Bristol Myers faces renewed, $6.7 billion lawsuit over delayed cancer drug
NEW YORK (Reuters) – Bristol Myers Squibb was hit on Thursday with a $6.7 billion lawsuit claiming it cheated former Celgene (NASDAQ:CELG) shareholders by delaying federal approval for three drugs, 1-1/2 months after a federal judge abruptly dismissed an earlier version of the case.
The lawsuit accused Bristol Myers of depriving holders of “contingent value rights” (CVR) an extra $9 per share in cash by dragging its heels in seeking approval of the drugs, including the cancer drug Breyanzi, by specified deadlines. It said Bristol Myers did this to avoid a big payout.
On Sept. 30, U.S. District Judge Jesse Furman in Manhattan ruled that the plaintiff UMB Bank had never been properly appointed trustee to represent the CVR holders.
He said this “inexplicable failure” doomed the earlier lawsuit that UMB filed after purportedly replacing a different trustee, and 17 months after Bristol Myers bought Celgene for $80.3 billion.
In Thursday’s complaint, UMB said it has addressed the judge’s concerns and been confirmed as trustee, entitling it to sue. Bristol Myers’ estimated $6.7 billion liability is up from $6.4 billion mentioned in earlier court papers.
Neither Bristol Myers nor its lawyers immediately responded to requests for comment after market hours. UMB’s lawyers did not immediately respond to separate requests.
Bristol Myers won U.S. Food and Drug Administration approval for Breyanzi to treat non-Hodgkin’s lymphoma on Feb. 5, 2021, five weeks after the relevant deadline for the CVR holders.
The case is UMB Bank NA v Bristol-Myers Squibb (NYSE:BMY) Co, U.S. District Court, Southern District of New York, No. 24-08668.
