Judge Rules in Favor of Aurion Biotech in IPO Lawsuit, Alcon Plans Appeal

In a significant legal development for the pharmaceutical industry, a Delaware Court of Chancery judge has ruled in favor of cell therapy company Aurion Biotech in a lawsuit brought by investor Alcon Research. The suit aimed to prevent Aurion from proceeding with its planned initial public offering (IPO), but the court's decision now clears the path for the biotech firm to debut on the New York Stock Exchange.

Legal Battle and Court Decision

The lawsuit, filed by Alcon Research, a subsidiary of eye care giant Alcon, argued that its rights as an investor were being violated by Aurion's IPO plans. Aurion countered with claims that Alcon was attempting to trap the biotech to facilitate a low-price acquisition.

On January 27, 2025, the judge determined that Alcon's consent was not required for Aurion to proceed with its IPO. The court decision stated that Alcon's "argument is illogical in light of the parties' contractual scheme," effectively dismissing the investor's attempt to block the public offering.

In response to the ruling, an Alcon spokesperson expressed disappointment and announced plans to appeal the decision. "Alcon respectfully disagrees with that ruling and will appeal it. Alcon remains committed to the long-term interests of Aurion and its promising technology," the spokesperson told Fierce Biotech.

Investment History and IPO Preparations

The legal dispute stems from a complex investment history between the two companies. In 2022, Aurion raised $120 million in a Series C funding round led by Deerfield Management, with Alcon Research contributing $40 million for 36% of the Series C shares. This investment granted Alcon a seat on Aurion's six-member board of directors.

Tensions arose when Aurion began exploring an IPO in 2024. During a June 2024 board meeting, all directors except Alcon's designee voted to form a special committee to negotiate IPO terms. Alcon's request to have a board designee on this committee was denied, leading to increased friction between the parties.

Despite Alcon's objections, Aurion moved forward with its IPO preparations. On January 24, 2025, the company filed documents detailing its plans to list on the New York Stock Exchange, prompting the legal action from Alcon.

Implications and Next Steps

While the court ruling primarily favors Aurion, it did address one of Alcon's concerns regarding voting rights. The judge ruled that Alcon "has the right to vote its full block of stock," which had grown to 40% through an October 2024 share purchase.

As Aurion proceeds with its IPO plans, the biotech industry will be watching closely to see how this legal battle impacts investor relations and corporate governance in similar situations. The case highlights the potential conflicts that can arise between investors and companies pursuing different strategic objectives.

With Alcon planning to appeal the decision, the final outcome of this dispute remains uncertain. However, for now, Aurion Biotech appears to have cleared a significant hurdle in its path to becoming a publicly-traded company.