© Reuters. FILE PHOTO: A sign in front of a Bristol Myers Squibb facility in Cambridge, Massachusetts, U.S., May 20, 2021. REUTERS/Brian Snyder
By Jonathan Stempel
NEW YORK (Reuters) – A U.S. judge on Wednesday threw out a lawsuit accusing Bristol Myers Squibb Co of defrauding investors who would receive $6.4 billion if it had won federal approval within specified timeframes for drugs developed by the first . Celgene Corporation (NASDAQ:).
In connection with the $80.3 billion purchase of Celgene in 2019, Bristol Myers had agreed to pay Celgene shareholders who held “contingent value rights” an additional $9 per share in cash if appropriate approvals were obtained from the US Food and Drug Administration. the US of the cancer drug Breyanzi and two other drugs.
The rights holders accused Bristol Myers of failing to submit critical information to the FDA and prepare the plants or inspection, in an attempt to delay approvals and avoid payment of $6.4 billion, while publicly pledging to use efforts.” Diligent” to meet the requirements of the December 2020 and March 2021 Deadlines.
However, US District Judge Jesse Furman in Manhattan found no evidence of intent to defraud.
He said there was no evidence that Bristol Myers executives sought to profit financially from the delays, and that even alleged corporate “mismanagement” did not amount to fraud.
“The relevant question is whether the allegations in the complaint support an inference that the executive defendants knew (or should have known) of the alleged errors,” he wrote. “They do not.”
Investors’ lawyers did not immediately respond to requests for comment. Bristol Myers and his attorneys did not immediately respond to similar requests. Furman said investors can resubmit some claims in an amended complaint.
Bristol Myers is still facing a separate lawsuit bringing similar claims in Manhattan federal court by a trustee representing former Celgene shareholders, and a third lawsuit bringing similar claims in New York state court. in Manhattan.
The New York-based company obtained FDA approval for Breyanzi on February 5, 2021 to treat non-Hodgkin’s lymphoma.
The case is In re Bristol-Myers Squibb (NYSE:) Co CVR Securities Litigation, US District Court, Southern District of New York, No. 21-08255.