Karuna Therapeutics is 24 months out from a hotly anticipated schizophrenia drug launch, and the industry is buzzing with rumors that the biotech will seek a Big Pharma partnership or other deal for commercialization.
CEO Bill Meury, who just took the helm in December, suggested at the J.P. Morgan Healthcare Conference Tuesday that his biotech is looking to buck the trend of partnering once a small company reaches launch, because biotechs can do it, too.
“It's often said that emerging biopharma is good at innovation and large cap pharma is good at commercialization. And while I get that sentiment, I understand that building an R&D commercial organization, transitioning Karuna to that type of a company, is infinitely doable,” Meury said.
The company has been subject to buyout rumors in recent months as it gears up to file a new drug application for KarXT, which aced a phase 3 trial last year and could provide a completely new option for patients who have long struggled with difficult side effects from existing treatments.
Meury promised that Karuna has the internal know-how and—perhaps more importantly—the cash in the bank to launch KarXT.
“The company’s well capitalized and will have the management team and capabilities needed to scale this business,” the CEO said.
Meury highlighted the company’s pipeline, which includes expanding KarXT into two more indications in adjunctive schizophrenia and Alzheimer’s disease-related psychosis. The company expects top-line data from the additional phase 3 schizophrenia trial in the first half of 2024, and the Alzheimer’s indication study will follow in 2025. Karuna also has four therapies with undisclosed targets in preclinical research.
With all that work underway, Meury stressed that the company knows what’s important.
“There is no ambiguity inside of Karuna about where our time, attention, resources need to be placed,” he said. “Filing the NDA, securing approval, will be the single most important path to value creation.”
He also noted the company’s drug discovery organization and “seasoned group of drug hunters” are actively looking for ways to grow the pipeline “organically and inorganically" through licensing deals or other potential partnerships.
“We'll be disciplined in terms of where and how much we invest,” Meury said. Key considerations will be the probability of technical and regulatory success and the potential financial outcomes, he added. “We’ll never start a project without understanding the value-creating potential of that project and the downside risks.”
What's it going to cost?
As much as the biopharma world wants to know about possible M&A, analysts and investors are also anxious to hear any news on a possible pricing strategy for KarXT. Meury declined to commit to a specific number, saying that making a prediction now would “not make a great deal of sense.” He promised the final number will be “intuitive.”
The chief executive acknowledged that KarXT will launch into a mature market that has long been served by atypical antipsychotics, including many generics. But patients have had to deal with myriad difficult side effects, including significant weight gain, so Meury thinks the field is ripe for disruption.
“We have a responsibility to achieve access at a price point that makes sense for the company and a price point that makes sense for payers,” Meury said. “We of course have 18 to 24 months to do that, but I like how this could shape up over the next two years.”
Karuna expects to file a new drug application in the middle of this year, with a potential launch following in the second half of 2024. In the meantime, the company is working on pricing research and other commercial activities.