In a securities case filed in the state of California, shareholders of a privately held biotechnology company brought suit against a pharmaceutical company that had acquired the biotechnology company in a stock-for-stock transaction.
In a securities case filed in the state of California, shareholders of a privately held biotechnology company brought suit against a pharmaceutical company that had acquired the biotechnology company in a stock-for-stock transaction. Counsel for the plaintiff retained Dr. Allan Kleidon, a senior vice president of Cornerstone Research, to assess damages suffered as a result of alleged misrepresentations made by the pharmaceutical company regarding the prospects for FDA approval of its flagship drug.
Dr. Kleidon presented his findings at arbitration.
Dr. Kleidon calculated damages based on the pharmaceutical company’s stock price declines associated with corrective disclosures related to the FDA approval. In an alternative analysis, Dr. Kleidon calculated rescission-based damages as the difference between the value of the pharmaceutical company’s securities issued to the plaintiffs at the time of the merger and their value later when the information regarding the misrepresentations was made public. Dr. Kleidon presented his findings at arbitration.
