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Karuna (KRTX) Reports Narrower-Than-Expected Loss in Q1
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Karuna Therapeutics reported a loss of $2.80 per share in first-quarter 2023, narrower than the Zacks Consensus Estimate of a loss of $2.86 and our model estimate of a loss of $3.06. In the year-ago quarter, the company posted loss of $1.95 per share. The wider loss was caused by higher operating expenses incurred by the company during the first quarter.
In the quarter, Karuna generated $0.7 million as licensing revenues from Zai Lab. In the year-ago quarter, the company did not record any revenues.
In the year so far, shares of Karuna have increased 5.1% against the industry’s 6.2% fall.
Image Source: Zacks Investment Research
Quarter in Detail
In the reported quarter, research and development expenses were $85.5 million, up 95.1% 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 64.0% year over year to $24.3 million due to higher employee-related costs.
As of Mar 31, 2023, Karuna Therapeutics had cash, cash equivalents and marketable securities of $1.5 billion compared with $1.1 billion on Dec 31, 2022. The upside resulted from the company’s follow-on public offering in March 2023. Management expects this cash balance to fund its operations and meet capital expenditure requirements through the end of 2026.
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).
In March, Karuna reported top-line data from the phase III EMERGENT-3 study, which evaluated the efficacy, safety and tolerability of its pipeline candidate, KarXT, in adults with schizophrenia. Data from the study showed that treatment with KarXT led to a significant reduction in schizophrenia symptom severity. These results were consistent with the phase III EMERGENT-2 study data announced last August, which also showed that treatment with KarXT led to a reduction in schizophrenia symptom severity.
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 third-quarter 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. The company also intends to start two late-stage studies (ADEPT-2 and ADEPT-3) on KarXT in AD patients in second-half 2023. ADEPT-2 will be evaluating the efficacy and safety of KarXT against placebo, while ADEPT-3 will evaluate the long-term safety of KarXT in adults with psychosis related to AD. Management expects the top-line data from the ADEPT-1 and ADEPT-2 studies 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.
Karuna intends to develop KAR-2618 as a potential treatment of mood and anxiety disorders. Management is yet to develop a planned course of action for the candidate but details are expected in the second half of 2023.
Karuna Therapeutics currently has a Zacks Rank #3 (Hold). Some other top-ranked stocks in the overall healthcare sector include Adaptimmune Therapeutics , Lisata Therapeutics (LSTA - Free Report) and Spero Therapeutics (SPRO - Free Report) , While Lisata Therapeutics and Spero Therapeutics sport a Zacks Rank #1 (Strong Buy), Adaptimmune Therapeuticscarriesa Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Spero Therapeutics’ stock has risen 4.6% in the year-to-date period. SPRO’s loss estimates for 2023 have narrowed from $1.45 to $1.02 per share in the past 60 days. During the same period, the loss estimates per share for 2024 have narrowed from $2.45 to 95 cents.
Spero Therapeutics beat earnings estimates in three of the last four quarters while missing the mark on one occasion. On average, the company’s earnings witnessed an earnings surprise of 56.37%. In the last reported quarter, SPRO delivered an earnings surprise of 237.50%.
In the past 60 days, estimates for Lisata Therapeutics’ 2023 loss per share estimates have narrowed from $3.81 to $3.58. During the same period, the loss estimates per share for 2024 have improved from $4.01 to $3.12. Shares of Lisata Therapeutics have gained 28.5% in the year-to-date period.
Earnings of Lisata beat estimates in two of the last four quarters, while missing the mark on the other two occasions. On average, the company’s earnings witnessed a negative surprise of 5.63%. In the last reported quarter, Lisata’s earnings beat estimates by 20.83%.
In the past 60 days, estimates for Adaptimmune Therapeutics’ 2023 loss per share estimates have narrowed from 78 cents to 63 cents. During the same period, the loss estimates per share for 2024 have improved from $1.10 to 59 cents. Shares of Adaptimmune Therapeutics have declined 4.1% in the year-to-date period.
Earnings of Adaptimmune beat estimates in two of the last four quarters, met the mark on one occasion while missing the mark on another. On average, the company’s earnings witnessed a surprise of 4.80%. In the last reported quarter, Adaptimmune’s earnings beat estimates by 28.00%.
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Karuna (KRTX) Reports Narrower-Than-Expected Loss in Q1
Karuna Therapeutics reported a loss of $2.80 per share in first-quarter 2023, narrower than the Zacks Consensus Estimate of a loss of $2.86 and our model estimate of a loss of $3.06. In the year-ago quarter, the company posted loss of $1.95 per share. The wider loss was caused by higher operating expenses incurred by the company during the first quarter.
In the quarter, Karuna generated $0.7 million as licensing revenues from Zai Lab. In the year-ago quarter, the company did not record any revenues.
In the year so far, shares of Karuna have increased 5.1% against the industry’s 6.2% fall.
Image Source: Zacks Investment Research
Quarter in Detail
In the reported quarter, research and development expenses were $85.5 million, up 95.1% 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 64.0% year over year to $24.3 million due to higher employee-related costs.
As of Mar 31, 2023, Karuna Therapeutics had cash, cash equivalents and marketable securities of $1.5 billion compared with $1.1 billion on Dec 31, 2022. The upside resulted from the company’s follow-on public offering in March 2023. Management expects this cash balance to fund its operations and meet capital expenditure requirements through the end of 2026.
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).
In March, Karuna reported top-line data from the phase III EMERGENT-3 study, which evaluated the efficacy, safety and tolerability of its pipeline candidate, KarXT, in adults with schizophrenia. Data from the study showed that treatment with KarXT led to a significant reduction in schizophrenia symptom severity. These results were consistent with the phase III EMERGENT-2 study data announced last August, which also showed that treatment with KarXT led to a reduction in schizophrenia symptom severity.
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 third-quarter 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. The company also intends to start two late-stage studies (ADEPT-2 and ADEPT-3) on KarXT in AD patients in second-half 2023. ADEPT-2 will be evaluating the efficacy and safety of KarXT against placebo, while ADEPT-3 will evaluate the long-term safety of KarXT in adults with psychosis related to AD. Management expects the top-line data from the ADEPT-1 and ADEPT-2 studies 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.
Karuna intends to develop KAR-2618 as a potential treatment of mood and anxiety disorders. Management is yet to develop a planned course of action for the candidate but details are expected in the second half of 2023.
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 other top-ranked stocks in the overall healthcare sector include Adaptimmune Therapeutics , Lisata Therapeutics (LSTA - Free Report) and Spero Therapeutics (SPRO - Free Report) , While Lisata Therapeutics and Spero Therapeutics sport a Zacks Rank #1 (Strong Buy), Adaptimmune Therapeuticscarriesa Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Spero Therapeutics’ stock has risen 4.6% in the year-to-date period. SPRO’s loss estimates for 2023 have narrowed from $1.45 to $1.02 per share in the past 60 days. During the same period, the loss estimates per share for 2024 have narrowed from $2.45 to 95 cents.
Spero Therapeutics beat earnings estimates in three of the last four quarters while missing the mark on one occasion. On average, the company’s earnings witnessed an earnings surprise of 56.37%. In the last reported quarter, SPRO delivered an earnings surprise of 237.50%.
In the past 60 days, estimates for Lisata Therapeutics’ 2023 loss per share estimates have narrowed from $3.81 to $3.58. During the same period, the loss estimates per share for 2024 have improved from $4.01 to $3.12. Shares of Lisata Therapeutics have gained 28.5% in the year-to-date period.
Earnings of Lisata beat estimates in two of the last four quarters, while missing the mark on the other two occasions. On average, the company’s earnings witnessed a negative surprise of 5.63%. In the last reported quarter, Lisata’s earnings beat estimates by 20.83%.
In the past 60 days, estimates for Adaptimmune Therapeutics’ 2023 loss per share estimates have narrowed from 78 cents to 63 cents. During the same period, the loss estimates per share for 2024 have improved from $1.10 to 59 cents. Shares of Adaptimmune Therapeutics have declined 4.1% in the year-to-date period.
Earnings of Adaptimmune beat estimates in two of the last four quarters, met the mark on one occasion while missing the mark on another. On average, the company’s earnings witnessed a surprise of 4.80%. In the last reported quarter, Adaptimmune’s earnings beat estimates by 28.00%.