Bristol Myers Squibb has made an agreement to buy biotech firm Karuna Therapeutics for $14 billion, an acquisition that gives the firm a promising experimental treatment for schizophrenia.
Under the terms of the deal, Bristol would pay $330 a share in cash for Karuna, which represents a 53.4% premium to its most recent closing price. Karuna's shares rose to $317 in premarket trading.
With declining demand due to competition from generics for its blood thinner Eliquis and cancer therapeutic Revlamid, and patents on other therapies due to expire, Bristol Myers Squibb has been looking to expand its drug pipeline.
The acquisition of Karuna will hand Bristol Myers Squibb a particularly promising drug for the treatment of schizophrenia, KarXT, currently under review by the U.S. Food and Drug Administration (FDA). KarXT (xanomeline-trospium) targets the muscarinic receptors, which help control the release of the neurotransmitter acetylcholine. Current schizophrenia treatments primarily target dopamine and serotonin.
KarXT met its primary endpoints in three mid- to late-stage trials. Additionally, it is currently 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 KarXT for use in schizophrenia by September 26, 2024; if approved, it could be launched by the end of next year.
"We expect KarXT to enhance our growth through the late 2020s and into the next decade," Christopher Boerner, CEO of Bristol Myers Squibb, said in a statement.
