Appeals Court Revives $6.7 Billion Lawsuit Against Bristol Myers Squibb Over Delayed Cancer Drug Approvals

What's Happening

A U.S. federal appeals court has revived a $6.7 billion lawsuit accusing Bristol Myers Squibb of intentionally delaying FDA approvals for three drugs in order to avoid making billions of dollars in additional payments to former Celgene shareholders.

The 2nd U.S. Circuit Court of Appeals ruled that a lower court incorrectly dismissed the lawsuit and that UMB Bank, acting as trustee for former Celgene shareholders, has the authority to pursue the claims. The decision allows the case to move forward after it had been dismissed in 2024.

The lawsuit centers on Bristol Myers' $80.3 billion acquisition of Celgene in 2019, which included contingent value rights (CVRs) promising former Celgene shareholders an additional $9 per share if three drugs received FDA approval before specified deadlines.

Background of the Dispute

When Bristol Myers acquired Celgene, shareholders received CVRs tied to the timely FDA approval of three therapies:

• Breyanzi (liso-cel) for certain blood cancers.
• Ozanimod for immune-mediated diseases.
• Ide-cel for multiple myeloma.

Former shareholders allege Bristol Myers failed to use the "diligent efforts" required under the merger agreement to secure approvals before the contractual deadlines.

The most significant issue involves Breyanzi, which received FDA approval approximately five weeks after the required deadline, preventing shareholders from receiving the additional payout.

What the Appeals Court Decided

The appeals court did not determine whether Bristol Myers intentionally delayed approvals.

Instead, it ruled that:

• UMB Bank was properly authorized to represent the former Celgene shareholders.
• The lower court should not have dismissed the lawsuit on procedural grounds.
• The litigation can continue in federal district court.

The court noted that Bristol Myers had recognized UMB's appointment as trustee and therefore could not argue that the trustee lacked authority to sue.

Bristol Myers' Position

Bristol Myers has consistently denied the allegations.

The company argues that:

• It worked diligently to obtain FDA approvals.
• The approval timelines reflected the normal regulatory review process.
• It did not intentionally delay approvals or undermine shareholders' contractual rights.

The company has not yet publicly commented on the appeals court's latest decision.

Industry Impact

• Pharmaceutical Companies: The case highlights the legal risks associated with milestone-based acquisition agreements where regulatory timelines directly affect shareholder payments.
• Investors: The ruling is significant for investors because it reinforces that merger-related performance obligations may remain enforceable years after large pharmaceutical acquisitions close.
• Healthcare Legal and Compliance Teams: Companies involved in mergers and acquisitions may review how contingent value rights are structured and administered to reduce future litigation risk.
• Biopharmaceutical M&A: The decision underscores the importance of documenting regulatory strategies and approval efforts when contractual payments depend on FDA milestones.

Looking Ahead

The lawsuit will return to the U.S. District Court in New York, where the substantive claims will now be litigated.

Former Celgene shareholders must still prove that Bristol Myers failed to exercise the contractually required "diligent efforts" to obtain timely FDA approvals. Bristol Myers will have an opportunity to defend its regulatory actions during the next phase of the litigation.

Why This Matters

Large pharmaceutical acquisitions increasingly include milestone-based payments tied to regulatory approvals and commercial performance.

This case illustrates how delays in FDA approvals—even by a matter of weeks—can lead to multibillion-dollar legal disputes and shape how future life sciences acquisitions are negotiated and executed.

Key Takeaways

• A federal appeals court revived a $6.7 billion lawsuit against Bristol Myers Squibb.
• Former Celgene shareholders allege Bristol Myers delayed FDA approvals for three drugs to avoid additional merger payments.
• The ruling addresses procedural issues and allows the lawsuit to proceed.
• Bristol Myers continues to deny intentionally delaying approvals.
• The case could influence future pharmaceutical mergers involving contingent value rights and regulatory milestones.

What This Means for Healthcare Marketers

The revived lawsuit highlights the strategic importance of regulatory execution, pharmaceutical mergers, and shareholder accountability within the life sciences industry. Pharmaceutical manufacturers, investment firms, legal advisory organizations, and healthcare strategy consultancies will closely monitor the case as it may influence future merger structures and commercialization planning. For healthcare marketers, organizations involved in biopharmaceutical strategy, regulatory affairs, mergers and acquisitions, and investor communications represent high-intent opportunities for thought leadership, stakeholder education, and strategic engagement.