Overview of the Deal
Acquirer: Bristol Myers Squibb (BMS)
Target: Karuna Therapeutics, Inc.
Total Transaction Size: $14.0 billion
Offer Details: $330.00 per share in cash
Announcement Date: December 22, 2023
Completion Date: March 18, 2024
Target Advisors: Goldman Sachs (Financial); Simpson Thacher & Bartlett LLP (Legal)
Acquirer Advisors: Not publicly disclosed
On December 22, 2023, Bristol Myers Squibb announced a definitive agreement to acquire Karuna Therapeutics, a biopharmaceutical company specializing in neuropsychiatric disorders, for $330.00 per share in cash, totaling approximately $14.0 billion. The transaction was unanimously approved by the Boards of Directors of both companies and was completed on March 18, 2024, making Karuna a wholly owned subsidiary of BMS.
Company Details (Acquirer – Bristol Myers Squibb)
Bristol Myers Squibb is a global biopharmaceutical company focused on discovering, developing, and delivering innovative medicines for patients with serious diseases.
- Founded: 1989 (merger of Bristol-Myers and Squibb Corporation)
- Headquarters: Princeton, New Jersey, USA
- CEO: Chris Boerner, Ph.D.
- 2023 Revenue: Approximately $46.4 billion
- Market Cap: Over $150 billion
- Recent Acquisitions:
- MyoKardia (2020)
- Turning Point Therapeutics (2022)
- Mirati Therapeutics (2024)
Company Details (Target – Karuna Therapeutics, Inc.)
Karuna Therapeutics is a clinical-stage biopharmaceutical company focused on developing novel therapies for neuropsychiatric conditions.
- Founded: 2009
- Headquarters: Boston, Massachusetts, USA
- CEO: Bill Meury
- Employees: Approximately 200
- Key Product:
- KarXT (xanomeline-trospium): An investigational muscarinic receptor agonist for the treatment of schizophrenia and other neuropsychiatric conditions. The U.S. Food and Drug Administration (FDA) accepted the New Drug Application (NDA) for KarXT, with an anticipated approval decision by September 26, 2024.
Projections and Assumptions
Short-Term Consequences
- Portfolio Expansion: The acquisition immediately enhances BMS’s neuroscience portfolio with the addition of KarXT, a potential first-in-class treatment for schizophrenia.
- Regulatory Milestones: BMS anticipates FDA approval of KarXT by September 26, 2024, which would allow for the commercialization of the therapy shortly thereafter.
Long-Term Upsides
- Market Leadership: KarXT has the potential to achieve multi-billion-dollar sales across multiple indications, positioning BMS as a leader in the treatment of schizophrenia and other neuropsychiatric disorders.
- Pipeline Development: The acquisition provides BMS with access to Karuna’s early-stage and pre-clinical pipeline, offering opportunities for future development in the neuroscience field.
Risks and Uncertainties
- Regulatory Approval: While the FDA has accepted the NDA for KarXT, approval is not guaranteed and depends on the outcome of ongoing evaluations.
- Market Competition: The neuropsychiatric treatment landscape is competitive, and the commercial success of KarXT will depend on its differentiation from existing therapies and market acceptance.
Sources
- Bristol Myers Squibb News Release
- Pharmaceutical Technology Article
- Associated Press News
- Bristol Myers Squibb Investor Presentation
