A stockholder of cancer drug developer Checkpoint Pharmaceuticals has filed a lawsuit in the Delaware Court of Chancery seeking corporate records related to the company’s proposed $355 million merger with India-based Sun Pharmaceuticals. The legal action alleges conflicts of interest and insufficient disclosure surrounding the role of controlling investor Fortress Biotech.
The Checkpoint Pharma lawsuit, filed by stockholder Gary Fell, centers on a document request to obtain information regarding insider benefits and Fortress Biotech’s potential financial gain from the transaction. According to the complaint, millions of unvested shares held by company insiders will vest if the deal goes through, raising questions about board independence and fiduciary duty.
Checkpoint shareholders were scheduled to vote on the transaction on May 28. Under the current terms, the merger offers $4.10 per share in cash and includes a non-tradeable contingent value right of $0.70 per share, dependent on specific milestones. Closing is anticipated by May 30, pending shareholder approval.
The lawsuit highlights additional concerns regarding Fortress’s entitlement to royalties from future sales of cosibelimab (marketed as Unloxcyt), Checkpoint’s lead cancer drug. It also alleges Fortress sought preferential treatment, including a potential $20 million cash payment and royalty arrangements, in return for supporting the merger.
Checkpoint, through legal counsel, rejected the initial document demands as overly broad and not compliant with Delaware’s books and records access law. However, the company expressed willingness to discuss the request further.
The lawsuit references legal precedent from Kahn v. M&F Worldwide, suggesting the current transaction may not meet the standards for business judgment protection due to Fortress’s significant influence—two of its executives serve on Checkpoint’s seven-member board.
The plaintiff is represented by Ashby & Geddes PA, Levi & Korsinsky LLP, and Kaskela Law LLC.
The case is Gary Fell v. Checkpoint Therapeutics Inc., case number 2025-0587, in the Delaware Court of Chancery.
