Biopharmaceutical major Bristol-Myers Squibb (NYSE:BMY) has agreed to acquire neuroscience company Karuna Therapeutics (NASDAQ:KRTX) for $330 per share. The $14 billion price tag has pushed KRTX shares nearly 48% higher today.
The M & A deal has received approval from the Boards of both companies. Karuna’s pipeline is focused on psychiatric and neurological conditions. Its lead candidate, KarXT, is an antipsychotic with a novel mechanism of action. The drug’s New Drug Application (NDA) for the treatment of schizophrenia has received an acceptance for review by the U.S. Food and Drug Administration (FDA) with a review date of September 26, 2024.
KarXT is also being evaluated for additional indications, including Alzheimer’s disease and Bipolar I disorder. The strategic deal is anticipated to bolster BMY’s neuroscience portfolio.
Under the deal, BMY will acquire all outstanding KRTX shares at a 53% premium over the stock’s closing price on December 21. The transaction is expected to be dilutive to BMY’s bottom line by nearly $0.30 in 2024. The acquisition is anticipated to close in the first half of next year.
BMY continues to make major moves in the M & A space. Recently, the company announced a global strategic collaboration with SystImmune in a deal worth nearly $8.4 billion. It also expanded its global licensing and research collaboration with Avidity Biosciences (NASDAQ:RNA) in a $2.3 billion deal.
What is the Future of BMY Stock?
Today’s announcement has sent BMY shares nearly 1.7% lower. That’s on top of a nearly 30% drop in the company’s share price over the past year. Overall, the Street has a Moderate Buy consensus rating on Bristol-Myers Squibb, and the average BMY price target of $60.93 implies an 18.9% potential upside in the stock.
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