Bristol Myers Squibb, the global pharmaceutical giant, said on Friday it will acquire Karuna Therapeutics, which makes drugs to treat schizophrenia and Alzheimer’s, in an all-cash deal valued at $14 billion as it looks to strengthen its pipeline of neuroscience drugs.
Bristol Myers said in a statement that it will pay $330 per share in cash, a premium of about 53 percent to Karuna’s share price on Thursday.
The increasing prevalence of schizophrenia, driven in part by an aging population, has fueled a push to develop more drugs to treat it. The market for such therapies is estimated to grow to $12.6 billion by 2032, according to the research firm. Market.Us. Earlier this month, the biomedical company AbbVie buy Cerevel Therapeutics, which develops drugs to treat mental and neurological disorders including schizophrenia and Parkinson’s disease for about $8.7 billion.
Karuna’s big bet in schizophrenia is the drug KarXT, which has been accepted by the Food and Drug Administration for review. The company said it expects to start selling the drug in September 2024, pending regulatory approval.
“We expect KarXT to enhance our growth in the late 2020s and into the next decade,” Christopher Boerner, Bristol Myers Squibb’s chief executive, said in a statement.
The boards of both companies unanimously approved the deal. Bristol Myers Squibb shares rose 2.5 percent in early trade, while Karuna stock jumped nearly 50 percent.
Other Bristol schizophrenia medications include the drug Abilify. In recent years, it has also been doubling down on developing cancer drugs, and to that end it acquired Celgene, a maker of the blockbuster Thalomid and Revlimid cancer drugs, for $74 billion in 2019.
