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Dissident shareholders led by former Biovail execs seek to oust Bioniche board

TORONTO – Dissident shareholders of Bioniche Life Sciences Inc. (TSX:BNC), led by two former Biovail Corp. executives, have formally requisitioned a special meeting to replace the current board of directors.

Former Biovail CEO Bill Wells and Greg Gubitz, Biovail’s former general counsel and senior vice-president of corporate development, say the move is in response to the “overwhelmingly positive reaction” of other shareholders to their open letter criticizing the company’s management and performance.

The so-called “concerned shareholders” accuse current management of continued failure to deliver on past promises in the face of a steady decline in the company’s business and prospects and erosion of shareholder value.

“We believe there is no alternative other than a fresh start,” the group said in a statement.

“We believe that Bioniche has potential to become a great Canadian life sciences company with the right leadership and proper business focus. It is time for new direction and new leadership.”

The dissidents, who circulated a letter critical of Bioniche management earlier this week, say they lead a group with more than five per cent of Bioniche shares — sufficient to call for a shareholders’ meeting to remove the board.

Bioniche responded to the letter by saying it has been reviewing several strategic partnering and investment-related offers over recent months and suggested the dissident shareholder group haven’t come up with the best alternative.

“The company has been in discussions with external advisers and a major U.S. investment bank is being engaged to manage this process,” Bioniche said.

“The individuals behind the letter have had access to confidential corporate information within the past few months and have made two overtures to the company which do not favourably compare to the opportunities under review,” it added.

In their statement Thursday, the dissidents said they would outline their plans for turning the company around and enhancing shareholder valued as “part of our solicitation of shareholder proxies” leading up to the special shareholders’ meeting.

“We trust the Bioniche board will act quickly to promptly call the special shareholders’ meeting so that the company’s long-suffering shareholders can have their say.”

Bioniche researches, develops, manufactures and commercializes health products used to treat humans and animals.

It shares, which traded near 70 cents last August, closed down half a cent at 26.5 cents Thursday on the Toronto Stock Exchange.