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Biovail Corp. is urging shareholders to spurn any slate of directors proposed by dissident founder and largest shareholder Eugene Melnyk and instead support the company’s new strategic plan.

The drug company has filed notice with securities regulators of an annual meeting June 25.

The document says shareholders should vote in favour of Biovail’s nominees, including newly appointed chief executive officer Bill Wells, because the company’s future is on the line.

Duncan Fulton, a spokesperson for Melnyk, said "all of his views will be clear in the circular that will be coming out shortly."

Meanwhile, a Biovail subsidiary, Biovail Pharmaceuticals Inc., has agreed to pay $24.6 million (U.S.) to settle criminal allegations in the United States related to the launch of the Cardizem LA heart drug in 2003.

The U.S. justice department had charged the unit made payments to induce purchasing or ordering of the drug, Reuters reported yesterday. If the settlement receives court approval, the subsidiary will plead guilty.

"Without this agreement, the company was at risk of being excluded from doing business with any health program sponsored by the U.S. federal government," parent Biovail said in a statement.

Meanwhile, Biovail also said its new plan, after a strategic review led by new CEO Wells, is to capitalize on the $70 billion global market for treatments targeting diseases such as Parkinson’s disease and multiple sclerosis.

The company, among many other woes, has been battling with Melnyk, the former chair and CEO, who disapproves of the company’s direction.

Last week, Melnyk wrote Biovail a letter blasting the hiring of Wells and the more than $3.4 million (Canadian) the company has promised Wells if Melnyk’s dissidents are elected and Wells is fired.

Melnyk, owner of the Ottawa Senators hockey team, holds an 11.7 per cent stake in the company and is involved in a family trust with about 7 per cent of the company freecreditreport. He stepped down at Biovail last year amid probes of accounting and reporting irregularities.

Yesterday, Biovail warned that, "if Mr. Melnyk does act and nominates dissident directors, Biovail shareholders will be faced with a crucial choice."

The choice is between "a return to a Melnyk-influenced company with all that entails, or a new way forward with a new, independent and experienced board, a new strategy driven by a proven business leader, and good prospects for sustainable long-term value for all shareholders … Your vote will determine the direction of Biovail."

Biovail has been mired in problems from 2002 and 2003, when investors filed a class action. That was settled for $138 million (U.S.) late last year.

Securities commissions in Canada and the United States are continuing their actions against Melnyk and other current and former executives.

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