Case 1:21-cv-02238 Document 1 Filed 03/15/21 Page 1 of 17
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF NEW YORK
`
`
`Plaintiff,
`
`
`
`
`
`
`
`
`
`
`
`
`Civil Action No.
`
`COMPLAINT FOR VIOLATIONS
`OF THE FEDERAL SECURITIES
`LAWS
`
`
`JURY TRIAL DEMANDED
`
`
` JONATHAN RAUL,
`
`
`
`v.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`ALEXION PHARMACEUTICALS,
`INC., DAVID R. BRENNAN,
`CHRISTOPHER J. COUGHLIN,
`DEBORAH DUNSIRE, PAUL A.
`FRIEDMAN, LUDWIG HANTSON,
`JOHN T. MOLLEN, FRANCOIS
`NADER, JUDITH A. REINSDORF, and
`ANDREAS RUMMELT,
`
`
`
`
`Defendants.
`
`
`
`
`
`
`
`
`
`
`Plaintiff Johnathan Raul (“Plaintiff”) by and through his undersigned attorneys, brings
`
`this action on behalf of himself, and alleges the following based upon personal knowledge as to
`
`those allegations concerning Plaintiff and, as to all other matters, upon the investigation of
`
`counsel, which includes, without limitation: (a) review and analysis of public filings made by
`
`Alexion Pharmaceuticals, Inc. (“Alexion” or the “Company”) and other related parties and non-
`
`parties with the United States Securities and Exchange Commission (“SEC”); (b) review and
`
`analysis of press releases and other publications disseminated by certain of the Defendants
`
`(defined below) and other related non-parties; (c) review of news articles, shareholder
`
`communications, and postings on the Company’s website concerning the Company’s public
`
`

`

`Case 1:21-cv-02238 Document 1 Filed 03/15/21 Page 2 of 17
`
`statements; and (d) review of other publicly available information concerning Alexion and the
`
`Defendants.
`
`SUMMARY OF THE ACTION
`
`1.
`
`This is an action brought by Plaintiff against Alexion and the Company’s Board
`
`of Directors (the “Board” or the “Individual Defendants”) for their violations of Section 14(a)
`
`and 20(a) of the Securities Exchange Act of 1934, 15.U.S.C. §§ 78n(a), 78t(a), and SEC Rule
`
`14a-9, 17 C.F.R. 240.14a-9, in connection with the proposed sale of the Company to
`
`AstraZeneca PLC (“Parent”), Delta Omega Sub Holdings Inc. (“Bidco”), Delta Omega Sub
`
`Holdings Inc. 1 (“Merger Sub I”), and Delta Omega Sub Holdings LLC 2 (“Merger Sub II,” and
`
`together with Parent, Bidco, and Merger Sub I, “AstraZeneca”). (the “Proposed Transaction”).
`
`2.
`
`On December 12, 2020, the Company entered into an Agreement and Plan of
`
`Merger (the “Merger Agreement”) with AstraZeneca. Pursuant to the terms of the Merger
`
`Agreement the Company’s shareholders will receive 2.1243 American depository shares of
`
`Parent and $60.00 in cash per share of Alexion owned (the “Merger Consideration”).
`
`3.
`
`On February 19, 2021, in order to convince the Company’s shareholders to vote
`
`in favor of the Proposed Transaction, the Board authorized the filing of a materially incomplete
`
`and misleading registration statement with the SEC on Form F-4 (the “Registration Statement”),
`
`in violation of Sections 14(a) and 20(a) of the Exchange Act.
`
`4.
`
`For these reasons, and as set forth in detail herein, Plaintiff asserts claims against
`
`Alexion and the Board for violations of Sections 14(a) and 20(a) of the Exchange Act and Rule
`
`14a-9. Plaintiff seeks to enjoin Defendants from taking any steps to consummate the Proposed
`
`Transaction unless and until the material information discussed below is disclosed to Alexion
`
`shareholders before the vote on the Proposed Transaction or, in the event the Proposed
`
`
`
`2
`
`

`

`Case 1:21-cv-02238 Document 1 Filed 03/15/21 Page 3 of 17
`
`Transaction is consummated, recover damages resulting from the Defendants’ violations of the
`
`Exchange Act.
`
`JURISDICTION AND VENUE
`
`5.
`
`This Court has subject matter jurisdiction over all claims asserted herein pursuant
`
`to Section 27 of the Exchange Act, 15 U.S.C § 78aa, and 28 U.S.C. § 1331, as Plaintiff alleges
`
`violations of Sections 14(a) and 20(a) of the Exchange Act.
`
`6.
`
`This Court has personal jurisdiction over all of the Defendants because each is
`
`either a corporation that conducts business in, solicits shareholders in, and/or maintains
`
`operations within, this District, or is an individual who is either present in this District for
`
`jurisdictional purposes or has sufficient minimum contacts with this District so as to make the
`
`exercise of jurisdiction by this Court permissible under traditional notions of fair play and
`
`substantial justice.
`
`7.
`
`Venue is proper under 28 U.S.C. § 1391 because a substantial portion of the
`
`transactions and wrongs complained of herein occurred in this District.
`
`THE PARTIES
`
`8.
`
`9.
`
`Plaintiff is, and has been at all times relevant hereto, the owner of Alexion shares.
`
`Defendant Alexion is incorporated under the laws of Delaware and has its
`
`principal executive offices located at 121 Seaport Boulevard, Boston, Massachusetts 02210. The
`
`Company’s common stock trades on the NASDAQ under the symbol “ALXN.”
`
`10.
`
`Defendant David R. Brennan (“Brennan”) is and has been the Chairman of the
`
`Board of Alexion at all times during the relevant time period.
`
`11.
`
`Defendant Christopher J. Coughlin (“Coughlin”) is and has been a director of
`
`Alexion at all times during the relevant time period.
`
`
`
`3
`
`

`

`Case 1:21-cv-02238 Document 1 Filed 03/15/21 Page 4 of 17
`
`12.
`
`Defendant Deborah Dunsire (“Dunsire”) is and has been a director of Alexion at
`
`all times during the relevant time period.
`
`13.
`
`Defendant Paul A. Friedman (“Friedman”) is and has been a director of Alexion
`
`at all times during the relevant time period.
`
`14.
`
`Ludwig Hantson (“Hantson”) is and has been the Chief Executive Officer and a
`
`director of Alexion at all times during the relevant time period.
`
`15.
`
`Defendant John T. Mollen (“Mollen”) is and has been a director of Alexion at all
`
`times during the relevant time period.
`
`16.
`
`Defendant Francois Nader (“Nader”) is and has been a director of Alexion at all
`
`times during the relevant time period.
`
`17.
`
`Defendant Judith A. Reinsdorf (“Reinsdorf”) is and has been a director of Alexion
`
`at all times during the relevant time period.
`
`18.
`
`Defendant Andreas Rummelt (“Rummelt”) is and has been a director of Alexion
`
`at all times during the relevant time period.
`
`19.
`
`Defendants Brennan, Coughlin, Dunsire, Friedman, Hantson, Mollen, Nader,
`
`Reinsdorf, and Rummelt are collectively referred to herein as the “Individual Defendants.”
`
`20.
`
`The Individual Defendants, along with Defendant Alexion, are collectively
`
`referred to herein as “Defendants.”
`
`SUBSTANTIVE ALLEGATIONS
`
`Background of the Company
`
`21.
`
`Alexion is a global biopharmaceutical company focused on serving patients and
`
`families affected by rare diseases and devastating conditions through the discovery, development
`
`and commercialization of medicines. Alexion has developed and commercializes two approved
`
`
`
`4
`
`

`

`Case 1:21-cv-02238 Document 1 Filed 03/15/21 Page 5 of 17
`
`complement inhibitors to treat patients with paroxysmal nocturnal hemoglobinuria (PNH) and
`
`atypical hemolytic uremic syndrome (aHUS), as well as the first and only approved complement
`
`inhibitor to treat anti-acetylcholine receptor (AChR) antibody-positive generalized myasthenia
`
`gravis (gMG) and neuromyelitis optica spectrum disorder (NMOSD) in patients who are anti-
`
`aquaporin-4 (AQP4) antibody positive. Alexion also has two enzyme replacement therapies and
`
`the first and only approved therapies for patients with life-threatening and ultra-rare metabolic
`
`disorders, hypophosphatasia (HPP) and lysosomal acid lipase deficiency (LAL-D) as well as the
`
`first and only approved Factor Xa inhibitor reversal agent.
`
`22.
`
`In addition to its marketed therapies, the Company has a diverse pipeline resulting
`
`from internal innovation and business development. The Company is developing several mid-to-
`
`late-stage therapies, including a copper-binding agent for Wilson disease, an anti-neonatal Fc
`
`receptor (FcRn) antibody for rare Immunoglobulin G (IgG)-mediated diseases and an oral Factor
`
`D inhibitor as well as several early-stage therapies, including one for light chain (AL)
`
`amyloidosis, a second oral Factor D inhibitor and a third complement inhibitor.
`
`The Company Announces the Proposed Transaction
`
`23.
`
`On December 12, 2020, the Company jointly issued a press release announcing
`
`the Proposed Transaction. The press release stated in part:
`
`AstraZeneca and Alexion Pharmaceuticals, Inc. (Alexion) have entered into a
`definitive agreement for AstraZeneca to acquire Alexion.
`
`Alexion shareholders will receive $60 in cash and 2.1243 AstraZeneca
`American Depositary Shares (ADSs) (each ADS representing one-half of one
`(1/2) ordinary share of AstraZeneca, as evidenced by American Depositary
`Receipts (ADRs)) for each Alexion share. Based on AstraZeneca's reference
`average ADR price of $54.14, this implies total consideration to Alexion
`shareholders of $39bn or $175 per share.
`
`
`
`5
`
`

`

`Case 1:21-cv-02238 Document 1 Filed 03/15/21 Page 6 of 17
`
`The boards of directors of both companies have unanimously approved the
`acquisition. Subject to receipt of regulatory clearances and approval by
`shareholders of both companies, the acquisition is expected to close in Q3
`2021, and upon completion, Alexion shareholders will own c.15% of the
`combined company.
`
`Pascal Soriot, Chief Executive Officer, AstraZeneca, said: "Alexion has
`established itself as a leader in complement biology, bringing life-changing
`benefits to patients with rare diseases. This acquisition allows us to enhance
`our presence in immunology. We look forward to welcoming our new
`colleagues at Alexion so that we can together build on our combined expertise
`in immunology and precision medicines to drive innovation that delivers life-
`changing medicines for more patients."
`
`Ludwig Hantson, Ph.D., Chief Executive Officer, Alexion, said: “For nearly
`30 years Alexion has worked to develop and deliver transformative medicines
`to patients around the world with rare and devastating diseases. I am
`incredibly proud of what our organisation has accomplished and am grateful
`to our employees for their contributions. This transaction marks the start of an
`exciting new chapter for Alexion. We bring to AstraZeneca a strong portfolio,
`innovative rare disease pipeline, a talented global workforce and strong
`manufacturing capabilities in biologics. We remain committed to continuing
`to serve the patients who rely on our medicines and firmly believe the
`combined organisation will be well positioned to accelerate innovation and
`deliver enhanced value for our shareholders, patients and the rare disease
`
`*
`
`*
`
`*
`
`
`Details of the acquisition
`
`Key terms
`
`The acquisition will be undertaken through a US statutory merger in which
`Alexion shareholders will receive $60 in cash and 2.1243 new AstraZeneca
`ADSs listed on the Nasdaq exchange for each of their Alexion shares. The
`cash and ADS consideration represents an c.45% premium to Alexion
`shareholders based on the closing stock price of Alexion on 11 December
`2020 and a c.43% premium, based on the 30-day volume-weighted average
`closing stock price of $122.04 before this announcement. If they elect,
`Alexion shareholders may receive their allocation of AstraZeneca ADSs in
`the form of a corresponding number of ordinary shares of AstraZeneca in
`addition to the cash consideration.
`
`Based on AstraZeneca's reference average ADR price of $54.14, this implies
`total consideration to Alexion shareholders of $39bn or $175 per share.
`
`
`
`6
`
`

`

`Case 1:21-cv-02238 Document 1 Filed 03/15/21 Page 7 of 17
`
`Financing
`
`To support the financing of the offer consideration, AstraZeneca has entered
`into a new committed $17.5bn bridge-financing facility, provided by Morgan
`Stanley, J.P. Morgan Securities plc and Goldman Sachs. The bridge-financing
`facility is available for an initial term of 12 months from the earlier of the
`date of completion of the acquisition and 12 December 2021 with up to two
`six-month extensions available at the discretion of AstraZeneca. The initial
`bridge financing facility is intended to cover the financing of the cash portion
`of the acquisition consideration and associated acquisition costs and to
`refinance the existing term loan and revolving credit facilities of Alexion. In
`due course, AstraZeneca intends to refinance the initial bridge-financing
`facility through a combination of new medium-term bank loan facilities, debt-
`capital market issuances and business cash flows.
`
`The acquisition is expected to significantly enhance cash generation, which
`will support rapid debt reduction and overall deleveraging. AstraZeneca
`remains committed to maintaining a strong investment-grade credit rating.
`The dividend policy remains unchanged with a commitment to a progressive
`dividend policy; dividend cover is expected to be materially enhanced as a
`result of the acquisition.
`
`Further information on synergies
`
`The acquisition is expected to realise recurring run-rate pre-tax synergies of
`c.$500m per year from the combined Group, generated from commercial and
`manufacturing efficiencies as well as savings in central costs, with full run-
`rate expected to be achieved by end of the third year following completion of
`the acquisition.
`
`To realise the total synergies, AstraZeneca expects to incur one-time cash
`costs of c.$650m, during the first three years following completion.
`
`Management and employees
`
`Members of Alexion's current senior management team will lead the future
`rare-disease activities. Under the terms of the acquisition agreement,
`AstraZeneca has agreed that for 12 months following closing, it will provide
`the Alexion employees with the same level of salary as such employees had
`before closing, incentive compensation opportunities that are in the aggregate
`no less favourable than those provided before closing and substantially
`comparable benefits to those provided before closing.
`
`Governance
`
`
`
`7
`
`

`

`Case 1:21-cv-02238 Document 1 Filed 03/15/21 Page 8 of 17
`
`The companies will mutually agree on two individuals from the Alexion
`board of directors who will join the AstraZeneca board as directors upon
`closing of the acquisition.
`
`Closing conditions
`
`Closing of the acquisition is subject to approval by AstraZeneca and Alexion
`shareholders, certain regulatory approvals, approval of the new AstraZeneca
`shares for listing with the Financial Conduct Authority and to trading on the
`London Stock Exchange, and other customary closing conditions.
`
`The acquisition is a Class 1 transaction for AstraZeneca and as such, will
`require the approval of its shareholders to comply with the UK Listing Rules.
`A shareholder circular, together with notice of the relevant shareholder
`meeting, will be distributed to shareholders in the first half of 2021. The
`Alexion proxy statement is also expected to be published in the first half of
`2021.
`
`Subject to the satisfaction of the closing conditions to the proposed
`acquisition, the companies expect the acquisition to close in Q3 2021.
`
`Termination
`
`The acquisition terms provide that Alexion will be liable to pay a break fee of
`up to $1.2bn to AstraZeneca in certain specified circumstances (including a
`change of Alexion’s board recommendation or completion of an alternative
`acquisition). AstraZeneca will also be required to pay Alexion a break fee of
`$1.4bn
`in certain specified circumstances,
`including a change of
`AstraZeneca’s board recommendation.
`
`Recommendation
`
`The boards of directors of both Alexion and AstraZeneca have unanimously
`approved the proposed acquisition and resolved to recommend that their
`respective shareholders vote in favour of it.
`
`Advisors to AstraZeneca
`
`Evercore Partners International LLP (“Evercore”), and Centerview Partners
`UK LLP (“Centerview Partners”) are acting as lead financial advisers. Ondra
`LLP (“Ondra”) are providing advice as part of their ongoing financial
`advisory services. Morgan Stanley & Co. International plc (“Morgan
`Stanley”) and Morgan Stanley Bank International Limited and J.P. Morgan
`are acting as financial advisors and lead debt financing underwriters.
`Goldman Sachs Bank USA is acting as lead debt financing underwriter.
`Morgan Stanley and Goldman Sachs International are joint corporate brokers.
`
`
`
`8
`
`

`

`Case 1:21-cv-02238 Document 1 Filed 03/15/21 Page 9 of 17
`
`Evercore is acting as sponsor in relation to the transaction described in this
`announcement. Freshfields Bruckhaus Deringer is acting as legal counsel.
`
`Advisors to Alexion
`
`Bank of America Securities is serving as financial advisor to Alexion, and
`Wachtell, Lipton, Rosen & Katz is serving as legal counsel.
`
`FALSE AND MISLEADING STATEMENTS
`AND/OR MATERIAL OMISSIONS IN THE REGISTRATION STATEMENT
`
`24.
`
`On February 19, 2021, the Company authorized the filing of the Registration
`
`Statement with the SEC. The Registration Statement recommends that the Company’s
`
`shareholders vote in favor of the Proposed Transaction.
`
`25.
`
`Defendants were obligated to carefully review the Registration Statement prior to
`
`its filing with the SEC and dissemination to the Company’s shareholders to ensure that it did not
`
`contain any material misrepresentations or omissions. However, the Registration Statement
`
`misrepresents and/or omits material information that is necessary for the Company’s
`
`shareholders to make informed decisions regarding whether to vote in favor of the Proposed
`
`Transaction, in violation of Sections 14(a) and 20(a) of the Exchange Act.
`
`Material False and Misleading Statements or Material
`Misrepresentations or Omissions Regarding the Company’s Financial Projections
`
`The Registration Statement contains projections prepared by the Company’s and
`
`26.
`
`AstraZeneca’s management concerning the Proposed Transaction, but fails to provide material
`
`information concerning such.
`
`27.
`
`The SEC has repeatedly emphasized that disclosure of non-GAAP projections can
`
`be inherently misleading, and has therefore heightened its scrutiny of the use of such
`
`
`
`9
`
`

`

`Case 1:21-cv-02238 Document 1 Filed 03/15/21 Page 10 of 17
`
`projections.1 Indeed, on May 17, 2016, the SEC’s Division of Corporation Finance released new
`
`and updated Compliance and Disclosure Interpretations (“C&DIs”) on the use of non-GAAP
`
`financial measures that demonstrate the SEC’s tightening policy.2 One of the new C&DIs
`
`regarding forward-looking information, such as financial projections, explicitly requires
`
`companies to provide any reconciling metrics that are available without unreasonable efforts.
`
`28.
`
`In order to make management’s projections included in the Registration Statement
`
`materially complete and not misleading, Defendants must provide a reconciliation table of the
`
`non-GAAP measures to the most comparable GAAP measures.
`
`29.
`
`Specifically, with respect to the Company’s projections, the Company must
`
`disclose the line item projections for the financial metrics that were used to calculate the non-
`
`GAAP measures, including: (i) Non-GAAP Operating Income; (ii) Tax-effected EBIT; (iii)
`
`Unlevered Free Cash Flow; and (iv) Non-GAAP EPS.
`
`30. With respect to AstraZeneca’s projections, the Company must disclose the line
`
`item projections for the financial metrics that were used to calculate the non-GAAP measures,
`
`including: (i) Core EBIT; (ii) Unlevered Free Cash Flow; and (iii) Core EPS.
`
`31.
`
`Disclosure of the above information is vital to provide investors with the complete
`
`mix of information necessary to make an informed decision when voting on the Proposed
`
`
`1 See, e.g., Nicolas Grabar and Sandra Flow, Non-GAAP Financial Measures: The SEC’s
`Evolving Views, Harvard Law School Forum on Corporate Governance and Financial
`Regulation (June 24, 2016), available at https://corpgov.law.harvard.edu/2016/06/24/non-gaap-
`financial-measuresthesecs evolving-views/; Gretchen Morgenson, Fantasy Math Is Helping
`Companies Spin Losses
`Into Profits, N.Y. Times, Apr. 22, 2016, available at
`http://www.nytimes.com/2016/04/24/business/fantasy-mathis-helping-companies-spin-ossesinto-
`profits.html?_r=0.
`
` Non-GAAP Financial Measures, Compliance & Disclosure Interpretations, U.S. SECURITIES
`AND
`EXCHANGE
`COMMISSION
`(May
`17,
`2017),
`at
`available
`https://www.sec.gov/divisions/corpfin/guidance/nongaapinterp.htm.
`
` 2
`
`
`
`10
`
`

`

`Case 1:21-cv-02238 Document 1 Filed 03/15/21 Page 11 of 17
`
`Transaction. Specifically, the above information would provide shareholders with a better
`
`understanding of the analyses performed by the Company’s financial advisor in support of its
`
`opinion.
`
`Material False and Misleading Statements or Material
`Misrepresentations or Omissions Regarding BofA’s Financial Opinion
`
`The Registration Statement contains the financial analyses and opinion of Bank of
`
`32.
`
`America Securities (“BofA”) concerning the Proposed Transaction, but fails to provide material
`
`information concerning such.
`
`33. With respect to BofA’s Selected Publicly Traded Companies Analyses for both
`
`companies, the Registration Statement fails to disclose the individual multiples and metrics for
`
`each of the companies observed in the analyses.
`
`34. With respect
`
`to BofA’s Selected Precedent Transactions Analysis,
`
`the
`
`Registration Statement fails to disclose the individual multiples and metrics for each of the
`
`specific transactions observed in the analysis.
`
`35. With respect to BofA’s Discounted Cash Flow Analysis of the Company, the
`
`Registration Statement fails to disclose: (i) the inputs and assumptions underlying BofA’s use of
`
`the discount rate range of 7.0% to 9.5%; (ii) the basis for BofA’s assuming no cash flows and
`
`terminal value for Alexion beyond 2040; (iii) the Company’s net debt; and (iv) the number of
`
`fully diluted shares of Alexion common stock outstanding.
`
`36. With respect to BofA’s Wall Street Analysts Price Targets analyses of the
`
`Company and AstraZeneca, the Registration Statement fails to disclose the specific price targets
`
`observed in the analyses, as well as the sources thereof.
`
`
`
`11
`
`

`

`Case 1:21-cv-02238 Document 1 Filed 03/15/21 Page 12 of 17
`
`37. With respect to BofA’s Premia Paid Analysis, the Registration Statement fails to
`
`disclose the transactions observed in the analysis, as well as the premiums paid in the
`
`transactions.
`
`38. With respect to BofA’s Discounted Cash Flow Analysis of AstraZeneca, the
`
`Registration Statement fails to disclose: (i) the inputs and assumptions underlying BofA’s use of
`
`the discount rate range of 6.0% to 7.5%; (ii) the inputs and assumptions underlying BofA’s use
`
`of the range of perpetuity growth rates of negative 3.0% to positive 1.0%; (iii) the terminal
`
`values used in the analysis; (iv) AstraZeneca’s net debt; and (v) the number of fully-diluted
`
`shares of AstraZeneca common stock outstanding.
`
`39. When a banker’s endorsement of the fairness of a transaction is touted to
`
`shareholders, the valuation methods used to arrive at that opinion as well as the key inputs and
`
`range of ultimate values generated by those analyses must also be fairly disclosed. Moreover,
`
`the disclosure of projected financial information is material because it provides shareholders with
`
`a basis to project the future financial performance of a company and allows shareholders to
`
`better understand the financial analyses performed by the Company’s financial advisor in support
`
`of its fairness opinion.
`
`40. Without the above described information, the Company’s shareholders are unable
`
`to cast a fully informed vote on the Proposed Transactions. Accordingly, in order to provide
`
`shareholders with a complete mix of information, the omitted information described above
`
`should be disclosed.
`
`COUNT I
`
`(Against All Defendants for Violations of Section 14(a)
`of the Exchange Act and Rule 14a-9 Promulgated Thereunder)
`
`Plaintiff incorporates each and every allegation set forth above as if fully set forth
`
`41.
`
`
`
`12
`
`

`

`Case 1:21-cv-02238 Document 1 Filed 03/15/21 Page 13 of 17
`
`herein.
`
`42.
`
`Section 14(a)(1) of the Exchange Act makes it “unlawful for any person, by the
`
`use of the mails or by any means or instrumentality of interstate commerce or of any facility of a
`
`national securities exchange or otherwise, in contravention of such rules and regulations as the
`
`Commission may prescribe as necessary or appropriate in the public interest or for the protection
`
`of investors, to solicit or to permit the use of his name to solicit any proxy or consent or
`
`authorization in respect of any security (other than an exempted security) registered pursuant to
`
`section 78l of this title.” 15 U.S.C. § 78n(a)(1).
`
`43.
`
`Rule 14a-9, promulgated by the SEC pursuant to Section 14(a) of the Exchange
`
`Act, provides that communications with stockholders in a recommendation statement shall not
`
`contain “any statement which, at the time and in the light of the circumstances under which it is
`
`made, is false or misleading with respect to any material fact, or which omits to state any
`
`material fact necessary in order to make the statements therein not false or misleading.” 17
`
`C.F.R. § 240.14a-9.
`
`44.
`
`Defendants have issued the Registration Statement with the intention of soliciting
`
`shareholders support for the Proposed Transaction. Each of the Defendants reviewed and
`
`authorized the dissemination of the Registration Statement, which fails to provide critical
`
`information regarding, among other things, the financial projections for the Company.
`
`45.
`
`In so doing, Defendants made untrue statements of fact and/or omitted material
`
`facts necessary to make the statements made not misleading. Each of the Defendants, by virtue
`
`of their roles as officers and/or directors, were aware of the omitted information but failed to
`
`disclose such information, in violation of Section 14(a). The Defendants were therefore
`
`negligent, as they had reasonable grounds to believe material facts existed that were misstated or
`
`
`
`13
`
`

`

`Case 1:21-cv-02238 Document 1 Filed 03/15/21 Page 14 of 17
`
`omitted from the Registration Statement, but nonetheless failed to obtain and disclose such
`
`information to shareholders although they could have done so without extraordinary effort.
`
`46.
`
`The Defendants knew or were negligent in not knowing that the Registration
`
`Statement is materially misleading and omits material facts that are necessary to render it not
`
`misleading. The Defendants undoubtedly reviewed and relied upon the omitted information
`
`identified above in connection with their decision to approve and recommend the Proposed
`
`Transaction.
`
`47.
`
`The Defendants knew or were negligent in not knowing that the material
`
`information identified above has been omitted from the Registration Statement, rendering the
`
`sections of the Registration Statement identified above to be materially incomplete and
`
`misleading. Indeed, the Defendants were required to be particularly attentive to the procedures
`
`followed in preparing the Registration Statement and review it carefully before it was
`
`disseminated, to corroborate that there are no material misstatements or omissions.
`
`48.
`
`The Defendants were, at the very least, negligent in preparing and reviewing the
`
`Registration Statement. The preparation of a Registration Statement by corporate insiders
`
`containing materially false or misleading statements or omitting a material fact constitutes
`
`negligence. The Defendants were negligent in choosing to omit material information from the
`
`Registration Statement or failing to notice the material omissions in the Registration Statement
`
`upon reviewing it, which they were required to do carefully as the Company’s directors. Indeed,
`
`the Defendants were intricately involved in the process leading up to the signing of the Merger
`
`Agreement and the preparation of the Company’s financial projections.
`
`49.
`
`The misrepresentations and omissions in the Registration Statement are material
`
`to Plaintiff, who will be deprived of his right to cast an informed vote if such misrepresentations
`
`
`
`14
`
`

`

`Case 1:21-cv-02238 Document 1 Filed 03/15/21 Page 15 of 17
`
`and omissions are not corrected prior to the vote on the Proposed Transaction.
`
`50.
`
`Plaintiff has no adequate remedy at law. Only through the exercise of this Court’s
`
`equitable powers can Plaintiff be fully protected from the immediate and irreparable injury that
`
`Defendants’ actions threaten to inflict.
`
`COUNT II
`
`(Against the Individual Defendants for
`Violations of Section 20(a) of the Exchange Act)
`
`Plaintiff incorporates each and every allegation set forth above as if fully set forth
`
`51.
`
`herein.
`
`52.
`
`The Individual Defendants acted as controlling persons of Alexion within the
`
`meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their positions as
`
`officers and/or directors of Alexion, and participation in and/or awareness of the Company’s
`
`operations and/or intimate knowledge of the incomplete and misleading statements contained in
`
`the Registration Statement filed with the SEC, they had the power to influence and control and
`
`did influence and control, directly or indirectly, the decision making of the Company, including
`
`the content and dissemination of the various statements that Plaintiff contends are materially
`
`incomplete and misleading.
`
`53.
`
`Each of the Individual Defendants was provided with, or had unlimited access to,
`
`copies of the Registration Statement and other statements 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 the statements to be corrected.
`
`54.
`
`In particular, each of the Individual Defendants had direct and supervisory
`
`involvement in the day-to-day operations of the Company, and, therefore, is presumed to have
`
`had the power to control or influence the particular transactions giving rise to the Exchange Act
`
`
`
`15
`
`

`

`Case 1:21-cv-02238 Document 1 Filed 03/15/21 Page 16 of 17
`
`violations alleged herein, and exercised the same. The Registration Statement at issue contains
`
`the unanimous recommendation of each of the Individual Defendants to approve the Proposed
`
`Transaction. They were thus directly involved in preparing this document.
`
`55.
`
`In addition, as set forth in the Registration Statement sets forth at length and
`
`described herein, the Individual Defendants were involved in negotiating, reviewing, and
`
`approving the Merger Agreement. The Registration Statement purports to describe the various
`
`issues and information that the Individual Defendants reviewed and considered. The Individual
`
`Defendants participated in drafting and/or gave their input on the content of those descriptions.
`
`56.
`
`By virtue of the foregoing, the Individual Defendants have violated Section 20(a)
`
`of the Exchange Act.
`
`57.
`
`As set forth above, the Individual Defendants had the ability to exercise control
`
`over and did control a person or persons who have each violated Section 14(a) and Rule 14a-9 by
`
`their acts and omissions as alleged herein. By virtue of their positions as controlling persons,
`
`these Defendants are liable pursuant to Section 20(a) of the Exchange Act. As a direct and
`
`proximate result of Individual Defendants’ conduct, Plaintiff will be irreparably harmed.
`
`58.
`
`Plaintiff has no adequate remedy at law. Only through the exercise of this Court’s
`
`equitable powers can Plaintiff be fully protected from the immediate and irreparable injury that
`
`Defendants’ actions threaten to inflict.
`
`PRAYER FOR RELIEF
`
`
`
`WHEREFORE, Plaintiff prays for judgment and relief as follows:
`
`A.
`
`Preliminarily and permanently enjoining Defendants and all persons acting in
`
`concert with them from proceeding with, consummating, or closing the Proposed Transaction;
`
`
`
`16
`
`

`

`Case 1:21-cv-02238 Document 1 Filed 03/15/21 Page 17 of 17
`
`B.
`
`Directing the Individual Defendants to disseminate an Amendment to the
`
`Registration Statement that does not contain any untrue statements of material fact and that states
`
`all material facts required in it or necessary to make the statements contained therein not
`
`misleading;
`
`C.
`
`Directing Defendants to account to Plaintiff for all damages sustained because of
`
`the wrongs complained of herein;
`
`D.
`
`Awarding Plaintiff the costs of this action, including reasonable allowance for
`
`Plaintiff’s attorneys’ and experts’ fees; and
`
`E.
`
`Granting such other and further relief as this Cou