Alston & Bird scored a decisive victory in Nevada state court last week by securing the dismissal with prejudice of a putative shareholder class action asserted against client OncoSec Medical Incorporated and its board of directors.
The class action sought to enjoin the closing of a strategic investment OncoSec had secured from two investors, Grand Decade Developments Limited, a wholly-owned subsidiary of China Grand Pharmaceutical and Healthcare Holdings Limited, and its U.S. affiliate, Sirtex Medical US Holdings Inc. The transaction included a $30 million cash investment in OncoSec, in addition to certain strategic partnerships between the parties.
The class action was filed in late 2018 by Alpha Holdings Inc., a South Korea-based institutional investor in OncoSec. Alpha alleged that OncoSec and its board made misstatements and omissions in connection with its proxy solicitation, failed to run an adequate process in connection with the proposed transaction, and improperly agreed to a series of coercive “deal protection” measures.
In early February, the court held a two-day evidentiary hearing, following expedited discovery, at which it considered Alpha’s motion for a preliminary injunction to enjoin the scheduled meeting of OncoSec’s shareholders, where shareholders would vote on the proposed transaction.
After weighing the evidence and argument presented at the hearing, the court denied Alpha’s preliminary injunction motion in its entirety. OncoSec then proceeded with the scheduled shareholder meeting, where it secured shareholder approval of the strategic investment transaction. That same day, the parties closed the transaction.
On March 5, 2020, the Eighth Judicial District Court in Clark County, Nevada dismissed the class action (and a related books and records action) with prejudice.
Advising OncoSec on the M&A/shareholder litigation and strategic investment transaction was a cross-practice group, cross-office Alston & Bird team led by partner Brett Jaffe and counsel Joe Tully (Litigation & Trial Practice); partners Matt Mamak, Dennis Garris, Dave Brown, Mark McElreath, and James Sullivan (Corporate & Business Transactions); partners Gerard Catalanello and Jim Vincequerra (Financial Restructuring & Reorganization); partner Bryan Skelton (Intellectual Property); and partner Gidon Caine (Securities Litigation).
The case is Alpha Holdings, Inc. v. OncoSec Medical Incorporated, et al., A-19-804491-B