Bristol-Myers Derivative Is Now Worthless as Key Deadline Passes

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Investors in a deal sweetener created when Bristol-Myers Squibb Co. acquired Celgene Corp. in 2019 have seen their all-or-nothing bet wiped out because U.S. regulators didn’t approve a drug in time.

The contingent value right, or CVR, depended on a trio of drug candidates getting cleared. In a statement early Friday, Bristol-Myers said the second key deadline — approval for lymphoma cell therapy liso-cel — expired on Dec. 31 without a decision from the Food and Drug Administration. The CVR’s final hurdle would have been approval by March 31 for another new therapy called ide-cel.

The $9-a-share sweetener traded as high as $4.76 apiece in April before falling to 49 cents in extended trading Thursday. There are almost 715 million CVRs outstanding, which would have translated to a total payout of $6.4 billion if all the terms were met, data compiled by Bloomberg show. The CVRs will no longer trade on the New York Stock Exchange.

Bristol-Myers said it continues to work closely with the FDA to support the review of the Biologics License Application for liso-cel and still wants to bring the therapy to patients.

In a note Dec. 23, Mizuho analyst Salim Syed highlighted how rare it is for the FDA to approve drugs between the Christmas and New Year’s Day holidays. He estimated the CVR’s litigation value at 30 cents to $1.40.

— With assistance by James Ludden

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