The state’s justices upheld a decision dismissing the case “on the basis of and for the reasons stated” by Vice Chancellor Morgan T. Zurn, who threw the case out of Delaware’s Chancery Court in August. The high court’s one-page April 8 ruling doesn’t contain any additional reasoning.
Zurn rejected claims by former Tesaro shareholders, who accused its former directors of rushing an underpriced deal—with Citi’s help—so New Enterprise could exit its longtime investment on terms justifying exorbitant fees it planned to charge on a new fund it was raising.
Although the suit had much to say about New Enterprise and its connections to Tesaro’s leadership, none of the allegations established self-dealing or showed other conflicts of interest that would have subjected the transaction to enhanced judicial scrutiny, Zurn said Aug. 31.
The proposed class action, filed in 2020, didn’t target Glaxo or Tesaro, which merged into the drug giant’s oncology division after the 2019 deal. It accused the former company leaders and Citi of succumbing to conflicts of interest based on their ties to New Enterprise and Glaxo, respectively.
The merger allegedly gave Glaxo the chance to commercialize Zejula, a potential “blockbuster” ovarian cancer drug being developed by Tesaro.
The ex-board was represented by Abrams & Bayliss LLP and Ropes & Gray LLP. Citi was represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP. New Enterprise was represented by Chipman Brown Cicero & Cole LLP and Holland & Knight LLP.
The investors were represented by Friedlander & Gorris PA; Cooch & Taylor PA; Robbins Geller Rudman & Dowd LLP; and Bronstein, Gewirtz & Grossman LLC.
The case is Kihm v. Mott, Del., No. 309, 2021, 4/8/22.
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