On Monday a case was filed in the Southern District of New York by David Kaufmann against Arena Pharmaceuticals and its associates. The case is regarding violations of sections 14(a) and 20(a) of the Securities Exchange Act of 1934 arising out of the company board’s attempt to sell the company to Pfizer, Inc. through its wholly-owned subsidiary Antioch Merger Sub, Inc.
Other lawsuits have been filed arising from the same deal.
Arena Pharmaceuticals is a clinical stage biopharmaceutical company, focusing on gastroenterology, dermatology, and cardiovascular fields. Previous work includes treatments for Crohn’s disease, alopecia, esophagitis and other conditions. The plaintiff accuses Arena of failure to file a complete disclosure regarding the management-prepared financial forecasts, specifically by omitting the Risk adjusted Total Revenue, the EBIT, and the unlevered free cash flow, which are used to calculate the stability of the potential merger as well as the lively revenue growth expected from the transaction.
The plaintiff is suing for violations of Section 14(a) of the Exchange Act and Rule 14a-9 and requests a preliminary and permanent injunction regarding proceeding with the merger until the absent information is provided, and requesting in the alternative if the transaction is consummated requesting rescission of the merger. Plaintiff is represented by Rowley Law PLLC.