Bristol Myers Squibb to acquire schizophrenia drugmaker Karuna Therapeutics for $14B

Princeton-based Bristol Myers Squibb & Co. on Friday agreed to acquire Karuna Therapeutics Inc. for $330 per share in cash, for a total equity value of $14 billion, or $12.7 billion net of estimated cash acquired. The transaction was unanimously approved by both the Bristol Myers Squibb and Karuna boards of directors.

The transaction is expected to close in the first half of 2024, subject to customary closing conditions, including approval of Karuna stockholders and receipt of required regulatory approvals.

Karuna is focused on developing treatments for psychiatric and neurological conditions. Karuna’s lead asset, KarXT (xanomeline-trospium), is an antipsychotic.

A New Drug Application for KarXT for schizophrenia in adults was accepted for review by the FDA, with a Prescription Drug User Fee Act date of Sept. 26, 2024.

KarXT is also in registrational trials both for adjunctive therapy to the existing standard-of-care agents in schizophrenia and for the treatment of psychosis in patients with Alzheimer’s disease.

“There are tremendous opportunities in neuroscience, and Karuna strengthens our position and accelerates the expansion and diversification of our portfolio in the space. We expect KarXT to enhance our growth through the late 2020s and into the next decade,” Christopher Boerner, CEO of Bristol Myers Squibb, said. “This transaction fits squarely within our business development priorities of pursuing assets that are strategically aligned, scientifically sound, financially attractive and have the potential to address areas of significant unmet medical need. We look forward to welcoming the talented Karuna team to Bristol Myers Squibb.”

“Schizophrenia and Alzheimer’s disease psychosis affect millions of people worldwide, with limited to no treatment options. KarXT’s novel mechanism has resulted in a transformational profile in schizophrenia, with compelling efficacy and a differentiated safety profile,” Dr. Samit Hirawat, executive vice president and chief medical officer, drug development, of Bristol Myers Squibb, said. “KarXT also has the potential to deliver meaningful benefits to patients as an adjunctive treatment for patients with schizophrenia and as a first treatment for Alzheimer’s disease psychosis.”