Threshold Pharmaceuticals Sued Over Proposed Merger

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A proposed class action lawsuit has been filed against Threshold Pharmaceuticals, Inc. and its board of directors claiming the company misled investors by failing to disclose important information regarding a proposed merger between Threshold and Molecular Templates, Inc. From the suit:

“The Proposed Transaction is the result of a flawed process tilted in favor of Molecular and led by conflicted [Threshold CEO], who knew as early on in the process that he would serve as the Chairman of the Board of the combined company following a merger.”

The complaint argues that the registration statement fails to disclose potential conflicts of interest among Threshold’s directors and neglects to provide the details concerning the financial analyses performed by the company’s financial advisor. As a result, the plaintiff alleges that stockholders are unable to determine whether they should vote in favor of the proposal.