Analyst Slams Biovail

Date: Friday, September 14, 2007
Author: HFN Daily Report

Contrary to the claims of pharmaceutical company Biovail, former Bank of America analyst David Maris says he is not cooperating with the company in any way in its campaign against a group of hedge funds.

After harassing Maris for over a year, even going to the point of having its lawyers hire private investigators to spy on Maris and his wife, Biovail recently dropped all litigation against Maris and Bank of America, paying a reported $2 million to cover their legal fees. The company said it would continue a suit against a group of hedge funds, however, and implied the settlement with Maris could turn up incriminating evidence on the funds.

Biovail claims hedge funds managed by such prestigious firms as SAC Capital, Pinacle Investment Advisors, Helios and Hallmark Funds conspired with analysts like Maris to spread false information about the company and drive down its stock price. The hedge funds then allegedly profited by shorting the company's stock.

The charges mirror those brought by Patrick Byrne, the eccentric chief executive officer of Overstock.com who blames his company's low share price on a conspiracy led by someone he calls a "Sith Lord." Like Overstock, Biovail has problems of a much more mundane nature involving its balance sheet that might also explain a sagging share price. In the case of Biovail, there have been declining quarterly revenues and investigations by regulators into possible accounting irregularities.

Biovail clearly implied Maris would be aiding its case, issuing a press release saying the settlement "is expected to be extremely helpful in Biovail's pursuit of its lawsuit" against the hedge funds. It even went so far as to mention "e-mails, correspondence, tape recordings and trading records" it expected Maris and Bank of America to hand over.

In response, Maris issued his own press release on Wednesday. He said while he was glad Biovail had dropped its lawsuit against him, he is not cooperating with the company and he has no obligation to do so under the settlement.

"Although Biovail is free to depose me, I don't believe my answers will assist the company in its cause," Maris said. "To the contrary, I am unaware of any conspiracy against Biovail and do not believe any such conspiracy ever existed."

The hedge fund firms involved have also denied any wrongdoing.