H.C. Wainwright cuts Karuna Therapeutics PT after stock sale

Karuna Therapeutics

28/03/2023 12:12

** H.C. Wainwright lowers drug developer Karuna Therapeutics
Inc's  KRTX.O  PT to $300 from $320 citing dilution impact from
a stock sale 
    ** Co last week sold ~2.5 mln shares at $161.33, raising
$400 mln to fund its lead experimental schizophrenia drug, KarXT
    ** Brokerage expects KRTX to end Q1'23 with over $1.4 bln in
cash, cash equivalents and short-term marketable investments
    ** KRTX recently also reported KarXT, significantly reduced
symptoms of schizophrenia in a late-stage trial, but
hypertension concerns weighed 
    ** H.C. Wainwright optimistic on the drug saying the
efficacy profile in totality seems to set a new standard in
schizophrenia, with broad impact across multiple symptom
categories 
    ** Increases its approval probability for the drug to 90% vs
prior assumption of 85% 
    ** Sees co to file for approval of KarXT in mid-2023, with
possible approval in H2'24
    ** Adds it conservatively, only expect revenue from sales of
KarXT to begin during 2025
    ** In 2022, KRTX stock was up 50%  

 (Reporting by Pratik Jain in Bengaluru)
 ((Pratik.Jain@thomsonreuters.com;))