CoLucid Pharmaceuticals, Inc.
Robbins Arroyo LLP: Acquisition of CoLucid Pharmaceuticals, Inc. (CLCD) by Eli Lilly and Company (LLY) May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of CoLucid Pharmaceuticals, Inc. (NASDAQ: CLCD) by Eli Lilly and Company (NYSE: LLY). On January 18, 2017, the two companies announced the signing of a definitive merger agreement pursuant to which Eli Lilly will acquire CoLucid. Under the terms of the agreement, CoLucid shareholders will receive $46.50 for each share of CoLucid common stock.
Is the Proposed Acquisition Best for CoLucid and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at CoLucid is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $46.50 per share merger consideration represents a premium of only 35.40% based on CoLucid’s one week average closing price for the period ending January 17, 2017. This premium is significantly below the average one week premium of nearly 50.68% for comparable transactions within the past three years. Further, the $46.50 per share merger consideration is significantly below the target price of $58.00 set by an analyst at BTIG, LLC on December 21, 2016, and the target price of $49.00 set by an analyst at Piper Jaffray on September 30, 2016.
On November 9, 2016, CoLucid reported strong earnings results for its third quarter 2016. CoLucid reported cash, cash equivalents, and investments of $100.2 million for the three months ended September 30, 2016, a 55.35% increase over the same period of the prior year. In commenting on these results and the company’s migraine treatment drug lasmiditan, CoLucid Chief Executive Officer Thomas P. Mathers remarked, “Given that in [a recent clinical trial], lasmiditan demonstrated efficacy as a primary treatment, successfully met the secondary endpoint as a rescue medication, and was well tolerated even in a patient demographic rich with cardiovascular risk factors and conditions, we are very encouraged by the prospects of potentially offering migraine patients the first new mechanism of action for acutely treating their migraines in over twenty years. We believe our recently completed follow-on public offering has afforded us the necessary capital to potentially submit a New Drug Application (“NDA”) to the FDA for lasmiditan in the first half of 2018, pending the outcome of our SPARTAN Phase 3 clinical trial and other necessary development activities.”
In light of these facts, Robbins Arroyo LLP is examining CoLucid’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
CoLucid shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
CoLucid shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.