Bristol Myers to acquire brain drug developer Karuna for $14B

Bristol Myers to acquire brain drug developer Karuna for $14B

Bristol Myers Squibb has agreed to acquire Karuna Therapeutics in a deal worth $14 billion, betting that the biotechnology company’s schizophrenia drug will become a top-selling medicine.

Per deal terms announced Friday, Bristol Myers will pay $330 share for Karuna, a roughly 53% premium to its closing price on Dec. 21. The deal values Karuna’s equity at $14 billion, or about $12.7 billion net of the cash that Karuna has on hand.

The acquisition hands Bristol Myers a closely watched medicine known as “KarXT” that’s currently being reviewed by the Food and Drug Administration as a potential treatment for schizophrenia. The drug is a newer type of medication that doesn’t work like available schizophrenia treatments. It’s already succeeded in three mid- to late-stage trials and, if approved by regulators, could be launched by the end of 2024.

KarXT is also in advanced testing as an adjunctive therapy to existing schizophrenia drugs and as a potential treatment for psychosis in patients with Alzheimer’s disease.

The FDA is expected to make a decision on its use in schizophrenia by Sept. 26 of next year.

“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,” said Bristol Myers CEO Christopher Boerner, in a statement.

The deal closely follows an announcement by AbbVie to acquire Cerevel Therapeutics, which has a similar, rival drug in advanced testing.

This is a breaking story. Check back for updates.

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