On December 22, 2021, Judge Jesse M. Furman of the United States District Court for the Southern District of New York appointed Cohen Milstein sole Lead Counsel in this securities class action against Bristol-Myers Squibb and certain directors and officers, arising from Bristol Myers’ alleged subversion of the FDA approval process for the cancer therapy Liso-cel for the purpose of avoiding a $6.4 billion payment to holders of contingent value rights (CVRs). (A CVR is a security payable upon the occurrence of a specified future event, often used by acquiring companies as partial merger consideration to the target company’s shareholders.)
In the same order, Judge Furman appointed Cohen Milstein’s client, Mangrove Partners, Lead Plaintiff.
On April 14, 2023, Plaintiffs filed a second amended complaint with the court.
On December 3, 2021, Cohen Milstein, on behalf of Mangrove Partners and other plaintiffs, who were shareholders of Celgene Corporation who had received Bristol-Myers Squibb CVRs in exchange for their Celgene shares pursuant to Bristol’s $74 billion acquisition of Celgene on November 20, 2019 and all persons who purchased CVRs between November 20, 2019 and December 31, 2020 (the “Class Period”), filed this securities class action with United States District Court for the Southern District of New York.
The securities class action arises from Bristol-Myers Squibb’s (NYSE: BMY-RT) acquisition of Celgene, which manufactured five “key pivotal assets” of pipeline drugs – the crown jewel being Liso-cel, a blockbuster cancer therapy, which the FDA had designation as both a “breakthrough therapy” and a “regenerative medicine advanced therapy.” More specifically, the suit arises from Bristol’s subsequent subversion of the FDA approval process for Liso-cel – for the purpose of avoiding a $6.4 billion payment to CVR holders. By Bristol’s own design, the CVR payout required FDA approval of three therapies, including Liso-cel, by specified milestone dates. A single therapy missing a milestone date meant, Bristol would not be obligated to pay CVR holders.
Plaintiffs claim that Bristol purposefully subverted the FDA regulatory approval process through a series of obstructive acts that it falsely passed off to shareholders and the market as innocent mistakes or as events out of its control, including omitting volumes of basic information concerning Liso-cel in its FDA filings. Bristol knew that each defective submission would delay FDA review, inspection and approval of Liso-cel, thus making it more likely that Bristol would miss the Liso-cel milestone and thereby allowing it to evade payment to CVR holders.
As a result of Bristol’s reckless failure to take diligent efforts to obtain FDA approvals by the milestone date of December 31, 2020, Plaintiffs claim, Defendants not only missed the requite milestone date, thereby terminating the CVRs and destroying billions of dollars in potential value, but also made materially false and misleading statements or omitted such material information about its efforts to meet such milestones, the likelihood that such milestones would be met, and the purported value of the CVRs, in its Registration Statement, filed on or about February 20, 2019, and the Joint Proxy, filed on or about February 22, 2019, in violation of the Securities Act of 1933 and the Securities Exchange Act of 1934.
The original case name is: Khalil, et al. v. Bristol Meyers Squibb, et al., Case No. 1:21-cv-08255-JMF, United States District Court for the Southern District of New York.
The operative case name is: In re Bristol-Myers Squibb Company CVR Securities Litigation, Case No. 1:21-cv-08255-JMF, United States District Court for the Southern District of New York.