- The Food and Drug Administration was unable to make a decision on whether to approve Bristol Myers Squibb's cell therapy liso-cel by its deadline Monday, citing delays for inspection of a manufacturing plant due to COVID-19 travel restrictions, the company said.
- Approval of liso-cel, an experimental treatment for lymphoma, is one of three requirements in a so-called contingent value right Bristol Myers promised when acquiring the drug's previous owner, Celgene. Approval by Dec. 31, 2020, is necessary for Celgene's investors to collect a payment, and that outcome is now less likely, with just 45 days left in the year.
- The value of those CVRs, which trade on the New York Stock Exchange, fell by a third on Tuesday following Bristol Myers' announcement, to less than $1 apiece. If liso-cel and one other drug meet their approval deadlines, CVR holders are due $9 a share.
When Bristol Myers was negotiating to buy Celgene for $74 billion last year, the companies could not reach an agreement on the value of three drugs: the now-approved multiple sclerosis drug Zeposia, liso-cel, and another experimental cell therapy called ide-cel.
The two drugmakers resolved their dispute by agreeing to a conditional payment from Bristol Myers if the first two won approval by Dec. 31, 2020, and ide-cel by March 31, 2021. If those deadlines were met, Bristol Myers would pay out an extra $6 billion to the former Celgene shareholders, or whoever now holds the tradable contingent value right, or CVR.
Each of those drugs have stumbled on their way to market. The FDA approved the multiple sclerosis drug Zeposia in March, but only after initially rejecting the drug in 2018. An approval decision for ide-cel, a treatment for multiple myeloma, was also deferred. The FDA will decide its fate by March 27, 2021, just four days ahead of the CVR deadline.
Liso-cel's delay represents yet another threat to the Celgene CVR. Bristol Myers said the FDA was unable to inspect a third-party manufacturing plant in Texas, and therefore couldn't clear the treatment.
Regulators have completed an inspection at a Washington state facility, and the fact that the FDA hasn't rejected liso-cel likely means no issues remain with that inspection or the company's approval application, Wall Street analysts wrote.
However, views differed on whether regulators can complete the inspection and clear liso-cel by Dec. 31. Mizuho analyst Salim Syed wrote Tuesday that a virtual inspection is possible, and the FDA's granting of a breakthrough designation — a tool to speed the review process — gives its staff incentive to seek to get approval as soon as possible.
Cowen analyst Steve Scala, however, doesn't expect pandemic-related travel restrictions will be eased, making approval unlikely. "FDA of course wants to get effective products to market, but FDA actions are not determined by CVR deadlines," he wrote.