Appeals Court Revives $6.7B Bristol Myers Squibb Lawsuit Over Celgene Deal

A federal appeals court has revived a $6.7 billion lawsuit against Bristol Myers Squibb (BMY), ruling that a lower court incorrectly dismissed the case. The suit, brought by UMB Bank on behalf of former Celgene shareholders, alleges that Bristol Myers Squibb delayed regulatory approvals for certain drugs, triggering contingent value rights (CVRs) that were part of the 2019 acquisition of Celgene. The appellate decision, issued on Thursday, reverses a previous dismissal and sends the case back for further proceedings. The lawsuit centers on whether Bristol Myers Squibb failed to use commercially reasonable efforts to obtain FDA approvals for three drugs, which would have affected the payout of CVRs. The original deal included CVRs that entitled Celgene shareholders to additional payments if certain milestones were met. The revived lawsuit could have significant financial implications for Bristol Myers Squibb, which has denied the allegations. The case is being watched closely by the pharmaceutical industry as it may set a precedent for how CVR obligations are enforced in mergers.