The fight over the direction of Canadian biotechnology firm Bioniche Life Sciences Inc. is heading to court, after the company refused for a second time to call a special meeting requested by a dissident shareholder group.
The shareholders, led by former Biovail chief executive officer Bill Wells, say they will ask an Ontario court to force a meeting where they will present an alternative slate of directors.
Mr. Wells has been trying since April to get the Belleville, Ont.-based company to call the meeting and get new leadership installed, which will then narrow the company’s focus.
Bioniche initially rejected Mr. Wells’ request for a meeting because he did not directly own his shares, and he had not named his alternative directors. Mr. Wells then got his shares registered, and provided a full list of seven new directors.
But on Wednesday Bioniche again balked at the request, saying that they do not have to call a special meeting because they have already scheduled a meeting of shareholders for Nov. 5.
The Bioniche board “carefully considered the appropriate timing for a shareholder meeting and concluded that a meeting in accordance with the normal cycle is in the best interests of the shareholders and the company, as it allows shareholders time to consider the issues associated with a contested board election,” the company said in a release. Waiting until November also means there will be no disruption of Bioniche’s efforts to sell off a large chunk of its business – the portion that sells products for animal health – the company said.
Mr. Wells and his associates have objected to the move to sell the animal health business, saying it is the only part of the Bioniche portfolio that produces revenue and positive cash flows. The remaining parts of the business – that makes products related to human health – generate no revenue, burn cash, and show no signs of a payoff, Mr. Wells has argued.
Mr. Wells’ associate, lawyer Greg Gubitz, said in an interview Tuesday that he and Mr. Wells will now ask a judge to force a meeting. Calling a meeting for five months from now is “insufficient,” he said. “They should call a meeting sooner. We will have the court decide now.”
Mr. Wells said in an interview in April that he wants Bioniche to become more focused on a narrower range of products. He ran Biovail from 2008 to 2010, a period when the company refocused its product line and its shares more than doubled in value. He left Biovail shortly after it merged with Valeant Pharmaceuticals International Inc. late in 2010.
Bioniche shares are less than a quarter the value they were at near the beginning of 2011.