BMS faces lawsuit from Celgene shareholders over missed deadline for Breyanzi approval

Celgene's former shareholders sued Bristol Myers Squibb in US court on Thursday claiming that the drugmaker failed to use its best efforts to secure FDA approval of Breyanzi (lisocabtagene maraleucel) by the end of 2020, thus avoiding the payment of an estimated $6.4-billion contingent value right (CVR) payout. The CAR-T therapy finally gained clearance in February this year, despite once having been on track for approval in August 2020.

Bristol Myers Squibb picked up Breyanzi via its $74-billion buyout of Celgene in 2019, with US approval by the end of last year being one of the conditions tied to a CVR issued as part of the takeover. FDA clearance of the CD19-directed therapy by the target date would have triggered a payment of $9 to CVR holders.

Failed to use "diligent efforts"

In a complaint filed with the District Court for the Southern District of New York, UMB Bank, acting as a trustee for Celgene's former shareholders, claimed that Bristol Myers Squibb failed to use contractually required "diligent efforts" to secure approval of Breyanzi. The lawsuit alleges that Bristol Myers Squibb delayed the development and production of the therapy "with the hope of eliminating its…liability under the CVR agreement."

According to UMB, when Celgene had control of Breyanzi, the drug was "on the fast track for approval," with this momentum lost after Bristol Myers Squibb took over responsibility. Specifically, the complaint claims that Bristol Myers Squibb decided to exclude critical and mandatory information in its initial marketing application, including data on tests needed to demonstrate the therapy's safety and efficacy.

Failed to prepare manufacturing sites for inspection

The lawsuit noted that Bristol Myers Squibb later submitted the required information, triggering an extension to the FDA's review of the filing by three months to November 2020, which UMB called "perilously close" to the CVR milestone date. The complaint alleges that instead of ensuring the remainder of the regulatory process went smoothly, Bristol Myers Squibb failed to take the steps necessary to prepare two manufacturing facilities for the FDA's inspections.

"Other cellular therapies based on similar technology have received FDA approval without the issues and ineptitude that plagued Bristol Myers, and in substantially less time," UMB said. The lawsuit said Bristol Myers Squibb's actions enabled it to acquire Celgene at an "enormous discount" and enjoy a "windfall" that it used to repurchase $4 billion of debt.

In response to the lawsuit, Bristol Myers Squibb said "we will not be commenting on pending litigation."