For a second time, billionaire Patrick Soon-Shiong has been sued for allegedly pulling a fast one in his takeover of biotech Altor, but this time it is celebrity singer Cher making the accusations.
Alleging shareholder deception by biotech Altor, music icon Cher is suing Soon-Shiong and other officials at the drug developer, which is working on cytokine-based therapies for cancer and infectious diseases.
Cher filed her lawsuit Friday, according to the Los Angeles Times, alleging that Altor bought her shares at $1.50 each, a price well below their actual level, without disclosing information key to the sale. Cher argues the company didn't disclose that its cancer and HIV/AIDS candidates were showing promise in clinical tests, which would've boosted the price. The total sale was worth $450,000. Specifically, the suit says Altor fraudulently concealed information and broke its fiduciary duties.
A spokesperson for Soon-Shiong told the publication the case has no merit. Fred Middleton, a vice chairman of Altor's board and another defendant, told the newspaper the celebrity was "under no duress to sell."
The case follows another set of allegations levied against the prominent biotech entrepreneur. Earlier this year, Soon-Shiong led a buyout of Altor for $2 per share, a deal that valued the company at $290 million. With similar allegations, a pair of minority shareholders sued to try and block the deal. Plaintiff Adam Waldman, founder of D.C. consultancy Endeavor Group, told FierceBiotech at the time that the value was "outrageous" considering the price of recent buyouts in biotech.
Waldman and another minority shareholder further argued that the deal contradicted Altor's previous statements that it'd pursue its own IPO before 2018.
“After years of informing plaintiffs that Altor would be preparing for an IPO, Altor made defendant Soon-Shiong’s true intentions apparent in April 2017—to acquire Altor in its entirety and squeeze out its minority stockholders," the lawsuit said.
The defendants didn't respond to requests for comments, according to FierceBiotech.
Aside from the shareholder lawsuits, Soon-Shiong has faced heat recently over news reports in Stat and Politico that his philanthropic donations ended up helping his businesses.