Celgene, BMS Sued Over Merger’s Effects on Drug Development Contract

On Friday, biotechnology company Nimbus Therapeutics sued two pharmaceutical companies, Celgene Corporation and Bristol-Myers Squibb Company (BMS), over BMS’s acquisition of Celgene. Plaintiff Nimbus alleges that the acquisition effectively breaches the Nimbus-Celgene contract and violates antitrust laws.

The lawsuit, filed in the Southern District of New York, centers on the prior collaboration between Nimbus and Celgene to develop drugs to treat joint psoriasis and other autoimmune and inflammatory diseases. When Celgene was later acquired by BMS, Nimbus argues that the acquisition by a competitor breaches the Nimbus-Celgene contract and will negatively affect the development of competitive drugs.

According to the complaint, Nimbus contracted with defendant Celegene in a 2017 agreement to develop a drug that would compete with BMS’s deucravacitinib, which the contract noted was a “competitive benchmark.” Under a separate Nimbus-Celegene agreement, Nimbus claims that Celgene had the option to acquire a Nimbus subsidiary that held some of Nimbus’s intellectual property (the Warrant). 

Nimbus claims that its collaboration with Celegene lasted for two years, until January 2019, when Celgene was acquired by its alleged competitor, BMS, in a transaction valued at $80 billion. The FTC declined to challenge the acquisition, which closed by the end of 2019.

A timeline of relevant events provided in the complaint.
A timeline of relevant events provided in the complaint.

The complaint states that as part of that FTC clearance, Celgene was compelled to divest its competitive apremilast drug (marketed under the brand Otezla).

Now, Nimbus contends that on June 1, BMS (through Celgene) gave Nimbus notice of Celgene’s intent to exercise the Warrant — to acquire the subsidiary holding Nimbus intellectual property — which Nimbus claims places the company in a “regulatory and business purgatory.” 

Nimbus further claims that as part of the Warrant process, BMS seeks access to Nimbus’s “confidential information” — including Nimbus’s “preclinical and clinical data,” “chemical structures,” “intellectual property filings,” and “patent strategy.” Nimbus argues that if it is forced to disclose its confidential information, that disclosure would “harm competition and Nimbus” by permitting a “killer acquisition” that will derail Nimbus’s development program.

In arguing that it should not be compelled to perform under the Warrant, Nimbus argues that Celgene breached the Warrant’s requirement that Celgene be in “compliance” with the law and “not violate any law.” Nimbus claims that after BMS acquired Celegene, that acquisition continues to violate antitrust laws, and that antitrust violation breaches the Warrant’s requirement that Celegene comply with (and “not violate”) the law.

Nimbus notes that on August 13, because of Celgene’s alleged contractual breach (by violating antitrust laws), Nimbus sent Celgene written notice of Nimbus’s termination of the Warrant.. 

The complaint includes the following claims: breach of contract, declaratory judgment on the contract, and antitrust claims under the Clayton and Sherman Acts. Nimbus seeks termination of the Warrant, treble damages for anticompetitive conduct, injunctive relief, and fees.

Plaintiffs Nimbus Therapeutics, LLC and Nimbus Lakshmi, Inc. are represented by Goodwin Procter LLP.