Bristol Myers Settles Celgene Fraud Claims

NEW YORK, November 5, 2025 – Bristol Myers Squibb (BMY.N) reached a 239 million settlement over claims former Celgene shareholders were defrauded about psoriasis drug prospects.

The settlement resolves allegations that investors were misled about the commercial viability of Otezla and other treatments before Bristol Myers’ 74 billion Celgene acquisition in 2019.

Key Takeaways

Bristol Myers pays 239 million to settle Celgene fraud claims
Settlement covers alleged misrepresentations about psoriasis, MS drug prospects
Resolves shareholder litigation from 74 billion Celgene acquisition

Market Context & Financial Impact

The settlement represents roughly 0.4% of Bristol Myers’ current market capitalization of approximately 60 billion ¹. Large pharmaceutical companies routinely face litigation costs, with Pfizer paying 2.3 billion in 2020 for similar acquisition-related claims.

Bristol Myers completed its acquisition of Celgene in November 2019, making it one of the largest pharmaceutical deals in history. The transaction was designed to bolster Bristol Myers’ oncology and immunology portfolios.

Settlement Details

The 239 million payment resolves claims that former Celgene shareholders were defrauded about the prospects for key drugs including Otezla, a psoriasis treatment ¹. The lawsuit alleged material misrepresentations were made during the merger process.

Otezla generated approximately 2.2 billion in revenue for Celgene in 2018, making it one of the company’s most valuable assets. Bristol Myers later divested the drug to Amgen for 13.4 billion as part of regulatory requirements.

Regulatory Strategy Shift

Separately, Bristol Myers announced in September it would sell its newer psoriasis drug Sotyktu directly to cash-paying patients at more than 80% discount to list price ^6,7. The move followed pressure from political leaders to reduce drug costs.

This pricing strategy reflects broader industry trends toward direct-pay models that bypass traditional insurance networks. The approach aims to improve patient access while maintaining revenue streams.

Legal Precedent

The settlement follows a pattern of pharmaceutical companies resolving merger-related fraud claims through financial settlements rather than lengthy litigation. Bristol Myers has previously paid 23 million to settle drug pricing allegations in California ⁹.

Such settlements typically include no admission of wrongdoing while providing closure for both companies and shareholders. The resolution allows Bristol Myers to focus on its current pipeline and commercial operations.

Outlook

Bristol Myers continues to face pricing pressure across its portfolio, particularly for older drugs losing patent protection. The company reported strong third-quarter results in 2020, though more recent performance has been mixed amid competitive challenges.

The Celgene integration has largely been completed, with Bristol Myers retaining most of the acquired company’s oncology assets. Management has emphasized the strategic value of the combined pipeline in addressing unmet medical needs.

Not investment advice. For informational purposes only.