A U.S. federal court on Friday shot down Bristol Myers Squibb’s motion to dismiss an investor lawsuit connected to its $74 billion Celgene buyout.
Filed by former Celgene shareholders last June, the suit hinges on a $6.4 billion Contingent Value Rights (CVR) agreement that evaporated when one of three drugs at the center of the megadeal—the CAR-T non-Hodgkin lymphoma treatment Breyanzi—failed to snag FDA approval by a Dec. 31, 2020, deadline.
BMS has sought to dismiss the case, which accuses the drugmaker of “blatant misconduct" for failing to apply “diligent efforts” to secure a timely approval for Breyanzi.
Bristol’s argument for dismissal principally concerned plaintiffs’ alleged failure to comply with certain pre-suit notice procedures, court documents show. The United States District Court for the Southern District of New York rejected the drugmaker's arguments late last week and said the case can proceed.
BMS now has 14 days from Friday to respond to the court’s decision. The company did not immediately respond to Fierce Pharma’s request for comment.
After the court's decision, Mizuho analyst Salim Syed wrote to clients that the ruling was the plaintiffs' "first notable win" in the case. It's still early, "but we now know this trial is proceeding," he added.
Previously, Syed projected that BMS will settle the case in 2 to 3 years at a price of $3 billion to $4 billion before interest. He reached that conclusion by looking at the precedent from Sanofi’s 2019 settlement with former Genzyme shareholders around multiple sclerosis drug Lemtrada.