A group of Osiris Therapeutics (NSDQ:OSIR) shareholders is suing to block its $660 million acquisition by Smith & Nephew (NYSE:SNN) because the purchase price is too low.

Earlier this month the British orthopedics and wound care giant put $19 per share on the table to acquire Osiris and its regenerative medicine portfolio, representing a 37% premium on the 90-day volume-weighted average for OSIR shares.

The deal is structured as a two-step tender offer, with Osiris chairman & co-founder Peter Friedli agreeing to commit his 30% stake. The acquisition is slated to close during the second quarter, with the 360 people employed by Osiris joining S&N, that company said. Osiris put up profit growth of 334.9% to $36.9 million last year, on sales growth of 20.5% to $142.8 million.

The lawsuit, brought by lead plaintiffs Elizabeth Recupero and Raymond Morrison in the U.S. District Court for Maryland against Friedli and fellow directors Thomas Knapp, Willi Miesch and Charles Reinhart III, alleges that the $19-per-share price “does not adequately reflect Osiris’s future growth prospects.” The suit disputes the calculation by Cantor Fitzgerald, which advised Osiris on the deal, saying that it’s based on revenue projections that are roughly half of the actual revenue growth from the prior four years.

“Over the prior four-year period, Osiris has grown revenues at 20%+ per year. At a valuation of $19.00 per share, Cantor Fitzgerald’s discounted cash flow analysis utilizes management’s projections which reflect revenue growth of just 10%, 10%, 9%, and 9% for 2019, 2020, 2021, and 2022, respectively,” according to the lawsuit. “Using Cantor Fitzgerald’s DCF model and the application of more appropriate revenue growth rates during the forecast period of 15% – 18%, (rather than 9%-10%) results in implied value per share of approximately $24.00, an increase of $5.00 per share over the offer price.”

That would make Osiris worth something more like $834 million.

The lawsuit seeks to block the merger “until such time that the individual defendants have adequately undertaken all appropriate and available methods to obtain a transaction which is in the best interests of Osiris’s stockholders,” according to the compliant.

Should the deal go through, the lawsuit asks the court to rescind the merger and award compensatory and rescissory damages. Either way the lawsuit wants the plaintiff’s legal costs to be covered by the defendants.

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