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Karuna's (KRTX) Q4 Loss Widens, Focus on Bristol Myers Buyout
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Karuna Therapeutics, Inc. reported a loss of $3.01 per share in fourth-quarter 2023, wider than the Zacks Consensus Estimate of a loss of $2.64.
In the year-ago quarter, the company posted a loss of $2.22 per share. The loss increased from the year-ago quarter due to higher operating expenses.
In the fourth quarter of 2023, Karuna did not record any revenues. Sales missed the Zacks Consensus Estimate of $2.9 million. In the year-ago quarter, the company recorded $5.3 million in licensing revenues.
Quarter in Detail
In the reported quarter, research and development expenses were $82.2 million, up 24.5% from the year-ago quarter’s figure, due to increased costs related to lead pipeline candidate KarXT (xanomeline-trospium) plus higher employee-related expenses.
General and administrative expenses surged almost 95% year over year to $47.4 million, driven by pre-commercialization activities for KarXT and higher employee-related costs.
As of Dec 31, 2023, Karuna had cash, cash equivalents and marketable securities of $1.3 billion, similar to what it had as of Sep 30, 2023.
Shares of Karuna have rallied 61.5% in the past year against the industry’s decline of 8.5%.
Image Source: Zacks Investment Research
Full-Year Results
In 2023, Karuna generated revenues of $0.6 million compared with $10.6 million generated in 2022.
In the same period, the company recorded a loss per share of $11.73 compared with $8.74 in 2022.
Recent Updates
Karuna is all set to be acquired by drug giant Bristol Myers (BMY - Free Report) for a total equity value of $14 billion.
In December 2023, the companies entered into a definitive merger agreement wherein Bristol Myers agreed to acquire all outstanding shares of Karuna for $330 per share in cash.
The transaction, expected to be completed by first-half 2024, is subject to customary closing conditions and clearance from regulatory authorities. Karuna and BMY’s board of directors have already approved this transaction.
An acquisition by Bristol Myers, which has high reserves of cash flow, would enable the company to ramp up the development of its pipeline.
Karuna’s KarXT is an antipsychotic with a novel mechanism of action and differentiated efficacy and safety. The new drug application for KarXT for treating schizophrenia in adults is currently under review in the United States. The FDA has set a target action date of Sep 26, 2024.
If approved, KarXT will provide a new treatment option for patients and be the first novel pharmacological approach for schizophrenia treatment in several decades.
KarXT is being evaluated in the phase III ARISE study as adjunctive treatment in schizophrenia. Top-line data from this study is expected in 2025. Meanwhile, the phase III ADEPT-1 and ADEPT-2 studies are evaluating KarXT in psychosis in Alzheimer’s disease. Top-line data from this study is expected in 2026.
In November 2023, the company announced positive data from a phase Ib study evaluating the effect of KarXT on ambulatory blood pressure in adults with schizophrenia. Data from the study showed that treatment with KarXT was not associated with clinically meaningful increases in blood pressure in the given patient population.
Karuna plans to initiate a phase Ib study evaluating KAR-2618, a TRPC4/5 inhibitor, to treat major depressive disorder later in 2024.
Karuna Therapeutics, Inc. Price, Consensus and EPS Surprise
In the past 60 days, the Zacks Consensus Estimate for Vanda Pharmaceuticals’ 2024 bottom line has improved from a loss of 46 cents per share to earnings of 1 cent. In the past year, shares of VNDA have plunged 33.1%.
Vanda Pharmaceuticals’ earnings beat estimates in each of the trailing three quarters. VNDA delivered an average earnings surprise of 92.88%.
In the past 60 days, estimates for Puma Biotechnology’s 2024 earnings per share have improved to 71 cents from 64 cents. In the past year, shares of PBYI have risen 49.1%.
Earnings of Puma Biotechnology beat estimates in three of the last four quarters while missing the same on the remaining occasion. PBYI delivered a four-quarter average earnings surprise of 76.55%.
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Karuna's (KRTX) Q4 Loss Widens, Focus on Bristol Myers Buyout
Karuna Therapeutics, Inc. reported a loss of $3.01 per share in fourth-quarter 2023, wider than the Zacks Consensus Estimate of a loss of $2.64.
In the year-ago quarter, the company posted a loss of $2.22 per share. The loss increased from the year-ago quarter due to higher operating expenses.
In the fourth quarter of 2023, Karuna did not record any revenues. Sales missed the Zacks Consensus Estimate of $2.9 million. In the year-ago quarter, the company recorded $5.3 million in licensing revenues.
Quarter in Detail
In the reported quarter, research and development expenses were $82.2 million, up 24.5% from the year-ago quarter’s figure, due to increased costs related to lead pipeline candidate KarXT (xanomeline-trospium) plus higher employee-related expenses.
General and administrative expenses surged almost 95% year over year to $47.4 million, driven by pre-commercialization activities for KarXT and higher employee-related costs.
As of Dec 31, 2023, Karuna had cash, cash equivalents and marketable securities of $1.3 billion, similar to what it had as of Sep 30, 2023.
Shares of Karuna have rallied 61.5% in the past year against the industry’s decline of 8.5%.
Image Source: Zacks Investment Research
Full-Year Results
In 2023, Karuna generated revenues of $0.6 million compared with $10.6 million generated in 2022.
In the same period, the company recorded a loss per share of $11.73 compared with $8.74 in 2022.
Recent Updates
Karuna is all set to be acquired by drug giant Bristol Myers (BMY - Free Report) for a total equity value of $14 billion.
In December 2023, the companies entered into a definitive merger agreement wherein Bristol Myers agreed to acquire all outstanding shares of Karuna for $330 per share in cash.
The transaction, expected to be completed by first-half 2024, is subject to customary closing conditions and clearance from regulatory authorities. Karuna and BMY’s board of directors have already approved this transaction.
An acquisition by Bristol Myers, which has high reserves of cash flow, would enable the company to ramp up the development of its pipeline.
Karuna’s KarXT is an antipsychotic with a novel mechanism of action and differentiated efficacy and safety. The new drug application for KarXT for treating schizophrenia in adults is currently under review in the United States. The FDA has set a target action date of Sep 26, 2024.
If approved, KarXT will provide a new treatment option for patients and be the first novel pharmacological approach for schizophrenia treatment in several decades.
KarXT is being evaluated in the phase III ARISE study as adjunctive treatment in schizophrenia. Top-line data from this study is expected in 2025. Meanwhile, the phase III ADEPT-1 and ADEPT-2 studies are evaluating KarXT in psychosis in Alzheimer’s disease. Top-line data from this study is expected in 2026.
In November 2023, the company announced positive data from a phase Ib study evaluating the effect of KarXT on ambulatory blood pressure in adults with schizophrenia. Data from the study showed that treatment with KarXT was not associated with clinically meaningful increases in blood pressure in the given patient population.
Karuna plans to initiate a phase Ib study evaluating KAR-2618, a TRPC4/5 inhibitor, to treat major depressive disorder later in 2024.
Karuna Therapeutics, Inc. Price, Consensus and EPS Surprise
Karuna Therapeutics, Inc. price-consensus-eps-surprise-chart | Karuna Therapeutics, Inc. Quote
Zacks Rank & Stocks to Consider
Karuna currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the healthcare sector are Vanda Pharmaceuticals Inc. (VNDA - Free Report) and Puma Biotechnology, Inc. (PBYI - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, the Zacks Consensus Estimate for Vanda Pharmaceuticals’ 2024 bottom line has improved from a loss of 46 cents per share to earnings of 1 cent. In the past year, shares of VNDA have plunged 33.1%.
Vanda Pharmaceuticals’ earnings beat estimates in each of the trailing three quarters. VNDA delivered an average earnings surprise of 92.88%.
In the past 60 days, estimates for Puma Biotechnology’s 2024 earnings per share have improved to 71 cents from 64 cents. In the past year, shares of PBYI have risen 49.1%.
Earnings of Puma Biotechnology beat estimates in three of the last four quarters while missing the same on the remaining occasion. PBYI delivered a four-quarter average earnings surprise of 76.55%.