Javelin Pharmaceuticals said it has filed a lawsuit against Hospira (HSP) and its subsidiary Discus Acquisition Corp. for a breach of the merger agreement announced in April. Javelin's lawsuit contends that Hospira and Discus breached the merger agreement by failing to accept and pay for shares tendered through May 18.
Late last month, Therabel Pharma N.V., Javelin's European commercial partner, said it was recalling all batches of its injectable pain drug Dyloject from the U.K. market due to quality control problems. Due to the recall, Hospira extended the deadline of the tender offer "based on its determination that all of the conditions to the offer had not been satisfied as of the expiration date of the offer."
Hospira said Thursday it has once again extended the tender offer to purchase Javelin to June 16. The offer had been set to expire earlier Thursday.Javelin shares were lately tumbling by 23 cents, or 15.1%, to $1.29. Hospira shares were up 0.3% to $52.02. The news prompted increase volume activity in Javelin shares. Volume topped 7.67 million shares, compared to the three-month average daily volume of 1.54 million, according to Yahoo! Finance. On the other hand, FuelCell Energy (FCEL - Get Report) was rallying by 46 cents, or 21.6%, to $2.59 after the company said it has received contracts totaling approximately $12.6 million from Pacific Gas and Electric Company for fuel cell power plants to install as utility-owned fuel cells on the campuses of California State University East Bay. Volume topped 2.3 million shares, compared to the 50-day average daily volume of 806,000, according to the Nasdaq. ZymoGenetics (ZGEN) also traded sharply higher, up 52 cents, or 12.5%, to $4.74, after the company said it has initiated the second part of a Phase II trial for its Hepatitis C treatment PEG-Interferon lambda. Volume topped 886,000 shares, compared to the 50-day average daily volume of 512,000. Among other decliners on heavy volume, American Capital (ACAS - Get Report) dropped 14.4% to $4.47 after Stifel Nicolaus cut its rating on the stock to sell from hold, arguing that the probability of bankruptcy has risen significantly. Volume of 29.14 million shares easily outpaced the average daily share volume of 8.34 million.