Karuna bucks the neuro trend

The psychiatry space has claimed its fair share of biopharma victims. But Karuna made light work of this tricky field today, claiming an emphatic win in the pivotal Emergent-2 study of its novel schizophrenia project KarXT.

However, Karuna still needs to collect more long-term safety data, and does not even expect to file KarXT with the FDA until mid-2023. But approval does look likely, so attention will shift to whether the company can pull off a successful solo launch, with Karuna still insisting that it can go it alone in the US. Still, investors might have one eye on a potential takeout.

These investors sent Karuna’s stock up 55% at the open today. The group’s rival Cerevel also got a 17% bump this morning, though that company’s selective muscarinic project is some way behind, with phase 2 data due in 2024.

Exceeded expectations

There should be pent-up demand for a new antipsychotic class, given that existing drugs, which hit dopamine and serotonin receptors, leave a lot to be desired.

Karuna execs talked up KarXT’s universal appeal during a conference call today. “I can see clinicians using and prescribing this drug across the board, in every category of patient out there,” said the group’s chief executive, Steve Paul. He cited treatment-naive patients, those who have responded to current antipsychotics but have experienced troublesome side effects like weight gain, and patients who have had a suboptimal response to current drugs.

Before the Emergent-2 data, some analysts had expected KarXT largely to be reserved for non-responders to existing therapies; the current Evaluate Pharma sellside consensus of $1.7bn sales by 2028 could therefore be due an upgrade. 

The headline findings certainly look impressive. The study met its primary endpoint, change from baseline in Positive and Negative Syndrome Scale (PANSS) total score at week five, with KarXT-treated patients showing a 21.2-point reduction, versus an 11.6-point drop in the placebo group.

This delta of 9.6 points was not too far off the 11.6-point difference seen in the phase 2 Emergent-1 trial, and well above the seven-point difference that investors had wanted to see, according to Stifel analysts.

Also impressive was the fact that Emergent-2 found a statistically significant benefit on the secondary endpoint of negative schizophrenia symptoms, which have historically been tough to address.

Adverse events

There are still some blanks to fill in around adverse events, particularly cholinergic side effects such as nausea and vomiting. The project is a coformulation of the muscarinic agonist xanomeline with trospium chloride, a peripheral muscarinic receptor antagonist – the idea being that trospium cancels out xanomeline’s peripheral side effects but does not hamper its effect in the brain.

All Karuna is saying for now is that KarXT’s safety profile was consistent with previous studies, with cholinergic side effects being mild to moderate and “mostly transient in nature”.

As for other adverse events previously flagged as ones to watch, Karuna noted that there were blood pressure increases in Emergent-2, but added that blood pressure measures were similar to placebo. 

And, as in phase 2, there were increases in heart rate, but these “decreased in magnitude by the end of the trial”.

Overall, adverse event-related discontinuation rates should reassure, at 7% with KarXT and 6% with placebo. And KarXT was not associated with the weight gain and somnolence seen with older antipsychotics.

The company does not believe that it will need any more efficacy data for its US filing, but investors still have nearly a year to wait for news on that front.