District Judge Jesse Furman ruled that the plaintiff, UMB Bank, does not have standing to bring the case against Bristol Myers Squibb because it is not a properly appointed trustee for shareholders’ contingent value rights.
A federal Judge in New York on Monday dismissed a years-long case against Bristol Myers Squibb, which alleged that the pharma purposely delayed the approval of the CAR T therapy Breyanz to avoid paying Celgene shareholders their contingent value rights, according to Reuters.
District Judge Jesse Furman ruled that UMB Bank, the plaintiff in the case, had no standing to file a complaint against BMS because it had not been appropriately appointed as a trustee for shareholders who held these contingent value rights (CVR).
“After three years of litigation and with so much money at stake, the court does not reach that conclusion lightly,” Furman wrote in his ruling, noting that UMB “has no one to blame for that result but itself.”
UMB Bank brought its suit against BMS in 2021, alleging that the pharma “slowed down the approval process” for Breyanzi in an attempt to avoid paying out a standing CVR agreement, according to a court 2022 document. Had it been granted, the CVR would have amounted to $6.4 billion.
The CVR was part of BMS’ $74 billion acquisition of Celgene in 2019. Under the deal, Celgene shareholders were given one tradeable CVR for each share that they held. This CVR entitled them to milestone payments upon reaching certain milestones—specifically approvals for Breyanzi, the multiple sclerosis drug Zeposia and another CAR T therapy Abecma, each by a specific date.
Breyanzi, in particular, needed to have crossed the FDA finish line by Dec. 31, 2020, according to the companies’ announcement of the acquisition. However, UMB alleged that BMS helped to delay approval “by not making its books and records available for inspection upon request on December 29, 2020.” Breyanzi was approved in February 2021.
Furman’s verdict on Monday continues the streak of dismissals on the matter. Earlier this year, courts in New York and New Jersey tossed similar lawsuits which were filed by CVR holders, according to BMS’ second-quarter business report. A notice of appeal has been filed in at least one of these cases.
In March 2023, Furman dismissed a lawsuit— also filed by CVR holders—which claimed that BMS had defrauded them of their payout by intentionally delaying approval, according to Reuters. Furman at the time said that he found no intent to commit fraud.
