Biovail founder Eugene Melnyk says he's unhappy with the current management of the company and considering his options, which include selling his stake in the drugmaker (TSX:BVF) or joining with partners to take Biovail private.

In a letter to Biovail's board of directors released last week, Melnyk said he has met with members of the current board to discuss his concerns.

"I indicated my serious concerns about the ineffective exploitation of the depth and value of the company's world-class drug delivery technology," Melnyk wrote in the letter.

"I requested them to consider various actions to enhance shareholder value."

But, having had no response, Melnyk said he was formally informing the board that he has decided to explore his options.

Biovail shares gained 78 cents or about six per cent to close at $14.39 in trading on the Toronto Stock Exchange after the letter was released. That's about half their high of $28.78 in May last year and down from a late-2001 peak of $91.

Biovail acknowledged it received the letter.

"Biovail's board of directors remains committed to enhancing shareholder value, and will carefully review any and all serious proposals put forth by Mr. Melnyk, or any other shareholder or potential investor," the company said in statement.

Melnyk holds a roughly 11-per-cent stake in the company, or about 18.2 million shares of Biovail.

He is still the company's largest shareholder, but no longer has a management role in the Toronto-area company. He used his personal fortune, based largely on Biovail's success, to buy the Ottawa Senators several years ago and remains its owner.

Last May, Ontario's securities regulator barred Melnyk from being a director of the company for one year in a settlement that included a $1-million payment by the businessman - who still insisted he'd done nothing wrong.

The Ontario Securities Commission alleged in July 2006 that Melnyk had failed to file trading reports and other required disclosures. He has always denied the allegations, saying he did not have control over the stock, which was in a trust for his family.

More recently, Biovail said that a U.S. federal grand jury is investigating activities surrounding the 2003 launch of Cardizem LA, a major initiative while Melnyk was Biovail's chief executive and chairman, and civil or criminal charges could result.

Biovail said it was notified of the probe by the U.S. attorney's office in Boston.

It also said the investigation "could lead to possible civil or criminal charges against the corporation."