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Eugene Melnyk

Mark Blinch

Eugene Melnyk has sold most of his holdings in Biovail Corp., effectively ending his involvement with the pharmaceutical firm he founded in the 1980s.

Mr. Melnyk filed a notice with the U.S. Securities and Exchange Commission yesterday saying he had sold 9.6 million shares in Biovail since the start of the year, leaving him with just 232,000 remaining.

The biggest chunk, 7.4 million shares, was sold last Thursday, for about $117-million (U.S.).

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"There was no real magic to the timing of it," Mr. Melnyk told Business News Network yesterday. "It was just time for me to exit out of Biovail and focus on my other businesses."

Kenneth Howling, who worked with Mr. Melnyk at Biovail and is now vice-president of one of his new ventures, Trimel Biopharma Holdings Inc., said "he wants to focus on actively growing businesses where he has more direct ownership and influence."

Mr. Melnyk has had little direct involvement in Biovail management since he quit as executive chairman in 2006. However, he provoked a proxy fight with Biovail's new managers in 2008, complaining about the direction they were taking and proposing a new board of directors and a change of management. At one point he floated the idea of taking the company private.

Mr. Melnyk lost that battle at a shareholder vote, although in 2009 he negotiated to get one director of his choosing on the Biovail board.

The company has pushed forward to concentrate on drugs that treat disorders of the central nervous system, a strategy Mr. Melnyk once characterized as "pharmaceutical suicide." The Biovail founder wanted the company to continue making generic versions of difficult-to-manufacture drugs.

Mr. Melnyk's position has softened since then. He said yesterday that Biovail isn't necessarily wrong in its new strategy, but he thinks the risks are higher than if it had taken another path.

Biovail had no comment on its founder's share sale yesterday.

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While Mr. Melnyk was the largest shareholder at Biovail for most of its history, last year he began to reduce his holding substantially. A few months ago New York investment firm BlackRock Inc. emerged as the largest Biovail shareholder with 8 per cent of the stock.

In the past Mr. Melnyk held as much as 25 per cent of the company's shares.

As well as his ownership of the Ottawa Senators hockey team, Mr. Melnyk is involved in a variety of business ventures. At Trimel he is attempting to improve on certain existing drugs by developing technology to deliver more precise doses. Mr. Howling said the new company is still "years away" from having a commercial product.

Other companies in Mr. Melnyk's portfolio include Fusion Brands Inc., which uses pharmaceutical advances to create beauty products, and PurGenesis, which incorporates natural plant materials in therapeutic products.

BIOVAIL (BVF)

Close: $16.27, up 16¢

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About the Author
Reporter, Report on Business

Richard Blackwell has reported on Canadian business for more than three decades. At the Financial Post and the Globe and Mail he has covered technology, transportation, investing, banking, securities and media, among many other subjects. Currently, his focus is on green technology and the economy. More

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