidance, Biovail actively misled investors and analysts about the reasons for the company's poor performance." Biovail settled for US$10 million.[6] Gradient Analytics, successor to Camelback, issued a press release stating that the SEC's suit "confirms the validity of Gradient's critical analysis of Biovail but raises serious questions about how companies retaliate against analysts with threats, intimidation, and lawsuits."[7][8]
60 Minutes has been accused of botching the Biovail story by the Columbia Journalism Review's Audit columnist and The New York Times' Joe Nocera, who felt Lesley Stahl accepted Biovail's conspiracy theories about short sellers without proper consideration.[9][10] [11]
SAC and Gradient filed a suit against Biovail for malicious prosecution in February 2010.[12] On September 28 Biovail merged into Valeant Pharmaceuticals Inc. On November 4 Valeant announced that they had settled with Gradient, saying "The initiation of litigation against Gradient, its founders Dr. Carr Bettis and Dr. Donn Vickrey, and others in 2006 by Biovail's management at the time was regrettable. We would like to put this incident behind us."[13]
Penalties against Eugene Melnyk
editIn May 2011, the Ontario Securities Commission in Canada banned Eugene Melnyk from senior roles at public companies in Canada for five years and fined him $565,000. Earlier in the same year Melnyk had settled with the US SEC, agreeing to pay a civil penalty of US$150,000; he had previously paid US$1 million to settle other claims with the SEC.[14]
References
edit- ^ paragraph 44 of OSC Settlement https://www.osc.gov.on.ca/documents/en/Proceedings-SET/set_20090210_crombieb.pdf
- ^ "Drugmaker Biovail to buy Valeant in $3.3 billion deal". Reuters. June 21, 2010. Archived from the original on October 6, 2015. Retrieved July 3, 2017.
- ^ "Biovail faces lawsuit over depression drug". Associated Press. 2008-09-10. Archived from the original on October 12, 2008.
- ^ "Fort Worth Employers' Retirement Fund v. Biovail Corp., 615 F. Supp. 2d 218 | Casetext Search + Citator". casetext.com. Retrieved 2024-10-02.
- ^ a b c "Betting on a Fall", Lesley Stahl, 60 Minutes story on Biovail lawsuit Archived May 27, 2008, at the Wayback Machine
- ^ SEC Charges Biovail Corporation and Senior Executives With Accounting Fraud, U.S. Securities and Exchange Commission press release, March 24, 2008
- ^ Gradient Analytics' Early Research Identified Same Issues as Charges in SEC Complaint Against Biovail. SEC Credits Analysts Who Questioned Biovail, but Retaliation Against Independent Researchers Through Lawsuits Continues Archived 2008-07-08 at the Wayback Machine, Gradient Analytics press release, March 25, 2008 (PDF)
- ^ U.S. and Canada Accuse Drug Maker of Fraud, Ian Austin, The New York Times, March 25, 2008
- ^ 60 Minutes Blows Biovail Story
- ^ 60 Minutes’s Biovail Trainwreck (cont.)
- ^ Nocera, Joe (April 2006). "No Free Title: "To continue reading the page you requested, you must be a subscriber to TimesSelect"". The New York Times.
- ^ Article by Carol Remond, Dow Jones News, February 18, 2010
- ^ "Valeant Pharmaceuticals and Gradient Analytics Settle Lawsuit" (Press release).
- ^ "Senators owner Melnyk banned for five years from boardrooms of public companies The Financial Post by Barbara Shector, May 5, 2011". Retrieved 2011-05-05.
