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Karuna (KRTX) Reports Narrower-Than-Expected Loss in Q4
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Karuna Therapeutics reported a loss of $2.22 per share in fourth-quarter 2022, narrower than the Zacks Consensus Estimate of a loss of $2.23 but wider than the year-ago quarter’s loss of 94 cents. This upside can be attributed to higher operating expenses incurred by the company during the fourth quarter.
In the quarter, Karuna generated $5.3 million as licensing revenues from Zai Lab. In the year-ago quarter, the company recorded $37.0 million as licensing revenues.
In the past year, shares of Karuna have surged 92.0% against the industry’s 10.1% fall.
Image Source: Zacks Investment Research
Quarter in Detail
For the reported quarter, research and development expenses were $66.0 million, up 46.4% from the year-ago quarter’s figure, due to increased costs for developing the company’s clinical programs plus higher employee-related expenses.
General and administrative expenses also rose 21.2% year over year to $24.3 million due to higher employee-related costs.
As of Dec 31, 2022, Karuna Therapeutics had cash, cash equivalents and marketable securities of $1.1 billion compared with $1.2 billion on Sep 30, 2022. Management expects this cash balance to fund its operations and meet capital expenditure requirements through the end of 2025.
Full Year Results
Karuna Therapeutics reported total revenues of $10.6 million, down 71.2% year over year. The revenue, in its entirety, was received from Zai Lab and recorded as licensing revenue.
For the same period, the company reported a loss of $8.74 per share, higher than the year-ago loss of $4.94.
2023 Guidance
Management expects to record total operating expenses between $430 and $470 million. This includes $70 million in non-cash stock compensation expenses.
Pipeline Updates
Karuna Therapeutics’ lead pipeline candidate KarXT is being evaluated in multiple late-stage studies as a potential treatment for schizophrenia and psychosis in Alzheimer’s disease (AD).
Last 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 above studies, Karuna expects to file a new drug application (NDA) with the FDA for KarXT as a treatment for schizophrenia in mid-2023. If approved, a commercial launch is expected next year.
An ongoing late-stage study (ADEPT-1) is evaluating KarXT for psychosis in elderly patients with moderate to severe psychosis related to AD. Another late-stage study (ADEPT-2) is expected to start later this year which will evaluate the efficacy and safety of KarXT against a placebo for AD indication. Data from these studies is expected in 2025.
Earlier this month, Karuna announced that it acquired an exclusive global license from Goldfinch Bio to develop and market the latter's TRPC4/5 channel candidates, including its lead clinical-stage candidate, KAR-2618 (formerly GFB-887), to treat psychiatric and neurological conditions.
In consideration of acquiring these rights, Karuna made an upfront payment of $15 million to Goldfinch Bio. In addition, the company is also obligated to pay up to $520 million in milestone payments for each licensed product. Goldfinch Bio can also receive royalties on any potential global net sales of each product acquired under the agreement.
Estimates for Adaptive Biotechnologies’ 2023 loss per share have narrowed from $1.31 to $1.20 in the past 60 days. Shares of Adaptive Biotechnologies have declined 39.4% in the past year.
Earnings of Adaptive Biotechnologies beat estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 10.75%. In the last reported quarter, ADPT delivered an earnings surprise of 24.32%.
Allogene’s stock has declined 31.2% in the past year. Allogene’s loss estimates for 2023 have narrowed from $2.84 to $2.83 per share in the past 60 days.
Allogene beat earnings estimates in each of the last four quarters, the average surprise being 9.44%. In the last reported quarter, the company delivered an earnings surprise of 6.45%.
Amarin’s stock has declined 44.3% in the trailing 12 months. Amarin’s loss estimates for 2023 narrowed from 8 cents per share to 6 cents in the past 60 days.
Amarin beat earnings estimates in two of the last four quarters and missed the mark on other two occasions, the average negative surprise being 14.29%. In the last reported quarter, Amarin’s earnings beat estimates by 200.00%.
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Karuna (KRTX) Reports Narrower-Than-Expected Loss in Q4
Karuna Therapeutics reported a loss of $2.22 per share in fourth-quarter 2022, narrower than the Zacks Consensus Estimate of a loss of $2.23 but wider than the year-ago quarter’s loss of 94 cents. This upside can be attributed to higher operating expenses incurred by the company during the fourth quarter.
In the quarter, Karuna generated $5.3 million as licensing revenues from Zai Lab. In the year-ago quarter, the company recorded $37.0 million as licensing revenues.
In the past year, shares of Karuna have surged 92.0% against the industry’s 10.1% fall.
Image Source: Zacks Investment Research
Quarter in Detail
For the reported quarter, research and development expenses were $66.0 million, up 46.4% from the year-ago quarter’s figure, due to increased costs for developing the company’s clinical programs plus higher employee-related expenses.
General and administrative expenses also rose 21.2% year over year to $24.3 million due to higher employee-related costs.
As of Dec 31, 2022, Karuna Therapeutics had cash, cash equivalents and marketable securities of $1.1 billion compared with $1.2 billion on Sep 30, 2022. Management expects this cash balance to fund its operations and meet capital expenditure requirements through the end of 2025.
Full Year Results
Karuna Therapeutics reported total revenues of $10.6 million, down 71.2% year over year. The revenue, in its entirety, was received from Zai Lab and recorded as licensing revenue.
For the same period, the company reported a loss of $8.74 per share, higher than the year-ago loss of $4.94.
2023 Guidance
Management expects to record total operating expenses between $430 and $470 million. This includes $70 million in non-cash stock compensation expenses.
Pipeline Updates
Karuna Therapeutics’ lead pipeline candidate KarXT is being evaluated in multiple late-stage studies as a potential treatment for schizophrenia and psychosis in Alzheimer’s disease (AD).
Last 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 above studies, Karuna expects to file a new drug application (NDA) with the FDA for KarXT as a treatment for schizophrenia in mid-2023. If approved, a commercial launch is expected next year.
An ongoing late-stage study (ADEPT-1) is evaluating KarXT for psychosis in elderly patients with moderate to severe psychosis related to AD. Another late-stage study (ADEPT-2) is expected to start later this year which will evaluate the efficacy and safety of KarXT against a placebo for AD indication. Data from these studies is expected in 2025.
Earlier this month, Karuna announced that it acquired an exclusive global license from Goldfinch Bio to develop and market the latter's TRPC4/5 channel candidates, including its lead clinical-stage candidate, KAR-2618 (formerly GFB-887), to treat psychiatric and neurological conditions.
In consideration of acquiring these rights, Karuna made an upfront payment of $15 million to Goldfinch Bio. In addition, the company is also obligated to pay up to $520 million in milestone payments for each licensed product. Goldfinch Bio can also receive royalties on any potential global net sales of each product acquired under the agreement.
Karuna Therapeutics, Inc. Price
Karuna Therapeutics, Inc. price | Karuna Therapeutics, Inc. Quote
Zacks Rank & Stocks to Consider
Karuna Therapeutics currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the overall healthcare sector include Adaptive Biotechnologies Corporation (ADPT - Free Report) , Allogene (ALLO - Free Report) and Amarin Corporation (AMRN - 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 Adaptive Biotechnologies’ 2023 loss per share have narrowed from $1.31 to $1.20 in the past 60 days. Shares of Adaptive Biotechnologies have declined 39.4% in the past year.
Earnings of Adaptive Biotechnologies beat estimates in three of the last four quarters and missed the mark on one occasion, the average surprise being 10.75%. In the last reported quarter, ADPT delivered an earnings surprise of 24.32%.
Allogene’s stock has declined 31.2% in the past year. Allogene’s loss estimates for 2023 have narrowed from $2.84 to $2.83 per share in the past 60 days.
Allogene beat earnings estimates in each of the last four quarters, the average surprise being 9.44%. In the last reported quarter, the company delivered an earnings surprise of 6.45%.
Amarin’s stock has declined 44.3% in the trailing 12 months. Amarin’s loss estimates for 2023 narrowed from 8 cents per share to 6 cents in the past 60 days.
Amarin beat earnings estimates in two of the last four quarters and missed the mark on other two occasions, the average negative surprise being 14.29%. In the last reported quarter, Amarin’s earnings beat estimates by 200.00%.