Le Lézard
Classified in: Health, Science and technology, Business
Subjects: EARNINGS, Business Update

Karuna Therapeutics Reports Fourth Quarter and Full Year 2023 Financial Results and Provides General Business Update


Karuna Therapeutics, Inc. (NASDAQ: KRTX), a biopharmaceutical company driven to discover, develop, and deliver transformative medicines for people living with psychiatric and neurological conditions, today announced financial results for the fourth quarter and full year ended December 31, 2023, and provided a general business update.

"2023 was a landmark year for Karuna, marked by the FDA acceptance of our NDA for KarXT for the treatment of schizophrenia in adults, with a potential launch in the second half of this year, and the continued advancement of our late-stage pipeline of KarXT as a potential adjunctive treatment for schizophrenia and in psychosis in Alzheimer's disease," said Bill Meury, president and chief executive officer of Karuna Therapeutics. "We look forward to continuing the work to bring KarXT and other potentially transformative medicines to patients living with serious mental illnesses, and we believe the pending acquisition of Karuna by Bristol Myers Squibb will accelerate our ability to achieve this mission."

KEY PIPELINE HIGHLIGHTS

Karuna is advancing a pipeline of novel drug candidates for the treatment of various psychiatric and neurological conditions led by KarXT (xanomeline-trospium), an oral, investigational M1/M4-preferring muscarinic agonist.

KarXT

The NDA for KarXT for the treatment of schizophrenia in adults is under review by the U.S. Food and Drug Administration (FDA) with a PDUFA action date of September 26, 2024. KarXT is also being evaluated in Phase 3 clinical trials as a potential adjunctive treatment for schizophrenia and as a potential treatment for psychosis in Alzheimer's disease.

Early-stage and discovery programs

The Karuna pipeline also includes clinical-stage candidate KAR-2618, a TRPC4/5 inhibitor for the treatment of mood and anxiety disorders, as well as pre-clinical muscarinic, TRPC4/5, and target-agnostic compounds for the treatment of psychiatric and neurological conditions.

BUSINESS UPDATES

ANTICIPATED UPCOMING MILESTONES

FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL RESULTS

The Company reported a net loss of $113.8 million for the fourth quarter of 2023, and a net loss of $433.7 million for the year ended 2023, as compared to $76.2 million and $276.3 million for the prior year periods, respectively. The increase in net loss for the year was primarily attributable to higher operating expenses of $495.4 million compared to $300.3 million for the prior year period, driven by research and development expenses related to the Company's ongoing KarXT clinical programs, NDA-supporting activities, pre-commercialization activities, the $15.0 million upfront license payment for Goldfinch Bio's TRPC4/5 channel candidates, increased employee headcount across the organization, higher stock-based compensation, and expenses associated with the pending acquisition of Karuna by Bristol Myers Squibb.

Research and development expenses were $82.2 million for the fourth quarter of 2023, and $364.1 million for the year ended 2023, as compared to $66.0 million and $224.2 million for the prior year periods, respectively. The increase in research and development expenses for the year was primarily driven by expenses related to the Company's KarXT clinical programs, NDA-supporting activities, the upfront license payment for Goldfinch Bio's TRPC4/5 channel candidates, increased employee headcount, and higher stock-based compensation.

General and administrative expenses were $47.4 million for the fourth quarter of 2023, and $131.3 million for the year ended 2023, as compared to $24.3 million and $76.1 million for the prior year periods, respectively. The increase in general and administrative expenses for the year was primarily driven by the Company's pre-commercialization activities, increased employee headcount, higher stock-based compensation, and expenses associated with the pending acquisition of Karuna by Bristol Myers Squibb.

The Company ended the year 2023 with $1.3 billion in cash, cash equivalents, and available-for-sale investment securities compared to $1.1 billion as of December 31, 2022. The increase was primarily the result of the completion of the Company's follow-on public offering in March 2023, which resulted in net proceeds of $436.7 million.

About Karuna Therapeutics

Karuna Therapeutics is a biopharmaceutical company driven to discover, develop, 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, the proposed acquisition of Karuna by Bristol Myers Squibb, 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, the proposed acquisition of Karuna by Bristol Myers Squibb, changes in laws and regulations to which we are subject, competitive pressures, our ability to identify additional product candidates, risks relating to business interruptions, and other risks set forth under the heading "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2023 and in our subsequent filings with the Securities and Exchange Commission. 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

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

License and other revenue

 

$

?

 

 

$

5,278

 

 

$

654

 

 

$

10,637

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

82,192

 

 

 

66,004

 

 

 

364,101

 

 

 

224,247

 

General and administrative

 

 

47,394

 

 

 

24,310

 

 

 

131,330

 

 

 

76,066

 

Total operating expenses

 

 

129,586

 

 

 

90,314

 

 

 

495,431

 

 

 

300,313

 

Loss from operations

 

 

(129,586

)

 

 

(85,036

)

 

 

(494,777

)

 

 

(289,676

)

Other income, net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

16,285

 

 

 

9,567

 

 

 

61,179

 

 

 

14,178

 

Sublease income

 

 

147

 

 

 

147

 

 

 

588

 

 

 

580

 

Total other income, net

 

 

16,432

 

 

 

9,714

 

 

 

61,767

 

 

 

14,758

 

Net loss before income taxes

 

 

(113,154

)

 

 

(75,322

)

 

 

(433,010

)

 

 

(274,918

)

Income tax provision

 

 

(670

)

 

 

(890

)

 

 

(670

)

 

 

(1,418

)

Net loss attributable to common stockholders

 

$

(113,824

)

 

$

(76,212

)

 

$

(433,680

)

 

$

(276,336

)

Net loss per share, basic and diluted

 

$

(3.01

)

 

$

(2.22

)

 

$

(11.73

)

 

$

(8.74

)

Weighted average common shares outstanding used in computing net loss per share, basic and diluted

 

 

37,780,998

 

 

 

34,406,182

 

 

 

36,959,049

 

 

 

31,629,013

 

Karuna Therapeutics, Inc.
Unaudited Consolidated Balance Sheet Data
(in thousands)

 

 

December 31, 2023

 

 

December 31, 2022

 

Cash, cash equivalents and investments

 

$

1,260,780

 

 

$

1,124,044

 

Working capital

 

 

1,247,184

 

 

 

1,120,823

 

Total assets

 

 

1,336,209

 

 

 

1,163,334

 

Total stockholders' equity

 

$

1,254,235

 

 

$

1,126,238

 

 


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