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Embattled Biovail Taps Mulligan as CFO

The Canadian drugmaker, facing SEC revenue-reporting violations, hires a veteran with banking-finance and "game theory" experience.
Stephen TaubAugust 21, 2008

Canadian drugmaker Biovail Corp., charged by the Securities and Exchange Commission earlier this year with revenue reporting violations, announced the appointment of a permanent CFO, effective Sept. 3. She’s Peggy Mulligan, named to succeed interim finance chief Adrian A. De Saldanha, who has served in the role since March.

Mulligan was most recently a principal at Priiva Consulting Corp., a game theory consulting practice. Prior to that she was executive vice president, CFO, and treasurer of Linamar Corp., from 2005 to 2007. Before that, Mulligan spent more than 11 years at the Bank of Nova Scotia, most recently as executive vice president, systems and operations. In that role she was responsible for operational processes and technology across Canada and in more than 50 other markets.

“Her impressive suite of financial, information technology and management capabilities developed over a distinguished career makes her the ideal candidate to lead our finance organization,” said Biovail CEO Bill Wells.

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Back in March, Biovail agreed to pay the SEC $10 million to settle claims that it improperly recognized revenue and misled analysts and investors by not being truthful in press releases and conference calls. The regulator’s charges against Canada’s largest publicly traded drug concern stem from financial transactions made more than four years ago, involving its founder, two former CFOs, and a former controller. Biovail acknowledged the settlement without admitting to or denying the allegations. At the time, the company announced that it had demoted two individuals named in the SEC’s complaint.

At the time, the SEC also charged four current or former Biovail senior executives: former CFOs Brian Crombie and Kenneth G. Howling, former chairman and CEO Eugene Melnyk, and current controller John Miszuk.

Melnyk, who also owns the Ottawa Senators hockey team, retired from Biovail last year. Crombie, who was demoted from CFO to senior vice president for strategic development in 2004, left the company in May 2007. Howling and Miszuk were still with the company at the time of the SEC’s announcement, but were reassigned to nonofficer positions.

Last month, Melnyk dropped an unsuccessful plan to oust the drugmaker’s board of directors and elect his own team at Biovail’s shareholders meeting this month.

The SEC’s complaint alleged that present and former senior Biovail executives, obsessed with meeting quarterly and annual earnings guidance, repeatedly overstated earnings and hid losses in order to deceive investors and create the appearance of achieving earnings goals. When it ultimately became impossible to continue concealing the company’s inability to meet its own earnings guidance, Biovail actively misled investors and analysts about the reasons for the company’s poor performance, according to the SEC.

Mulligan currently serves on the boards of Ontario Power Generation Inc. and Resolve Business Outsourcing Income Fund. Her other community involvement has included serving as a trustee of the Ontario Science Centre, a governor of Appleby College, and a governor of the University of Waterloo.

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