In February, the FDA green lit Breyanzi, a CAR-T cell therapy developed by Bristol-Myers Squibb to treat patients with certain types of large B-cell lymphoma. Although any new drug approval is generally met with applause, for Celgene shareholders, the occasion was apparently viewed with suspicion.
After BMS bought Celgene in November 2019, part of the deal, valued at about $80.3 billion, was that if the company won approval of three specific drugs before Dec. 31, 2020, a Celgene Contingent Value Rights (CVR) payout would kick in. If those milestones were met? The CVR notes in circulation could have paid out $6.4 billion to Celgene shareholders.
Earlier this year, reports suggested that delays related to the pandemic and FDA facility inspections were the main culprits behind why BMS couldn’t get the drug across the finish line before the Dec. 31 deadline. Yet, Celgene investors aren’t buying it.
This week, a new lawsuit was announced claiming that BMS purposefully delayed the end stages of the drug’s development to avoid the Celgene shareholder payout. According to the plaintiffs, the company failed to use contractually required “diligent efforts” to get the treatment approved.
The lawsuit was filed this week in a federal court in Manhattan.
