A U.S. federal appeals court said a judge erred in dismissing a $6.7 billion lawsuit accusing Bristol Myers Squibb (BMY.N) of cheating former Celgene shareholders by delaying federal approval for three drugs, including the cancer treatment Breyanzi.
In a 3-0 decision on Thursday, the 2nd U.S. Circuit Court of Appeals in Manhattan said UMB Bank (UMBF.O) was entitled to represent the Celgene shareholders as a trustee despite an error in how it was appointed.
Bristol Myers and its lawyers did not immediately respond to requests for comment. UMB and its lawyers did not immediately respond to similar requests.
Thursday's decision revived a lawsuit that U.S. District Judge Jesse Furman in Manhattan dismissed in September 2024. It was not immediately clear how the decision affected UMB's similar lawsuit raising several new claims against Bristol Myers, and which Furman let proceed last December.
BRISTOL MYERS ACCUSED OF BEING TOO SLOW
The case arose from Bristol Myers' purchase of Celgene for $80.3 billion in 2019.
Celgene shareholders who held "contingent value rights" (CVR) were entitled to an extra $9 per share in cash if Bristol Myers won timely U.S. Food and Drug Administration approvals for Liso-cel, which is sold as Breyanzi, and the drugs Ozanimod and Ide-cel.
Some CVR holders grew concerned that Bristol Myers would miss the deadlines to avert a big payout, and hired UMB to replace an earlier trustee.
UMB ultimately accused the drugmaker of failing to use "diligent efforts" to win approvals, and wrongly delisting the CVRs from the New York Stock Exchange before holders could enforce their rights.
Bristol Myers won FDA approval for Breyanzi to treat non-Hodgkin lymphoma on February 5, 2021, five weeks after the relevant deadline.
In a December court filing, the Princeton, New Jersey-based company denied UMB's claims that it slow-rolled the approval process and tried to undermine the CVR holders' rights.
DRUGMAKER 'NOT CONFUSED'
The appeals court said UMB had standing to sue because Bristol Myers, the prior trustee and a majority of the CVRs' "beneficial owners" approved UMB's appointment, though the investors were not "registered" owners as defined in the CVR agreement.
"Bristol Myers was not confused about the status of the investors who purported to appoint UMB," Circuit Judge Beth Robinson wrote.
In his December ruling, Furman allowed Kansas City, Missouri-based UMB to pursue some claims against Bristol Myers, including breach of contract and failure to act in good faith.
