Karuna is a biopharmaceutical firm focused on the discovery, development and delivery of transformative medicines for individuals with psychiatric and neurological conditions
Karuna’s lead asset, KarXT is intended for the treatment of schizophrenia in adults. (Credit: Pete Linforth from Pixabay)
Bristol Myers Squibb (BMS) has signed a definitive merger agreement to acquire schizophrenia drugmaker Karuna Therapeutics for a total equity value of $14bn.
Karuna is a biopharmaceutical firm focused on the discovery, development and delivery of transformative medicines for individuals with psychiatric and neurological conditions.
The lead asset of Karuna, KarXT (xanomeline-trospium), is an antipsychotic with a unique mode of action (MoA) and distinct safety and efficacy.
KarXT is a potential first-in-class treatment for schizophrenia and as an adjunctive therapy.
It is also intended as a first-in-disease treatment for Alzheimer’s disease psychosis, with promise in additional neuropsychiatric and neurodegenerative indications.
Karuna’s New Drug Application (NDA) for KarXT has been accepted for evaluation by the US Food and Drug Administration (FDA) with a Prescription Drug User Fee Act (PDUFA) date of 26 September 2024.
Additionally, registrational trials are being conducted on the asset for the treatment of psychosis in Alzheimer’s disease patients as well as for use as an adjuvant therapy to current standard-of-care medicines in the treatment of schizophrenia.
According to Bristol Myers Squibb, KarXT offers significant potential for revenue contribution. The firm also sees potential from Karuna’s early-stage and pre-clinical programmes.
Bristol Myers Squibb CEO Christopher Boerner 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.”
Under the terms of the merger agreement, Karuna Therapeutic’s outstanding shares will be acquired by BMS for $330 in cash per share, which represents a 53% premium to its last closing price.
This will result in a total equity value of approximately $14bn or $12.7bn net of estimated cash acquired.
The deal is anticipated to close in the first half of 2024, subject to the usual closing circumstances.
Karuna Therapeutics president and CEO Bill Meury said: “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.”