UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On February 24, 2022, Karuna Therapeutics, Inc. announced its financial results and general corporate updates for the fourth quarter and fiscal year ended December 31, 2021. A copy of the press release is being furnished as Exhibit 99.1 to this Report on Form 8-K.
The information in this Report on Form 8-K and Exhibit 99.1 attached hereto is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 |
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Press Release issued by Karuna Therapeutics, Inc., dated February 24, 2022 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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KARUNA THERAPEUTICS, INC. |
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Date: |
February 24, 2022 |
By: |
/s/ Troy Ignelzi |
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Troy Ignelzi |
Exhibit 99.1
Karuna Therapeutics Reports Fourth Quarter and Full Year 2021 Financial Results and Provides General Business Update
Topline data from the Phase 3 EMERGENT-2 and EMERGENT-3 trials expected in mid-2022 and in the second half of 2022, respectively
Initiated the Phase 3 ARISE trial evaluating KarXT in adults with schizophrenia who inadequately respond to current standard of care in the fourth quarter of 2021
On track to initiate the Phase 3 program evaluating KarXT for the treatment of psychosis in elderly patients with Alzheimer’s disease in mid-2022
$494.0 million in cash expected to fund operations, including multiple milestones, for at least 12 months following the potential New Drug Application (NDA) submission of KarXT for schizophrenia
BOSTON—Feb. 24, 2022—Karuna Therapeutics, Inc. (NASDAQ: KRTX), a clinical-stage biopharmaceutical company driven to create and deliver transformative medicines for people living with psychiatric and neurological conditions, today announced financial results for the fourth quarter and full year ended December 31, 2021, and provided a general business update.
“We are excited by the momentum we’ve built in executing our comprehensive late-stage clinical program for KarXT this past year, which has laid the groundwork for additional key milestones in 2022, including topline data from the registrational Phase 3 EMERGENT-2 and EMERGENT-3 trials in schizophrenia, as well as the planned initiation of our Phase 3 program in psychosis in Alzheimer’s disease,” said Steve Paul, M.D., chief executive officer, president, and chairman. “Looking ahead, we are dedicated to expanding and diversifying our development efforts and capabilities to reach people living with psychiatric and neurological conditions globally, as evidenced by our strategic collaboration with Zai Lab in Greater China and the growth of our commercial organization in preparation for a potential launch in the U.S.”
Pipeline Updates
Karuna is advancing a pipeline of novel drug candidates for the treatment of various psychiatric and neurological conditions. The clinical pipeline is led by KarXT (xanomeline-trospium), an oral investigational antipsychotic with a novel mechanism of action mediated via muscarinic cholinergic receptors, that is currently being evaluated in late-stage clinical trials as a potential treatment for schizophrenia and psychosis in Alzheimer’s disease.
Business Updates
Anticipated Upcoming Milestones
Fourth Quarter and Full Year 2021 Financial Results
The Company reported a net loss of $28.0 million for the fourth quarter of 2021, and a net loss of $143.8 million for the year ended 2021, as compared to $24.0 million and $68.6 million for the prior year periods, respectively. The increase in net loss for the year was primarily attributable to higher operating expenses of $180.8 million compared to $71.8 million for the prior year period, driven by research and development expenses related to the Company’s enrollment of the Phase 3 EMERGENT trials, NDA-supporting activities, the initiation and enrollment of the Phase 3 ARISE trial, increased employee headcount across the organization, and higher stock-based compensation expense. The increase in operating expenses was partially offset by an increase in revenue of $37.0 million related to the upfront payment and related tax gross ups for the Company’s exclusive license agreement with Zai Lab for the development, manufacturing, and commercialization of KarXT in Greater China, which was signed in November 2021.
Research and development expenses were $45.1 million for the fourth quarter of 2021, and $128.2 million for the year ended 2021, as compared to $15.6 million and $43.4 million the prior year periods, respectively. The increase in research and development expenses for the year was primarily driven by expenses related to the Company’s enrollment of the Phase 3 EMERGENT trials, manufacturing to support ongoing and planned clinical trials, preparation for a potential NDA submission of KarXT for schizophrenia, the initiation and enrollment of the Phase 3 ARISE trial, personnel-related costs due to the increase in employee headcount, and higher stock-based compensation expense.
General and administrative expenses were $20.1 million for the fourth quarter of 2021, and $52.6 million for the year ended 2021, as compared to $8.8 million and $28.4 million for the prior year periods, respectively. The increase in general and administrative expenses for the year was primarily due to an increase in employee headcount and higher stock-based compensation expense, an increase in professional fees, and one-time expenses related to the execution of the Company’s exclusive license agreement with Zai Lab for the development, manufacturing, and commercialization of KarXT in Greater China.
The Company ended the year 2021 with $494.0 million in cash, cash equivalents, and available-for-sale investment securities compared to $322.3 million as of December 31, 2020. The increase was the result of the completion of the Company’s follow-on public offering in March 2021, as well as an upfront cash payment from Zai Lab, partially offset by cash used in operations for the year ended December 31, 2021. The Company expects that current cash, cash equivalents and available-for-sale investment securities as of December 31, 2021 will enable the Company to fund its operating expenses and capital expenditure requirements for at least 12 months following the potential NDA submission of KarXT for the treatment of psychosis in adults with schizophrenia.
About Karuna Therapeutics
Karuna Therapeutics is a clinical-stage biopharmaceutical company driven to create and deliver transformative medicines for people living with psychiatric and neurological conditions. At Karuna, we understand there is a need for differentiated and more effective treatments that can help patients navigate the challenges presented by these severe and disabling disorders. Utilizing our extensive knowledge of neuroscience, we are harnessing the untapped potential of the brain in pursuit of novel pathways to develop medicines that make meaningful differences in peoples’ lives. For more information, please visit www.karunatx.com.
Forward Looking Statements
This press release contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our expectations about the timing of our ongoing and planned clinical trials and regulatory filings, our goals to develop and commercialize our product candidates, our liquidity and capital resources and other statements identified by words such as “could,” “expects,” “intends,” “may,” “plans,” “potential,” “should,” “will,” “would,” or similar expressions and the negatives of those terms. Forward looking statements are not promises or guarantees of future performance, and are subject to a variety of risks and uncertainties, many of which are beyond our control, and which could cause actual results to differ materially from those contemplated in such forward-looking statements. These factors include risks related to our limited operating history, our ability to obtain necessary funding, our ability to generate positive clinical trial results for our product candidates and other risks inherent in clinical development, the timing and scope of regulatory approvals, changes in laws and regulations to which we are subject, competitive pressures, our ability to identify additional product candidates, risks relating to business interruptions resulting from the coronavirus (COVID-19) pandemic, and other risks set forth under the heading “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2021. Our actual results could differ materially from the results described in or implied by such forward looking statements. Forward-looking statements speak only as of the date hereof, and, except as required by law, we undertake no obligation to update or revise these forward-looking statements.
Karuna Therapeutics, Inc.
Unaudited Consolidated Statements of Operations
(in thousands, except share and per share data)
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Three Months Ended |
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Year Ended |
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December 31, |
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December 31, |
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2021 |
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2020 |
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2021 |
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2020 |
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License revenue |
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$ |
36,964 |
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$ |
- |
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$ |
36,964 |
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$ |
- |
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Operating expenses: |
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Research and development |
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45,092 |
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15,584 |
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128,200 |
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43,408 |
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General and administrative |
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20,063 |
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8,823 |
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52,617 |
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28,408 |
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Total operating expenses |
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65,155 |
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24,407 |
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180,817 |
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71,816 |
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Loss from operations |
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(28,191 |
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(24,407 |
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(143,853 |
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(71,816 |
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Other income, net: |
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Impairment loss on right-of-use assets |
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(25 |
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— |
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(702 |
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— |
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Interest income |
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139 |
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441 |
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502 |
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3,305 |
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Sublease income |
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123 |
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— |
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254 |
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— |
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Total other income, net |
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237 |
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441 |
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54 |
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3,305 |
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Net loss before income taxes |
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(27,954 |
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(23,966 |
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(143,799 |
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(68,511 |
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Income tax provision |
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(6 |
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(43 |
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(6 |
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(43 |
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Net loss attributable to common stockholders |
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$ |
(27,960 |
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$ |
(24,009 |
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$ |
(143,805 |
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$ |
(68,554 |
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Net loss per share, basic and diluted |
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$ |
(0.94 |
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$ |
(0.89 |
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$ |
(4.94 |
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$ |
(2.59 |
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Weighted average common shares |
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29,688,658 |
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26,883,923 |
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29,138,915 |
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26,446,006 |
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Karuna Therapeutics, Inc.
Unaudited Consolidated Balance Sheet Data
(in thousands)
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December 31, 2021 |
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December 31, 2020 |
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Cash, cash equivalents and investments |
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$ |
493,991 |
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$ |
322,330 |
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Working capital |
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497,121 |
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337,746 |
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Total assets |
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527,671 |
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347,625 |
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Total stockholders’ equity |
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$ |
502,026 |
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$ |
338,931 |
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Investor Contact:
Alexis Smith
518-338-8990
asmith@karunatx.com
Media Contact:
Lauren Sneider
917-886-0247
lsneider@karunatx.com