Bristol Myers Squibb completes $14B acquisition of Karuna Therapeutics

Bristol Myers Squibb on Monday announced it completed the previously announced acquisition of Karuna Therapeutics for $330 per share, or a total equity value of approximately $14 billion.

With the acquisition, Princeton-based BMS now gains full control of KarXT (xanomeline tartrate/trospium chloride), an antipsychotic drug that could become the first to reach the schizophrenia market with a completely new mechanism of action in more than 50 years. 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, with potential to expand to additional indications, including Bipolar I disorder and Alzheimer’s disease agitation.

“We are excited to expand our neuroscience portfolio as we welcome Karuna to Bristol Myers Squibb,” Chris Boerner, BMS’ CEO, said. “Importantly, this transaction aligns with our commitment to strengthening BMS’ growth profile in the latter half of the decade and beyond. We look forward to working with Karuna’s talented team to bring KarXT to patients with schizophrenia later this year.”

The transaction will be accounted for as an asset acquisition resulting in an approximately $12 billion one-time, nondeductible Acquired In-Process Research and Development charge impacting both first-quarter and full-year Generally Accepted Accounting Principles and non-GAAP earnings per share by approximately $5.93.

In connection with the takeover, PureTech Health, which was an early investor in Karuna and held a 2.3% stake in the company, has pocketed $293 million in gross proceeds and is also in line for regulatory milestones and royalties on KarXT sales.