Karuna parts ways with executive as it gears up for schizophrenia drug's high-profile launch

Karuna Therapeutics is gearing up for a potential launch of schizophrenia med KarXT—one analysts say could be “amongst the highest in profile in recent times.” But it’ll now be doing it without its Chief Commercial Officer Charmaine Lykins, who quietly departed Thursday afternoon.

The Boston-based biotech disclosed the executive move in a Securities and Exchange Commission filing Thursday. Karuna and Lykins “mutually agreed” on the departure, which was effective Jan. 5. The filing said “the company expects to enter into a separation agreement with Ms. Lykins that provides for a general release and waiver of claims against the company.” Lykins will also receive severance.

A request for comment from Karuna was not returned as of publication. The company did not announce a successor. Lykins took over the CCO role in November 2021, when CEO Steve Paul, M.D., touted her skills in launching neuropsychiatric medicines and said she would be in charge of developing a commercial strategy for the company's late-stage pipeline. She previously worked at Eli Lilly, Lundbeck, Sunovion and Acadia Pharmaceuticals.

“While the specific reason or reasons for Ms. Lykins' departure is unclear to us, we note that the timing of this management change is somewhat curious, especially given the anticipation of a potential U.S. commercial launch of lead asset KarXT next year — one which we believe could be amongst the highest in profile in recent times,” said Mizuho analyst Graig Suvannavejh, Ph.D., in a Thursday evening note.

Karuna has been rumored to be a potential M&A target as pharma companies have noted late-stage assets as high on their wish lists. The company’s schizophrenia med has been noted as a new offering that could revitalize the indication that has long been treated with antipsychotic medications that can have significant side effects. 

Karuna reported a win in the phase 3 EMERGENT-2 trial back in August 2022, and more late-stage data are due in the first quarter. The company expects an application to the FDA will be submitted around midyear 2023. 

Mizuho in late December 2022 predicted $6.8 billion in global peak risk-unadjusted sales for KarXT across several indications. The firm sees the medicine as having applications in the Alzheimer’s disease psychosis setting as well. Karuna is testing the Alzheimer’s indication in a phase 3 trial and also has two other schizophrenia studies underway to expand the potential label.

Suvannavejh previously summarized the drug this way: “KarXT, a game changer.” The analyst therefore now thinks that Lykins’ departure could “rekindle investor discussions” about a buyout.

“Overall, the news does not impact our generally bullish view of the stock, which is based on the potential we see in KarXT to be transformative to the treatment paradigm in schizophrenia and potentially other psychiatric conditions,” the analyst wrote.

KarXT is currently the closest schizophrenia med in the muscarinics class to market, although Cerevel Therapeutics also has one in early-stage clinical development. The competing biotech presented safety data in late December 2022 showing the therapy is safe and does not raise blood pressure, which was a concern among investors based on phase 1b evidence.

Karuna will present at the J.P. Morgan Healthcare Conference Tuesday, where the industry will gather in person once again for the biggest business development meet-up of the year. Mizuho expects Karuna’s leadership will face questions about the CCO departure during its presentation.