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Karuna (KRTX) Reports Narrower-Than-Expected Loss in Q2
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Karuna Therapeutics reported a loss of $2.75 per share in second-quarter 2023, slightly narrower than the Zacks Consensus Estimate of a loss of $2.76. In the year-ago quarter, the company posted a loss of $2.17 per share. The wider loss was caused by higher operating expenses incurred by the company during the quarter.
In the quarter, Karuna did not record any revenues. Sales missed the Zacks Consensus Estimate of $1 million. In the year-ago quarter, the company recorded $5.3 million as licensing revenues from Zai Lab.
In the year so far, shares of Karuna have lost 4.9% compared to the industry’s 13.0% fall.
Image Source: Zacks Investment Research
Quarter in Detail
In the reported quarter, research and development expenses were $92.5 million, up 76% 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 54% year over year to $27.4 million, driven by pre-commercialization activities and higher employee-related costs.
As of Jun 30, 2023, Karuna Therapeutics had cash, cash equivalents and marketable securities of $1.4 billion compared with $1.5 billion on Mar 31, 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 reduced 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 before the end of next month. 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. During the third quarter, Karuna initiated the phase III ADEPT-3 study to evaluate the long-term safety of KarXT in adults with psychosis related to AD. Management also intends to start another late-stage study (ADEPT-2) later this year to evaluate the efficacy and safety of KarXT against placebo in AD patients. Top-line data from the ADEPT-1 and ADEPT-2 studies is expected in 2025.
Karuna intends to develop its recently acquired clinical stage candidate 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.
Caribou Biosciences’ loss estimates for 2023 have narrowed from $1.91 to $1.63 per share in the past 30 days. During the same period, the loss estimates per share for 2024 have narrowed from $2.60 to $1.72. Year to date, Caribou Biosciences’ stock has risen 8.9%.
Caribou Biosciences beat earnings estimates in three of the last four quarters while missing the mark on one occasion. On average, the company’s earnings witnessed a negative earnings surprise of 1.36%. In the last reported quarter, CRBU delivered an earnings surprise of 4.17%.
In the past 30 days, estimates for J&J’s 2023 earnings per share have increased from $10.66 to $10.73. During the same period, the earnings estimates per share for 2024 have risen from $11.01 to $11.28. Shares of J&J are down 3.4% in the year-to-date period.
Earnings of J&J beat estimates in each of the last four quarters, witnessing an average earnings surprise of 5.58%. In the last reported quarter, J&J’s earnings beat estimates by 7.28%.
In the past 30 days, the estimates for Novartis’ 2023 and 2024 EPS have increased from $6.74 to $6.92 and $7.28 to $7.48, respectively. Shares of Novartis are up 12.5% in the year-to-date period.
Earnings of Novartis beat estimates in each of the last four quarters, witnessing an average earnings surprise of 6.56%. Novartis’ earnings beat estimates by 8.93%.
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Karuna (KRTX) Reports Narrower-Than-Expected Loss in Q2
Karuna Therapeutics reported a loss of $2.75 per share in second-quarter 2023, slightly narrower than the Zacks Consensus Estimate of a loss of $2.76. In the year-ago quarter, the company posted a loss of $2.17 per share. The wider loss was caused by higher operating expenses incurred by the company during the quarter.
In the quarter, Karuna did not record any revenues. Sales missed the Zacks Consensus Estimate of $1 million. In the year-ago quarter, the company recorded $5.3 million as licensing revenues from Zai Lab.
In the year so far, shares of Karuna have lost 4.9% compared to the industry’s 13.0% fall.
Image Source: Zacks Investment Research
Quarter in Detail
In the reported quarter, research and development expenses were $92.5 million, up 76% 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 54% year over year to $27.4 million, driven by pre-commercialization activities and higher employee-related costs.
As of Jun 30, 2023, Karuna Therapeutics had cash, cash equivalents and marketable securities of $1.4 billion compared with $1.5 billion on Mar 31, 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 reduced 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 before the end of next month. 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. During the third quarter, Karuna initiated the phase III ADEPT-3 study to evaluate the long-term safety of KarXT in adults with psychosis related to AD. Management also intends to start another late-stage study (ADEPT-2) later this year to evaluate the efficacy and safety of KarXT against placebo in AD patients. Top-line data from the ADEPT-1 and ADEPT-2 studies is expected in 2025.
Karuna intends to develop its recently acquired clinical stage candidate 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 #4 (Sell). Some other top-ranked stocks in the overall healthcare sector include Caribou Biosciences (CRBU - Free Report) , Johnson & Johnson (JNJ - Free Report) and Novartis (NVS - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Caribou Biosciences’ loss estimates for 2023 have narrowed from $1.91 to $1.63 per share in the past 30 days. During the same period, the loss estimates per share for 2024 have narrowed from $2.60 to $1.72. Year to date, Caribou Biosciences’ stock has risen 8.9%.
Caribou Biosciences beat earnings estimates in three of the last four quarters while missing the mark on one occasion. On average, the company’s earnings witnessed a negative earnings surprise of 1.36%. In the last reported quarter, CRBU delivered an earnings surprise of 4.17%.
In the past 30 days, estimates for J&J’s 2023 earnings per share have increased from $10.66 to $10.73. During the same period, the earnings estimates per share for 2024 have risen from $11.01 to $11.28. Shares of J&J are down 3.4% in the year-to-date period.
Earnings of J&J beat estimates in each of the last four quarters, witnessing an average earnings surprise of 5.58%. In the last reported quarter, J&J’s earnings beat estimates by 7.28%.
In the past 30 days, the estimates for Novartis’ 2023 and 2024 EPS have increased from $6.74 to $6.92 and $7.28 to $7.48, respectively. Shares of Novartis are up 12.5% in the year-to-date period.
Earnings of Novartis beat estimates in each of the last four quarters, witnessing an average earnings surprise of 6.56%. Novartis’ earnings beat estimates by 8.93%.