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 August 8, 2022, Karuna Therapeutics, Inc. announced its financial results and general corporate updates for the second quarter ended June 30, 2022. 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 August 8, 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, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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KARUNA THERAPEUTICS, INC. |
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Date: |
August 8, 2022 |
By: |
/s/ Troy Ignelzi |
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Troy Ignelzi |
Exhibit 99.1
Karuna Therapeutics Reports Second Quarter 2022 Financial Results and Provides General Business Updates
Met primary and key secondary endpoints in Phase 3 EMERGENT-2 trial of KarXT in schizophrenia
The Company plans to submit a New Drug Application (NDA) with the U.S. Food &
Drug Administration (FDA) in mid-2023
Topline data from the Phase 3 EMERGENT-3 trial and Phase 3 ARISE trial of KarXT in schizophrenia expected in the first quarter of 2023 and first half of 2024, respectively
Phase 3 ADEPT-1 trial of KarXT in psychosis related to Alzheimer’s disease to initiate in the third quarter of 2022
$407.4 million in cash expected to fund operations for at least 12 months following the potential New Drug Application (NDA) submission of KarXT for schizophrenia
Management to host conference call and webcast at 8:00 a.m. ET to discuss Phase 3 EMERGENT-2 trial topline results
BOSTON—August 8, 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 second quarter of 2022 and provided a general business update.
In a separate press release issued today, the Company announced positive results from the Phase 3 EMERGENT-2 trial evaluating the efficacy, safety and tolerability of its lead investigational therapy, KarXT (xanomeline-trospium), in adults with schizophrenia. The trial met its primary endpoint, with KarXT demonstrating a statistically significant and clinically meaningful 9.6-point reduction in Positive and Negative Syndrome Scale (PANSS) total score compared to placebo (-21.2 KarXT vs. -11.6 placebo; p<0.0001) at Week 5 (Cohen’s d effect size of 0.61). KarXT also met key secondary endpoints in the Phase 3 EMERGENT-2 trial, demonstrating a statistically significant reduction in both positive symptoms (e.g., hallucinations or delusions) and negative symptoms (e.g., difficulty enjoying life or withdrawal from others) of schizophrenia as measured by the PANSS positive, PANSS negative and PANSS negative Marder factor subscales. KarXT was generally well tolerated, with a side effect profile substantially consistent with prior trials of KarXT in schizophrenia.
“It is an incredibly exciting time for Karuna; with two positive, registrational trials in hand for KarXT, we are another step closer to potentially providing the first new class of medicine in more than 50 years to the millions of people worldwide living with schizophrenia,” said Steve Paul, M.D., chief executive officer, president, and chairman of Karuna Therapeutics. "People living with serious mental illness are in dire need of medicines that work differently than current treatments in order to find relief from burdensome symptoms. We plan to submit a New Drug Application in schizophrenia in mid-2023, and will simultaneously continue to progress the ARISE and ADEPT clinical trial programs to explore KarXT's potential in additional indications."
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 ongoing and planned late-stage clinical trials as a potential treatment for schizophrenia and psychosis related to Alzheimer’s disease.
Anticipated Upcoming Milestones
Second Quarter 2022 Financial Results
The Company reported a net loss of $64.9 million for the second quarter of 2022, as compared to $34.4 million for the prior year period. The increase in net loss for the quarter was driven by research and development expenses related to the Company’s enrollment of the Phase 3 EMERGENT and ARISE trials, NDA-supporting activities, increased employee headcount across the organization, and higher stock-based compensation expense. The Company recognized licensing revenue of $5.3 million for the second quarter of 2022 related to a development milestone and related tax gross ups associated with our License Agreement with Zai Lab (Shanghai) Co., Ltd. There was no license revenue in the prior year period.
Research and development expenses were $52.5 million for the second quarter of 2022, as compared to $24.1 million the prior year period. The increase in research and development expenses for the quarter was primarily driven by expenses related to the Company’s Phase 3 EMERGENT, ARISE and ADEPT trials, manufacturing to support ongoing and planned clinical trials, as well as for a planned NDA submission and potential commercialization of KarXT for schizophrenia, personnel-related costs due to the increase in employee headcount, and higher stock-based compensation expense.
General and administrative expenses were $17.8 million for the second quarter of 2022, as compared to $10.4 million for the prior year period. The increase in general and administrative expenses was primarily due to an increase in employee headcount.
The Company ended the quarter with $407.4 million in cash, cash equivalents and available-for-sale investment securities compared to $494.0 million as of December 31, 2021. The Company expects that current cash, cash equivalents and available-for-sale investment securities as of June 30, 2022 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 serious mental illness. 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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Six Months Ended |
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June 30, |
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June 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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License revenue |
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$ |
5,278 |
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$ |
— |
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$ |
5,278 |
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$ |
— |
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Operating expenses: |
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Research and development |
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52,487 |
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24,147 |
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96,293 |
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44,333 |
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General and administrative |
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17,843 |
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10,384 |
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32,631 |
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20,161 |
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Total operating expenses |
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70,330 |
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34,531 |
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128,924 |
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64,494 |
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Loss from operations |
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(65,052 |
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(34,531 |
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(123,646 |
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(64,494 |
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Other income (loss), net: |
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Interest income |
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490 |
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106 |
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727 |
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249 |
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Sublease income |
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147 |
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9 |
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286 |
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9 |
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Impairment loss on right-of-use assets |
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— |
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— |
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— |
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(677 |
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Total other income (loss), net |
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637 |
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115 |
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1,013 |
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(419 |
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Net loss before income taxes |
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(64,415 |
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(34,416 |
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(122,633 |
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(64,913 |
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Income tax provision |
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(528 |
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— |
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(528 |
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— |
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Net loss attributable to common stockholders |
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$ |
(64,943 |
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$ |
(34,416 |
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$ |
(123,161 |
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$ |
(64,913 |
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Net loss per share, basic and diluted |
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$ |
(2.17 |
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$ |
(1.17 |
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$ |
(4.13 |
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$ |
(2.27 |
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Weighted average common shares |
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29,896,332 |
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29,482,511 |
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29,851,396 |
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28,639,210 |
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Karuna Therapeutics, Inc.
Unaudited Consolidated Balance Sheet Data
(in thousands)
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June 30, |
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December 31, 2021 |
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Cash, cash equivalents and investments |
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$ |
407,414 |
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$ |
493,991 |
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Working capital |
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400,313 |
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497,121 |
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Total assets |
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433,556 |
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527,671 |
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Total stockholders’ equity |
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$ |
405,409 |
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$ |
502,026 |
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Investor Contact:
Alexis Smith
518-338-8990
asmith@karunatx.com
Media Contact:
Falon Moran
fmoran@karunatx.com