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Karuna's (KRTX) Q3 Loss Wider-Than-Expected, Sales Miss
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Karuna Therapeutics reported a loss of $3.16 per share in third-quarter 2023, wider than the Zacks Consensus Estimate of a loss of $2.74.
In the year-ago quarter, the company posted a loss of $2.38 per share. The downside 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 $1.3 million. In the year-ago quarter, the company recorded $0.08 million in licensing revenues.
Shares of Karuna lost 2.3% on Nov 2, following the earnings announcement, likely due to dismal earnings results.
Year to date, shares of Karuna have lost 13.9% compared with the industry’s 23.5% fall.
Image Source: Zacks Investment Research
Quarter in Detail
In the reported quarter, research and development expenses were $104.0 million, up 68% 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 69% year over year to $32.3 million, driven by pre-commercialization activities and higher employee-related costs.
As of Sep 30, 2023, Karuna Therapeutics had cash, cash equivalents and marketable securities of $1.3 billion compared with $1.4 billion on Jun 30, 2023. Management expects this cash balance to fund operations and meet capital expenditure requirements through 2026.
2023 Guidance
Though management reiterated its guidance for total operating expenses to be between $430 and $470 million, it expects the expenses to come in toward the top end of the range of $470 million.
Based on this expectation, it now expects full-year R&D and G&A expenses to be $355 million and $115 million, respectively.
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).
During the third quarter, Karuna filed a new drug application (“NDA”) with the FDA seeking approval for KarXT to treat schizophrenia in adults. The filing is supported by data from the three completed studies from the EMERGENT program that have demonstrated Kar-XT’s potential to address schizophrenia symptoms without the common side effects of current treatment options.
If approved, KarXT will provide a new treatment option for patients and be the first novel pharmacological approach for schizophrenia treatment in several decades. A commercial launch is expected in second-half 2024.
In first-quarter 2023, management started a phase Ib study evaluating the effect of KarXT on 24-hour ambulatory blood pressure in adults with schizophrenia. The study’s top-line data, which is expected before year-end, will provide insight into the long-term use of KarXT. This data will be part of the 120-day safety update to the above NDA.
During the third quarter, management initiated two late-stage studies, namely ADEPT-2 and ADEPT-3, evaluating KarXT for treating psychosis in AD patients. The company started the phase III ADEPT-1 study last year, which is evaluating KarXT for psychosis in elderly patients with moderate to severe psychosis related to AD. Top-line data from the ADEPT studies are expected by 2025.
Karuna intends to develop its recently acquired clinical stage candidate KAR-2618 as a potential treatment of mood and anxiety disorders. Management plans to evaluate the candidate to treat major depressive disorder (MDD). In this regard, management plans to start a phase Ib study next year.
Karuna Therapeutics currently has a Zacks Rank #4 (Sell). Some better-ranked stocks in the overall healthcare sector include Acadia Pharmaceuticals (ACAD - Free Report) , Alkermes (ALKS - Free Report) and Puma Biotechnology (PBYI - Free Report) . While Puma Biotechnology sports a Zacks Rank #1 (Strong Buy) at present, Acadia and Alkermes carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Puma Biotechnology’s earnings estimates for 2024 have increased from 55 cents to 56 cents per share in the past 30 days. Year to date, Puma Biotechnology’s stock has lost 41.1%.
Puma Biotechnology 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 95.94%. In the last reported quarter, PBYI delivered an earnings surprise of 42.86%.
In the past 30 days, estimates for Acadia’s 2023 loss per share have narrowed from 41 cents to 37 cents. During the same period, the earnings estimates per share for 2024 have risen from 60 cents to 68 cents. Shares of ACAD are up 44.4% in the year-to-date period.
Earnings of Acadia beat estimates in two of the last four quarters while missing the mark on the other two occasions, witnessing an average earnings surprise of 20.33%. In the last reported quarter, Acadia’s earnings beat estimates by 108.33%.
In the past 30 days, the estimate for Alkermes’ 2023 and 2024 EPS have increased from $1.61 to $1.63 and $1.93 to $2.14, respectively. Shares of ALKS are down 6.1% in the year-to-date period.
Earnings of Alkermes beat estimates in each of the last four quarters, witnessing an average earnings surprise of 93.34%. Alkermes’ earnings beat estimates by 45.45%.
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Karuna's (KRTX) Q3 Loss Wider-Than-Expected, Sales Miss
Karuna Therapeutics reported a loss of $3.16 per share in third-quarter 2023, wider than the Zacks Consensus Estimate of a loss of $2.74.
In the year-ago quarter, the company posted a loss of $2.38 per share. The downside 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 $1.3 million. In the year-ago quarter, the company recorded $0.08 million in licensing revenues.
Shares of Karuna lost 2.3% on Nov 2, following the earnings announcement, likely due to dismal earnings results.
Year to date, shares of Karuna have lost 13.9% compared with the industry’s 23.5% fall.
Image Source: Zacks Investment Research
Quarter in Detail
In the reported quarter, research and development expenses were $104.0 million, up 68% 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 69% year over year to $32.3 million, driven by pre-commercialization activities and higher employee-related costs.
As of Sep 30, 2023, Karuna Therapeutics had cash, cash equivalents and marketable securities of $1.3 billion compared with $1.4 billion on Jun 30, 2023. Management expects this cash balance to fund operations and meet capital expenditure requirements through 2026.
2023 Guidance
Though management reiterated its guidance for total operating expenses to be between $430 and $470 million, it expects the expenses to come in toward the top end of the range of $470 million.
Based on this expectation, it now expects full-year R&D and G&A expenses to be $355 million and $115 million, respectively.
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).
During the third quarter, Karuna filed a new drug application (“NDA”) with the FDA seeking approval for KarXT to treat schizophrenia in adults. The filing is supported by data from the three completed studies from the EMERGENT program that have demonstrated Kar-XT’s potential to address schizophrenia symptoms without the common side effects of current treatment options.
If approved, KarXT will provide a new treatment option for patients and be the first novel pharmacological approach for schizophrenia treatment in several decades. A commercial launch is expected in second-half 2024.
In first-quarter 2023, management started a phase Ib study evaluating the effect of KarXT on 24-hour ambulatory blood pressure in adults with schizophrenia. The study’s top-line data, which is expected before year-end, will provide insight into the long-term use of KarXT. This data will be part of the 120-day safety update to the above NDA.
During the third quarter, management initiated two late-stage studies, namely ADEPT-2 and ADEPT-3, evaluating KarXT for treating psychosis in AD patients. The company started the phase III ADEPT-1 study last year, which is evaluating KarXT for psychosis in elderly patients with moderate to severe psychosis related to AD. Top-line data from the ADEPT studies are expected by 2025.
Karuna intends to develop its recently acquired clinical stage candidate KAR-2618 as a potential treatment of mood and anxiety disorders. Management plans to evaluate the candidate to treat major depressive disorder (MDD). In this regard, management plans to start a phase Ib study next year.
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 Acadia Pharmaceuticals (ACAD - Free Report) , Alkermes (ALKS - Free Report) and Puma Biotechnology (PBYI - Free Report) . While Puma Biotechnology sports a Zacks Rank #1 (Strong Buy) at present, Acadia and Alkermes carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Puma Biotechnology’s earnings estimates for 2024 have increased from 55 cents to 56 cents per share in the past 30 days. Year to date, Puma Biotechnology’s stock has lost 41.1%.
Puma Biotechnology 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 95.94%. In the last reported quarter, PBYI delivered an earnings surprise of 42.86%.
In the past 30 days, estimates for Acadia’s 2023 loss per share have narrowed from 41 cents to 37 cents. During the same period, the earnings estimates per share for 2024 have risen from 60 cents to 68 cents. Shares of ACAD are up 44.4% in the year-to-date period.
Earnings of Acadia beat estimates in two of the last four quarters while missing the mark on the other two occasions, witnessing an average earnings surprise of 20.33%. In the last reported quarter, Acadia’s earnings beat estimates by 108.33%.
In the past 30 days, the estimate for Alkermes’ 2023 and 2024 EPS have increased from $1.61 to $1.63 and $1.93 to $2.14, respectively. Shares of ALKS are down 6.1% in the year-to-date period.
Earnings of Alkermes beat estimates in each of the last four quarters, witnessing an average earnings surprise of 93.34%. Alkermes’ earnings beat estimates by 45.45%.