MONTH-IN-BRIEF (Oct 2021)
Delaware Chancery Court Dismisses Pacira BioSciences’ Claims of Post-Merger Interference, Upholds Milestone Payments to MyoScience in Wake of 2019 Merger
By Patton Webb
On October 25, 2021, the Delaware Court of Chancery (the “Court”) issued a memorandum opinion addressing several claims made by Pacira BioSciences, Inc., a leading provider of non-opioid pain management solutions (“Pacira”), against Fortis Advisors, LLC, a company providing post-closing representation to shareholders in relation to mergers, and three former employees (the “Defendants”) of MyoScience, a medical device company that was acquired by Pacira pursuant to a merger agreement between the two companies (“MyoScience”). The merger closed in April 2019.
Pacira acquired MyoScience for $120 million cash, subject to upward adjustment in the event certain milestones were reached. Such upward adjustments were to be paid to former MyoScience shareholders. These milestone payments were contingent on whether the Centers for Medicare and Medicaid (“CMS”) would reimburse treatments using the MyoSciences technologies acquired pursuant to the merger at certain dollar thresholds. Specifically, if the reimbursement rates for certain procedures using MyoScience technologies met specified thresholds, the former stockholders could receive up to $50 million in payments.