Kite Pharma’s Proposed Merger Sparks Another Securities Lawsuit

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Kite Pharma, Inc. and its board of directors are on the receiving end of a proposed class action lawsuit claiming they published a misleading recommendation statement in connection with a potential merger between the company and a subsidiary of Gilead Sciences, Inc. The suit takes issue with the statement’s alleged non-disclosure of certain details about the company’s financial projections and figures used in the valuation analyses performed by Kite’s financial advisor. The plaintiff argues that this information is material to stockholders, who are faced with the decision of whether to vote in favor of the merger and must be able to determine if the deal is fair.

The complaint notes that Kite Pharma is “on the precipice of becoming extremely profitable” and claims that if its newest cancer treatment is approved by the U.S. Food and Drug Administration, the company “could reap enormous returns” and therefore benefit stockholders.