Bristol Myers Squibb To Acquire Karuna Therapeutics For $330/share Cash

(RTTNews) - Bristol-Myers Squibb Co. (BMY) and biopharmaceutical company Karuna Therapeutics, Inc. (KRTX) announced Friday that they have entered into a definitive merger agreement under which Bristol Myers Squibb has agreed to acquire Karuna for $330.00 per share in cash, for a total equity value of $14.0 billion, or $12.7 billion net of estimated cash acquired.

The offer price represents an approximately 53% premium to Karuna Therapeutic's closing stock price on December 21, 2023.

Karuna's lead asset, KarXT (xanomeline-trospium), is an antipsychotic with a novel mechanism of action (MoA) and differentiated efficacy and safety.

Bristol Myers believes KarXT represents a significant revenue contribution opportunity and also sees potential from Karuna's early-stage and pre-clinical pipeline.

The transaction is expected to be dilutive to Bristol Myers' adjusted earnings per share by approximately $0.30 in 2024. Bristol Myers Squibb expects to offset the operational expenses of the transaction through continued resource allocation, cost efficiencies and portfolio prioritization.

Bristol Myers Squibb expects to finance the acquisition with primarily new debt issuance. The transaction was unanimously approved by both the Bristol Myers Squibb and Karuna Boards of Directors.

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.