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Karuna Therapeutics Reports Second Quarter 2022 Financial Results and Provides General Business Updates


Karuna Therapeutics, Inc. (NASDAQ: KRTX), a clinical-stage biopharmaceutical company driven to create and deliver transformative medicines for people living with psychiatric and neurological conditions, today announced financial results for the second quarter of 2022 and provided a general business update.

In a separate press release issued today, the Company announced positive results from the Phase 3 EMERGENT-2 trial evaluating the efficacy, safety and tolerability of its lead investigational therapy, KarXT (xanomeline-trospium), in adults with schizophrenia. The trial met its primary endpoint, with KarXT demonstrating a statistically significant and clinically meaningful 9.6-point reduction in Positive and Negative Syndrome Scale (PANSS) total score compared to placebo (-21.2 KarXT vs. -11.6 placebo; p<0.0001) at Week 5 (Cohen's d effect size of 0.61). KarXT also met key secondary endpoints in the Phase 3 EMERGENT-2 trial, demonstrating a statistically significant reduction in both positive symptoms (e.g., hallucinations or delusions) and negative symptoms (e.g., difficulty enjoying life or withdrawal from others) of schizophrenia as measured by the PANSS positive, PANSS negative and PANSS negative Marder factor subscales. KarXT was generally well tolerated, with a side effect profile substantially consistent with prior trials of KarXT in schizophrenia.

"It is an incredibly exciting time for Karuna; with two positive, registrational trials in hand for KarXT, we are another step closer to potentially providing the first new class of medicine in more than 50 years to the millions of people worldwide living with schizophrenia," said Steve Paul, M.D., chief executive officer, president, and chairman of Karuna Therapeutics. "People living with serious mental illness are in dire need of medicines that work differently than current treatments in order to find relief from burdensome symptoms. We plan to submit a New Drug Application in schizophrenia in mid-2023, and will simultaneously continue to progress the ARISE and ADEPT clinical trial programs to explore KarXT's potential in additional indications."

Pipeline Updates

Karuna is advancing a pipeline of novel drug candidates for the treatment of various psychiatric and neurological conditions. The clinical pipeline is led by KarXT (xanomeline-trospium), an oral investigational antipsychotic with a novel mechanism of action mediated via muscarinic cholinergic receptors, that is currently being evaluated in ongoing and planned late-stage clinical trials as a potential treatment for schizophrenia and psychosis related to Alzheimer's disease.

Anticipated Upcoming Milestones

Second Quarter 2022 Financial Results

The Company reported a net loss of $64.9 million for the second quarter of 2022, as compared to $34.4 million for the prior year period. The increase in net loss for the quarter was driven by research and development expenses related to the Company's enrollment of the Phase 3 EMERGENT and ARISE trials, NDA-supporting activities, increased employee headcount across the organization, and higher stock-based compensation expense. The Company recognized licensing revenue of $5.3 million for the second quarter of 2022 related to a development milestone and related tax gross ups associated with our License Agreement with Zai Lab (Shanghai) Co., Ltd. There was no license revenue in the prior year period.

Research and development expenses were $52.5 million for the second quarter of 2022, as compared to $24.1 million the prior year period. The increase in research and development expenses for the quarter was primarily driven by expenses related to the Company's Phase 3 EMERGENT, ARISE and ADEPT trials, manufacturing to support ongoing and planned clinical trials, as well as for a planned NDA submission and potential commercialization of KarXT for schizophrenia, personnel-related costs due to the increase in employee headcount, and higher stock-based compensation expense.

General and administrative expenses were $17.8 million for the second quarter of 2022, as compared to $10.4 million for the prior year period. The increase in general and administrative expenses was primarily due to an increase in employee headcount.

The Company ended the quarter with $407.4 million in cash, cash equivalents and available-for-sale investment securities compared to $494.0 million as of December 31, 2021. The Company expects that current cash, cash equivalents and available-for-sale investment securities as of June 30, 2022 will enable the Company to fund its operating expenses and capital expenditure requirements for at least 12 months following the potential NDA submission of KarXT for the treatment of psychosis in adults with schizophrenia.

About Karuna Therapeutics

Karuna Therapeutics is a clinical-stage biopharmaceutical company driven to create and deliver transformative medicines for people living with psychiatric and neurological conditions. At Karuna, we understand there is a need for differentiated and more effective treatments that can help patients navigate the challenges presented by serious mental illness. Utilizing our extensive knowledge of neuroscience, we are harnessing the untapped potential of the brain in pursuit of novel pathways to develop medicines that make meaningful differences in peoples' lives. For more information, please visit www.karunatx.com.

Forward-Looking Statements

This press release contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our expectations about the timing of our ongoing and planned clinical trials and regulatory filings, our goals to develop and commercialize our product candidates, our liquidity and capital resources and other statements identified by words such as "could," "expects," "intends," "may," "plans," "potential," "should," "will," "would," or similar expressions and the negatives of those terms. Forward looking statements are not promises or guarantees of future performance, and are subject to a variety of risks and uncertainties, many of which are beyond our control, and which could cause actual results to differ materially from those contemplated in such forward-looking statements. These factors include risks related to our limited operating history, our ability to obtain necessary funding, our ability to generate positive clinical trial results for our product candidates and other risks inherent in clinical development, the timing and scope of regulatory approvals, changes in laws and regulations to which we are subject, competitive pressures, our ability to identify additional product candidates, risks relating to business interruptions resulting from the coronavirus (COVID-19) pandemic, and other risks set forth under the heading "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2021. Our actual results could differ materially from the results described in or implied by such forward looking statements. Forward-looking statements speak only as of the date hereof, and, except as required by law, we undertake no obligation to update or revise these forward-looking statements.

 

Karuna Therapeutics, Inc.

Unaudited Consolidated Statements of Operations

(in thousands, except share and per share data)

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2022

 

 

2021

 

2022

 

2021

 

License revenue

 

$

5,278

 

 

$

?

 

 

$

5,278

 

 

$

?

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

52,487

 

 

 

24,147

 

 

 

96,293

 

 

 

44,333

 

General and administrative

 

 

17,843

 

 

 

10,384

 

 

 

32,631

 

 

 

20,161

 

Total operating expenses

 

 

70,330

 

 

 

34,531

 

 

 

128,924

 

 

 

64,494

 

Loss from operations

 

 

(65,052

)

 

 

(34,531

)

 

 

(123,646

)

 

 

(64,494

)

Other income (loss), net:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

490

 

 

 

106

 

 

 

727

 

 

 

249

 

Sublease income

 

 

147

 

 

 

9

 

 

 

286

 

 

 

9

 

Impairment loss on right-of-use assets

 

 

?

 

 

 

?

 

 

 

?

 

 

 

(677

)

Total other income (loss), net

 

 

637

 

 

 

115

 

 

 

1,013

 

 

 

(419

)

Net loss before income taxes

 

 

(64,415

)

 

 

(34,416

)

 

 

(122,633

)

 

 

(64,913

)

Income tax provision

 

 

(528

)

 

 

?

 

 

 

(528

)

 

 

?

 

Net loss attributable to common stockholders

 

$

(64,943

)

 

$

(34,416

)

 

$

(123,161

)

 

$

(64,913

)

Net loss per share, basic and diluted

 

$

(2.17

)

 

$

(1.17

)

 

$

(4.13

)

 

$

(2.27

)

Weighted average common shares outstanding used in computing net loss per

share, basic and diluted

 

 

29,896,332

 

 

 

29,482,511

 

 

 

 

29,851,396

 

 

 

28,639,210

 

 

Karuna Therapeutics, Inc.

Unaudited Consolidated Balance Sheet Data

(in thousands)

 

 

June 30, 2022

 

 

December 31, 2021

Cash, cash equivalents and investments

 

$

407,414

 

 

$

493,991

Working capital

 

 

400,313

 

 

 

497,121

Total assets

 

 

433,556

 

 

 

527,671

Total stockholders' equity

 

$

405,409

 

 

$

502,026

 


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News published on 8 august 2022 at 06:35 and distributed by: