Bristol Myers to buy schizophrenia drugmaker Karuna TherapeuticsKaruna Therapeutics surges 47% after Bristol Myers Squibb announces $14 billion deal.
Bristol Myers Squibb (BMY.N) on Friday agreed to buy Karuna Therapeutics ( NASDAQ:KRTX ) for $14 billion, gaining a promising new type of antipsychotic medicine to help power growth as patents on its older therapies expire later this decade.
Karuna's experimental schizophrenia drug, called KarXT, should drive sales through the late 2020s and into the next decade, at a time when two of its top drugs, blood cancer treatment Revlimid and blood thinner Eliquis face generic competition.
The deal will help expand Bristol Myers’ drug pipeline after competition from a generic offering caused demand for the company’s blood cancer drug Revlimid to tumble in its third quarter.
The boards of directors at both Bristol Myers and Karuna unanimously approved the acquisition, and it is expected to close in the first half of 2024.
Technical Analysis
Karuna Therapeutics has broken up from an approximate horizontal trend channel in the medium long term. This signals a continued strong development, and the stock now meets support on possible reactions down towards the ceiling of the trend channel.
A decisive break will signal a further rise to $362 or more. There is no resistance in the price chart and further rise is indicated. In case of a negative reaction, NASDAQ:KRTX has support at approximately $238 dollar. Positive volume balance strengthens the stock in the short term.
Investors have steadily paid more to buy the stock, which indicates increasing optimism and that the price will continue to rise.
