Bristol Myers faces renewed $6.7bn lawsuit over Celgene deal milestones

Bristol Myers Squibb (BMY) must once again defend itself against claims that it delayed regulatory approvals for key medicines to avoid a multibillion-dollar payout to former Celgene investors, after a US appeals court revived a lawsuit previously dismissed in 2024.

In a unanimous decision, the US Court of Appeals for the Second Circuit ruled that UMB Financial (UMBF), acting as trustee for holders of contingent value rights linked to Bristol Myers' $80.3bn acquisition of Celgene, had standing to pursue the case despite irregularities surrounding its appointment.

The ruling reopens a legal dispute worth an estimated $6.7bn and represents a setback for the New Jersey-based drugmaker as it continues to face scrutiny over the integration of one of the largest acquisitions in the pharmaceutical sector.

The case centres on contingent value rights, or CVRs, issued as part of Bristol Myers' 2019 takeover of Celgene. Under the terms of the deal, shareholders were entitled to receive an additional $9 a share if the company secured US Food and Drug Administration approval for three therapies by specified deadlines: the CAR-T cancer treatment liso-cel, now marketed as Breyanzi, alongside ozanimod and ide-cel.

Investors allege Bristol Myers failed to use the "diligent efforts" required under the agreement and deliberately slowed elements of the approval process to avoid triggering the additional payment. They also contend that the company improperly delisted the CVRs from the New York Stock Exchange before holders had an opportunity to enforce their rights.

A key focus of the dispute is Breyanzi, which received FDA approval for the treatment of certain forms of non-Hodgkin lymphoma on February 5, 2021, approximately five weeks after the deadline stipulated in the CVR agreement.

Bristol Myers has consistently rejected allegations that it intentionally delayed regulatory submissions or sought to undermine investors' rights. In court filings, the company denied claims that it had slow-walked the approval process.

Thursday's decision overturns a September 2024 ruling by US District Judge Jesse Furman, who had dismissed the lawsuit. The appeals court found that UMB could validly represent the investors because Bristol Myers, the previous trustee and a majority of the CVRs' beneficial owners had supported its appointment, notwithstanding technical issues concerning the distinction between beneficial and registered holders under the agreement.

Writing for the panel, Circuit Judge Beth Robinson said Bristol Myers could not credibly claim uncertainty over the status of the investors who appointed UMB, noting that the company was aware of the parties involved in the process.

The ruling adds a further layer of complexity to the broader litigation. Furman had already allowed a related lawsuit brought by UMB to move forward in December 2025, including claims for breach of contract and violations of the implied covenant of good faith and fair dealing.

The revived case raises potentially significant questions about the treatment of milestone-linked securities in pharmaceutical mergers and acquisitions. For investors, the outcome could establish important precedents around how aggressively acquirers must pursue regulatory approvals when future payments depend on specific development milestones. For Bristol Myers, the stakes extend beyond the financial exposure: the litigation revisits one of the most closely scrutinised aspects of its landmark acquisition of Celgene and the commercialisation strategy for some of its most important oncology assets.