Bristol Myers Squib (NYSE:BMY) on Friday agreed to buy Karuna Therapeutics (NASDAQ:KRTX) for $14 billion in cash, gaining a promising experimental schizophrenia drug to power growth as patents on its older therapies expire.
Under the terms of the deal, Bristol would pay $330 a share in cash for Karuna, which represents a 53.4% premium to its last closing price.
The acquisition comes roughly two months after Bristol’s deal to buy cancer drugmaker Mirati Therapeutics for as much as $5.8 billion.
New York-based Bristol has been under pressure to expand its drug pipeline due to declining demand for two of its top drugs, blood cancer treatment Revlimid and blood thinner Eliquis, which face generic competition.
“We expect KarXT to enhance our growth through the late 2020s and into the next decade,” Bristol Myers CEO Christopher Boerner said in a statement.
Analysts have forecast multi-billion dollars in sales of the drug, called KarXT. A decision on its use in adults is due by September next year, and the company is also testing it to treat patients with psychosis tied to Alzheimer’s disease.
While there are several drugs for schizophrenia, KarXT belongs to a new class of drug that are likely to cause lesser side effects like weight gain.
BMY shares captured 68 cents, or 1.3%, to $51.94, while KRTX shares went for $316.74, up $101.36, or 47.1%.
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