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Karuna Therapeutics Reports First Quarter 2021 Financial Results and Provides General Business Update Pharma & Healthcare Monitor Worldwide Karuna Therapeutics Reports First Quarter 2021 Financial Results and Provides General Business UpdateKaruna 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 first quarter of 2021 and provided a general business update. This year is off to a very productive start, with the advancement of our early- and late-stage clinical programs, most notably the initiation and ongoing enrollment of three Phase 3 trials in our EMERGENT program, the clinical program evaluating KarXT, our lead product candidate, in schizophrenia, said Steve Paul, M.D., chief executive officer, president and chairman. We believe KarXT represents a major advance in the treatment of neuropsychiatric conditions, such as schizophrenia and dementia-related psychosis, where symptoms of psychosis are prominent and disabling. We look forward to furthering our journey to improve the lives of those living with these conditions. Pipeline Updates KarXT (xanomeline-trospium) is an oral investigational antipsychotic with a novel mechanism of action mediated via muscarinic cholinergic receptors. KarXT is currently being evaluated as a potential treatment for psychiatric disorders, including schizophrenia and dementia-related psychosis. KarXT for the treatment of psychosis in adults with schizophrenia. The U.S. Food & Drug Administration has indicated that the previously completed positive Phase 2 five-week, inpatient safety and efficacy trial (EMERGENT-1), one successful Phase 3 efficacy and safety trial, and additional safety data would be acceptable to support a New Drug Application (NDA) filing in schizophrenia. The Phase 3 EMERGENT-2, EMERGENT-3 and EMERGENT-4 trials are currently enrolling. The Phase 3 EMERGENT-5 trial remains on track to initiate in the second quarter of 2021. The EMERGENT program includes the following Phase 3 trials: EMERGENT-2: A five-week inpatient trial evaluating the efficacy and safety of KarXT compared to placebo in 246 adults with schizophrenia in the U.S. EMERGENT-3: A five-week inpatient trial evaluating the efficacy and safety of KarXT compared to placebo in 246 adults with schizophrenia in the U.S. and Ukraine. EMERGENT-4: A 52-week outpatient, open-label extension trial evaluating the long-term safety and tolerability of KarXT in 350 adults with schizophrenia who completed EMERGENT-2 or EMERGENT-3. EMERGENT-5: A 52-week outpatient, open-label trial evaluating the long-term safety and tolerability of KarXT in 400 adults with schizophrenia in the U.S. in patients who were not enrolled in EMERGENT-2 or EMERGENT-3. KarXT for the treatment of schizophrenia in adults who experience an inadequate response to standard of care. The Company plans to initiate a Phase 2 trial evaluating the potential of KarXT to improve symptoms of schizophrenia in adults who have not achieved an adequate response on their current antipsychotic treatment. This trial will evaluate the safety and efficacy of KarXT when dosed with background antipsychotic treatment, and is expected to initiate in the second half of 2021. Data highlighting the antipsychotic activity of xanomeline in combination with an atypical antipsychotic in pre-clinical models of psychosis will be presented at the 2021 American Society of Clinical Psychopharmacology in June. The poster presentation will include data demonstrating xanomeline's, the active ingredient in KarXT, augmentation of ineffective doses of an atypical antipsychotic in a pre-clinical model. KarXT for the treatment of dementia-related psychosis. The multi-cohort, placebo-controlled Phase 1b dose-ranging trial evaluating the safety and tolerability of KarXT in healthy elderly volunteers is ongoing. Data from Cohort 3 of the Phase 1b trial in healthy elderly volunteers is expected in the second quarter of 2021. Based on interim data from Cohorts 1 and 2, previously reported in the first quarter of 2021, the Company believes that potentially therapeutic doses of KarXT can be administered to elderly adults while maintaining a favorable tolerability profile, providing a path to a Phase 2 trial evaluating KarXT in dementia-related psychosis. Cohort 3 will serve to further refine the dose range of xanomeline and trospium and the titration protocol. Planning for this Phase 2 trial in dementia-related psychosis has commenced and the Company expects to provide further guidance following the completion of Cohort 3 later this year. Business Updates The Company completed a successful follow-on offering in the first quarter of 2021. The follow-on public offering resulted in net proceeds of $270.0 million after deducting underwriting discounts and commissions, and other offering related expenses. The United States Patent and Trademark Office (USPTO) granted two patents in the first quarter of 2021, with September 2039 patent expiration dates and the potential for patent term extension. The USPTO granted US Patent Nos. 10,933,020 and 10,925,832 related to compositions and methods for treating disorders ameliorated by muscarinic receptor activation. COVID-19 update. The Company continues to monitor the impact of COVID-19 on operations and will provide relevant updates on its impact on activities as deemed appropriate. First Quarter 2021 Financial Results The Company reported a net loss of $30.5 million for the first quarter of 2021, as compared to $8.7 million for the prior year period. The increase in net loss for the quarter was due to higher research and development expenses related to the Companys preparation, initiation and enrollment of the Phase 3 clinical trials within its EMERGENT program, NDA-supporting activities such as manufacturing, and increased employee headcount across the organization. Research and development expenses were $20.2 million for the first quarter of 2021, as compared to $4.4 million the prior year period. The increase in research and development expenses for the quarter was primarily driven by expenses related to the Companys preparation, initiation and enrollment of the Phase 3 clinical trials within the EMERGENT program, expenses related to manufacturing in preparation for a potential NDA submission, increased spend on the Companys discovery programs and increased personnel-related costs due to the increase in employee headcount. General and administrative expenses were $9.8 million for the first quarter of 2021, as compared to $5.6 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 $571.3 million in cash, cash equivalents and available-for-sale investment securities compared to $322.3 million as of December 31, 2020. The increase was the result of the completion of the Companys public offering. The Company expects that current cash, cash equivalents and available-for-sale investment securities as of March 31, 2021, 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. 2021 Global Data Point. |
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