The fight for control of Ontario biotechnology firm Bioniche Life Sciences Inc. has heated up, with a dissident group trying to call a special meeting of shareholders, which the company rejects as an "inappropriate and invalid" move.
The leader of the dissident faction, former Biovail Inc. chief executive officer Bill Wells, has called the special meeting for Aug. 27. Mr. Wells wants to present an alternative board of directors and oust the current Bioniche CEO Graeme McRae.
Mr. Wells said his group has the right to call the meeting because it owns more than 5 per cent of Bioniche shares, and the current board and management has refused requests for a shareholders' meeting.
Bioniche, for its part, said the proposal is improper because the company has already set a meeting for Nov. 5. In a statement Friday, it also noted that Mr. Wells' group has already initiated court proceedings to try to force a meeting. Trying to set up an August meeting is "in total disregard for the court process," the company said.
Mr. Wells objects to the efforts of current Bioniche management to try to sell the company's animal health business, which generates most of its revenue and cash flow. "If the sale is completed, it would permanently impair Bioniche and destroy shareholder value," his group said in a statement.
The remaining human health business, which is mainly focused on a cancer drug, "is still years away from producing any meaningful revenue," Mr. Wells said in a letter to shareholders.
Bioniche has promised that if they find a buyer for the animal health business, the sale will be put to a shareholder vote.
The fight between the two sides has become increasingly bitter. Mr. Wells' group has declared that the current board "continues to mismanage the company." Bioniche calls Mr. Wells' moves "increasingly aggressive public attacks" which "have the potential to jeopardize the very important initiatives underway to maximize the company's asset value."
Mr. Wells ran Biovail from 2008 to 2010, a period when that 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.