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.
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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.