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Melnyk's next big move – Merger of JJR and Trimel BioPharma
Barry Critchley, Financial Post · Feb. 25, 2011
He did it once and turned Biovail Corp. into one of the country's largest specialty pharmaceutical companies and along the way attracted attention from investors, customers - and the regulators. Now Eugene Melnyk is back, hoping to create the next Biovail. J5 Acquisition Corp., a capital pool company, announced a letter of intent with Trimel BioPharama Holdings Inc., the private company Melnyk set up in 2008. If things work out as planned, J5 will merge with Trimel, Trimel will also do a private round of equity financing and Trimel will be the resulting public company. Trimel BioPharma is home to many of the executives who helped pilot Biovail, including Kenneth Howling (former chief financial officer) and Bruce Brydon (a former chief executive.) Further links: Trimel BioPharama operates from the old Biovail's offices in suburban Toronto. Trimel was the handle for Melnyk's original company he set up in 1982. (Back then, it was a medical publishing company.) In 1989 he invested $6.5-million into a related entity, Trimel Life Sciences, which later purchased Biovail, a drug-development company that had been active in Europe. Biovail, in September 1995, received approval to market Tiazac, which became a big winner. The decision to merge with J5 comes a few months after Trimel tried to raise capital in a private round. Those plans came unstuck because investors wanted liquidity much quicker than the company was contemplating. Now the same investors will be able to invest on what is a "go public transaction." And J5, which went public in August 2009 when it raised $400,000, was available. (J5 is from the JJR Capital stable, which specializes in reverse takeovers.) Last December J5 said its proposed qualifying transaction with Riverbank Power Corp., a deal announced last May, had been called off. So what does Barbados-incorporated Trimel BioPharama, do? According to its website, it "is focused on improving the utility of known and successfully marketed pharmaceutical compounds by employing 21stcentury dosing technologies that are specifically designed to avoid firstpass metabolism." It has the rights to three such platforms and five products: an intra-nasal gel; a dry powder inhaler and a dry power dispersion. The company is in advanced clinical trials on all three. So what's it worth? Try a value north of $200-million. UBS battle? The annual meeting of Unique Broadband System is on Friday, and given the events of the past year, it can't be ruled out that the old board members -who were ousted last July at a special meeting -will put forward a slate of directors. Last July the dissidents received the support of about 37 million votes, or seven million more than the insiders who are now the outsiders. And the former insiders have one advantage: They own a concentrated block of about 23 million UBS shares. Presumably the insiders don't like what the new directors have been doing and may want to put forward a slate from the floor. -Given the voting deadline has passed (it was last Wednesday at 5 p.m.), will the company's 13,000 shareholders exercise their rights even though the shares are trading at 7¢? -Given the allegations and lawsuits against the former insiders, will be the regulators get involved? If the former insiders win, it may be more difficult for the OSC to get co-operation.

Source: http://www.jjrcapital.com/JJR_capital_corp_press_release_BioPharma.pdf