Bristol Myers Squibb Lawsuit Dismissal

(Reuters) – Bristol Myers Squibb has successfully dismissed a $6.4 billion lawsuit alleging it deceived former Celgene shareholders by delaying federal approval for the cancer drug Breyanzi and two other Celgene drugs.

Court Decision

U.S. District Judge Jesse Furman in Manhattan ruled that UMB Bank was never properly appointed as the trustee for shareholders who owned “contingent value rights” (CVR) because their appointment was backed by a majority of beneficial owners rather than registered owners.

Furman stated that this “inexplicable failure” led to the lawsuit’s downfall, which UMB had filed on behalf of CVR holders in June 2021, following Bristol Myers’ acquisition of Celgene for $80.3 billion.

“After three years of litigation and with so much money at stake, the court does not reach that conclusion lightly,” Furman remarked, adding that UMB was solely responsible for the result. He noted that a properly appointed trustee could refile the case.

Reactions and Background

Neither UMB Bank’s lawyers nor those representing Bristol Myers immediately responded for comments.

The merger agreement mandated Bristol Myers to pay CVR holders an additional $9 per share in cash if it secured FDA approval for Liso-Cel (Breyanzi) and Ozanimod by December 31, 2020, and Ide-cel by March 31, 2021.

CVR holders accused Bristol Myers of intentionally delaying the submission of vital information to the FDA and preparing facilities for inspection, aiming to postpone approvals and avoid the $6.4 billion payout.

Bristol Myers eventually gained FDA approval for Breyanzi on February 5, 2021, for treating non-Hodgkin’s lymphoma.

CVR holders are also appealing Furman’s February dismissal of another lawsuit directly accusing Bristol Myers of securities fraud. Additionally, lawsuits filed by CVR holders in New York and New Jersey, which claimed Bristol Myers’ registration statement for the Celgene merger did not disclose its lack of intention to obtain timely FDA approval for Breyanzi, were dismissed in 2024.

Case Reference

The case is referenced as UMB Bank NA v Bristol-Myers Squibb (NYSE:BMY) Co, U.S. District Court, Southern District of New York, No. 21-04897.