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Bristol Myers’ $14 Billion Gamble: Acquiring Karuna for Groundbreaking Schizophrenia Treatment

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Bristol Myers Squibb is making waves in the pharmaceutical world with its $14 billion acquisition of Karuna Therapeutics, signifying confidence in Karuna’s experimental schizophrenia treatment drug, KarXT, which could herald a groundbreaking treatment for this debilitating condition. According to the terms of the deal revealed on Friday, Bristol Myers will shell out $330 per share for Karuna, representing a substantial 53% premium over its closing price on December 21. After accounting for Karuna’s existing cash reserves, the deal’s total value stands at approximately $12.7 billion.

At the heart of this acquisition lies KarXT, a highly anticipated medicine currently under review by the Food and Drug Administration (FDA) as a potential schizophrenia treatment. Diverging from conventional schizophrenia treatments, KarXT offers a novel approach, demonstrating promising results in three mid to late-stage trials. Pending regulatory approval, this innovative drug could hit the market by the end of 2024.

KarXT: A Potential Schizophrenia Game-Changer

KarXT is not limited to schizophrenia; it’s also undergoing advanced testing as an adjunctive therapy for existing schizophrenia drugs and as a potential treatment for psychosis in Alzheimer’s disease patients. The FDA is slated to decide on its use in schizophrenia by September 26 next year.

This strategic acquisition marks a return to neuroscience research for Bristol Myers. Over the past decade, the company had shifted its focus primarily to oncology, riding the wave of success in cancer immunotherapy. However, Bristol Myers has recently reaffirmed its commitment to neuroscience, aiming to “put the CNS back in BMS.” This decision aligns with its ongoing research in Alzheimer’s disease, ALS, and multiple sclerosis, emphasizing the importance of advancing brain-related drug research.

Schizophrenia Treatment

Competition and Targeting Muscarinic Receptors on Schizophrenia Treatment

The acquisition follows AbbVie’s $8.7 billion deal to acquire Cerevel Therapeutics, which boasts a similar drug to Karuna’s in advanced testing. Both drugs target “muscarinic receptors,” responsible for regulating the release of the neurotransmitter acetylcholine. This approach differs from conventional schizophrenia treatments that primarily focus on dopamine and serotonin.

While Cerevel’s drug zeroes in on the “M4” member of the muscarinic receptor family, Karuna’s KarXT targets both “M4” and “M1.” Notably, Karuna holds a lead over Cerevel in clinical testing progress, with Cerevel facing delays in its trials.

For Karuna, this acquisition serves as validation for a journey that began in 2009 when PureTech Health established the company around a discarded drug called Xanomeline, previously abandoned by Eli Lilly. Under the guidance of Steven Paul, a former Lilly executive, xanomeline was paired with another drug, trospium, resulting in KarXT. Clinical trials have demonstrated that this combination can effectively reduce the severity of schizophrenia symptoms.

Schizophrenia affects approximately 1.6 million individuals in the U.S., and many of them do not respond well to existing therapies. This complex condition remains not entirely understood, with symptoms ranging from hallucinations to withdrawal and diminished motivation.


Resource: Biopharmadive, December 22, 2023

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