Bristol Myers Squibb (BMY) announced today that it has agreed to acquire Karuna Therapeutics (KRTX), a biopharmaceutical company focused on psychiatric and neurological disorders, for $330 per share in cash, or $14 billion in total.

“There are tremendous opportunities in neuroscience, and Karuna strengthens our position and accelerates the expansion and diversification of our portfolio in the space. We expect KarXT to enhance our growth through the late 2020s and into the next decade,” said Christopher Boerner, Ph.D., Chief Executive Officer of Bristol Myers Squibb.

“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. We look forward to welcoming the talented Karuna team to Bristol Myers Squibb.”

The deal, which was approved by both boards of directors, will give Bristol Myers Squibb access to Karuna’s lead drug, KarXT, an antipsychotic with a novel mechanism of action and a differentiated safety and efficacy profile. KarXT is currently under review by the FDA for the treatment of schizophrenia in adults, and is also in clinical trials for other indications, such as Alzheimer’s disease psychosis and bipolar disorder.

“Schizophrenia and Alzheimer’s disease psychosis affect millions of people worldwide, with limited to no treatment options. KarXT’s novel mechanism has resulted in a transformational profile in schizophrenia, with compelling efficacy and a differentiated safety profile,” said Samit Hirawat, M.D., Executive Vice President, Chief Medical Officer, Drug Development of Bristol Myers Squibb.

“KarXT also has the potential to deliver meaningful benefits to patients as an adjunctive treatment for patients with schizophrenia and as a first treatment for Alzheimer’s disease psychosis.”

Bristol Myers Squibb expects the acquisition to be dilutive to its earnings per share by $0.30 in 2024, but to offset the costs through cost efficiencies and portfolio prioritization. The company plans to finance the deal with new debt issuance, and to maintain its commitment to strong credit ratings and shareholder returns. The transaction is expected to close in the first quarter of 2024, subject to customary closing conditions and regulatory approvals.

Bill Meury, President and Chief Executive Officer of Karuna Therapeutics, said, “Karuna’s portfolio offers advancements in treatment not seen in many years. With Bristol Myers Squibb’s long-standing expertise in developing and commercializing medicines on a global scale and legacy in neuroscience, KarXT and the other assets in our pipeline will be well-positioned to reach those living with schizophrenia and Alzheimer’s disease psychosis. This announcement is a testament to the Karuna team’s talent, hard work, and innovation.”