As Alcon Research seeks to block investee Aurion Biotech from listing on the New York Stock Exchange, another investor has come to Aurion’s defense.
Deerfield Management has sued Alcon Research, a subsidiary of eye care firm Alcon, to stop what it calls “an unrelenting campaign to take over Aurion” at a cheaper price, according to Delaware court documents filed Feb. 24.
Alcon’s January suit to stop Aurion’s IPO was rejected by a judge, a decision Alcon said it will appeal. In the meantime, Deerfield has alleged that Alcon took actions to hamstring Aurion’s board and amend the biotech’s bylaws to stop it from pursuing debt or equity financing.
In what Deerfield calls a “Valentine’s Day massacre,” Alcon entered into an agreement to buy Aurion stock from fellow investor Petrichor Opportunities Fund on Feb. 14, a move that would give Alcon a majority of voting shares. Later that day, Aurion's executive chair of the board Thomas Frinzi resigned, and Petrichor and Alcon swapped out a Petrichor board appointee for an Alcon designee, which would result in Alcon holding three of six total board seats, according to the suit.
“Given Alcon’s opposition to the IPO and alternative financing sources more generally, and the rest of the board’s support, the result in all likelihood will be deadlock,” Deerfield wrote. Alcon could then use this deadlock to wait out Aurion’s remaining cash reserves, Deerfield alleges, until Aurion has no choice but to allow Alcon to acquire it.
In its suit, Deerfield is requesting that Alcon’s Valentine’s Day actions be deemed invalid and seeks damages from its fellow investor for “its breaches of fiduciary duty.” Deerfield estimates that Alcon’s actions may have damaged Aurion’s value by as much as $1 billion.
“We are aware of the suit and will be responding accordingly,” Alcon told Fierce Biotech in an emailed statement. “As Aurion’s largest stockholder, Alcon remains committed to the long-term interests of Aurion and its promising technology.”
Deerfield and Alcon both invested in Aurion as part of a $120 million series C round Deerfield led in 2022. Aurion’s focus is on regenerative therapies for eye diseases, and its lead candidate is a cell therapy for corneal edema secondary to endothelial dysfunction, a disease that currently requires invasive specialty surgery to treat.