Deerfield Management claims that Alcon Research is seeking a discounted takeover of Aurion Biotech while blocking the startup’s efforts to go public.
Investment firm Deerfield Management in a lawsuit on Monday alleged that Alcon Research is obstructing the initial public offering of Aurion Biotech in an effort to orchestrate a discounted takeover of the biotech.
Aurion is a mid-stage company that works to develop novel eye therapies. Both Deerfield and Alcon are investors, though the latter is a bigger shareholder: Deerfield holds 34% of Aurion’s outstanding stock, while Alcon owns around 40.5%, as per the lawsuit.
Last month, Aurion filed for its initial public offering (IPO)—a move that Alcon was opposed to.
In the complaint, filed in Delaware’s Court of Chancery, Deerfield claimed that Aurion’s Board was “unanimous” in pursuing an IPO, with only Alcon’s representative voting against the move. “Alcon has sought to obstruct the IPO, because the IPO would thwart Alcon’s goal of buying Aurion for itself at a discount,” Deerfield alleged.
On the evening of Feb. 14, Alcon then carried out what Deerfield called a “Valentine’s Day massacre” to force a deadlock of the IPO vote. That day, Board Executive Chair Thomas Frinzi “unexpectedly, and without explanation” stepped down from his role “by email.” Thereafter, “a mere six minutes later,” Alcon replaced another board member with one of its designees, Jeannette Bankes, according to Deerfield.
If Bankes’ appointment is deemed valid, it would leave Aurion’s board with six people—three of whom were appointed by Alcon. The IPO vote, according to Deerfield, would be split in half, resulting in a deadlock.
Shortly after, Thomas Hudnall, one of Alcon’s designated directors on Aurion’s Board, told CEO Greg Kunst that “the IPO was not going to happen and that Alcon would only provide financing that would allow Alcon to purchase the company on Alcon’s terms and at a time that would be suitable for Alcon,” Deerfield claimed.
In light of these allegations, Deerfield is asking the court to deem Bankes’ appointment invalid and declare Alcon’s other actions—including alterations it made to Aurion’s bylaws and its purchase of additional voting shares from another investor—as void.
Deerfield is also asking for an expedited court action. “Timing is critical,” the investment firm wrote, “because [Aurion] currently has cash sufficient to continue operations for only a few months.”
Previously, a judge ruled against Alcon in a 2024 lawsuit it brought against Aurion, seeking to block the biotech’s initial plans for an IPO. In its complaint, Alcon said that Aurion needed consent from Alcon to push through with its IPO—a claim that Aurion resisted. A court ruling last month went in favor of Aurion, clearing the way for its public offering. Alcon has said that it plans to appeal the decision.
