Inspire-To-Merck Opthamalogicals Deal To Be Subject Of “Fiduciary Breach” Litigation?

According to published reports, a New York securities plaintiffs’ side firm is looking into whether Merck secured an unfairly-low “yard sale” price — on Inspire Pharma — yesterday, viz:

. . . .The investigation concerns whether the Inspire Board of Directors breached their fiduciary duties to Inspire stockholders by failing to adequately shop the Company before entering into this transaction and whether Merck is underpaying for Inspire shares. According to Thomson/First Call, at least one analyst set a price target of $10.00 for Inspire shares. . . .

[Ed. Note — from another published source:] . . . .Even with recent setbacks, the company had solid prospects ahead and sold itself to Merck at a discount, said analyst Liana Moussatos of Wedbush PacGrow Life Sciences in San Francisco.

“It’s not like they were dying,” she said. “They’ve had bad luck recently and investor sentiment didn’t support a bigger premium, I guess. . . .”

In addition, recall that we’ve been discussing the intersections between these two firms, and Warburg Pincus, with Fred Hassan.

As such, I think there may also be concerns about the “relatedness” factors, here — seems the chief agent for the Inspire Pharma sellers (Warburg) may have some competing bets (Bausch + Lomb’s Zylet® franchise, which is a loteprednol etabonate and tobramycin ophthalmic suspension) that Warburg arguably wishes to protect, in the longer term (as Warburg Pincus owns essentially all of Bausch + Lomb, as opposed to 28 percent of Inspire). [Inspire’s chief product is branded as Azasite®; chemical name: azithromycin — see images at right; click to enlarge.] I think that might also be styled as a conflicting interest claim, under applicable state corporate law. We shall see — and as ever, we shall keep you posted.


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