Plaintiff Catherine Coffman filed suit against Adamas Pharmaceuticals, Inc. and its Board of Directors on Friday in the Northern District of California. The complaint was filed for alleged violations of Federal Securities Laws, specifically the Securities Exchange Act of 1934 (the Exchange Act); it is one of many in a series against Adamas after a recent merger announcement.
Adamas is a pharmaceutical company that “focuses on the discovery, development, and commercialization of medicines for patients suffering from chronic neurologic disorders.” The company had a particularly successful second quarter of 2021, with defendant McFarlane commenting that the strong performance was due to “a robust increase in demand” which “set to fuel future growth.”
The defendants held a press release in early October wherein they announced their intent to merge the company into Supernus Pharmaceuticals, Inc. Coffman asserts that this proposed transaction positions Adamas insiders as the primary beneficiaries rather than Adamas’ stockholders. Specifically, she details that Adamas’ executives and board “have secured unique benefits for themselves from the Proposed Transaction not available to Plaintiff and the public stockholders of Adamas.”
In addition to the discrepancies the plaintiff has with the tender offer, she claims that the defendants filed a recommendation statement with the SEC that was “materially incomplete and misleading.” In order for the stockholders to make an educated and informed decision regarding the Proposed Transaction, the statement must be revised to contain the omitted information, which includes financial projections, financial analyses, and company insiders’ potential conflicts of interest.
The complaint cites multiple violations of the Exchange Act, leading the plaintiff to seek preliminary, permanent, and injunctive relief. The plaintiff is seeking to enjoin the expiration of the tender offer in the Proposed Transaction. In the event that the Proposed Transaction is consummated prior to any adjustments, Coffman is seeking rescissory damages. Coffman also seeks litigation fees and any other relief deemed proper by the court.
The plaintiff is represented by WeissLaw LLP.
