Bristol Myers Squibb (BMS) has won a significant legal victory, successfully dismissing a $6.4 billion lawsuit that accused the company of deliberately delaying the FDA approval of Breyanzi (lisocabtagene maraleucel) and two other drugs acquired from Celgene. The lawsuit, filed on behalf of former Celgene shareholders holding contingent value rights (CVRs), alleged that BMS intentionally stalled the approval process to avoid a substantial payout.
Judge Jesse Furman of the U.S. District Court in Manhattan ruled that UMB Bank, the trustee representing the CVR holders, was not properly appointed because its hiring was supported by a majority of beneficial owners rather than registered owners. This procedural flaw proved fatal to the case, which had been ongoing for three years.
The core of the plaintiffs' argument was that Bristol Myers Squibb deliberately delayed submitting crucial information to the FDA and preparing manufacturing plants for inspection. They contended that this was a calculated strategy to postpone drug approvals and evade the $6.4 billion obligation to CVR holders.
The merger agreement between Bristol Myers and Celgene stipulated that CVR holders would receive an additional $9 per share if the FDA approved Breyanzi (liso-cel) and Ozanimod by December 31, 2020, and Ide-cel by March 31, 2021. While Breyanzi did receive FDA approval on February 5, 2021, for the treatment of non-Hodgkin’s lymphoma, the plaintiffs argued that the approval came later than it should have due to BMS's alleged manipulation.
Despite this victory for Bristol Myers Squibb, the legal saga may not be entirely over. CVR holders are appealing a separate lawsuit, previously dismissed in February, where they directly accused BMS of securities fraud. Additionally, state court judges in New York and New Jersey have dismissed lawsuits from CVR holders claiming that BMS's registration statement for the Celgene merger failed to disclose the company's alleged lack of intention to secure timely FDA approval for Breyanzi.
While Judge Furman acknowledged the substantial amount of money at stake and the length of the litigation, he emphasized that UMB Bank had only itself to blame for the dismissal. He did, however, leave the door open for a "properly appointed" trustee to refile the case, suggesting that the legal battle could potentially resume.
