Big Pharma is pursuing a ‘fix’ for mental disorders, as Squibb’s $14 billion deal shows

Will Big Pharma ever eliminate mental disorders? From a layman’s point of view, dangerous and peculiar behavior may derive from character and personality problems or from difficulties with how the brain functions. If only medicine could discover a way to “fix” the trouble.

Among the pharmaceutical acquisitions so far this year, Bristol Myers Squibb’s purchase of Karuna Therapeutics for $14 billion offers significant insight into where the industry is headed.

The search for a “cure” for Alzheimer’s and other forms of dementia and schizophrenia continues but remains elusive for a family of ailments that affect millions in the U.S. alone. The field of neuropsychiatry – Karuna’s specialty – shifts the focus in a different direction. It deals with mental disorders caused by brain dysfunction.

Medications such as thorazine, which has passed the 50-year mark, reduce the patient’s ability to act out. That is not a cure; it merely lowers the danger and peculiar behavior of the sufferer. Proponents claim this leads patients to something close to a “normal” life.

Neuropsychiatry by contrast delves into the brain itself. Bristol Myers already offers medicines for Alzheimer’s disease and amyotrophic lateral sclerosis (ALS).

The drug maker knows that people who are taking medications for schizophrenia often do not respond well. The medical profession generally relies on observed behavior to fit patients suffering from these ailments into a recognizable category. This proves challenging since the behavioral aspects often overlap. Patients may appear to be “manic depressive” but may also exhibit traits of “paranoia.” These classifications have been partially replaced by “positive” and “negative” symptoms.

There is actually a term used in medicine, “treatment-resistant schizophrenia,” confirming the limitations of available medications. For patients in this category, a common prescription is clozapine.

However, it is not effective for more than half of patients who fall into the treatment-resistant schizophrenia class. An entry on WebMD states that: “While most people with schizophrenia get better with treatment, schizophrenia can sometimes get worse.” This is a discouraging illness to experience and to treat.

Karuna is the developer of “KarXT,” which is expected to get approval from the Food and Drug Administration in September. The early feedback has been positive: Good results in three trials. Bristol Myers Squibb is hoping to form a link with Alzheimer’s treatment, which is well defined and lucrative.

Premiums reign supreme

Along with the other pharmaceutical giants, Bristol Myers is loaded with money. Annual sales are about $46 billion and it holds over $12 billion in cash. There is no surprise that the deal is coming with an approximate 53% premium.

Continued good results from KarXT would build up the neuropsychiatry area and would put Bristol Myers, which maintains a strong presence in oncology and cardiovascular disease, in good shape to advance in research dealing with how the brain operates.

Bristol Myers’ market capitalization exceeds $100 billion; the acquisition will boost its image and its financial strength in light of several medications losing patent protection.

Read more: The 10 U.S. companies providing the greatest benefits to humanity