Biotech Values

[jbog]

Bristol-Myers likely to settle lawsuit related to CVR for Celgene drug potentially for $3B-$4B, analyst says

https://seekingalpha.com/news/3710675-bristol-meyers-likely-to-settle-lawsuit-related-to-cvr-for-celgene-drug-potentially-for-3b-4b-analyst-says


Bristol-Myers Squibb (NYSE:BMY) is likely to settle the $6.4B shareholder lawsuit against it over allegations it sought to delay FDA approval for Breyanzi to avoid payments linked to a Contingent Value Rights (NYSE:BMY.RT), according to Mizuho.

Bristol Myers could settle the suit for $3B-$4B using the Genzyme/Sanofi GCVRZ (NASDAQ:GCVRZ) as precedent, according to Mizuho analyst Salim Syed. Using GCVRZ as a precedent, potential to see a settlement in 2-3 years for $4.20-$5.60 a share, out of the estimated value of $9 per unit.

It would benefit Bristol-Myers to settle as it could end up paying $3B-$4B plus interest, etc., rather than the $6.4B it would have had to at the $9/unit value.

"If BMY would like to use a CVR as consideration in any future M&A there is incentive here to make sure BMY-R holders win (even if not to the fullest extent, but again, north of their cost basis)," Syed wrote.