Mizuho Sees Compelling Risk/Reward For This Schizophrenia Stock Despite Recent Weakness

  • Yesterday, Karuna Therapeutics Inc KRTX highlighted progress across the ongoing and planned clinical programs of KarXT, with a primary focus on the planned Phase 3 program evaluating KarXT for psychosis in Alzheimer's disease.
  • Mizuho believes Karuna management did a commendable with laying out the data supporting their decision to move their lead asset KarXT forward in Alzheimer's disease psychosis (ADP).
  • The analysts believe that the asset should help mitigate side effect concerns as they move more fully into an elderly population. 
  • Read Next: Amid Russia's Invasion On Ukraine, Karuna Therapeutics Withdraws Guidance On Late-Stage Schizophrenia Trial.
  • Mizuho noted that a review of the previously-published Phase 2 data from Eli Lilly And Co LLY illustrated the impact higher doses of xanomeline alone could have on treating and preventing various Alzheimer's associated psychotic symptoms.
  • The analysts are encouraged by Karuna's work to expand the KarXT opportunity beyond schizophrenia. 
  • The topline data expected in 3Q22 from the pivotal EMERGENT-2 trial in schizophrenia remains the focus of investor conversations. 
  • Mizuho believes investor expectations remain relatively high that KarXT will be able to deliver the necessary efficacy in EMERGENT-2, with perhaps more questions on how the safety profile will look in this initial Phase 3 trial.
  • Price Action: KRTX shares are up 2.49% at $106.86 during the market session on the last check Thursday.
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