filed today..... as I've indicated previously, I sold all of my shares, but........... go, BVF, go!
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
BIOTECHNOLOGY VALUE FUND, L.P., :
:
Plaintiff, :
:
v. : C.A. No. 17500
:
SIBIA NEUROSCIENCES, INC. :
:
Defendant. :
COMPLAINT UNDER 8 DEL.C. Section 220
1. Plaintiff Biotechnology Value Fund, L.P. ("BVF") at all pertinent
times hereto was the holder of record of 755,250 shares of common stock of
defendant SIBIA Neurosciences, Inc. (the "Company").
2. The Company is a Delaware corporation having its principal place of
business at 505 Coast Boulevard South, Suite 300, La Jolla, California
92037-4641. The Company's registered agent for service of process in the State
of Delaware is The Corporation Trust Company, 1209 Orange Street, Wilmington,
Delaware 19801.
3. On October 13, 1999, the Company distributed to its stockholders a
Notice of Special Meeting of Stockholders and Information Statement
("Information Statement") regarding a special meeting of stockholders that will
be held on November 12, 1999. According to those documents, the meeting of
stockholders is being held to vote upon a proposed merger by which Merck & Co.,
Inc. ("Merck"), through a wholly-owned subsidiary that owns approximately 69%
of the outstanding shares of the
Company, will acquire the entire equity interest in the Company (the "Merger");
stockholders of the Company who do not exercise appraisal rights will receive
$8.50 per share in the Merger; and the Company anticipates that the Merger will
be effected on November 12, 1999, or as promptly as possible thereafter.
4. On Friday October 15, 1999, BVF, through an authorized signatory, made,
under oath, a written demand (the "Demand") in accordance with Section 220 of
the Delaware General Corporation Law demanding the right to inspect and copy
the stock list and certain of the books and records of the Company. That same
day, the Demand was mailed to the Company at its principal place of business
and to its registered agent in Delaware by overnight mail. A copy of the Demand
is attached as Exhibit A.
5. The Demand was received by the Company on October 18, 1999.
6. On October 22, 1999, counsel for the Company responded to the Demand by
refusing to produce the materials requested. A copy of that letter is attached
as Exhibit B.
7. The Demand states a proper purpose for inspection under Section 220. As
set forth in the Demand, BVF seeks inspection of the Company's stock list and
certain books and records of the Company in order to assist BVF in ascertaining
the value of BVF's shares of Company stock, deciding whether to dissent from
the
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Merger and seek appraisal of its shares, and communicating with other
stockholders regarding the desirability of dissenting from the merger and
seeking appraisal.
8. The information sought by BVF is highly material to determining the
value of its shares of the Company's stock and assessing the desirability of
dissenting from the merger and seeking appraisal. For example, the information
sought relates to the following activities of the Company:
- Investors in the Company have been awaiting a decision by Eli Lilly &
Company ("Lilly") as to whether Lilly intends to exercise its
exclusive option with respect to certain products of the Company. Upon
information and belief, Lilly recently communicated its decision to
the Company with respect to SIB-1508Y, but the Company has failed to
make any disclosure regarding this decision.
- In its most recent 10-Q filing, the Company disclosed that Phase 2 of
its clinical trial of SIB-1553A for Alzheimer's disease was expected
to be completed during the third quarter of 1999. The results of these
clinical trials have not been disclosed.
- In the Information Statement, the Company set forth in summary fashion
management projections that would support a valuation for the Company
substantially above the proposed Merger price. The Company, however,
has failed to provide any of the back-up information necessary to
evaluate these projections.
- As a result of the Company obtaining a judgment in a patent
infringement suit against Cadus Pharmaceuticals Corporation, $18
million was placed in escrow pending resolution of an appeal. The
Company, however, has failed to provide any updated information
concerning the status of the escrowed funds.
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9. BVF has complied with the requirements of Section 220 with respect to
the form and manner of making its Demand for the inspection of the books are
records identified in the Demand.
10. BVF is entitled to the inspection sought.
11. BVF has no adequate remedy at law.
WHEREFORE, BVF asks that this Court enter orders as follows:
A) Summarily requiring the Company immediately to permit BVF, through
its agents, to inspect and copy the documents identified in the Demand; and
B) Granting BVF such other relief, including reasonable attorneys' fees
and costs, as the Court shall deem appropriate. |
