Investor Objections Can't Halt Amgen's $1.2B Micromet Buy (Law360)

By Lance Duroni

A Delaware judge refused to block Amgen Inc.'s $1.16 billion purchase of cancer drug specialist Micromet Inc. on Wednesday, rejecting claims in a class action that the offer was deceptive and shortchanged Micromet investors.

In February, several Micromet shareholders sued in Delaware Chancery Court, alleging the company's board jumped on the $11 per share deal without properly seeking a better offer and failed to disclose material aspects of the merger and potential conflicts involving Micromet's financial adviser, Goldman Sachs & Co.

In a 32-page opinion, Vice Chancellor Donald F. Parsons said the sale process was reasonable and that shareholders had received adequate information to make an decision on the deal.

"I conclude that plaintiffs have failed to show a reasonable likelihood that they will succeed in proving the challenged transaction is unfair or that the directors breached their fiduciary duties of care or loyalty, including their disclosure obligations, in approving the transaction," the judge said.

Vice Chancellor Parsons found the Micromet board's quick test of the market for the Rockville, Md.-based company was sufficient given the short list of potential buyers, who all had a familiarity with Micromet's prized product — a clinical-stage tumor treatment called blinatumomab — and declined to pursue a deal.

The judge likewise rejected the shareholders' argument that the board should have contacted private equity buyers in addition to parties in the biotechnology industry.

"Micromet needed not only capital, but technical expertise, to realize the full potential of its product pipeline," he said

The shareholders also failed to persuade the judge that Micromet needed to disclose the fees it paid to Goldman or the financial adviser's $336 million stake in Thousand Oaks, Calif.-based Amgen.

Vice Chancellor Parsons pointed out that Goldman held similar or larger stakes in two other potential bidders and public documents on the deal disclosed that Goldman was free to trade in either company's securities. Concerned shareholders could then ascertain Goldman's holdings from the investment bank's own publicly-filed documents, he said.

"Plaintiffs did not present any more detailed evidence from which the court could reasonably infer that the size and nature of Goldman's Amgen holdings in this case would be likely to impede its ability effectively and loyally to perform its assignment to Micromet," the judge said.

The decision came only a day before Amgen's tender offer was set to expire. The $11 per share bid represents a 33 percent premium over Micromet's stock price before the merger was announced.

Representatives for Amgen and Micromet did not immediately respond to requests for comment Thursday.

When the deal was announced on Jan. 26, Micromet CEO Christian Itin, who is a defendant in the suit, said the deal would be good for both companies, their stockholders and cancer patients.

"Amgen's extensive resources and experience in the development and commercialization of biologics promise to speed blinatumomab's path to market, expand its development across a broader range of B-cell malignancies and maximize the full potential of our novel BiTE technology," he said.

BiTE antibodies — a category that includes blinatumomab — are designed to direct the body's cell-destroying T cells against tumor cells, and represent a new therapeutic approach to cancer therapy, according to Amgen.

The shareholders are represented by Rosenthal Monhait & Goddess PA, Rigrodsky & Long PA, Block & Leviton LLP, Levi & Korsinsky LLP, Binkow & Goldberg LLP and The Weiser Law Firm PC.

Micromet and its board are represented by Morris Nichols Arsht & Tunnell LLP and Cooley LLP.

Amgen is represented by Richards Layton & Finger PA and Sullivan & Cromwell LLP.

The case is In re: Micromet Inc. Shareholders Litigation, case number 7197, in the Delaware Court of Chancery.