Dec 22, 2023 - Business

Bristol Myers paying $14 billion for schizophrenia drug developer Karuna

Bristol Myers Squibb on Friday announced plans to buy schizophrenia drug developer Karuna for around $14 billion.

Why it matters: This reflects how neuroscience has become one of pharma's fastest-growing market segments.

Karuna's lead candidate, called KarXT, is currently being reviewed by the FDA for the treatment of schizophrenia. The Boston-based company also says it believes there's a chance it could be applied to other neurological conditions, including bipolar disorder and Alzheimer's.

Details: Bristol Myers will pay $330 per Karuna share in cash, which represents over a 53% premium on Thursday's closing price.

Around $1.3 billion of the $14 billion purchase price represents Karuna's cash on hand.

Zoom out: Bristol Myers appears to be on an acquisition spree as it faces generics competition for some of its top-selling drugs.

In October, it agreed to buy cancer-focused Mirati Therapeutics for up to $5.8 billion.

Go deeper: The quest to unlock precision psychiatry