BMS has so far been on a winning streak in the contingent value right cases, which allege that the pharma intentionally delayed regulatory activities for Breyanzi in order to avoid a $6.4 billion payout to Celgene shareholders.
Just weeks after a judge ruled in its favor in a similar case, Bristol Myers Squibb on Thursday was hit with a $6.7 billion lawsuit from former shareholders of Celgene alleging that the pharma took steps to avoid paying out contingent value rights associated with regulatory milestones for three therapies, according to Reuters.
The complaint, filed in the U.S. District Court for the Southern District of New York, alleged that BMS had intentionally delayed regulatory filings for the CAR T therapy Breyanzi (lisocabtagene maraleucel), alongside two other treatments, in an effort to avoid an extra $9-per-share payout to Celgene shareholders, as per a contingent value right (CVR) clause.
Breyanzi was originally developed by Celgene, which BMS acquired in 2019 for $74 billion. The CVR was part of this buyout and gave Celgene’s shareholders the right to certain payments for each share that they owned, contingent on regulatory milestones.
This CVR agreement has been a fraught legal battlefront between BMS and former Celgene shareholders in recent years. UMB Bank, representing the plaintiffs, first filed the lawsuit in June 2021, alleging that BMS “delayed the development and production” of Breyanzi, causing it to miss the deadline for the regulatory milestone by 36 days. Without these intentional delays, BMS would have been on the hook for $6.4 billion in CVR payments, according to the lawsuit.
“Bristol-Myers breached the CVR Agreement, which requires Bristol-Myers to use “Diligent Efforts” to secure approval from the Federal Drug Administration . . . by December 31, 2020,” the lawsuit read, calling BMS’s delaying tactics “blatant misconduct.” The complaint sought monetary damages for Celgene shareholders.
Last month, a federal New York judge handed BMS a legal victory in the matter. In his ruling, Judge Jesse Furman argued that UMB Bank had no standing to bring the case against BMS as the bank had not been properly appointed as a trustee for the shareholders who held the CVR. “The court does not reach that conclusion lightly,” Furman wrote at the time, especially given that there is “so much money at stake.”
BMS has also scored several previous favorable rulings on the CVR lawsuits. According to its second-quarter 2024 business report, New York and New Jersey courts earlier this year dismissed multiple similar complaints from CVR holders, though at least one of these cases is being appealed.
