Karuna Therapeutics, a US-based neuropsychiatric disorder drug developer backed by pharmaceutical firm PureTech Health and real estate provider Nan Fung, has filed for a $75m initial public offering.
Founded in 2009, Karuna is working on treatments for neuropsychiatric conditions – mental disorders originating from the nervous system – such as schizophrenia and Alzheimer’s disease, as well as various types of pain.
The company was formed by PureTech, which forms spinoffs such as Karuna to develop treatments for a range of ailments, in conjunction with its internal therapeutic pipeline. Karuna has also licensed compounds targeting schizophrenia from Vanderbilt University in 2011.
Karuna’s lead asset, KarXT, is undergoing phase 2 trials for acute psychosis in schizophrenia patients. A portion of the IPO proceeds will go towards completing that trial and advancing the drug into phase 3 studies.
The money will also support a phase 1b and phase 2 trial of KarXT for the treatment of psychosis in Alzheimer’s disease, as well as a phase 1b trial for the cognitive and negative symptoms in schizophrenia. Karuna will also use the proceeds to undertake phase 1b and phase 2 trials for pain treatment, and to expand its drug pipeline.
The company confidentially filed for the IPO in April 2019, and completed a series B round indicated by the IPO filing to be $82.1m in size the same month when venture capital firm Sofinnova Investments supplied a $12m extension.
PureTech contributed $5m to the initial $68m tranche the previous month alongside the Nan Fung-backed Pivotal BioVenture Partners, investment and financial services group Fidelity Management & Research, Arch Venture Partners, Eventide Asset Management, Partner Fund Management, Wellcome Trust and Sands Capital.
Karuna had received $42m in series A funding from PureTech, Arch Venture Partners, Wellcome Trust and Steven Paul in August 2018. PureTech owns a 43.5% stake in Karuna, while Arch Venture Partners holds 18.6% of its shares, Wellcome Trust 7.5% and Sofinnova 6.1%.
Goldman Sachs and Citigroup are lead book-running managers for the proposed offering, which is set to take place on the Nasdaq Global Market. Wells Fargo Securities is also a book-running manager while Wedbush PacGrow is co-manager.
