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Karuna Therapeutics (KRTX) Posts Wider-Than-Expected Q3 Loss
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Karuna Therapeutics reported a loss of $2.38 per share in third-quarter 2022, wider than the Zacks Consensus Estimate of a loss of $1.99 and the year-ago quarter’s loss of $1.72. The upside can be attributed to higher operating expenses incurred by the company during the third quarter.
During the quarter, Karuna Therapeutics recorded $0.08 million as licensing, missing the Zacks Consensus Estimate of $10.0 million. It did not record any revenue in the year-ago quarter.
In the year so far, shares of Karuna have surged 69.8% against the industry’s fall of 22.3%.
Image Source: Zacks Investment Research
Quarter in Detail
For the reported quarter, research and development expenses were $62.0 million, up 59.8% from the year-ago figure, due to increased costs for developing Karuna Therapeutics’ clinical programs plus higher employee-related expenses.
General and administrative expenses also surged 54.3% year over year to $19.1 million due to higher employee-related costs.
As of Sep 30, 2022, Karuna Therapeutics had cash, cash equivalents and marketable securities of $1.2 billion compared with $407.4 million on Jun 30, 2022. The substantial increase in cash balance was due to the public offering issued during the third quarter.
Management expects its current cash balance to fund its operations and meet capital expenditure requirements through the end of 2025.
Pipeline Updates
Karuna Therapeutics has only one candidate in its pipeline, KarXT, which is also its lead candidate. KarXT is being evaluated in multiple late-stage studies as a potential treatment of psychosis in adults with schizophrenia.
Earlier this August, Karuna reported top-line data from the phase III EMERGENT-2 study, which showed that treatment with KarXT led to a meaningful reduction in schizophrenia symptom severity. Top-line data from the phase III EMERGENT-3 study is expected in first-quarter 2023.
Based on data from the EMERGENT program, Karuna expects to file a new drug application (NDA) with the FDA for KarXT as a treatment for schizophrenia in mid-2023.
The company also intends to start the phase IIIb PENNANT study to evaluate the safety, tolerability and efficacy of KarXT in adults with schizophrenia living in the United States. Data from the study will provide insight into the long-term use of KarXT over multiple years.
Apart from schizophrenia, Karuna Therapeutics is developing KarXT as a potential treatment for dementia-related psychosis (DRP). KRTX initially focuses on developing KarXT to treat psychosis in Alzheimer’s disease (AD), one of the most prevalent subtypes of DRP. During the third quarter, Karuna Therapeutics initiated the phase III ADEPT clinical program, which will evaluate the candidate for psychosis in elderly patients with AD. This program will consist of three late-stage studies, out of which one has already been initiated in third-quarter 2022 while the remaining are expected to start next year. Data from these studies is expected in 2025.
Estimates for Angion Biomedica’s 2022 loss per share have narrowed from $1.64 to $1.53 in the past 60 days. Angion’s loss estimates for 2023 have narrowed from $1.54 to $1.43 in the past 60 days. Shares of Angion Biomedica have plunged 67.9% in the year-to-date period.
Earnings of Angion Biomedica beat estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 62.85%. In the last reported quarter, ANGN delivered an earnings surprise of 34.78%.
Gilead’s stock has risen 9.4% this year so far. While Gilead’s earnings estimates for 2022 have risen from $6.61 to $7.02 per share in the past 60 days, estimates for 2023 have increased from $6.32 to $6.79 per share during the same period.
Gilead beat earnings estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 0.36%. In the last reported quarter, GILD delivered an earnings surprise of 31.94%.
Merck’s stock has risen 28.9% this year so far. While Merck’s earnings estimates for 2022 have risen from $7.36 to $7.38 per share in the past 60 days, estimates for 2023 have increased from $7.17 to $7.34 per share during the same period.
Merck beat earnings estimates in each of the last four quarters, delivering an average earnings surprise of 16.07%, on average. In the last reported quarter, Merck reported an earnings surprise of 10.78%.
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Karuna Therapeutics (KRTX) Posts Wider-Than-Expected Q3 Loss
Karuna Therapeutics reported a loss of $2.38 per share in third-quarter 2022, wider than the Zacks Consensus Estimate of a loss of $1.99 and the year-ago quarter’s loss of $1.72. The upside can be attributed to higher operating expenses incurred by the company during the third quarter.
During the quarter, Karuna Therapeutics recorded $0.08 million as licensing, missing the Zacks Consensus Estimate of $10.0 million. It did not record any revenue in the year-ago quarter.
In the year so far, shares of Karuna have surged 69.8% against the industry’s fall of 22.3%.
Image Source: Zacks Investment Research
Quarter in Detail
For the reported quarter, research and development expenses were $62.0 million, up 59.8% from the year-ago figure, due to increased costs for developing Karuna Therapeutics’ clinical programs plus higher employee-related expenses.
General and administrative expenses also surged 54.3% year over year to $19.1 million due to higher employee-related costs.
As of Sep 30, 2022, Karuna Therapeutics had cash, cash equivalents and marketable securities of $1.2 billion compared with $407.4 million on Jun 30, 2022. The substantial increase in cash balance was due to the public offering issued during the third quarter.
Management expects its current cash balance to fund its operations and meet capital expenditure requirements through the end of 2025.
Pipeline Updates
Karuna Therapeutics has only one candidate in its pipeline, KarXT, which is also its lead candidate. KarXT is being evaluated in multiple late-stage studies as a potential treatment of psychosis in adults with schizophrenia.
Earlier this August, Karuna reported top-line data from the phase III EMERGENT-2 study, which showed that treatment with KarXT led to a meaningful reduction in schizophrenia symptom severity. Top-line data from the phase III EMERGENT-3 study is expected in first-quarter 2023.
Based on data from the EMERGENT program, Karuna expects to file a new drug application (NDA) with the FDA for KarXT as a treatment for schizophrenia in mid-2023.
The company also intends to start the phase IIIb PENNANT study to evaluate the safety, tolerability and efficacy of KarXT in adults with schizophrenia living in the United States. Data from the study will provide insight into the long-term use of KarXT over multiple years.
Apart from schizophrenia, Karuna Therapeutics is developing KarXT as a potential treatment for dementia-related psychosis (DRP). KRTX initially focuses on developing KarXT to treat psychosis in Alzheimer’s disease (AD), one of the most prevalent subtypes of DRP. During the third quarter, Karuna Therapeutics initiated the phase III ADEPT clinical program, which will evaluate the candidate for psychosis in elderly patients with AD. This program will consist of three late-stage studies, out of which one has already been initiated in third-quarter 2022 while the remaining are expected to start next year. Data from these studies is expected in 2025.
Karuna Therapeutics, Inc. Price
Karuna Therapeutics, Inc. price | Karuna Therapeutics, Inc. Quote
Zacks Rank & Stocks to Consider
Karuna Therapeutics currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the overall healthcare sector include Angion Biomedica , Gilead Sciences (GILD - Free Report) and Merck (MRK - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Estimates for Angion Biomedica’s 2022 loss per share have narrowed from $1.64 to $1.53 in the past 60 days. Angion’s loss estimates for 2023 have narrowed from $1.54 to $1.43 in the past 60 days. Shares of Angion Biomedica have plunged 67.9% in the year-to-date period.
Earnings of Angion Biomedica beat estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 62.85%. In the last reported quarter, ANGN delivered an earnings surprise of 34.78%.
Gilead’s stock has risen 9.4% this year so far. While Gilead’s earnings estimates for 2022 have risen from $6.61 to $7.02 per share in the past 60 days, estimates for 2023 have increased from $6.32 to $6.79 per share during the same period.
Gilead beat earnings estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 0.36%. In the last reported quarter, GILD delivered an earnings surprise of 31.94%.
Merck’s stock has risen 28.9% this year so far. While Merck’s earnings estimates for 2022 have risen from $7.36 to $7.38 per share in the past 60 days, estimates for 2023 have increased from $7.17 to $7.34 per share during the same period.
Merck beat earnings estimates in each of the last four quarters, delivering an average earnings surprise of 16.07%, on average. In the last reported quarter, Merck reported an earnings surprise of 10.78%.