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For a guy who "retired" last year, Eugene Melnyk is awfully busy. It's a sunny Friday in late August, but he's not in a T-shirt and flip-flops, sipping a beer in front of a plasma TV screen at Bert's, the watering hole and "official Caribbean headquarters of the Ottawa Senators" that he owns near his beachfront home in Barbados. Instead, the 49-year-old Toronto-born pharmaceutical magnate—and hockey team owner, racehorse breeder and omnivorous fan of just about every sport under the sun—is in New York City. He's sitting at the dining room table of his Upper West Side condo, dressed in black slacks and a black Senators golf shirt, keeping one eye on his BlackBerry while he gives his take on the business battles he's fought over the past six months.
Melnyk's wife, Laura, wants him to take a holiday. Indeed, next Monday, he's to leave on a week-long fishing trip to Northern Quebec with Laura and their two young daughters, Anna and Olivia. Melnyk will apparently be out of BlackBerry range, "but I think I can get a sat [satellite] phone," he says with a grin when Laura is out of earshot. Either that or maybe he can drive 30 kilometres or so every day to retrieve e-mail and phone messages.
There will be lots of them. Consider what this retiree has on the go. First and foremost, there's the question of what to do next now that he's lost his proxy fight to oust the board and management of Biovail Corp., the Mississauga-based drug maker and distributor he established in the 1980s and built into a billion-dollar-a-year company. He's still Biovail's largest shareholder, with a 12% stake. In August, Melnyk apparently tossed in his cards in the proxy battle. But he's not ruling out another round. "If they don't perform, I'll be right there," he vows.
Next on the list are the charges filed by U.S. regulators and the Ontario Securities Commission in March, both zeroing in on Biovail's aggressive accounting in 2003. Then there's a grinding lawsuit filed by Jerry Treppel, a U.S. stock analyst who was fired after crossing swords with Melnyk in 2002. Treppel has recently won a court ruling allowing him to conduct a forensic search of Melnyk's laptop computer to see if Melnyk pressured the bank to have him fired. Also still in the courts is a $4.6-billion lawsuit Melnyk and Biovail filed in 2006 against several U.S. hedge funds and analysts, accusing them of conspiring to drive down Biovail's share price and profit from short-selling the stock (all currency in U.S. dollars except where noted).
It's not all acrimony, however. Melnyk is on the verge of securing a Major League Soccer team for Ottawa, where he hopes to replicate the success of Toronto FC. The Senators open their season in September, and he figures they can win the Stanley Cup. Last season, the Senators won 13 of their first 14 games, an NHL record, but were then plagued by injuries. The season culminated in a demoralizing first-round playoff loss—and that after they went all the way to the Cup final the year before. "We've kept the core team together," says Melnyk. "We have everything we need."
On the Biovail front, as part of his campaign, Melnyk is launching Trimel Biopharma. It will pursue a strategy similar to Biovail's in its "golden years" in the 1990s, when he was chairman and Bruce Brydon was CEO: making improved versions of both name-brand drugs and generics. Biovail carved out a lucrative niche in the global pharmaceutical market by reformulating drugs to get into patients' bodies faster, often with just one pill a day, rather than several. "Some of these new drug delivery systems are just space age," declares Melnyk. "Within five years, we'll say the delivery of insulin by injection was barbaric."
As it has been throughout Melnyk's career, this entrepreneurial drive can be inspiring and effective. It can also be annoying and frustrating, even to his own shareholders, because Melnyk won't let even the slightest criticism from analysts or regulators pass. If Melnyk was a sports star rather than a sports owner, he'd be John McEnroe, one of the best tennis players of his generation, but most often remembered for his blow-ups with officials. Melnyk, in fact, was among the top tennis players in Canada as a teenager. "Then I went to the States," he says, "and the level of competition was a lot higher." These days, Melnyk looks more like a team's equipment manager than an athlete—pudgy and jovial, although more compact than he sometimes appears in photographs.
