Investors send Bristol Myers' CVR soaring on rekindled hopes for timely CAR-T site inspection

Bristol Myers Squibb new sign outside
Investors sent Bristol Myers Squibb's CVR up after seeing hopes that the FDA might perform a much-delayed plant inspection in time for a decision on Celgene's CAR-T therapy liso-cel by year-end. (Bristol Myers Squibb)

Perhaps no one is paying closer attention to the FDA’s drug manufacturing site inspection activities than holders of the Bristol Myers Squibb contingent value rights tied to its Celgene buyout. After sending the shares’ worth to a new low in mid-November, the investors, reading the tea leaves, suddenly had a change of heart.

Prices for the Bristol Myers’ CVR jumped as much as 55% on Thursday to their highest level in about three weeks, Bloomberg reported.

The reason? Word that the FDA recently inspected another company’s manufacturing site ahead of its decision date on a drug application spelled promise for delayed CAR-T candidate liso-cel.

The FDA has completed an inspection of the manufacturing facility for Macrogenics’ HER2 antibody margetuximab, which bears an FDA decision deadline of Dec. 18 for its application in metastatic breast cancer, the company’s CEO, Scott Koenig, said at Evercore ISI’s annual HealthCONx event Wednesday.

The site belongs to contract manufacturer AGC Biologics in Seattle, and the inspection was conducted in person, Evercore ISI analyst Umer Raffat wrote in an investor note Thursday. The CDMO didn’t immediately respond to a Fierce Pharma request for confirmation.

By itself, the drug isn’t the most important candidate in Macrogenics’ portfolio, according to Raffat, but the plant inspection rekindles hopes for Bristol CVR holders that they might eventually be able to collect $9 for each piece, as promised.

RELATED: Bristol Myers' hopes for a CAR-T nod by year-end fade as COVID-19 delays FDA inspection

As part of Bristol’s $74 billion acquisition of Celgene, the New York pharma offered Celgene shareholders the CVR. But to realize the $9-apiece payment, approvals for three ex-Celgene drugs must meet their prespecified deadlines.

Multiple sclerosis therapy Zeposia already hit its target with an approval in March. And bluebird bio-shared anti-BCMA CAR-T therapy ide-cel, despite a previous manufacturing documentation miss, could meet its goal of March 31, as the FDA has set a decision date for March 27.

However, the possibility of CD19-directed CAR-T candidate liso-cel meeting its year-end deadline looked remote after the FDA in November postponed its decision for the second time. As part of the review process, the agency had been unable to conduct an inspection of a Lonza facility in Texas, which is meant to make the viral vector for the cell therapy. Before that, the FDA had already postponed its original action date by three months to review additional documents from the company.

The news crashed the CVR’s trading price to below $1, and, if an inspection isn’t complete to facilitate an approval by year-end, the CVR will be worth nothing. BMS declined to comment.

RELATED: Revance's frown-line injection latest to face regulatory delay after FDA can't hit inspection deadline

Of course, the Macrogenics story means that FDA plant inspections remain underway during the pandemic, but not necessarily for BMS. And as Mizuho analyst Salim Syed noted in his analysis, “there is a lot of tea leaf reading going on right now,” and there’s “nothing definitive that I can point to.” Apparently, desperate CVR holders are also reading “movement at the Lonza facility” as positive signs, according to Syed.

The FDA’s site inspection activities have been limited during the pandemic as travel restrictions are in place and as the agency ensures the safety of its staff. Those constraints have come at the expense of several drug approvals. After liso-cel, Revance’s frown-line injection daxibotulinumtoxinA was also hit with a delay after the FDA admitted it couldn’t inspect a Newark, California, plant on time for its review.