Law firm investigates Pharmacopeia/Ligand merger

New York, USA, law firm Levi & Korsinsky is investigating possible breaches of fiduciary duty and other violations of state law by the board of directors of Pharmacopeia arising out of their attempt to sell the company to Ligand Pharmaceuticals (Marketletter September 29. Under the terms of the deal, Pharmacopeia shareholders would receive 0.58 shares of Ligand stock for each if their shares. Based on the September 24 closing price of Ligand, the value Pharmacopeia shareholders are to receive is around $1.81 per share.

The transaction also includes a contingent value right from which Pharmacopeia shareholders may receive an additional $15.0 million under certain circumstances bringing the potential value of the transaction to about $70.0 million.

The price is unfair, the lawyers argue, given that the company's share price traded at $2.87 as recently as August 22, and Pharmacopeia has more than $1.49 per share in cash. The proposed acquisition is subject to customary conditions and regulatory approvals.