Deerfield Sues Alcon over Latest Moves to Prevent Aurion IPO

Deerfield Management has filed a lawsuit against an Alcon subsidiary, seeking to prevent Alcon from interfering with Aurion Biotech’s ability to launch an initial public offering.

The lawsuit, filed Feb. 24 in the Court of Chancery of the State of Delaware, claims Alcon has been trying to take over Aurion, developer of a corneal cell therapy, at a highly discounted valuation.

Deerfield, of New York, and Alcon, a Swiss company with US headquarters in Texas, both invested in Aurion as part of a $120 million Series C round led by Deerfield in 2022. Deerfield says it holds about 34 percent of Aurion’s outstanding stock.

Aurion—with offices in Seattle; Cambridge, Massachusetts; and Tokyo—patented a process developed by Shigeru Kinoshita, MD, PhD, to culture healthy endothelial cells from a donor cornea. Cells manufactured from a single donor can treat more than 100 recipient eyes, Aurion says. The endothelial cells are injected intracamerally, where they repopulate into a healthy monolayer and start decreasing corneal edema.

In 2024, Aurion’s board approved pursuing an IPO, and Aurion took steps to prepare for it.

Alcon sued Aurion in October 2024 to stop the IPO, claiming that Alcon’s rights as a preferred shareholder were being violated. Aurion filed a countersuit the next month claiming that Alcon wanted to prevent the public offering so it could buy Aurion at a low price.

A judge ruled in Aurion’s favor on Jan. 27, 2025.

Alcon said it would appeal.

Aurion filed SEC paperwork ahead of the judge’s decision, on Jan. 24, 2025, to launch the IPO for a reported $100 million.

The Deerfield lawsuit claims that Aurion planned to price the IPO on Feb. 14 but delayed it until the Delaware Supreme Court could rule on Alcon’s appeal.

Still, Feb. 14 became a pivotal day in the escalating battle.

Prior to Feb.  14, Alcon held 40.5 percent of Aurion’s outstanding stock, according to Deerfield’s lawsuit.

The lawsuit claims the following:

—Alcon on Feb. 14 entered into a stock purchase agreement to acquire Petrichor’s shares of Aurion, which would result in Alcon holding 54 percent of the outstanding shares and give Alcon majority ownership of Aurion. Also, Alcon would assume the Series B director seat on Aurion’s board held by Petrichor.

—The transaction was subject to a 30-day initial waiting period under the HSR Act and not closed as of the time of subsequent actions by Alcon.

—On the evening of Feb. 14, the executive chair of Aurion’s board, Thomas Frinzi, unexpectedly announced his resignation by email without providing a reason. Frinzi has a close relationship with Alcon’s CEO.

—Frinzi’s resignation left the board, which previously had seven members, with only six.

—Minutes after the resignation, Alcon and Petrichor sent by email a written consent to replace the Series B director with an Alcon designee, resulting in a board split three to three between Alcon and non-Alcon designees. Given Alcon’s opposition to the IPO, the result in all likelihood would be deadlock, the suit claims.

Aurion had planned to use the proceeds to help fund clinical development of its next-generation cell therapy, AURN001, which has completed a Phase I/II clinical trial for the treatment of corneal edema secondary to corneal endothelial dysfunction.

Aurion launched its first-generation cell therapy, Vyznova (neltependocel), for the treatment of bullous keratopathy of the cornea, in Japan in September 2024.

Deerfield is seeking damages and for Alcon’s actions on Feb. 14 to be deemed invalid.

Deerfield has named as defendants the Alcon subsidiary, Alcon Research, LLC;

Frinzi; and Aurion board members Jeannette Bankes, Thomas Hudnall, and Joe Rappon, who are all Alcon employees.

News outlet Fierce Biotech reported Feb. 24 that Alcon emailed it a statement, saying: “We are aware of the suit and will be responding accordingly,” adding, “As Aurion’s largest stockholder, Alcon remains committed to the long-term interests of Aurion and its promising technology.”