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Karuna Therapeutics Jumps 47% After Being Bought For $14 Billion In Cash - Finance Awards
Home » Karuna Therapeutics Jumps 47% After Being Bought For $14 Billion In Cash

Karuna Therapeutics Jumps 47% After Being Bought For $14 Billion In Cash

by Lucas Finis
Karuna Therapeutics

On Friday, Bristol Myers Squibb declared that it has reached an agreement to purchase Karuna Therapeutics, a biopharmaceutical business, for $14 billion in cash, or $330 per share.

Following the news on Friday, Karuna Therapeutics stock surged almost 47%, closing at $317.85 per share. Shares of Bristol Myers Squibb finished 2% higher.

The transaction will aid in expanding Bristol Myers’ therapeutic pipeline following a decline in demand for the company’s blood cancer treatment Revlimid during the third quarter due to competition from a generic product.

The transaction was unanimously approved by the boards of directors of Bristol Myers and Karuna, and a release states that it is anticipated to close in the first half of 2024.

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Karuna Therapeutics creates pharmaceuticals for people with mental and neurological illnesses. According to the press announcement, the company’s main product is an antipsychotic called KarXT, which is anticipated to be used as a treatment for individuals with schizophrenia starting in late 2024.

“Neurons offer enormous potential, and Karuna enhances our standing and quickens the growth and diversification of our holdings in the field. Christopher Boerner, the CEO of Bristol Myers Squibb, stated in a statement, “We expect KarXT to enhance our growth through the late 2020s and into the next decade.”

According to the release, KarXT is also being considered as a potential treatment for a kind of bipolar disorder and psychosis associated with Alzheimer’s disease. The portfolio of Karuna, according to CEO Bill Meury, “offers advancements in treatment not seen in many years.”

“KarXT and the other assets in our pipeline will be well-positioned to reach those living with schizophrenia and Alzheimer’s disease psychosis, thanks to Bristol Myers Squibb’s long-standing expertise in developing and commercializing medicines on a global scale and legacy in neuroscience,” the company said in a statement.

Bristol Myers was advised on the deal by Citi and Gordon Dyal & Co., and Karuna’s exclusive advisor was Goldman Sachs.

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