DUSA Pharmaceuticals (NASDAQ: DUSA) will be investigated by Block & Leviton LLP for possible breaches of fiduciary duties by the Board of Directors in relation to the proposed acquisition by Sun Pharmaceutical Industries in a cash transaction of around $8.00 per share. The terms of the acquisition were announced on November 8, 2012. This places the value of the acquisition at $230 million. According to the terms of the deal, a subsidiary of Sun Pharmaceutical will make a tender offer for all the outstanding common stock of DUSA.
Sun Pharma has said that DUSA’s FDA-approved products and dermatological treatment devices offered good value. DUSA’s CEO has also welcomed the acquisition, as it would ensure the growth of DUSA’s products. The acquisition is subject to regulatory approval.
The acquisition announcement was followed by an announcement from Harwood Feffer LLP stating that the firm is investigating potential claims against the board of DUSA in relation to the acquisition agreement. The investigations are expected to center around analyst valuation of DUSA, as one analyst had placed a target value of $9.50 per DUSA share. The investigations will enquire into whether the DUSA board has done all it can to increase shareholder value.
DUSA is an 86-person life sciences firm that focuses on dermatology. DUSA’s main product is Levulan PDT. Levulan PDT is used in the treatment and prevention of precancerous lesions called actinic keratosis, the most frequently diagnosed dermatological disease in the U.S.
The treatment involves a laser device, BLU-U Light, and a topical drug that increases the effectiveness of the laser device. The Levulan Kerastick is activated and rubbed on the face of the patient, before the laser circles it.
About Sun Pharma
Sun Pharma is headquartered in India and is a global specialty pharmaceutical company. Sun manufactures and markets both branded and generic pharmaceutical formulations across the world. Sun has expertise in product development, dosage forms, process chemistry and manufacturing of complex API. Sun has products for a wide range of health issues such as diabetes, skin diseases, psychiatric issues, cardiac problems and orthopedic issues.
DUSA shares rose 37.7% to $7.96, near the $8.00 offer made by Sun. The $8.00 per share cash price was a 38% hike over DUSA’s closing share price on Wednesday, the day before the offer was finalized.
While DUSA shares have seen a substantial increase in prices, other shares did not fare so well. For instance, Genomic Health (NASDAQ: GHDX) lost 17.1% of its value to close at $26.42, with 1.6 million shares being traded. Also, Cyclacel Pharmaceuticals (NASDAQ: CYCC) lost 14.1% of its value when it closed at $5.78 with 258,219 shares changing hands. OraSure Technologies (NASDAQ: OSUR) declined by 12.1% to finish at $7.61 with a total of 4.4 million shares being traded.
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