Shareholders sue Novartis and Alcon over merger deal; Novartis debuts Fanapt in USA

Following the announcement that Swiss drug major Novartis had entered a deal with food giant Nestle to gain control of leading eye-care company Alcon (The Pharma Letter January 4), and while the latter's Independent Committee of Directors is still fuming that other shareholders had been offered an unfair deal, US minority investors in the company have taken things into their own hands, launching a law suit against both Novartis and Alcon.

The plaintiffs' suit charges that this proposed transaction was structured so as to deprive Alcon's minority shareholders of the true value of their stock, and it accuses Novartis of attempting to strip shareholders of any protection or legal redress.

On January 4, Novartis revealed that it would exercise its option to purchase around 52% of the Alcon shares held by Nestle for $180 per share, or about $28.1 billion, giving it an overall ownership interest in Alcon of some 77% Thereafter, it would consolidate the two companies based on a merger that the minority shareholders claim is 'unfair, inequitable and in violation of the company's articles of incorporation and the law.'