American multinational pharmaceutical company Bristol Myers Squibb and Karuna Therapeutics, Inc. (“Karuna”) have announced that they have entered into a definitive merger agreement under which Bristol Myers Squibb has agreed to acquire Karuna, a clinical-stage biopharma company developing medications for patients living with neurological and psychiatric conditions.
Under this agreement, Bristol Myers Squibb is set to acquire Karuna for $330.00 per share in cash, amounting to a total equity value of $14.0 billion. The net value, accounting for estimated cash acquired, stands at $12.7 billion. This strategic move has received unanimous approval from both the Bristol Myers Squibb and Karuna Boards of Directors.
Transaction Delivers KarXT, a First-in-Class M1 / M4 Muscarinic Receptor Agonist, with Differentiated Efficacy and Safety
The focal point of Karuna’s portfolio is its lead asset, KarXT (xanomeline-trospium), an antipsychotic featuring a novel mechanism of action (MoA) and demonstrating differentiated efficacy and safety. Karuna has submitted a New Drug Application (NDA) for KarXT, specifically for the treatment of schizophrenia in adults, to the U.S. Food and Drug Administration (FDA). The regulatory body has accepted the application for review, and a Prescription Drug User Fee Act (PDUFA) date has been set for September 26, 2024. In addition to its pursuit in the schizophrenia domain, KarXT is undergoing registrational trials for both adjunctive therapies to existing standard-of-care agents in schizophrenia and the treatment of psychosis in patients with Alzheimer’s disease.
Bristol Myers Squibb sees the acquisition of Karuna as an opportunity to tap into the potential revenue stream presented by KarXT. With its unique MoA and promising efficacy and safety profile, KarXT is poised to make a significant impact in the psychiatric pharmaceutical landscape. Beyond KarXT, Bristol Myers Squibb is optimistic about the value derived from Karuna’s early-stage and pre-clinical pipeline, hinting at the potential for further innovations in the field.
The transaction reflects the strategic vision of both companies to drive innovation and provide transformative solutions for individuals grappling with complex neurological and psychiatric conditions.
The acquisition is anticipated to undergo regulatory scrutiny and is subject to customary closing conditions. The companies expect the deal to be finalized in the coming months, ushering in a new era of collaboration and advancements in psychiatric and neurological therapeutics.
Christopher Boerner, Ph.D., Chief Executive Officer of Bristol Myers Squibb said:
“There are tremendous opportunities in neuroscience, and Karuna strengthens our position and accelerates the expansion and diversification of our portfolio in the space. We expect KarXT to enhance our growth through the late 2020s and into the next decade. 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. We look forward to welcoming the talented Karuna team to Bristol Myers Squibb.”
Samit Hirawat, M.D., Executive Vice President, Chief Medical Officer, Drug Development of Bristol Myers Squibb said:
“Schizophrenia and Alzheimer’s disease psychosis affect millions of people worldwide, with limited to no treatment options. KarXT’s novel mechanism has resulted in a transformational profile in schizophrenia, with compelling efficacy and a differentiated safety profile. KarXT also has the potential to deliver meaningful benefits to patients as an adjunctive treatment for patients with schizophrenia and as a first treatment for Alzheimer’s disease psychosis.”
Bill Meury, President and Chief Executive Officer of Karuna Therapeutics, said:
“Karuna’s portfolio offers advancements in treatment not seen in many years. With Bristol Myers Squibb’s long-standing expertise in developing and commercializing medicines on a global scale and legacy in neuroscience, KarXT and the other assets in our pipeline will be well-positioned to reach those living with schizophrenia and Alzheimer’s disease psychosis. This announcement is a testament to the Karuna team’s talent, hard work, and innovation.”
Source: Bristol Myers Squibb – Press Release