‘Informal’ Letter About Ultragenyx Board Pay Was Pre-Suit Demand

An Ultragenyx Pharmaceutical Inc. shareholder’s “harmless letter” telling the drug company’s board it was overpaying itself counts as a rejected demand for an internal investigation, which dooms his lawsuit, a Delaware judge ruled Oct. 30.

The derivative suit targeted Ultragenyx’s eight non-employee directors. It challenged their $400,000 annual compensation, which allegedly far exceeds the median at comparable companies. By taking those excessive salaries, the board members were breaching their duties to the company, the suit claimed.

The case was filed in the Chancery Court by an individual investor, John Solak. He argued that director conflicts of interest stemming from the ...