Bristol Myers beat $6.4 billion lawsuit to delay cancer drug

Bristol Myers Squibb on Monday won the dismissal of a $6.4 billion lawsuit alleging it defrauded former Celgene shareholders by delaying federal approval of the cancer drug Breyanzi and two other drugs developed by Celgene.

U.S. District Judge Jesse Furman in Manhattan said UMB Bank was never properly appointed as trustee for shareholders holding “Contingent Value Rights” (CVRs) because its hiring was supported by the majority of beneficial owners, not registered owners .

Furman said the “inexplicable failure” doomed the lawsuit UMB filed on behalf of CVR holders in June 2021, months after it allegedly replaced another administrator and 17 months after Bristol Myers bought Celgene for $80.3 billion.

“After three years of litigation and with so much money at stake, the court does not reach this conclusion lightly,” Furman wrote. “UMB has no one to blame for this outcome but itself.” He said a “properly appointed” administrator can reopen the case.

Neither UMB’s attorneys nor the Kansas City, Missouri-based bank immediately responded to requests for comment. Bristol Myers and its attorneys did not immediately respond to similar requests.

The merger called for Bristol Myers to pay CVR holders an additional $9 a share in cash if it receives U.S. Food and Drug Administration approval for Liso-Cel, which is sold as Breyanzi, and Ozanimod by December 31, 2020, and Ide- the one until March 31, 2021.

CVR holders accused Bristol Myers of delaying sending critical information to the FDA and preparing plants for inspection, hoping to delay approvals and avoid paying $6.4 billion.

Bristol Myers won FDA approval for Breyanzi on February 5, 2021, to treat non-Hodgkin’s lymphoma.

The CVR holders are appealing Furman’s dismissal in February of a separate lawsuit they had filed directly accusing Bristol Myers of securities fraud.

Also in 2024, state court judges in New York and New Jersey dismissed lawsuits by CVR holders who said Bristol Myers’ registration statement for the Celgene merger failed to disclose that it did not intend to seek FDA approval for Breyanzi at time.

The case is UMB Bank NA v. Bristol-Myers Squibb Co, U.S. District Court, Southern District of New York, no. 21-04897.

(Reporting by Stempel in New York; Editing by Leslie Adler)