Shareholders contend that the board did not show that it couldn’t find a better offer.
A group of Micromet shareholders yesterday asked a Delaware Court of Chancery judge to stop the company’s pending $1.16 billion acquisition by Amgen. They argued that their company’s board had not adequately shown it could not find a better offer than the one it accepted from the biotech giant.
As reported by the Associated Press, the shareholder group clashed in court with lawyers for Micromet and Amgen over whether Micromet could have fetched more than the $11 per share offered by Amgen. Vice Chancellor Donald F. Parsons Jr. issued no immediate decision after hearing more than two hours of arguments by both sides. Adding to the urgency of the case is the fact Amgen’s tender offer for Micromet shares expires at midnight Thursday.
The court case, Passes v. Micromet, Inc., is one of eight class action lawsuits filed by Micromet shareholders in Delaware and Maryland courts since Amgen’s plan to acquire Micromet was announced January 26. Micromet is based in Rockville, MD; Amgen, in Thousand Oaks, CA.
“We believe Amgen is paying a full and attractive price to Micromet shareholders,” Amgen spokeswoman Mary Klem told the Ventura County Star of Camarillo, CA. Amgen has noted that its offer price for Micromet was 33% above the closing price for company shares the day before both companies announced the acquisition. Micromet’s closing share price has inched up since to $10.95 on February 8 and $10.99 on February 27.
In a similar case pending in U.S. District Court in Maryland, shareholder Charles E. Raad alleged, according to a copy of the court complaint, that “the consideration to be paid to the class members is unfair and grossly inadequate,” contending in part that “the intrinsic value of the stock of Micromet is materially in excess of $11 per share, giving due consideration to the possibilities of growth and profitability of Micromet in light of its business, earnings, and earnings power, present and future.” Raad also alleged that the $11 share price offered by Amgen was “fixed arbitrarily by certain insiders and Amgen” as part of its eventual acquisition plan.
Raad contended that Micromet’s board breached its fiduciary duty to shareholders by blocking other potential buyers from accessing confidential information necessary for them to make a bid; by allowing Amgen four business days to match any competing proposal that could’ve been made; and agreeing to pay Amgen a $40 million termination fee.
Micromet has sided with its prospective new owner. The Amgen-Micromet merger cleared a regulatory hurdle on February 14 when the U.S. Federal trade Commission terminated, three days early, the waiting period under the amended Hart-Scott-Rodino Antitrust Improvement Act of 1976.
Micromet’s lead candidate blinatumomab is a bispecific T-cell engager (BiTE) undergoing five trials. Data released in December showed 70% of the hardest-to-treat patients with relapsed or refractory lymphoblastic leukemia achieved a complete response. “What’s been shown is that you can harness the power of cytotoxic T lymphocytes to kill tumor cells. So you have to find the right targets, and then demonstrate in the clinic that those targets actually can be destroyed without undue adverse effects,” Roger Perlmutter, evp, R&D at Amgen, said during a January 26 conference call with analysts. “I think the opportunity that exists there with respect to that platform is simple. It’s a better way to kill tumor cells, and now we have to go about showing that we can kill the right cells in patients suffering from malignancy.”
Last July Amgen entered into a collaboration with Micromet covering research into BiTE antibodies against three undisclosed solid tumor targets as well as development and commercialization of compounds related to two of these three targets. Amgen paid Micromet €10 million (about $13.4 million) up front and agreed to another roughly €695 million (about $932 million) in clinical and commercial milestone payments plus up to double-digit royalties on worldwide net sales, excluding reimbursement of R&D costs. The initial development plan contemplated €25 million ($33.5 million) in funding of Micromet R&D activities if two BiTE antibodies are advanced to IND.
For the story from Associated Press, click here.
For the story from Ventura County Star, click here.