Bristol Myers Squibb has agreed to acquire Karuna Therapeutics for $14 billion, betting that the biotechnology company’s experimental schizophrenia drug will become a top-selling medicine.
Per deal terms announced Friday, Bristol Myers will pay $330 a share for Karuna, a roughly 53% premium to its closing price on Dec. 21. Net of the cash that Karuna has on hand, the deal is worth about $12. 7 billion.
The acquisition hands Bristol Myers a closely watched medicine known as “KarXT” that’s currently being reviewed by the Food and Drug Administration as a potential treatment for schizophrenia. The drug is a newer type of medication that doesn’t work like available schizophrenia treatments. It’s already succeeded in three mid- to late-stage trials and, if approved by regulators, could be launched by the end of 2024.
KarXT is also in advanced testing as an adjunctive therapy to existing schizophrenia drugs and as a potential treatment for psychosis in patients with Alzheimer’s disease.
The FDA is expected to make a decision on its use in schizophrenia by Sept. 26 of next year.
“This transaction fits squarely within our business development priorities of pursuing assets that are strategically aligned, scientifically sound, financially attractive, and have the potential to address areas of significant unmet medical need,” said Bristol Myers CEO Christopher Boerner, in a statement.
Like many pharmas, Bristol Myers had pulled away from the neuroscience research field over the past decade or so, devoting more resources to oncology as its cancer immunotherapy business boomed.
But the company recently re-established neuroscience as a therapeutic area of focus, a commitment that’s part of a mission to “put the CNS back in BMS,” Ken Rhodes, Bristol Myers’ head of neuroscience research told BioPharma Dive in October.
Bristol Myers has medicines for Alzheimer’s disease and ALS in clinical testing, and sees its work in multiple sclerosis as complementary to further brain drug research.
The deal also closely follows an $8.7 billion deal by AbbVie to acquire Cerevel Therapeutics, which has a similar, rival drug to Karuna’s in advanced testing.
Both medicines target what’s known as “muscarinic receptors,” which help control the release of a neurotransmitter known as acetylcholine. Existing schizophrenia treatments are mostly aimed at the mood-regulating chemicals dopamine and serotonin.
Cerevel’s drug targets the “M4” member of the muscarinic receptor protein family, while Karuna’s goes after both M4 and “M1.” Cerevel is also some ways behind Karuna in clinical testing, having faced clinical delays.
For Karuna, the acquisition is validation for a decade-plus-long journey that began in 2009, when PureTech Health formed Karuna around a drug called xanomeline that had been discarded by Eli Lilly.
Steven Paul, a Lilly executive who worked on xanomeline there in the 1990s, paired xanomeline with another drug, trospium, that works in an opposite fashion. The thinking was trospium could alleviate unwanted side effects of xanomeline but, because it doesn’t cross into the brain, leave xanomeline’s antipsychotic effect intact.
According to Bristol Myers, there are 1.6 million people treated for schizophrenia in the U.S., many of whom don’t respond well or at all to current therapies. The causes of the disease aren’t entirely understood and its symptoms can vary from “positive” ones like hallucinations, to “negative” ones like withdrawal and diminished motivation.
Editor’s note: This story has been updated with additional details throughout.
This post has been syndicated from a third-party source. View the original article here.