Immunomedics, Inc. IMMU stock soared in midday trading Thursday following the stop on the company’s deal with Seattle Genetics SGEN after the lawsuit filed by Immunomedics’ largest investor, venBio Select Advisor LLC, reported by The Street.
Immunomedics is up 16.4% at $5.85 per share.
The deal with Seattle Genetics was announced on Feb. 10. The activist firm, venBio, claimed the deal provides little value to the IMMU shareholders. Seattle Genetics agreed to pay $250million in cash for the rights to IMMU-132, a cancer treatment drug. Besides the $250 million, Seattle Genetics also agreed to royalties on IMMU-132 sales and an additional $1.7 billion in back-end milestone payments to IMMU.
Despite being the largest shareholder with 9.9% in IMMU, venBio just came into power after electing four venBio’s nominees onto IMMU’s board during their 2016 Annual Meeting of Stockholders last Friday.
The annual meeting was delayed twice due to legal pursuit against venBio by IMMU on behalf of all stockholders. IMMU believed that venBio had unlawfully interfered with the voting process and sought for emergency relief. The Court denied IMMU’s recent motion for emergency relief and said the meeting will go forward, and if IMMU can prove the result was tainted, then the court will exercise its right to void the result of the Annual Meeting.
The biopharmaceutical company believes the partnership with Seattle Genetics will provide a low-risk environment to develop and market IMMU-132. The company also believes this is in the best interest of all stockholders.
It looked like stockholders sided with venBios.
“We are very pleased with the preliminary results of today’s vote, which clearly show that stockholders agree that real change is needed at IMMU,” said Dr. Behzad Aghazadeh, Managing Partner and portfolio manager at venBio, in press release.
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