Bristol Myers wins $6.4 billion lawsuit over delayed cancer drug

(Reuters) – Bristol Myers Squibb won on Monday the dismissal of a $6.4 billion lawsuit alleging the company harmed former Celgene shareholders by delaying federal approval for cancer drug Breyanzi and two others drugs developed by Celgene cheated.

U.S. District Judge Jesse Furman in Manhattan said UMB Bank was never properly appointed as trustee for shareholders holding contingent value rights (CVR) because its hiring was supported by a majority of beneficial owners, not registered owners .

Furman said “inexplicable failure” doomed the lawsuit that UMB filed on behalf of CVR holders in June 2021, just months after the alleged replacement of another trustee and 17 months after Bristol Myers Celgene for 80, Bought for $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 “duly appointed” trustee could reopen the case.

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

The merger required Bristol Myers to pay CVR holders an additional $9 per share in cash if the company received approval from the U.S. Food and Drug Administration for liso-cel, known as Liso-Cel, by December 31, 2020 Breyanzi will be sold, and Ozanimod as well as Ide-cel will be available until March 31, 2021.

CVR holders accused Bristol Myers of being slow to provide key information to the FDA and prepare facilities for inspection in hopes of delaying approvals and avoiding a $6.4 billion payout.

Bristol Myers received FDA approval for Breyanzi for the treatment of non-Hodgkin lymphoma on February 5, 2021.

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

Also in 2024, New York and New Jersey state judges dismissed lawsuits from CVR holders who said Bristol Myers' registration statement for the Celgene merger failed to disclose that the company did not intend to file a timely notice with the FDA -Get approval for Breyanzi.

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 Jonathan Stempel in New York; Editing by Leslie Adler)