Bristol Myers Squibb Scoops Up Schizophrenia Player Karuna Therapeutics In Massive $14B Deal

On Friday, Bristol Myers Squibb & Co BMY agreed to acquire Karuna Therapeutics Inc KRTX for $330.00 per share in cash, for a total equity value of $14.0 billion, or $12.7 billion net of estimated cash acquired. 

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 (NDA) for KarXT for schizophrenia in adults was accepted for review by the FDA, with a Prescription Drug User Fee Act date of September 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. 

Bristol Myers Squibb believes KarXT represents a significant revenue contribution opportunity. 

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Bristol Myers Squibb also sees potential from Karuna's early-stage and pre-clinical pipeline.

• Schizophrenia: KarXT is expected to launch in late 2024 in the U.S. as a treatment for schizophrenia in adults. There are approximately 1.6 million people treated for schizophrenia in the U.S.
• Adjunctive schizophrenia: A registrational clinical trial is currently underway evaluating KarXT as adjunctive treatment with the current standard of care agents for schizophrenia, with data expected in 2025.
• Alzheimer's disease psychosis: Registrational clinical trials are currently underway evaluating KarXT for Alzheimer's disease psychosis, with data expected in 2026. More than 6 million people are living with Alzheimer's disease in the U.S. 
• Additional indications: Bristol Myers Squibb believes KarXT also has potential in additional indications, including Bipolar I disorder, which impacts approximately 1.4 million people in the U.S., and Alzheimer's disease agitation.

The transaction is expected to be dilutive to Bristol Myers' non-GAAP EPS by approximately $0.30 in 2024.

The transaction is expected to close in the first half of 2024.

Price Action: KRTX shares are up 48.80% at $320.30, and BMY stock is down 0.41% at $51.05 during the premarket session on the last check Friday.