Shareholder sues Karuna over BMS buyout

Feb. 16, 2024

A Karuna Therapeutics shareholder is suing the Boston-based schizophrenia drugmaker, alleging Karuna and directors filed an incomplete proxy statement describing Bristol Meyers Squibb’s $14 billion proposed buyout of the company.

The lawsuit alleges that the proxy statement, filed with the SEC earlier this month, contained misleading information and was missing key facts. In the statement, Karuna's board unanimously recommended that shareholders vote in favor of the proposed BMS buyout during the March 12 meeting.

The $14 billion deal, revealed back in December, values Karuna at $330 per share. The buyout would give BMS Karuna's promising schizophrenia drug, KarXT. The drug is already in the hands of the FDA, witih a PDUFA date of September 26, 2024. If approved, KarXT would be the first new pharmacological approach to treating schizophrenia in several decades. 

The recent lawsuit, filed in U.S. District Court for the District of Delaware by shareholder Shannon Jenkins, is seeking to block the deal.