Emisphere’s Stockholders Sue Over Novo Nordisk Purchase
3 years ago
By Josh Neil
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A trio of lawsuits are being levelled at Emisphere Technologies over its recent sale to Novo Nordisk in late 2020. The sale, which saw Emisphere acquired for $1.8 billion, drew criticism from a number of stockholders who alleged that controlling stockholder MHR Fund Management ‘co-opted’ the company’s board and forced an ‘ill-timed’ sale at an ‘artificially low price’.
Emisphere Technologies’ oral formulation technology, Eligen SNAC, was used in Novo Nordisk’s diabetes medication Rybelsus. The drug launched in September 2019 after receiving FDA approval. In 2020 the drug generated around $305 million.
Rybelsus controls blood sugar levels in adults with type 2 diabetes. Its active substance, semaglutide, increases the amount of insulin that the pancreas releases in response to food.
Shortly after Rybelsus’ launch, Novo Nordisk announced its purchase of the company, alongside plans to ‘apply and further develop the technology and use it on current and future pipeline assets’.
One of those suing Emisphere, IsZo Capital, alleges MHR ‘diverted… a portion of the purchase price to its pocket’, and that MHR Chief Investment Officer Mark Rachesky ceded the majority-of-the-minority condition during the sale talks. The lawsuit also claims that Emisphere was worth considerably more than the $1.35 billion remaining for stockholders after MHR’s payout is accounted for.
Finally, the lawsuits allege that compensation given to two MHR appointees for nine month’s work – each receiving over $7.8 million – should not have happened to the extent that it did.
Joshua Neil, Editor
Proventa International
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