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According to a Reuters report, U.S. District Judge Jesse Furman in Manhattan refused to dismiss a $6.4 billion lawsuit accusing Bristol Myers Squibb Co (NYSE: BMY) of delaying its Breyanzi cancer drug to avoid payments to former Celgene shareholders.
The judge rejected Bristol Myers' claim that it was never properly notified about its alleged default on its merger obligations by the trustee representing the former Celgene shareholders.
While two drugs were approved by the deadlines, the trustee said Bristol Myers failed to use the required "diligent efforts" to obtain approval for Breyanzi by December 31, 2020. It reaped a "windfall" by avoiding the extra payout of $9/share in cash.
FDA approved Breyanzi in February 2021 for non-Hodgkin's lymphoma.
The trustee said Bristol Myers had delayed submitting critical information to the FDA and failed to prepare its manufacturing plants for inspections.
"(Bristol Myers) cites no authority to support the proposition that a breach of a contract cannot, as a matter of law, 'continue' after the termination of the contract," Furman wrote.
Most recently, FDA approved Breyanzi for adult patients with large B-cell lymphoma with the refractory disease to first-line chemoimmunotherapy or relapse within 12 months of first-line chemoimmunotherapy or who are not eligible for hematopoietic stem cell transplant.
Price Action: BMY shares are up 1.54% at $80.18 during the market session on the last check Monday.
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