Shares of biopharmaceutical company Karuna Therapeutics skyrocketed more than 47% Friday morning after giant Bristol-Myers Squibb Co (NYSE:BMY, ETR:RM, OTC:BMYMP) announced a deal to acquire the company for $14 billion in cash.
The agreement valued Karuna at $330 per share. Karuna stock traded at $316.51 early Friday afternoon. Bristol Myers shares climbed 2.7%.
For Bristol Myers, the move expands its drug pipeline. That’s significant, particularly after demand for its blood cancer medication Revlimid dropped in recent months due to competition from a generic version.
Karuna’s primary development focus is treatments for neurological and psychiatric conditions. Its flagship drug, KarXT, is an antipsychotic for patients with schizophrenia.
“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,” Bristol Myers CEO Christopher Boerner said in a statement.
The deal is expected to close in the first half of 2024, according to a statement.