Case 1:21-cv-08255 Document 1 Filed 10/06/21 Page 1 of 48
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`
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`
`
`SM Merger/Arbitrage, L.P., SM Investors, L.P.
`and SM Investors II, L.P., on behalf of
`themselves and all others similarly situated,
`
`
`
`
`
`vs.
`
`
`
`BRISTOL-MYERS SQUIBB COMPANY,
`GIOVANNI CAFORIO, VICKI L. SATO,
`PETER J. ARDUINI, ROBERT BERTOLINI,
`MATTHEW W. EMMENS, MICHAEL
`GROBSTEIN, ALAN J. LACY, DINESH C.
`PALIWAL, THEODORE R. SAMUELS,
`GERALD L. STORCH and KAREN H.
`VOUSDEN,
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
` Case No. 21-cv-8255
`
`CLASS ACTION COMPLAINT
`
`
`
`
`JURY TRIAL DEMANDED
`
`Plaintiffs,
`
`Defendants.
`
`
`
`

`

`Case 1:21-cv-08255 Document 1 Filed 10/06/21 Page 2 of 48
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`I. 
`
`PRELIMINARY STATEMENT ........................................................................................ 2 
`
`TABLE OF CONTENTS
`
`A. 
`
`B. 
`
`C. 
`
`The Merger Was Consummated Based on a Materially False and
`Misleading Joint Proxy ........................................................................................... 3 
`
`Bristol Assumes Control of Celgene and Files a Materially Deficient
`Chemistry, Manufacturing and Controls Portion of Liso-cel’s BLA ..................... 6 
`
`Bristol’s Actions Were Contrary to Industry Standards and Its Own Prior
`Practices .................................................................................................................. 8 
`
`1. 
`
`2. 
`
`3. 
`
`Bristol Submitted 96 Amendments to Liso-cel’s BLA Application
`– 50% More Than Those Submitted by Direct Competitors ...................... 9 
`
`Liso-cel Was Approved 415 Days After Celgene’s BLA
`Submission, More Than Twice the 194-Day Average For Similarly
`Situated CAR-T Therapies ........................................................................ 10 
`
`The 415-Day Approval Time Was Nearly Twice That of Every
`Other Original BLA/NDA Submitted by Both Celgene and Bristol
`from 2014-2020 ........................................................................................ 10 
`
`II. 
`
`III. 
`
`D. 
`
`Bristol’s Actions Demonstrate It Intended Never to Meet the Liso-cel
`Milestone............................................................................................................... 11 
`
`JURISDICTION AND VENUE ....................................................................................... 13 
`
`PARTIES .......................................................................................................................... 13 
`
`A. 
`
`B. 
`
`C. 
`
`Plaintiffs ................................................................................................................ 13 
`
`Corporate Defendant ............................................................................................. 14 
`
`Individual Defendants ........................................................................................... 14 
`
`IV. 
`
`FACTUAL BACKGROUND ........................................................................................... 15 
`
`A. 
`
`B. 
`
`C. 
`
`Celgene Acquires Juno Therapeutics in 2018 to Develop its Flagship
`CAR-T Therapy Liso-cel ...................................................................................... 15 
`
`Celgene Assures Investors FDA Approval of Liso-cel is On Track and
`Expected in 2020................................................................................................... 19 
`
`Celgene Accedes to Bristol’s Demand to Issue CVRs to Celgene
`Shareholders in Exchange for Less Cash Consideration ...................................... 23 
`
`i
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`

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`
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`D. 
`
`E. 
`
`Case 1:21-cv-08255 Document 1 Filed 10/06/21 Page 3 of 48
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`Bristol Myers and Celgene Issue The Materially False and Misleading
`Joint Proxy ............................................................................................................ 25 
`
`Bristol Assumes Control of the Liso-cel Approval Process and Takes
`Actions With No Legitimate Business Purpose Other Than to Delay FDA
`Approval: Bristol Sabotages the Process .............................................................. 27 
`
`1. 
`
`2. 
`
`Bristol Files a BLA for Liso-cel Lacking Basic Information to
`Enable the FDA to Assess Bristol’s Control Over Analytical
`Procedures and Validation Reports ........................................................... 27 
`
`Bristol Further Delays FDA Approval By Failing To Prepare The
`Liso-cel Manufacturing Facilities ............................................................. 30 
`
`F. 
`
`Bristol Myers Misses the Liso-cel Milestone Approval Date By Thirty-Six
`Days – Illustrating The Falsity of Its Joint Proxy Disclosure that It Would
`Make Diligent Efforts to Reach the Milestones .................................................... 33 
`
`V. 
`
`THE MATERIALLY FALSE AND MISLEADING STATEMENTS IN THE
`JOINT PROXY ................................................................................................................. 34 
`
`VI. 
`
`LOSS CAUSATION ......................................................................................................... 37 
`
`VII.  CLASS ACTION ALLEGATIONS ................................................................................. 37 
`
`VIII. 
`
`INAPPLICABILITY OF STATUTORY SAFE HARBOR ............................................. 38 
`
`IX. 
`
`STATUTE OF LIMITATIONS ........................................................................................ 39 
`
`COUNT I On Behalf of Plaintiffs and the Class Against All Defendants for Violations of
`Section 14(a) of the Exchange Act and Rule 14a-9 Promulgated Thereunder ................. 39 
`
`COUNT II On Behalf of Plaintiffs and the Class Against the Individual Defendants for
`Violations of Section 20(a) of the Exchange Act ............................................................. 40 
`
`PRAYER FOR RELIEF ............................................................................................................... 42 
`
`JURY DEMAND .......................................................................................................................... 42 
`
`ii
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`Case 1:21-cv-08255 Document 1 Filed 10/06/21 Page 4 of 48
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`Plaintiffs SM Merger/Arbitrage, L.P., SM Investors, L.P. and SM Investors II, L.P.
`
`(“Plaintiffs”) allege the following based upon personal knowledge as to themselves and their own
`
`acts and upon information and belief as to all other matters. Plaintiffs’ information and belief is
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`based on, inter alia, the independent investigation of their undersigned counsel. This investigation
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`included a review and analysis of: (i) public filings submitted by Celgene Corporation (“Celgene”)
`
`and Bristol-Myers Squibb Company (“Bristol” or “Bristol Myers”) to the U.S. Securities and
`
`Exchange Commission (the “SEC”); (ii) research reports by securities and financial analysts
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`concerning the merger (the “Merger”) of Celgene and Bristol Myers; (iii) transcripts of Celgene
`
`and Bristol Myers investor conference calls; (iv) publicly available presentations by Celgene and
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`Bristol Myers; (v) press releases and media reports; (vi) economic analyses of securities movement
`
`and pricing data; (vii) publicly available filings in other legal actions brought against Bristol
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`Myers; (viii) publicly available analyses and data concerning the U.S. Food and Drug
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`Administration (“FDA”) Biologic License Application (“BLA”) approval process; (ix)
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`information provided by relevant experts; and (x) other publicly available material and data
`
`identified herein. Counsel’s investigation into the factual allegations contained herein is
`
`continuing, and many of the relevant facts are known only by Defendants (defined below) or are
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`exclusively within their custody or control. Plaintiffs believe substantial additional evidentiary
`
`support will exist for the allegations set forth herein after a reasonable opportunity for discovery.
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`The basis of Plaintiffs’ claims is that the joint definitive proxy statement filed by the
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`Defendants on February 22, 2019 with the SEC on Schedule 14A (“Joint Proxy”) to solicit
`
`shareholder approval of the Merger of Celgene and Bristol contained materially false and
`
`misleading statements and/or omitted material facts.
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`
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`

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`Case 1:21-cv-08255 Document 1 Filed 10/06/21 Page 5 of 48
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`I.
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`PRELIMINARY STATEMENT
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`1.
`
`This class action is brought on behalf of all former Celgene shareholders that
`
`received Contingent Value Rights (“CVRs”) in exchange for their Celgene shares pursuant to
`
`Bristol’s $74 billion acquisition of Celgene on November 20, 2019, and who were damaged
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`thereby (the “Class”). The claims asserted herein are based upon materially false and misleading
`
`statements and omissions of material facts in the Joint Proxy, made in violation of Sections 14(a)
`
`and/or 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 14a-9
`
`promulgated thereunder.
`
`2.
`
`This action arises from Bristol’s subversion of the FDA approval process for a
`
`blockbuster cancer therapy – JCAR017 a/k/a lisocabtagene maraleucel (“Liso-cel”) – for the
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`purpose of avoiding a $6.4 billion payment to CVR holders. By Bristol’s own design, the CVR
`
`payout required approval of three therapies, including Liso-Cel, by specified dates (the
`
`“Milestones”). A single therapy missing its Milestone by a single day was all Bristol needed to
`
`avoid payment to CVR holders.
`
`3.
`
`To assure that miss, Bristol intended to subvert the FDA regulatory approval
`
`process. Bristol submitted FDA filings that omitted volumes of basic information concerning
`
`Liso-cel in contravention of industry standards and Bristol’s own long-standing practices in a
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`multitude of prior FDA filings. Bristol knew that each defective submission would delay FDA
`
`review, inspection and approval of Liso-cel. Bristol plainly exploited the approval process to
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`ensure those delays would cause it to miss the Liso-cel Milestone and evade payment to CVR
`
`holders.
`
`4.
`
`The facts demonstrate that from the outset of the Merger, by its own design, Bristol
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`knew it would not take diligent efforts to obtain FDA approval for Liso-cel by the Milestone date
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`of December 31, 2020. Accordingly, the statements in the Joint Proxy concerning the efforts
`
`2
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`

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`Case 1:21-cv-08255 Document 1 Filed 10/06/21 Page 6 of 48
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`Bristol would make to meet the Milestones, the likelihood that the Milestones would be met and
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`the purported value of the CVRs were materially false and misleading when made.
`
`A.
`
`5.
`
`The Merger Was Consummated Based on a Materially False and Misleading
`Joint Proxy
`Critical to Bristol’s decision to pursue an acquisition of Celgene was Celgene’s
`
`robust pipeline of five late-stage, near-term drugs slated for imminent FDA approval that were
`
`expected to generate upwards of $15 billion in annual revenue. Bristol’s stated business purpose
`
`for the Merger was to acquire Celgene’s pipeline at “an attractive price.”1
`
`6.
`
`In the months preceding the Merger, Celgene had touted to its investors that the
`
`five pipeline drugs were “Key Pivotal Assets” designed to offset its sales erosion from the
`
`expiration of patents on earlier drugs:
`
`7.
`
`The crown jewel of Celgene’s late-stage, near-term pipeline was Liso-cel, a
`
`revolutionary Chimeric Antigen Receptor (“CAR”) immunotherapy designed to train T-cells
`
`(“CAR-T” or “CAR T”) to recognize and attack specific proteins on cancer cells for use in patients
`
`
`
`
`1 https://news.bms.com/news/corporate-financial/2019/Bristol-Myers-Squibb-Announces-Filing-of-
`Definitive-Proxy-Statement-in-Connection-with-Proposed-Merger-with-Celgene/default.aspx
`
`3
`
`

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`Case 1:21-cv-08255 Document 1 Filed 10/06/21 Page 7 of 48
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`with relapsed or refractory B-cell Non-Hodgkin’s lymphoma. The development of Liso-cel was
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`so crucial to the treatment of such cancer that the FDA designated it as both a “Breakthrough
`
`Therapy” and a “Regenerative Medicine Advanced Therapy.” Both designations meant that Liso-
`
`cel would receive an expedited review process by a dedicated team of senior FDA personnel
`
`working with Celgene, and later Bristol, to ensure it would enter the market quickly.
`
`8.
`
`Celgene’s management repeatedly stated – both prior to and following the
`
`announcement of the Merger – that Celgene was “on track for submitting the [Biologic License
`
`Application or BLA for Liso-cel] in the second half of 2019 with an expected U.S. approval in
`
`mid-2020.” Celgene further stated that the Liso-cel BLA would “include a robust data package
`
`containing substantial follow-up on the relapsed/refractory diffuse large B-cell lymphoma cohort.”
`
`Thus, at the time the Merger was announced, Liso-cel was well on its way to securing expedited
`
`approval from the FDA.
`
`9.
`
`The valuation of Liso-cel, along with Celgene’s other pipeline drugs, was the
`
`central point of contention in Merger negotiations between Bristol and Celgene. According to the
`
`Joint Proxy, in December 2018, Bristol and Celgene had reached an impasse over the value of
`
`Celgene’s pipeline. To resolve this disagreement, Bristol suggested at a December 28, 2018
`
`meeting that the parties explore the possibility of issuing CVRs to current Celgene shareholders
`
`payable by Bristol, in addition to the cash and stock components of the Merger consideration. A
`
`CVR is a security payable upon the occurrence of a specified future event (i.e., upon obtaining
`
`regulatory approval for a drug candidate), often used by acquiring companies as partial merger
`
`consideration to the target company’s shareholders.
`
`10.
`
`Consistent with industry practice, Celgene proposed structuring the CVR
`
`agreement to provide a separate payout to CVR holders upon FDA approval of each of Celgene’s
`
`4
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`

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`Case 1:21-cv-08255 Document 1 Filed 10/06/21 Page 8 of 48
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`five near-term, late-stage pipeline assets. Under this structure, CVR holders would be entitled to
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`a $2 payout upon FDA approval of each drug, for a total potential payout of $10. The CVRs would
`
`not terminate if Bristol failed to achieve FDA approval for one or more drugs.
`
`11.
`
`However, Bristol flatly refused Celgene’s proposed CVR structure, stating it was
`
`unwilling to pay any amount under a CVR agreement unless multiple milestones were achieved
`
`before specified dates. Under this “all-or-nothing” approach, Bristol countered that it would be
`
`agreeable to a payout of $9 under a CVR agreement conditioned on approval of three of Celgene’s
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`five near-term, late-stage pipeline assets – (i) JCAR017 a/k/a Liso-cel, (ii) Ozanimod and (iii)
`
`bb2121 a/k/a Ide-cel – prior to a Milestone date of December 31, 2020. Celgene ultimately agreed
`
`to Bristol’s demands after convincing Bristol to extend the Milestone date for Ide-cel to March 31,
`
`2021 (while keeping the Liso-cel and Ozanimod Milestone dates on December 31, 2020).
`
`12.
`
`A Form CVR Agreement (“CVR Agreement”) was appended to the Joint Proxy
`
`and notably represented that Bristol would use “diligent efforts” to achieve approval of the three
`
`Celgene near-term, late-stage assets covered by the CVR – i.e., Liso-cel, Ide-cel and Ozanimod.
`
`In this regard, the CVR Agreement stated that Bristol’s “diligent efforts” would include “such
`
`effort and employ[] such resources normally used by such person or entity in the exercise of its
`
`reasonable business discretion relating to the research, development or commercialization of”
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`these Milestone drugs. The CVR Agreement further represented to investors that Bristol’s efforts
`
`to achieve the Milestones would be benchmarked objectively against other drugs with “similar
`
`market potential at a similar stage in its development or product life.”
`
`13.
`
`In reliance on these and other false and misleading representations in the Joint
`
`Proxy, Celgene shareholders overwhelmingly voted to approve the Merger on April 12, 2019. The
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`transaction closed on November 21, 2019, with existing Celgene shareholders receiving one CVR
`
`5
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`

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`Case 1:21-cv-08255 Document 1 Filed 10/06/21 Page 9 of 48
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`valued at $9, along with one share of Bristol common stock and $50 in cash, for each share of
`
`Celgene common stock owned.
`
`B.
`
`14.
`
`Bristol Assumes Control of Celgene and Files a Materially Deficient
`Chemistry, Manufacturing and Controls Portion of Liso-cel’s BLA
`
`Immediately after the Merger closed, Bristol assumed control of the regulatory
`
`approval process for the Milestone therapy Liso-cel. On December 18, 2019, Bristol submitted
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`the Chemistry, Manufacturing and Controls (“CMC”) portion of the BLA to the FDA. Celgene
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`had submitted the first component of the Liso-cel BLA to the FDA on September 30, 2019, before
`
`the Merger became effective.2
`
`15.
`
`FDA provisions governing the CMC portion of BLAs obligate applicants to
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`“include a full description of the manufacturing process, including analytical procedures that
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`demonstrate the manufactured product meets prescribed standards of identity, quality, safety,
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`purity, and potency” and provide that the substantiating data “must be available to establish that
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`the analytical procedures used in testing meet proper standards of accuracy, sensitivity, specificity,
`
`and reproducibility and are suitable for their intended purpose.”3
`
`16.
`
`As subsequently revealed in regulatory documentation released by the FDA, in
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`direct contravention of these guidelines, the CMC portion of the Liso-cel BLA submitted by Bristol
`
`in December 2019 only included “summaries” of assays (i.e., tests used to ensure the drug is safe
`
`and efficacious) and platform validations performed at contract testing organizations that the FDA
`
`later deemed “inadequate to understand and assess control of the analytical procedures and
`
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`2 Bristol was unable to exercise meaningful control over the Milestone therapy for Ozanimod because the
`FDA had already accepted the New Drug Application (“NDA”) for that therapy.
`
`3 https://www.fda.gov/files/drugs/published/Analytical-Procedures-and-Methods-Validation-for-Drugs-
`and-Biologics.pdf
`
`6
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`

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`Case 1:21-cv-08255 Document 1 Filed 10/06/21 Page 10 of 48
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`respective validations.” These and other failures were detailed in the final CMC BLA Review
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`Memorandum from the FDA’s Center for Biologics Evaluation and Research:
`
`
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`17.
`
`Bristol caused one inexcusable delay after another. On April 15, 2020, Bristol
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`submitted Amendment 31 to the Liso-cel BLA remedying the CMC defects observed by the FDA.
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`The additional information contained in Bristol’s Amendment 31 was so significant that it
`
`prompted the FDA to issue a Major Amendment Acknowledgment on May 5, 2020. Such a step
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`is rarely taken by the FDA, particularly where, as here, a therapy has received a “Breakthrough”
`
`designation. The Major Amendment Acknowledgement had two substantive results that
`
`effectively foreclosed FDA approval of Liso-cel by the Milestone date of December 31, 2020.
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`18.
`
`First, the Major Amendment Acknowledgment automatically extended the FDA’s
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`target approval deadline from August 17, 2020 to November 16, 2020 – within weeks of the Liso-
`
`cel Milestone deadline.
`
`19.
`
`Second, the Major Amendment Acknowledgement prompted the FDA to
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`reschedule its planned Pre-License inspection of Liso-cel’s two manufacturing facilities – the
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`Juno facility in Bothell, Washington (the “Juno Facility”) and the Lonza Group AG facility in
`
`Houston, Texas (the “Lonza Facility”) – from June 2020 to October and December 2020,
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`respectively.
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`7
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`

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`Case 1:21-cv-08255 Document 1 Filed 10/06/21 Page 11 of 48
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`20.
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`The rescheduling of the outside approval date and the inspection of Liso-cel’s
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`manufacturing facilities all but ensured the CVRs would not become payable, particularly when
`
`considering the pandemic-induced FDA inspection and approval backlog. Moreover, documents
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`released by the FDA in connection with Liso-cel also indicate that Bristol wholly failed to prepare
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`the facilities for Pre-License inspection. Indeed, FDA documents reveal that when the inspections
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`of Liso-cel’s manufacturing facilities were conducted, the FDA identified myriad basic
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`manufacturing and quality control problems – which the FDA characterized as a “litany of errors”
`
`– requiring a response and remediation plan by Bristol.
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`21.
`
`Regulatory documents released in connection with Liso-cel further reveal that the
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`FDA found Bristol’s responses to the FDA “unclear” with “questionable points identified,” and
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`that Bristol failed to supplement these responses until December 18, 2020 – only two weeks before
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`the outside date on the Liso-cel Milestone. Indeed, the FDA subsequently stated that “there were
`
`outstanding concerns from the [Juno] facility inspection prior to the action due date.”
`
`22.
`
`On December 31, 2020, the Milestone date for Liso-cel lapsed and the CVRs were
`
`terminated, destroying billions of dollars in potential value for CVR holders. The FDA approved
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`Bristol’s BLA for Liso-cel just 36 days later. Despite its repeated delinquency in timely
`
`responding to FDA requests for further information both in its BLA submission and in response to
`
`FDA Form 483s identifying significant issues at the Juno and Lonza facilities, Bristol
`
`disengenuously placed the blame solely on COVID-related plant inspection delays.
`
`C.
`
`Bristol’s Actions Were Contrary to Industry Standards and Its Own Prior
`Practices
`
`23.
`
`As set forth above, Bristol’s deficient CMC submission set in motion a chain of
`
`events – extending the FDA approval deadline and delaying FDA inspections of manufacturing
`
`facilities – that doomed the approval of Liso-cel by the Milestone date and, therefore, the CVRs.
`
`8
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`

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`Case 1:21-cv-08255 Document 1 Filed 10/06/21 Page 12 of 48
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`24. Myriad facts demonstrate that Bristol never intended to employ “diligent efforts”
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`to obtain FDA approval for Liso-cel as represented in the Joint Proxy, and that its actions were
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`commercially unreasonable when compared to its prior practices and industry peers.
`
`25.
`
`Indeed, Mizuho analyst Salim Syed, who followed the Bristol BLA approval
`
`process, reviewed the primary source FDA documents and performed an empirical study on
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`Bristol’s Liso-cel timeline versus that of its competitors. Mr. Syed remarked that Bristol “may not
`
`have been entirely thorough” during the application and review process and that “[a]pplications
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`are either complete or not – this is a very binary concept.” Mr. Syed similarly challenged
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`Bristol’s contention that the failure to obtain approval for Liso-cel was solely due to COVID-
`
`related inspection delays, stating its “not the whole story” because the inadequate BLA information
`
`was submitted months prior to the pandemic.
`
`1. Bristol Submitted 96 Amendments to Liso-cel’s BLA Application – 50%
`More Than Those Submitted by Direct Competitors
`
`26.
`
`FDA regulatory filings demonstrate that Bristol made a total of 96 amendments to
`
`the Liso-cel BLA application, 50% more than the average made by competitor companies seeking
`
`FDA approval of similarly situated CAR-T rival therapeutics:
`Therapy Manufacturer BLA Amendments CAR-T Submitted
`
`Liso-cel
`Bristol
`96
`Kymriah
`Novartis
`70
`Yescarta
`Gilead (Kite)
`61
`
`
`
`
`
`27.
`
`The fact that Bristol submitted 50% more amendments than those submitted by its
`
`competitors for the same type of therapy demonstrates that the delayed approval was due to a
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`grossly deficient application.
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`9
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`Case 1:21-cv-08255 Document 1 Filed 10/06/21 Page 13 of 48
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`2. Liso-cel Was Approved 415 Days After Celgene’s BLA Submission, More
`Than Twice the 194-Day Average For Similarly Situated CAR-T Therapies
`
`28.
`
`In addition to submitting an excessive quantity of BLA amendments relative to peer
`
`therapies with less efficacy, Bristol also obtained FDA approval for Liso-cel 415 days after its
`
`initial BLA filing – more than twice the 194-day average time for FDA approval of similar and
`
`less effective therapies:
`
`Manufacturer
`
`Bristol
`Gilead (Kite)
`Novartis
`Gilead (Kite)
`
`BLA
`Submission
`Date
`12/19/2019
`12/11/2019
`3/28/2017
`3/31/2017
`
`FDA Approval Date
`
`2/5/2021
`7/24/2020
`8/30/2017
`10/19/2017
`
`Days from BLA
`Submission
`Date to FDA
`Approval
`415
`226
`155
`202
`
`CAR-T
`Therapy
`
`Liso-cel
`Tecartus
`Kymriah
`Yescarta
`
`
`
`29.
`
`As set forth in the above table, Bristol’s direct competitor Gilead submitted a BLA
`
`for its rival CAR-T therapy, Tecartus, on December 11, 2019, just 8 days prior to the submission
`
`of the BLA for Liso-cel. The FDA approved Tecartus on July 24, 2020 – over half a year before
`
`the approval of Liso-cel.
`
`30.
`
`Notably, Gilead obtained FDA approval for Tecartus during the height of the
`
`COVID-19 pandemic. At the same time, Bristol falsely represented to investors that FDA approval
`
`for Liso-cel would be delayed due to pandemic-induced issues impacting FDA Pre-License
`
`inspections of Liso-cel’s manufacturing facilities.
`
`3. The 415-Day Approval Time Was Nearly Twice That of Every Other
`Original BLA/NDA Submitted by Both Celgene and Bristol from 2014-
`2020
`
`31.
`
`Bristol and Celgene submitted nine therapies for FDA approval between July 2014
`
`and 2020. As set forth in the chart below, the average time for FDA approval of these therapies
`
`was 221.6 days:
`
`10
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`

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`Case 1:21-cv-08255 Document 1 Filed 10/06/21 Page 14 of 48
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`Original NDA and Original BLA Approvals Filed By Bristol Myers and Celgene,
`2014-2020
`
`Applicant
`
`Proprietary
`Name
`
`FDA Received
`Date
`
`Approval Date
`
`Bristol
`Bristol
`Bristol
`Bristol
`Bristol
`Celgene
`Celgene
`Celgene
`Celgene
`
`Opdivo
`Opdivo
`Evotaz
`Daklinza
`Empliciti
`Idhifa
`Reblozyl
`Zeposia
`Onureg
`
`7/30/2014
`7/30/2014
`4/4/2014
`3/31/2014
`6/29/2015
`12/30/2016
`4/4/2019
`3/25/2019
`3/3/2020
`
`12/22/2014
`12/22/2014
`1/29/2015
`3/4/2015
`11/30/2015
`8/1/2017
`11/8/2019
`3/25/2020
`9/1/2020
`
`Days from
`FDA
`Received
`Date to
`Approval
`Date
`145
`145
`300
`338
`154
`214
`218
`366
`182
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Shortest Days to
`Approval
`Average Days to
`Approval
`
`145
`
`221.6
`
`
`
`
`
`D.
`
`Bristol’s Actions Demonstrate It Intended Never to Meet the Liso-cel
`Milestone
`
`32.
`
`As set forth above, Bristol’s BLA submission for Liso-cel inexcusably omitted
`
`volumes of basic information required by the FDA. No one, much less an experienced drug
`
`company like Bristol, would ever have omitted such key information had they truly intended to
`
`use “diligent efforts” to obtain FDA approval of Liso-cel by the Milestone date. This is particularly
`
`true where, as here, the omitted data was so incredibly favorable to Liso-cel as an effective
`
`therapeutic. The only plausible explanation is that Bristol never intended to complete the approval
`
`for Liso-cel in time to meet the CVR Milestone and, in fact, intended at all times to subvert and
`
`delay FDA approval to avoid payment on the CVR.
`
`11
`
`

`

`Case 1:21-cv-08255 Document 1 Filed 10/06/21 Page 15 of 48
`
`
`
`33.
`
` By Bristol’s own design, the CVR payout required approval of all three therapies
`
`within the Milestone periods. A single miss by a single day was all Bristol needed to avoid billions
`
`of dollars in payments under the CVR Agreement. Bristol subverted the process from its first BLA
`
`submission within weeks of the Merger closing to its intentional delays in the Juno and Lonza
`
`Facility inspections.
`
`34.
`
`Bristol’s true intent is demonstrated by its success in subverting the process with
`
`the resulting near 36-day miss and 415 days from the date of the BLA submission to final approval.
`
`These facts demonstrate that, from the outset, Bristol intended that it would not obtain FDA
`
`approval for Liso-cel by the stated Milestone date, and the value of the CVRs received by Celgene
`
`investors at the time of the Merger was $0.
`
`35.
`
`Accordingly, the statements in the Joint Proxy concerning the CVRs were based on
`
`the false premise that they had value as partial consideration in the Merger and were misleading
`
`when made. Moreover, as set forth below, the Joint Proxy’s statements concerning the valuation
`
`of the CVRs, the probability of success in reaching the Milestones, Bristol’s promise to use diligent
`
`efforts to achieve the Milestones and the related risk factors in the Joint Proxy were materially
`
`false and misleading when made because Bristol knew, or should have known, the CVRs were
`
`worthless.
`
`36.
`
`As a result of these material misrepresentations and omissions, Celgene
`
`shareholders were misled into accepting consideration from the Merger that was significantly
`
`lower than represented. Based upon these and other facts set forth below, Plaintiffs allege that
`
`Defendants violated Section 14(a) and 20(a) of the Exchange Act by filing a materially false and
`
`misleading Joint Proxy.
`
`12
`
`

`

`Case 1:21-cv-08255 Document 1 Filed 10/06/21 Page 16 of 48
`
`
`
`II.
`
`JURISDICTION AND VENUE
`
`37.
`
`The claims asserted herein arise under Sections 14(a) and 20(a) of the Exchange
`
`Act, 15.U.S.C. §§ 78n(a), 78t(a), and Rule 14a-9 promulgated thereunder by the SEC, 17 C.F.R.
`
`§ 240.14a-9. This Court has jurisdiction over the subject matter of the claims pursuant to 28 U.S.C.
`
`§§ 1331 and 1337, and Section 27 of the Exchange Act, 15 U.S.C. § 78aa.
`
`38.
`
`Personal jurisdiction exists over each Defendant either because the Defendant
`
`conducts business in or maintains operations in this District or is an individual who is either present
`
`in this District for jurisdictional purposes or has sufficient minimum contacts with this District as
`
`to render the exercise of jurisdiction over Defendant by this Court permissible under traditional
`
`notions of fair play and substantial justice. In addition, Bristol Myers submitted itself to the
`
`personal jurisdiction of the State of New York under Section 8.11(b) of the Bristol-Celgene Merger
`
`Agreement (“Merger Agreement”).
`
`39.
`
`Venue is proper in this District pursuant to Section 27 of the Exchange Act, 15
`
`U.S.C. § 78aa, and 28 U.S.C. § 1391(b). Venue is also proper in the District pursuant to Section
`
`8.09 of the Bristol-Celgene Merger Agreement.
`
`40.
`
`In connection with the acts alleged in this complaint, Defendants, directly or
`
`indirectly, used the means and instrumentalities of interstate commerce, including, but not limited
`
`to, the mails, interstate telephone communications and the facilities of the national securities
`
`markets.
`
`III.
`
`PARTIES
`A.
`
`Plaintiffs
`
`41.
`
`Plaintiff SM Merger/Arbitrage, L.P. exchanged its Celgene shares and received
`
`Bristol CVRs as partial consideration in connection with the Merger, as set forth in the attached
`
`13
`
`

`

`Case 1:21-cv-08255 Document 1 Filed 10/06/21 Page 17 of 48
`
`
`
`certification. Plaintiff suffered damages as a result of the violations of the federal securities laws
`
`alleged herein.
`
`42.
`
`Plaintiff SM Investors, L.P. exchanged its Celgene shares and received Bristol
`
`CVRs as partial consideration in connection with the Merger, as set forth in the attached
`
`certification. Plaintiff suffered damages as a result of the violations of the federal securities laws
`
`alleged herein.
`
`43.
`
`Plaintiff SM Investors II, L.P. exchanged its Celgene shares and received Bristol
`
`CVRs as partial consideration in connection with the Merger, as set forth in the attached
`
`certification. Plaintiff suffered damages as a result of the violations of the federal securities laws
`
`alleged herein.
`
`B.
`
`44.
`
`Corporate Defendant
`
`Defendant Bristol Myers is a Delaware corporation, with its principal executive
`
`offices located at 430 East 29th Street, 14th Floor, New York, New York 10016. Bristol’s common
`
`stock is listed and actively traded on the NYSE under the ticker symbol “BMY.” Bristol Myers is
`
`one of the world’s largest pharmaceutical companies and is consistently ranked on the Fortune 500
`
`list of the largest U.S. corporations. As of September 2020, it had total revenue of $39.3 billion.
`
`C.
`
`45.
`
`Individual Defendants
`
`Defendant Giovanni Caforio has served as Bristol Myers’ Chief Executive Officer
`
`since 2015. Caforio signed the Joint Proxy filed with the SEC in connection with the Merger.
`
`46.
`
`Defendant Vicki L. Sato served as Bristol Myers’ Lead Independent Director at all
`
`relevant times.
`
`47.
`
`Defendants Peter J. Arduini served as a Director of Bristol Myers at all relevant
`
`times.
`
`14
`
`

`

`Case 1:21-cv-08255 Document 1 Filed 10/06/21 Page 18 of 48
`
`48.
`
`Defendant Robert Bertolini served as a Director of Bristol Myers at all relevant
`
`
`
`times.
`
`49.
`
`Defend