Summary
- Bristol-Myers disclosed some market moving information on a Citigroup call.
- We are getting close to the deadline for Liso-cel and the manufacturing facilities haven't been inspected yet.
- Investors are getting nervous staring at a potential zero.
- But things did not really change that much because of the Citigroup call.
- Looking for a portfolio of ideas like this one? Members of Special Situation Report get exclusive access to our model portfolio. Get started today »
September 8 news came out that the Contingent Value Right or CVR (NYSE:BMY.RT) associated with Bristol-Myers Squibb's (BMY) $74B acquisition of Celgene was down significantly in apparent reaction to management comments at a Citigroup conference revealing that the manufacturing plant for CAR T therapies has not yet been inspected by the FDA. These contingent value rights are strange beasts. This particular one either pays out $0 or $9 apiece. There are no other options except through an undesirable route of litigation.
According to SA:
The disclosure has unnerved investors considering the agency's November 16 action date for its review of the company's marketing application for CAR T lisocabtagene maraleucal (liso-cel) for relapsed/refractory large B-cell lymphoma patients who have received at least two prior lines of treatment.
At the special situations report, we've basically had exposure since January 2019 to the acquisition of Celgene by Bristol-Myers. I've written a publicly available article on the rights when they were trading at $3 and I found them particularly attractive. They subsequently went up a lot, then down, and got smashed the 9th. Which is when I wrote that it was quite attractive at $2.12. Didn't expect it to stay there but it is actually still at that level.
