A nail-biter for Celgene investors

Thanks to Bristol-Myers Squibb, every outstanding share of Celgene will soon be redeemed for one share of Bristol, $50 in cash, and one lottery ticket called a CVR. But unfortunately for Celgene shareholders, that lottery ticket is already looking a little shaky.

That’s because of ozanimod, a once-rejected treatment for multiple sclerosis. Celgene resubmitted it to the FDA back in March but hasn’t said a word about it since. And, as Mizuho analyst Salim Syed pointed out, the FDA’s customary 60-day review period has come and gone in that time.

That doesn't necessarily mean ozanimod's in trouble. The agency has the right to take an additional 14 days to review applications, and a Celgene spokeswoman said the company still expects to hear back from the agency within that timeframe.

But here's why the FDA silence could be alarming to Celgene shareholders: If three of the company’s drugs win approval on a specific timeline, each CVR transforms into $9 in cash. But if a single drug falls out, the CVR becomes worthless. For ozanimod, that means clearing the FDA by the end of 2020, a prospect that will get more difficult if the latest application needs amendments.