Bristol Myers hints at some problems with an FDA inspection needed for the liso-cel OK, and the Celgene CVR investors are panicking
The nail-biting among the investors who held on to their contingent value rights $BMYRT from the Celgene buyout is giving way to panic today.
During their Q3 call with analysts, execs said that the FDA had inspected the Bothell, WA plant being used for liso-cel (JCAR017), the CAR-T Bristol Myers picked up in the deal. That’s a plus.
But there was a hitch.
They went on to say that no inspection had yet even been scheduled for the Texas CMO involved. And with that, the slow trickle of investors seeping out of the CVR group turned into an instant rout. The stock plunged about 80% from the $3.40 still left for the CVR at the end of the day yesterday. That took it down into penny stock territory.
Bristol CVR took another turn down after they said on the call that an inspection of the Lonza facility has not yet been scheduled. $BMYRT
— Brad Loncar (@bradloncar) November 5, 2020
Why the stampede?
Remember that during last-minute buyout negotiations, Bristol Myers CEO Giovanni Caforio insisted that they replace cash on the table with a $9 CVR tied to the approval of 3 drugs by certain dates. Ozanimod made the deadline, but the fate of liso-cel (JCAR017) and ide-cel are hanging on FDA actions. Liso-cel was delayed and ide-cel got slapped with a refuse-to-file. That drug has until the end of Q1 next year to make good.
As Bristol Myers notes in its Q3 presentation today, there’s a Nov. 16 PDUFA date looming for liso-cel, and without a clean bill of health on CMC, regulators aren’t likely to come through with an OK for a once closely-watched therapy that earned breakthrough status at the FDA. That could spell another significant delay.
Salim Syed at Mizuho, who’s been tracking every tiny detail around the CMC work — including private eye reports complete with telephoto lenses on the Bothell inspection — summed it up here:
The way it was couched on the call was that this is due to COVID-19 and the FDA wanting to keep its employees safe. However, investors were expecting, and what seemed to make most logical sense, is to inspect the plants together closely in sequence, Bothell and Texas.
Syed, though, is urging calm in the melee. While the PDUFA is dated Nov. 16, the deadline on the CVR is the end of this year — still some weeks out.
Remember, the FDA only needs here about ~3 weeks (by reasonable standards and our KOL call) post-inspection to finish up all the paperwork and get a drug to the finish line.
Besides, he adds, this is a BTD program, so the FDA should be willing to hurry up. The execs at Bristol Myers never said if there could be a virtual inspection and besides, the company already said that if they learned that they would miss the PDUFA, they’d say so promptly.
So far, so good on that score. The PDUFA remains in place.
But with the deadline drawing very, very close, a lot of the investors are bolting.