Shareholder Representative Services, LLC v. Alexion Pharmaceuticals, Inc.

── Shareholder Representative Services, LLC v. Alexion Pharmaceuticals, Inc. ── Court: Court of Chancery of Delaware Date: May 27, 2026 Category: General COURT OF CHANCERY OF THE STATE OF DELAWARE MORGAN T. ZURN LEONARD L. WILLIAMS JUSTICE CENTER VICE CHANCELLOR 500 N. KING STREET, SUITE 11400 WILMINGTON, DELAWARE 19801-3734 May 27, 2026 Michael A. Barlow, Esquire David E. Wilks, Esquire Quinn Emanuel Urquhart & Sullivan, LLP Wilks Law, LLC 500 Delaware Avenue, Suite 220 4250 Lancaster Pike, Suite 200 Wilmington, DE 19801 Wilmington, DE 19805 RE: Shareholder Representative Services, LLC v. Alexion Pharmaceuticals, Inc., C.A. No. 2020-1069-MTZ Dear Counsel: I write to resolve your clients’ claims regarding problems with drug materials Alexion acquired when it acquired Syntimmune.1 This letter is fairly characterized as inside baseball. After trial, and with assistance from a court-appointed expert, I 1 Readers seeking more background, defined terms, and citation formats can refer to S’holder Representative Servs. LLC v. Alexion Pharms., Inc., 2024 WL 4052343 (Del. Ch. Sept. 5, 2024) [hereinafter “Alexion I”]. This letter assumes familiarity with that opinion. Citations in the form “Sharpnack Rep.” refer to the Expert Report of Robert Sharpnack, available at D.I. 414. Citations in the form “DB Exp. __” refer to Defendant and Counterclaim Plaintiff Alexion Pharmaceuticals, Inc.’s Brief Regarding the Conclusions of the D.R.E. 706 Expert Robert Sharpnack, available at D.I. 425. Citations in the form “PB Exp. __” refer to Plaintiff and Counterclaim Defendant’s Brief Regarding the Opinions and Testimony of Court-Appointed D.R.E. 706 Expert Robert Sharpnack, available at D.I. 426. Citations in the form “PB Exp. Ex. __” refer to the exhibits to the Transmittal Affidavit of Michael A. Barlow in Support of Plaintiff and Counterclaim Defendant's Brief Regarding the Opinions and Testimony of Court-Appointed D.R.E. 706 Expert Robert Sharpnack, available at D.I. 426. Citations in the form “Sharpnack Dep.” refer to the Deposition of Bob Sharpnack available at D.I. 426 Ex. 1. S’holder Representative Servs. LLC v. Alexion Pharms., Inc., C.A. No. 2020-1069-MTZ May 27, 2026 Page 2 of 65 have concluded that Alexion proved by the preponderance of the evidence that Syntimmune breached its representation about the manufacture of those drug materials, and that Alexion is entitled to approximately $11 million in indemnification. Before the Merger, Syntimmune was attempting to develop a monoclonal antibody into a clinical drug. That work requires drug substance, meaning the active ingredient intended to provide a therapeutic effect, and drug product, meaning the final product in dosage form as in a tablet, capsule, or solution.2 Drug substance is a necessary component of drug product. When Alexion bought Syntimmune, Alexion also bought Syntimmune’s drug product and drug substance on hand and in its manufacturing pipeline.3 Syntimmune 2 21 C.F.R. § 314.3(b). The FDA defines a “[d]rug product” as “a finished dosage form, for example, tablet, capsule, or solution, that contains a drug substance, generally, but not necessarily, in association with one or more other ingredients.” Id. And it defines “[d]rug substance” as “an active ingredient that is intended to furnish pharmacological activity or other direct effect in the diagnosis, cure, mitigation, treatment, or prevention of disease or to affect the structure or any function of the human body.” Id; see 21 C.F.R. § 210.3(b)(4) (defining “[d]rug product as “a finished dosage form, for example, tablet, capsule, solution, etc., that contains an active drug ingredient generally, but not necessarily, in asso