Bristol Myers won a $6.4 billion case dismissed due to a delay in medication approval.
A lawsuit alleging Bristol Myers Squibb Co (BMY.N) of defrauding investors who stood to collect $6.4 billion had it received regulatory approval for medications developed by the former Celgene Corp. by the stated deadlines was dismissed by a U.S. judge on Wednesday.
Bristol Myers had agreed to pay Celgene shareholders holding “contingent value rights” an additional $9 per share in cash as part of its $80.3 billion purchase of Celgene in 2019 if the company received timely approval from the US Food and Drug Administration for the cancer drug Breyanzi and two other medications.
While publicly committing to employ “diligent” efforts to achieve the Dec. 2020 and March 2021 deadlines, rights holders accused Bristol Myers of failing to submit crucial information to the FDA, preparing factories, or inspecting to delay the approvals and avoid the $6.4 billion fee.
When a US federal judge dismissed a $6.4 billion lawsuit in 2021 accusing Bristol Myers Squibb of harming shareholders by delaying the clearance of a new medicine, the pharmaceutical corporation scored a significant victory in the courtroom.
Investors filed the complaint, alleging that Bristol Myers Squibb had concealed information concerning delays in the approval of Eliquis, a blood thinner that the company co-developed with Pfizer, from them.
The investors claimed that when the medication was approved, and its market value fell short of expectations, the delays cost them money. Additionally, they charged the business with making false and deceptive claims about the potential of the medication to boost the value of its shares artificially.
The judge, however, determined that Bristol Myers Squibb had not intentionally misled shareholders and that the investors had not shown enough evidence to back up their accusations. The judge also pointed out that drug approval delays are typical in the pharmaceutical sector and that Bristol Myers Squibb had been open about its difficulties.
Bristol Myers Squibb, which has faced numerous legal challenges in recent years over its medication development and marketing methods, considered the dismissal of the complaint to be a significant success. The business is still a considerable force in the global pharmaceutical market and is well known for its contributions to creating ground-breaking cures for debilitating illnesses.
However, U.S. District Judge Jesse Furman in Manhattan concluded that there was no evidence of fraudulent intent. According to him, there is no proof that Bristol Myers executives tried to profit financially from delays, and even the purported “mismanagement” of the company is not a fraud.
The pertinent inquiry is whether the accusations in the complaint justify the conclusion that the executive defendants were aware of the claimed errors, according to his writing. “No, they don’t.”
Requests for feedback from the investors’ attorneys were delayed. Bristol Myers or its attorneys waited to answer similar demands. According to Furman, the investors can resubmit some claims in an updated complaint.
A trustee for former Celgene stockholders is still pursuing a separate action against Bristol Myers in Manhattan federal court, while a third lawsuit asserting similar allegations is pending in Manhattan state court.
On February 5, 2021, the New York-based business received FDA approval for Breyanzi, a treatment for non-Hodgkin lymphoma. In re Bristol-Myers Squibb Co CVR Securities Lawsuit, Southern District of New York U.S. District Court, Case No. 21-08255.
Bristol Myers Squibb
An international biopharmaceutical business, Bristol Myers Squibb, creates and distributes cutting-edge medications for people with critical conditions. The company’s headquarters are in New York City, USA, established in 1858.
Treatments for various illnesses, such as cancer, cardiovascular disease, immunology, and fibrosis, are included in Bristol Myers Squibb’s product line. The most well-known goods produced by the corporation include Opdivo, Yervoy, Eliquis, Orencia, and Revlimid.
Bristol Myers Squibb works on numerous projects to assist patient access to healthcare, advance sustainability in its business practices, and create new medications. The corporation employs more than 30,000 people worldwide and is in more than 60 nations.
There have been several high-profile incidents using Bristol-Myers Squibb’s medications. Here are a few illustrations:
- Plavix: Bristol Myers Squibb and Sanofi, who jointly market the blood thinner Plavix, agreed to pay $162 million in 2012 to resolve claims that they illegally sold the medication. The firms were charged with making false statements regarding the safety and efficacy of the drug.
- Abilify: To resolve claims that it improperly marketed the antipsychotic medication Abilify, Bristol Myers Squibb agreed to pay $19.5 million in 2016. The business was charged with bribing physicians to prescribe and advertise the medicine for unapproved uses.
- Opdivo: To resolve claims that it paid kickbacks to doctors to prescribe its cancer treatment Opdivo, Bristol Myers Squibb agreed to pay $14.5 million in 2017. The business was charged with masking the payments as meals and speaker fees.
- Orencia: A group of patients filed a lawsuit against Bristol Myers Squibb in 2020, alleging that the pharmaceutical corporation neglected to inform them of the dangers of life-threatening infections linked to its rheumatoid arthritis medication Orencia.
The patients claimed that after taking the medication, they experienced life-threatening illnesses. It’s important to note that the thousands of medications Bristol Myers Squibb has created and marketed over the years pale compared to the cases at hand. The company has also made significant investments in research and development to bring new treatments to market. Many of the company’s medications have received high praise for their success in treating serious illnesses.
Edited by Prakriti Arora