Shares of Karuna Therapeutics Inc.
KRTX,
rocketed 47.3% into record territory in premarket trading Friday, after the biopharmaceutical company announced an agreement to be bought by Bristol Myers Squibb Co.
BMY,
in a deal valued at $14 billion. Bristol Myers’ stock slumped 2.2% ahead of the open. Under terms of the deal, Bristol Myers will pay $330 in cash for each Karuna share outstanding, which represents a 53.4% premium to Thursday’s closing price of $215.19. The agreement was reported earlier by The Wall Street Journal. The deal includes $1.3 billion in cash held by Karuna, and the company’s schizophrenia treatment KarXT, in which Karuna’s new drug application has recently been accepted by the U.S. Food and Drug Administration. “There are tremendous opportunities in neuroscience, and Karuna strengthens our position and accelerates the expansion and diversification of our portfolio in the space,” said Bristol Myers Chief Executive Christopher Boerner. “We expect KarXT to enhance our growth through the late 2020s and into the next decade.” Karuna’s stock has gained 9.5% year to date through Thursday, while Bristol Myers shares have tumbled 28.8% and the S&P 500
SPX,
has advanced 23.6%.