Top Plaintiff's Verdicts by Impact: Depomed Inc. v. Horizon Pharma PLC

Mergers and acquisitions - injunction

Santa Clara County

Superior Court Judge Peter H. Kirwan

Plaintiff's attorneys: Gibson, Dunn & Crutcher LLP, Brian M. Lutz, Paul J. Collins, Noah F. Stern, Michael J. Kahn, Henry H. Pistell

Defense attorneys: Skadden, Arps, Slate, Meagher & Flom LLP, Amy S. Park, Richard S. Horvath Jr.

A hotly contested battle for corporate control of Newark-based pharmaceutical company Depomed Inc. ended abruptly when a Santa Clara County Superior Court judge temporarily enjoined Horzion Pharma PLC's hostile takeover bid in November. The failed transaction was valued at about $3 billion.

Horizon pulled out of the deal about an hour after the judge ruled. Depomed Inc. v. Horion Pharma PLC, 15-CV-283834 (Santa Clara County Sup. Ct., filed Aug. 3, 2015).

Judge Peter H. Kirwan ruled after Depomed's lawyers at Gibson, Dunn & Crutcher LLP showed that Horizon had misused confidential Depomed information in the takeover attempt.

Horizon acquired the information in an earlier bid to a acquire a pain drug called Nucynta from Janssen Pharmaceuticals Inc., a bidding process in which Depomed was the winner and which included non-disclosure agreements that Horizon allegedly later misused when it sought to gain control of Depomed.

The agreements foreclosed the parties from using information exchanged during the Nucynta acquisition battle for any other purpose.

Kirwan's ruling sent an important message to mergers and acquisitions participants that California courts will enforce contractual obligations, even if it means interrupting a potential multi-billion dollar transaction, Gibson Dunn said in a statement.

"Injunctions preventing or delaying M&A transactions are exceedingly rare given the powerful incentives of allowing M&A participants and shareholders to consider and pursue potential value-maximizing transactions," the firm said.

- John Roemer