Monday, May 20

Bristol Myers to acquire drugmaker Karuna for $14 billion

Bristol Myers Squibb, the global pharmaceutical giant, said Friday it will acquire Karuna Therapeutics, which makes drugs to treat schizophrenia and Alzheimer’s, in an all-cash deal worth $14 billion with the aim of strengthening its its neuroscience drug pipeline.

Bristol Myers said in a statement that it will pay $330 per share in cash, a premium of about 53% to Karuna’s stock price on Thursday.

A growing prevalence of schizophrenia, driven in part by an aging population, has led to a push to produce more drugs to treat it. The market for such therapies is estimated to reach $12.6 billion by 2032, according to research firm Market.Us. Earlier this month, biomedical company AbbVie bought Cerevel Therapeutics, which develops drugs to treat psychiatric and neurological disorders including schizophrenia and Parkinson’s disease, for about $8.7 billion.

Karuna’s big bet on schizophrenia is the drug KarXT, which the Food and Drug Administration has accepted for review. The company said it plans to begin marketing the drug in September 2024, pending regulatory approval.

“We expect KarXT to strengthen our growth into the late 2020s and into the next decade,” Christopher Boerner, chief executive officer of Bristol Myers Squibb, said in a statement.

The boards of directors of both companies approved the agreement unanimously. Shares of Bristol Myers Squibb rose 2.5% in early trading, while shares of Karuna rose nearly 50%.

Bristol’s other schizophrenia medications include the drug Abilify. In recent years, it has also doubled down on cancer drug development and, to that end, acquired Celgene, a maker of the blockbuster cancer drugs Thalomid and Revlimid, for $74 billion in 2019.