Bristol-Myers Squibb Acquires Karuna Therapeutics

By Bobby Samwell • Monday, March 18 10:14 • Permanent Link

Bristol Myers Squibb (NYSE: BMY) has completed its acquisition of Karuna Therapeutics, Inc., making Karuna a wholly-owned subsidiary of Bristol Myers Squibb. With the completion of the acquisition, Karuna shares have ceased trading on the NASDAQ Global Select Market. The acquisition brings Karuna's lead asset, KarXT (xanomeline-trospium), into Bristol Myers Squibb's portfolio.

KarXT has a prescription drug user fee act (PDUFA) date of September 26, 2024, for the treatment of schizophrenia in adults. It is also in registrational trials for adjunctive therapy to existing standard of care agents in schizophrenia and for the treatment of psychosis in patients with Alzheimer’s disease. KarXT has the potential to expand into additional indications, including bipolar I disorder and Alzheimer’s disease agitation.

The transaction is expected to be dilutive to Bristol Myers Squibb’s non-GAAP diluted earnings per share by approximately $0.30 in 2024 from the financing cost of the transaction, primarily from a recently completed new debt issuance. Bristol Myers Squibb expects to offset the operational expenses of the transaction through continued disciplined resource allocation, cost efficiencies, and portfolio prioritization.

The acquisition will be accounted for as an asset acquisition resulting in an approximately $12 billion one-time, non-deductible acquired in-process research and development (acquired IPR&D) charge, impacting both 2024 first quarter and full-year GAAP and non-GAAP EPS by approximately $5.93.

Bristol Myers Squibb plans to provide an update to its financial outlook when it reports first-quarter 2024 results on April 25, 2024.

Financial advisors to Bristol Myers Squibb for the acquisition include Gordon Dyal & Co. and Citi, while Goldman Sachs & Co. LLC served as the exclusive financial advisor to Karuna.

Bristol Myers Squibb aims to strengthen its neuroscience portfolio through this acquisition and is looking forward to bringing KarXT to patients with schizophrenia later this year. Today the company's shares have moved -1.1% to a price of $51.74. For more information, read the company's full 8-K submission here.

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