Ademi LLP is investigating Lumos Pharma (NASDAQ: LUMO) for possible breaches of fiduciary duty and other violations of law in its transaction with Double Point Ventures.
In the transaction, Lumos Pharma shareholders will receive only (i) $4.25 per share in cash at closing and (ii) one CVR for each share of common stock outstanding, representing the future right to receive additional contingent cash payments upon the achievement of certain milestone events relating to the level of annual global net revenue of LUM-201 up to the year 2037, different transactions involving Lumos Pharma or its assets that occur within 18 months of closing or certain sales, license or similar revenue-generating agreements entered into within 18 months of closing and that are related to Lumos Pharma’s legacy products other than LUM-201.
The transaction agreement unreasonably limits competing transactions for Lumos Pharma by imposing a significant penalty if Lumos Pharma accepts a competing bid. Lumos Pharma insiders will receive substantial benefits as part of change of control arrangements.
We are investigating the conduct of Lumos Pharma’s board of directors, and whether they are fulfilling their fiduciary duties to all shareholders.