CICCOTELLI v. FIVE PRIME THERAPEUTICS, INC. et al

On March 30, 2021, Alex Ciccotelli (the “Plaintiff”), represented by Joshua H. Grabar of Grabar Law Office, filed a civil action against Five Prime Therapeutics, Inc. (“Five Prime” or the “Company”), William R. Ringo, Franklin M. Berger, Kapil Dhingra, Peder K Jensen and Others (collectively, “Defendants”), seeking injunctive and declaratory relief along with damages for allegedly failing to disclose material information regarding the proposed merger, and defendants alleged violation of Sections 14(e), 14(d), and 20(a) of the Securities Exchange Act of 1934. This case was filed in U.S. District Court in the Eastern District of Pennsylvania with Judge John M. Younge presiding.

In this complaint, the Plaintiff alleged that “On March 4, 2021, Five Prime entered into an agreement (the “Merger Agreement”) to be acquired by Amgen Inc. (“Parent”) and Franklin Acquisition Sub, Inc. (“Merger Sub”) (together, “Amgen”) (the “Proposed Merger”). Under the terms of the Merger Agreement, Merger Sub commenced a tender offer to purchase all of Five Prime’s outstanding common stock for $38.00 per share (the “Tender Offer”), which is set to expire on April 15, 2021. On March 18, 2021, defendants filed a recommendation statement (the “Recommendation Statement”) with the U.S. Securities and Exchange Commission (the “SEC”). As alleged herein, the Recommendation Statement fails to disclose material information regarding the Proposed Merger, and defendants violated Sections 14(e), 14(d), and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”).”

The Plaintiff further alleged that “The Recommendation Statement fails to disclose material information regarding the financial analyses performed by Lazard Frères & Co. LLC (“Lazard”), Five Prime’s financial advisor.” Also, “The Recommendation Statement fails to disclose material information regarding Five Prime’s financial projections and potential conflict of interests.” The Plaintiff also alleged that “The disclosure of projected financial information is material because it provides stockholders with a basis to project the future financial performance of a company, and allows stockholders to better understand the financial analyses performed by a company’s financial advisor in support of its fairness opinion.”

There are three claims for relief laid down by the Plaintiff. The first and second claim against all Defendants is for violation of Section 14(e) and 14(d) of the Exchange Act wherein it has been alleged that the Defendants knowingly or with deliberate recklessness omitted the material information set forth above, causing statements therein to be materially incomplete and misleading. The third claim against the Individual Defendants and Amgen is for Violation of Section 20(a) of the Exchange Act wherein the Plaintiff claims that each of the Individual Defendants and Amgen were provided with or had unlimited access to copies of the Recommendation Statement alleged by plaintiff to be misleading prior to and/or shortly after these statements were issued and had the ability to prevent the issuance of the statements or cause them to be corrected.

In the prayer for relief the plaintiff has requested the court to pass an order for injunctive relief and in the alternative, if the defendants consummate the Proposed Transaction, to rescind it and award rescissory damages. The Plaintiff further requested the court to direct the Defendants to file true statements of material facts and declare the violation of laws by the Defendant as claimed in the complaint and to award costs of litigation including reasonable allowance for attorneys’ and experts’ fees.

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