Bristol-Myers Squibb Company (NYSE: BMY) disclosed that it has faced lawsuit of $6.4 billion for purportedly delaying its Breyanzi cancer drug to dodge payments to shareholders of the former Celgene Corp, which the drugmaker purchased in 2019. The lawsuit has been filed in Manhattan federal court.
The lawsuit stated that Bristol Myers failed to use contractually mandatory "diligent efforts" to win U.S. FDA authorization for the non-Hodgkin lymphoma drug by a Dec. 31, 2020, time limit. By missing the time limit, Bristol Myers was exempted from owing an additional $9 in cash to Celgene shareholders for each share they held, allowing it to buy Celgene at a "huge discount" and enjoy a "bonus".
Furthermore, Bristol Myers has acquired Celgene for $80.3 billion in cash and stock in November 2019. It secured FDA authorization for Breyanzi, whose chemical name is lisocabtagene maraleucel, on Feb. 5. The lawsuit was filed by UMB Bank NA, serving as a trustee for Celgene's former shareholders.
In addition to this, UMB disclosed that Bristol Myers suspended or slowly submitted needed information to the FDA for Breyanzi's authorization. It did not commence its manufacturing plants for necessary reviews. UMB added that other cellular therapies based on similar technology have secured FDA authorization without any problem and incompetence that beset Bristol Myers, and in considerably less time.