In the neuroscience arena, Bristol Myers Squibb has inked a deal to acquire Karuna Therapeutics, shelling out a hefty $14 billion. The transaction sets a record as the largest buyout of a Massachusetts company this year. According to the terms announced last Friday, Bristol Myers will pay a 53% premium over Karuna's closing price on the previous day, placing the per-share price at $330, as reported by BioPharma Dive.

The purchase comes at a time when biotech buyouts seem to be regaining momentum after a period in the doldrums. Bristol Myers is setting its sights on the approval of KarXT, Karuna's experimental schizophrenia drug, which the FDA is slated to review by September 26, 2024. This deal is seen as a pivotal step for Bristol Myers to potentially come back strong in the neuroscience field after rivalry from generic drugs, as detailed by The Boston Globe.

KarXT has sparked significant interest due to its distinctive mechanism of action, a departure from existing treatments for schizophrenia aiming to selectively stimulate muscarinic receptors in the brain. With a promising lead in its clinical trials, this therapeutic breakthrough could potentially also serve as a treatment for bipolar disorder and agitation related to Alzheimer's.“This transaction fits squarely within our business development priorities of pursuing assets that are strategically aligned, scientifically sound, financially attractive, and have the potential to address areas of significant unmet medical need," Bristol Myers CEO Christopher Boerner remarked, highlighting the drug's potential to meet sizable unmet medical needs, as gleaned from BioPharma Dive.

After the purchase news broke, Karuna's stock price leaped by 47.7 percent. Bristol Myers is making a calculated gamble to strengthen its neuroscientific arsenal, hoping to reap rewards from KarXT, should it get the FDA's green light. "We expect KarXT to enhance our growth through the late 2020s and into the next decade," Boerner stated, hinting at an optimistic outlook for the company's future, according to The Boston Globe.

For Karuna, parented by PureTech Health and born out of an alliance between the compounds xanomeline and trospium chloride, this acquisition stands as a testament to the enduring journey of a drug initially cast aside by Eli Lilly in the 1990s. Today, KarXT moves forward under the Bristol Myers umbrella, carrying the hopes of offering a new lease on life for the 1.6 million people in the United States grappling with schizophrenia. "If the agency clears the drug, it will represent the first novel pharmacological approach to treating schizophrenia in several decades," Karuna CEO Bill Meury told The Boston Globe.