Bristol Myers Squibb the manufacture was announced agreed to buy biopharmaceutical company Karuna Therapeutics for $14 billion in cash or $330 per share.
Karuna stock closed up more than 47% on the news on Friday, hitting $317.85 a share. Shares of Bristol Myers Squibb closed up 2%.
The deal will help expand Bristol Myers’ pipeline of drugs after competition from a generic offering drove demand for the company’s blood cancer drug Revlimid to fall in the third quarter.
The boards of directors at both Bristol Myers and Karuna have unanimously approved the acquisition, and it is expected to close in the first half of 2024, according to a liberation.
Karuna develops medicines for patients living with neurological and psychiatric conditions. The company’s main asset is an antipsychotic called KarXT, which is expected to serve as a treatment for adults with schizophrenia starting in late 2024, the release 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 drive our growth through the late 2020s and into the next decade,” said Bristol Myers Squibb CEO Christopher Boerner said in a statement.
KarXT is also being evaluated as a potential treatment for Alzheimer’s disease psychosis and a form of bipolar disorder, according to the release. Karuna CEO Bill Meury said the company’s portfolio “offers advances in therapy that have not been 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 at our disposal will be well-positioned to reach those living with schizophrenia and psychosis with Alzheimer’s,” he said. in a statement.
Citi and Gordon Dyal & Co. advised Bristol Myers on the deal, while Goldman Sachs served as exclusive advisor to Karuna.
— CNBC’s Annika Kim Constantino contributed to this report.
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