Puretech-backed Karuna makes Nas­daq de­but with $89M IPO

Bet­ting on the po­ten­tial of two old­er drugs to fight Alzheimer’s and schiz­o­phre­nia — Boston-based Karuna Ther­a­peu­tics has priced its up­sized ini­tial pub­lic of­fer­ing in the mid­dle of the range, rais­ing gross pro­ceeds of about $89 mil­lion.

The com­pa­ny, which will de­but on the Nas­daq un­der the sym­bol “$KRTX” on Fri­day, is work­ing on the hy­poth­e­sis that a com­bi­na­tion of mus­carinic acetyl­choline re­cep­tor ag­o­nist xanome­line — an Eli Lil­ly $LLY castoff — and tro­spi­um chlo­ride, an FDA-ap­proved mus­carinic re­cep­tor an­tag­o­nist to­geth­er will make an adept an­tipsy­chot­ic.

Steven Paul Linkedin

Once up­on a time, star CNS re­searcher (and for­mer Voy­ager chief) Steven Paul was at Lil­ly, where he worked on xanome­line. The drug is de­signed to tar­get M1 and M4 re­cep­tors in the brain — but ad­verse events trig­gered by off-tar­get ef­fects soured the US drug­mak­er on the drug. Last Au­gust, he was one of the syn­di­cates of in­vestors in­clud­ing ARCH Ven­ture Part­ners and the Well­come Trust that backed Karuna.

Ex­ist­ing an­tipsy­chot­ic treat­ments work pri­mar­i­ly by in­hibit­ing D2 dopamine re­cep­tors. Mus­carinic re­cep­tor ag­o­nists emerged in the 1990s as a po­ten­tial al­ter­na­tive ap­proach for treat­ing psy­chosis —  but the de­vel­op­ment of such ther­a­peu­tics has been lim­it­ed by un­de­sir­able side-ef­fects that are trig­gered by the stim­u­la­tion of mus­carinic re­cep­tors in pe­riph­er­al tis­sues.

An­drew Miller Linkedin

Karuna — whose COO is MIT grad­u­ate An­drew Miller — con­tends that the ad­di­tion of tro­spi­um chlo­ride will counter the ad­verse event pro­file of xanome­line. The com­bined prod­uct,  dubbed KarXT, is de­signed to make a bee­line for mus­carinic re­cep­tors in the cen­tral ner­vous sys­tem and to ig­nore pe­riph­er­al tis­sues.

The lead ex­per­i­men­tal treat­ment is be­ing test­ed as a treat­ment for psy­chosis in a mid-stage study with schiz­o­phre­nia pa­tients — da­ta is ex­pect­ed by the end of the year. It is al­so in ear­ly-stage pro­grams for oth­er schiz­o­phre­nia symp­toms, Alzheimer’s-re­lat­ed psy­chosis and pain.

Oth­er drug­mak­ers have al­so been se­duced by the po­ten­tial of mus­carinic re­cep­tors. For in­stance, Al­ler­gan $AGN inked a $3.3 bil­lion deal to in-li­cense M1 and M4 tar­get­ed drugs from Hep­tares in the spring of 2016.

Less than a year af­ter rais­ing $42 mil­lion, PureTech-backed Karuna laid the ground­work for a $75 mil­lion IPO ear­li­er in June. Karuna orig­i­nal­ly filed to of­fer 4.4 mil­lion shares. On Thurs­day, the firm said it is of­fer­ing 5.6 mil­lion at $16, the mid­point of the $15 to $17 range.

So­cial im­age: Steven Paul, Karuna

Image courtesy of The Janssen Pharmaceutical Companies of Johnson & Johnson.

Pro­tect­ing the glob­al phar­ma­ceu­ti­cal in­no­va­tion ecosys­tem – what’s at stake?

We are living in a new era of healthcare that is rapidly advancing progress impacting patient outcomes and experiences. We’ve seen a remarkable pace of transformational innovation, applied research, and advanced clinical development over the last decade.

Despite this tremendous progress, there is much more work to be done, and patients are counting on us – now more than ever – to continue that momentum. At the heart of our industry is a focus on developing and delivering medicines for some of the world’s most challenging diseases, including those that have few or no effective treatments today.

End­points 20(+2) un­der 40, 2023; Bio­phar­ma's high­est-paid CEOs; N-of-1 CRISPR sto­ry goes on af­ter tragedy; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

We will be off Monday in observance of Memorial Day — and when we get back, it will be a straight march to ASCO, BIO and more. Enjoy the (long) weekend!

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Rich Horgan (R) with his late brother, Terry

Rich Hor­gan spear­head­ed a gene ther­a­py for his broth­er. The tri­al end­ed in tragedy, but the work con­tin­ues for more pa­tients

Rich Horgan’s quest to create a custom gene therapy for his brother, Terry, ended in tragedy. But Horgan doesn’t believe it’s the end of the story.

Terry, a 27-year-old patient with Duchenne muscular dystrophy, died last October just eight days after receiving the therapy in a clinical trial in which he was the only participant. The case raised questions about the safety of certain gene therapies and what would happen to other drug programs under a nonprofit that Horgan created, called Cure Rare Disease.

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Bio­phar­ma's 20 high­est-paid CEOs of 2022, each bring­ing in $20M+ pay­days

Even in a down year for much of the biopharma market, 20 CEOs brought in pay packages valued at more than $20 million, an Endpoints News analysis found.

Endpoints collected data on more than 350 CEO compensation packages, covering a wide range of pharma, biotech, and life sciences companies. All told, the 20 largest earners made over $725 million in 2022 — an average package of $36.4 million. Three brought in paydays over $50 million, and one CEO broke the $100 million mark.

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Mi­rati’s drug sitra­va­tinib flops PhI­II in com­bo with Op­di­vo for cer­tain lung can­cer

Mirati Therapeutics’ path to a second drug approval will likely have to wait. The San Diego biotech company said Wednesday that its investigational lung cancer drug failed a Phase III trial testing it in combination with Bristol Myers Squibb’s Opdivo.

The drug, sitravatinib, and Opdivo weren’t better than the chemo drug docetaxel at keeping patients alive, Mirati said in a press release. The spectrum-selective kinase inhibitor missed the primary goal of overall survival in patients with second- or third-line advanced non-squamous, non-small cell lung cancer.

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The 20(+2) un­der 40: Your guide to the next gen­er­a­tion of biotech lead­ers

This year’s list of 20 biotech leaders under the age of 40 includes a huge range of ambitions. Some of our honorees are planning to create the next big drug giant. Others are pushing the bounds of AI. One is working to revolutionize TB testing. All are compelling talents who are still young in age, but already far along in achievement.

And, as in years past, we went over. The 20 are actually 22 because of two double profiles that reflect how important teamwork is in the industry. As one of our honorees, Joe Illingworth of DJS Antibodies, told me in our interview, “It takes a village to raise a biotech.”

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Athena Countouriotis, Avenzo Therapeutics CEO (website via Nasdaq)

Ex-Turn­ing Point ex­ecs plan to have their next bet, Aven­zo, on the Nas­daq next sum­mer

The crew at Turning Point Therapeutics is back together for a new biotech that wants to acquire early-stage oncology small molecules, including antibody drug conjugates, and potentially form partnerships with China-based drug developers for ex-China rights as it eyes a speedy leap onto the Nasdaq around this time next year, CEO Athena Countouriotis told Endpoints News.

After selling Turning Point to Bristol Myers Squibb, announced at the onset of last year’s ASCO confab, she and colleague Mohammad Hirmand founded Avenzo Therapeutics. The CEO and CMO already have approximately $200 million in seed and Series A financing from five big-name investors to evaluate which drugs to bring into its pipeline. That includes SR One, OrbiMed, Foresite Capital, Citadel’s Surveyor Capital and Lilly Asia Ventures. Bidding wars for assets have led Avenzo to miss out on some deals in recent months, but the biotech has three active term sheets and hopes to bring in its first asset in the third quarter, Countouriotis said in a Friday morning interview.

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FDA ap­proves Lex­i­con’s heart-fail­ure drug af­ter de­feat in di­a­betes

The FDA on Friday approved Lexicon’s heart failure drug sotagliflozin following a string of setbacks for the pharma company, including an FDA rejection in diabetes and the loss of a development deal with Sanofi.

The dual SGLT1 and SGLT2 inhibitor will be marketed as Inpefa and is a once-daily tablet. It’s been approved to reduce the risk of cardiovascular death and heart failure-related hospitalization or urgent visits in adults with heart failure or type 2 diabetes mellitus, chronic kidney disease, and other cardiovascular risk factors. The label spans the range of left ventricular ejection fraction, including preserved ejection fraction and reduced ejection fraction, as well as patients with or without diabetes, Lexicon said Friday.

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Eu­ro­pean Com­mis­sion to re­ceive few­er Pfiz­er-BioN­Tech vac­cine dos­es un­der amend­ed con­tract

The European Commission has made a few changes to its vaccine contract with Pfizer and BioNTech, reducing the dose volume while extending the delivery timeline to cope with “evolving public health needs.”

The Commission previously struck a contract in May 2021 for 900 million doses, with the option to purchase another 900 million. Of those, 450 million were expected to be delivered in 2023, though an amendment now calls for fewer doses. While neither the Commission nor Pfizer and BioNTech have revealed an exact amount, an unnamed source told Reuters that the amendment reduces the remaining expected doses by about a third.

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