The Delaware Supreme Court on Tuesday narrowly upheld a Delaware Court of Chancery ruling that denied a $50 million bonus payment to former investors in Calistoga Pharmaceuticals Inc. for partial European approval of a new blood-cancer treatment drug.

A bare majority of the state's high court agreed that Gilead Sciences Inc., which purchased the privately held biotechnology company in 2011, did not owe the post-merger benchmark payment to the company's former shareholders because European Union regulators had approved the drug for just a small subset of patients suffering from chronic lymphocytic leukemia, or CLL.

The 3-2 ruling upheld a decision by Chancery Court Chancellor Andre G. Bouchard in March that Gilead had agreed to make the post-merger payment only if the drug, CAL-101, won broad “disease-level” approval as a first-line treatment for all patients suffering from the disease. Bouchard, however, determined that European authorization to treat CLL patients with rare genetic defects did not trigger the payment under the terms of an 84-page merger agreement.

The plaintiff, Shareholder Representative Services, appealed to the state Supreme Court in April, arguing that Bouchard improperly considered evidence outside of the contract in reaching his conclusion.

On Tuesday, Chief Justice Leo E. Strine Jr. ruled that the terms of the agreement were ambiguous, and Bouchard was therefore correct to consider extrinsic evidence in the case.

“In this situation, it is our duty to defer to a trial judge's properly supported fact findings and we thus affirm,” Strine wrote in a brief order signed also by Justices Karen L. Valihura and James T. Vaughn Jr.

The court's other two justices, Collins J. Seitz Jr. and Gary F. Traynor, disagreed that there was any ambiguity in the merger agreement. In a two-page dissent, they said that patients' genetic abnormalities were irrelevant because Gilead had received regulatory approval for its drug as a first-line treatment for patients with CLL.

“In our opinion, the analysis should have ended there,” the two justices wrote. Instead, they said, Bouchard had adopted Gilead's interpretation, which was too narrow in light of the contract's plain language.

“Gilead persuaded the court to embark on a search for ambiguity where there was none, and added a 'disease-level' approval requirement” to trigger the milestone payment, Seitz and Traynor wrote in the unsigned dissent.

The bonus was one of three negotiated payments designed to compensate the former Calistoga shareholders for regulatory approvals of the flagship drug.

In August 2014, Gilead paid $175 million after the U.S. Food and Drug Administration signed off on its use domestically, but the company refused to pay the third installment the following month, sparking a lawsuit from Shareholder Representative Services on behalf of the former Calistoga investors.

David S. Steuer, an attorney for Shareholder Representative Services, said he was disappointed in the result but that the split decision indicated a much closer case on appeal.

“The fact that two out of the five justices wrote a dissenting opinion in our favor shows that the case was much closer than the Chancery Court supposed,” said Steuer, a partner with Wilson Sonsini Goodrich & Rosati. “We were disappointed that we were not able to convince one more justice that the judgment below should be reversed.

An attorney for Gilead was not immediately available to comment on Wednesday.

Shareholder Representative Services was represented Steuer, Steven Guggenheim, Evan L. Seite, Bradley D. Sorrels, Shannon E. German and Jessica A. Hartwell of Wilson Sonsini.

Gilead was represented by Jason Sheasby, Gary N. Frischling, Harry A. Mittleman and Lisa S. Glasser of Irell & Manella and Brian C. Ralston and Aaron R. Sims of Potter Anderson & Corroon.

The case was captioned Shareholder Representative Services v. Gilead Sciences.