Four Firms Advise on the Teva-Allergan Deal: Business of Law

Israeli drugmaker Teva Pharmaceuticals Industries Ltd. agreed to buy the generic-drug business of Allergan Plc for about $40.5 billion in cash and stock and ended its hostile bid for Mylan NV.

Sullivan & Cromwell LLP represents Teva, while Latham & Watkins LLP is primary counsel for Allergan. In addition, Cleary Gottlieb Steen & Hamilton LLP advised Allergan on international competition law matters outside the U.S. and Canada and certain financing-related matters, and Weil, Gotshal & Manges LLP is representing Allergan on antitrust aspects of the deal.

From Sullivan & Cromwell representing Teva are partners Joseph Frumkin, Eric Krautheimer, Sarah Payne and Krishna Veeraraghavan, corporate; Matthew Friestedt, executive compensation and benefits; Nader Mousavi, intellectual property; Michael McGowan and Davis Wang, tax; and Steven Holley and Juan Rodriguez, antitrust.

Latham’s corporate and M&A team is led by partners Charles Ruck and Scott Shean and also includes partners Wesley Holmes, finance, Laurence Stein, Nicholas DeNovio and Sean Finn, tax; Jim Barrall and Catherine Drinnan, benefits and compensation; Kenneth Schuler, intellectual property; Stuart Kurlander and Carolyne Hathaway, regulatory; and Christopher Norton, environmental.

From Cleary representing Allergan are partners Romano Subiotto, competition; and Meme Peponis and Jeff Karpf, and counsel Helena Grannis, finance. From Weil the partners are Steven Newborn, Ann Malester and Jeff White, all antitrust.

The deal bolsters Teva’s position as the world’s largest maker of generic drugs, and gives it greater negotiating power with governments and private health insurers. It also allows the drugmaker to extricate itself from an increasingly antagonistic pursuit of Mylan, which is in the midst of trying to buy Perrigo Co.

The acquisition extends a wave of mergers that has swept over the health-care industry. Announced pharmaceutical deals so far this year have topped $180 billion, according to data compiled by Bloomberg. That’s on pace to beat last year’s record of more than $200 billion.

Allergan, which makes the blockbuster wrinkle treatment Botox, said Sunday it would buy the biotech company Naurex Inc., which is developing a fast-acting antidepressant. The $560 million all-cash transaction is expected to close by year-end.

Teva expects its Allergan transaction, which both boards backed unanimously, to close in the first quarter of 2016 and boost earnings per share.

Teva had been pursuing a $40.1 billion deal to buy Mylan since April, a merger rejected by Mylan management as culturally unfit. Last week, Mylan’s independent foundation exercised an option to acquire shares that let it control half of the company in a move that rendered Teva’s attempt to win over a majority of its shareholders much more difficult. Abbott Laboratories, Mylan’s top shareholder, in June said it backed Mylan’s plan to avoid being taken over by Teva.

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Magistrate Rejects Settlement Over Size of Attorneys’ Fees

Apparently, when it comes to attorneys’ fees in a class-action settlement, 5 percent can make all the difference.

Federal magistrate Stanley Boone rejected a settlement in in a case claiming that CVS Pharmacy Inc. had shortchanged its workers in overtime pay, only because the attorneys’ fee sought was too high.

The plaintiffs sought a fee of 30 percent of the $900,000 settlement. In his ruling, Boone said that while a 25 percent benchmark was reasonable, anything more, without evidence to support a larger amount, warranted rejection.

“Plaintiffs offer boilerplate justification of why these factors would justify an upward multiplier of the fees, but none of the proffered reasons are substantial,” he wrote.

Boone indicated in his ruling that apart from the question of fees, he viewed the settlement as fair.

Jody Landry, a shareholder at Littler Mendelson P.C. who represents CVS, declined to comment on the ruling. Michelle Jackson, one of the attorneys representing the plaintiffs, didn’t return a call seeking comment.

The suit involves distribution workers at the health-care giant who claim they should have been compensated for the time spent storing and retrieving personal items after they went to work, an issue that has vexed other companies that haven’t considered that time as compensable.

On July 16, a federal judge in San Francisco said Apple Inc. store workers in California can sue as a class under state law in their bid to be paid for time spent in “demoralizing” security searches of their bags when they leave work each day.

The U.S. Supreme Court ruled in 2014 that workers don’t have a right to be paid for time spent in post-shift security searches under the federal Fair Labor Standards Act.

The case is Ceja-Corona v. CVS Pharmacy, Inc., 1:12-cv-01868, U.S. District Court, Eastern District of California (Fresno).

Clock Is Ticking for Decision on Landmark Insider-Trading Ruling

Time is running out for the U.S. to ask the Supreme Court to review a ruling that could lay the framework for how insider trading will be prosecuted for years to come.

Solicitor General Donald Verrilli has until Aug. 3 to decide whether to let stand an appeals court ruling that makes it harder to prosecute insider traders.

The government won more than 80 insider-trading convictions in New York over the past six years. If Verrilli declines to pursue an appeal -- or the Supreme Court lets the ruling stand - - challenges to some convictions will be strengthened, others might be encouraged to fight and future prosecutions may be harder to win.

That will “have real impact on the government’s ability to bring insider-trading cases,” said Jonathan Streeter. Streeter was one of the lawyers who successfully prosecuted Galleon Group LLC co-founder Raj Rajaratnam for insider trading in 2011.

The decision in question came from the U.S. Court of Appeals in New York in December, throwing out the convictions of Todd Newman, a former portfolio manager at Diamondback Capital Management, and Anthony Chiasson, co-founder of Level Global Investors. The court’s known for making law in securities cases and is Wall Street’s home court. The ruling became known as the Newman decision.

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