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By Jacob Rund
A Juno Therapeutics shareholder is seeking access to the biotechnology company’s records to determine whether its $9 billion sale to Celgene Corp. involved “wrongdoing or mismanagement” by board members.
The investor wants access to, among other items, the minutes from every Juno board meeting since Jan. 1, 2017, material provided by any other potential acquirers, financial summaries given to the board, and all materials given to or created by the board about the independence of its directors.
Investors often use records complaints like this as a stepping stone for subsequent litigation against a company’s directors, and Delaware courts have set a low bar for proving the need for obtaining company documents.
The investor, Young Hwan Kim, filed a lawsuit March 2 in Delaware Chancery Court that alleges Juno’s pending buyout may be driven by the self interests of its board and of Celgene — the company’s largest stockholder.
“Based on Celgene’s substantial ownership of Juno and its ongoing collaboration with the company’s management,” it appears that “no other strategic alternatives,” including with other potential partners, were genuinely entertained, the complaint said.
Kim wants more information about the transaction to decide if claims of breaches of fiduciary duty by Juno’s directors should be filed.
Summit, N.J.-based Celgene announced the all-cash deal in January, giving it control of Juno’s cancer treatment portfolio. Celgene, in a written statement March 5, said its tender offer for Juno shares has expired, and the deal should become final “in the coming days.”
The public information about the acquisition provides a “credible basis” to suspect wrongdoing that warrants investigation, the complaint said.
However, the investor claims the available data isn’t sufficient for the purposes of looking at possible issues with the deal, or at the independence of Juno’s directors.
The lawsuit cites the 2015 nomination of a Celgene executive to Juno’s board as one reason to suspect the acquisition may not have been fair.
Seattle-based Juno didn’t immediately respond to a request for comment.
The case is Kim v. Juno Therapeutics Inc. , Del. Ch., No. 2018-0140, complaint filed 3/2/18 .
To contact the reporter on this story: Jacob Rund in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Yin Wilczek at email@example.com
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