A Manhattan federal appeals court ruled Friday that Bristol-Myers Squibb Co.’s “candid” reaction to a failed clinical trial was not evidence that the pharmaceutical giant and its executives intentionally misled investors about the prospects for a once-promising cancer drug.

The ruling, from a three-judge panel of the U.S. Court of Appeals for the Second Circuit, upheld a lower court’s dismissal of a proposed securities class action, which claimed that Bristol-Myers Squibb made material misstatements or omissions around a clinical trial to determine the drug’s efficacy for treating certain kinds of lung cancers.