Key facts
- A $6.7 billion lawsuit against Bristol Myers Squibb has been revived by a U.S. federal appeals court.
- The lawsuit accuses the company of cheating former Celgene shareholders by delaying FDA approval for three drugs.
- One of the delayed drugs is the cancer treatment Breyanzi.
- The 2nd U.S. Circuit Court of Appeals ruled that UMB Bank can represent Celgene shareholders.
- The appeals court overturned a previous dismissal by U.S. District Judge Jesse Furman.
A U.S. federal appeals court has revived a $6.7 billion lawsuit against Bristol Myers Squibb, alleging the company defrauded former Celgene shareholders by intentionally delaying the U.S. Food and Drug Administration's approval for three drugs, including the cancer treatment Breyanzi.
The 2nd U.S. Circuit Court of Appeals in Manhattan ruled 3-0 that UMB Bank, acting as a trustee, is entitled to represent the Celgene shareholders in the case. This decision overturns a September 2024 dismissal by U.S. District Judge Jesse Furman.
The lawsuit stems from Bristol Myers' $80.3 billion acquisition of Celgene in 2019. Celgene shareholders holding "contingent value rights" (CVRs) were promised an additional $9 per share if specific drugs, including Liso-cel (Breyanzi), Ozanimod, and Ide-cel, received timely FDA approval. Concerns arose that Bristol Myers might miss these deadlines, prompting CVR holders to appoint UMB as a new trustee.
UMB accused Bristol Myers of not making diligent efforts to secure approvals and of delisting the CVRs prematurely. Bristol Myers secured FDA approval for Breyanzi in February 2021, five weeks after the deadline stipulated in the CVR agreement. The company has denied these allegations, stating it did not intentionally delay the approval process or undermine CVR holders' rights.
The appeals court clarified that UMB had standing to sue, as Bristol Myers was aware of the investors appointing the bank, despite a technicality in the CVR agreement regarding registered ownership. Judge Jesse Furman had previously allowed UMB to proceed with some claims, including breach of contract and bad faith, in December.