- PureTech Health, the original backer of an experimental schizophrenia therapy being developed by Karuna Therapeutics, said Thursday it has sold some of its royalty rights to the drug on the heels of a second successful Phase 3 trial.
- Royalty Pharma, a prolific buyer of biopharmaceutical royalties, will pay $100 million upfront and up to $400 million in milestone-based payments to PureTech in return for a portion of its 3% royalty rights. PureTech will retain a 3.1% equity stake in Karuna and rights to other payments.
- On Monday, Karuna reported its drug, called KarXT, significantly reduced symptoms of schizophrenia in a trial of 250 patients. Based on this trial and two others, Karuna plans to ask the Food and Drug Administration for approval in mid-2023.
PureTech founded Karuna in 2009 with a lead drug candidate containing an antipsychotic component that the company’s leadership had first researched at Eli Lilly in the 1990s. A mid-stage study success in 2019 was an “A-ha moment,” validating Karuna’s revival of the drug.
The $100 million from the deal will bolster PureTech’s cash holdings, which as of June 2022 stood at $341 million. Prior to Thursday’s sale, the company expected to have enough money to fund operations through early 2026. The company has three wholly owned drug candidates in clinical testing for several diseases and expects to add another by the end of this year.
Under the deal, Royalty Pharma gets PureTech’s right to a 3% royalty on KarXT sales of up to $2 billion and a third of those payments for sales above that level. PureTech is still owed payments from Karuna if the drug meets certain regulatory milestones as well as 20% of sublicense income.
Karuna said Monday it hopes to launch the drug in the second half of 2024 and would seek partnerships so it can sell the drug into Europe. Around 3 million people in the U.S. and 21 million more across the world have schizophrenia, according to Karuna.
Meanwhile, Royalty Pharma last week raised its 2023 guidance to $2.85 billion to $2.95 billion after the FDA approved Zavzpret, a new migraine medicine from Pfizer, netting it a milestone payment of $475 million from Pfizer.