Will BMS Eventually Have To Pay Celgene Holders ~$6.4 Billion? We Shall See: Of "Contingent Value Rights"

To be sure, so-called "contingent value rights" have been used since the late 1980s, in M&A circles, to close deals where there would otherwise be intractable differences of opinion on the overall price for a company, or asset.

In this case, Celgene felt it was worth more than BMS was giving it credit for at the bargaining table. So, to split the difference (and think Seagen/Pfizer here, this year!), and cross the gulf. . . the parties agreed that if a certain Celgene candidate called Breyanzi won FDA approval by 2020, BMS would pay out a performance bonus of sorts, to the former shareholders of Celgene -- another $6.4 billion in all, give or take.

But BMS missed the deadline for FDA approval by a couple months -- and the claim is that BMS management slow-rolled the approval to avoid paying out on the CVRs. We will pick up the story there -- but FiercePharma is right: this is many long nights away from being over. In fact it is pending in several court houses, in one form or another, around the nation. So litigation it will remain:

. . .Did Bristol Myers Squibb deliberately drag its feet with Breyanzi’s FDA application to avoid paying former Celgene shareholders $6.4 billion? A federal judge found no proof of that intent.

U.S. District Judge Jesse Furman on Wednesday dismissed a lawsuit that accused BMS of lying about getting CAR-T therapy Breyanzi a timely FDA approval, which would have enabled a $6.4 billion payout to investors.

But as Mizuho analyst Salim Syed pointed out in a Thursday note, BMS’ legal battle around the contingent value rights is far from over. . . .

Now you know. . . we will keep you apprised. Smile.

नमस्ते