Karuna is a clinical-stage biopharmaceutical company driven to create and deliver transformative medicines for people living with psychiatric and neurological conditions. The transaction is expected to close in the first half of 2024, subject to customary closing conditions, including approval of Karuna stockholders and receipt of required regulatory approvals.

“There are tremendous opportunities in neuroscience, and Karuna strengthens our position and accelerates the expansion and diversification of our portfolio in the space,” said Christopher Boerner, Chief Executive Officer of Bristol Myers Squibb.

Karuna’s lead asset, KarXT (xanomeline-trospium), is an antipsychotic with a novel mechanism of action (MoA) and differentiated efficacy and safety. Karuna’s New Drug Application (NDA) for KarXT for the treatment of schizophrenia in adults was accepted for review by the U.S. Food and Drug Administration (FDA), with a Prescription Drug User Fee Act (PDUFA) date of September 26, 2024. KarXT is also in registrational trials both for adjunctive therapy to existing standard of care agents in schizophrenia and for the treatment of psychosis in patients with Alzheimer’s disease. BMS believes KarXT represents a significant revenue contribution opportunity. Bristol Myers Squibb also sees potential from Karuna’s early-stage and pre-clinical pipeline.

Boerner added: "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, Bristol Myers Squibb will acquire all outstanding shares of Karuna common stock for $330 per share in cash representing an approximately 53% premium to Karuna Therapeutic’s closing stock price on December 21, 2023, for a total equity value of approximately $14.0 billion, or $12.7 billion net of estimated cash acquired.