Shareholders sue Gentium board, Jazz Pharmaceuticals to halt deal
Shareholders of Gentium SpA filed a case against the company's board in a bid to halt Jazz Pharmaceuticals Plc from acquiring it, Bloomberg reported. The shareholders claimed that the deal, valued at $1 billion is "hopelessly flawed."
A biopharmaceutical firm, Gentium concentrates on discovering, researching and manufacturing therapies to treat and prevent a number of vascular diseases and cancer-related conditions. Jazz Pharmaceuticals, meanwhile, identifies, develops and commercializes products for narcolepsy, oncology, pain and psychiatry.
Jazz Pharmaceuticals was also sued by the shareholders who alleged that the terms of the tender offer from the company to buy Gentium at a price of $57 per share favored only the board of Gentium and Jazz, the report said.
A proposed class action or group lawsuit lodged in a Manhattan federal court today said Gentium's board and the company will get more than the $360 million from divesting their illiquid holdings. The investors said that the defendants did not honor their fiduciary duty to get the best possible price for the shares of Gentium. They shareholders also claimed that false and misleading documents were filed by the defendants with the US Securities and Exchange Commission, the report said.
Last month, Dublin-based Jazz agreed to acquire Gentium which holds headquarters in Villa Guardia, Italy. The tender offer is set to expire on January 22. Jazz manufactures Xyrem, a treatment for narcolepsy. Average estimates from eight analysts gathered by Bloomberg showed that sales of $567 million was expected to be generated from the narcolepsy drug in 2013.
Gentium was able to get approval in Europe in October for a drug that can treat an illness that could happen after stem cell transplants, a Bloomberg report on January 3 said. The report also cited estimates from analysts compiled by Bloomberg which said that Gentium's revenue may quadruple in the next three years.