Federal Judge Dismisses $6.4 Billion Lawsuit Against Bristol Myers Squibb Over Celgene Acquisition

Lawsuit Dismissal:
A federal judge has dismissed a $6.4 billion lawsuit against Bristol Myers Squibb (BMS) related to its acquisition of Celgene. The lawsuit alleged that BMS delayed the FDA approval of the CAR-T therapy Breyanzi to avoid paying former Celgene shareholders.

Contingent Value Rights (CVR):
The lawsuit centered on a CVR agreement that promised additional payments to Celgene shareholders if certain drugs, including Breyanzi, received FDA approval by specific deadlines. Breyanzi missed its deadline, leading to the lawsuit.

Legal Rationale:
The judge found that the plaintiffs failed to provide sufficient evidence of "conscious misbehavior or recklessness" by BMS to support the fraud claims. The plaintiffs were given the opportunity to amend their claims.

Ongoing Legal Battles:
Despite this dismissal, BMS faces another related lawsuit alleging breach of contract, which has proceeded to the fact-finding phase. This case could potentially cost BMS $8 billion to $9 billion if lost.

Industry Impact:
The use of CVRs in biopharma mergers and acquisitions has regained popularity, highlighting the importance of these legal disputes in the pharmaceutical industry.