Key Takeaways
- Bristol Myers Squibb will pay $14 billion to buy Karuna Therapeutics to boost its neuroscience portfolio.
- The deal gives Karuna investors $330 per share, a 53% premium to yesterday’s closing price.
- Karuna Therapeutics shares soared to an all-time high following the news.
Karuna Therapeutics (KRTX) shares skyrocketed over 46% after Bristol Myers Squibb (BMY) said it would buy the biopharmaceutical firm for $14 billion to expand its neuroscience portfolio.
Bristol Myers Squibb said it would pay Karuna investors $330 in cash for every share they owned. That works out to a 53% premium to Karuna’s closing price yesterday.
The drug maker said that Karuna is working to develop medicines for those suffering from psychological or neurological conditions. Its lead asset is KarXT, an antipsychotic with “a novel mechanism of action (MoA) and differentiated efficacy and safety.” It noted that the Food and Drug Administration (FDA) will review a new drug application for KarXT to treat schizophrenia in adults.
Bristol Myers Squibb said it believes KarXT “represents a significant revenue contribution opportunity.” It added that it also sees potential in Karuna’s early-stage and pre-clinical pipeline.
CEO Christopher Bonner said the purchase “strengthens our position and accelerates the expansion and diversification of our portfolio in this space.” The deal is expected to close in the first half of 2024.
Karuna Therapeutics shares were up 46.9% to $316 per share as of about noon Eastern following the news. Shares of Bristol-Myers Squbb also advanced and were 2.8% higher at $52.68 per share.