Bristol derivative rendered worthless at end of deadline

Photographer: Daniel Acker / Bloomberg

Investors in a sweetener created when Bristol-Myers Squibb Co., which acquired Celgene Corp. in 2019, saw its all-or-nothing bet dashed because US regulators failed to approve a drug on time.

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

The $ 9 per share sweetener traded as high as $ 4.76 each in April before falling to 49 cents in extended trading on Thursday. There are nearly 715 million CVRs in circulation, which would have translated into a total payout of $ 6.4 billion had all the conditions been met, according to data compiled by Bloomberg. 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 offer the therapy to patients.

In a December 23 memo, Mizuho analyst Salim Syed pointed out how rare it is for the FDA to approve drugs between the Christmas and New Years holidays. He estimated the value of the litigation of the CVR between 30 cents and $ 1.40.

– With the help of James Ludden