Shares in the biopharmaceutical firm Karuna Therapeutics more than tripled in active trading after it announced positive results from a phase 2 clinical trial evaluating an experimental drug’s ability to treat acute psychosis in patients with schizophrenia.
Its market capitalisation broke $1bn for the first time, reaching $2.24bn (£1.73bn, €2bn) after its shares price rose 442 per cent to finish at $96.
Founded a decade ago, the company declares itself to be on a mission to “develop first-in-class therapeutics that have the potential to dramatically improve life for people living with schizophrenia, Alzheimer's disease and pain, and their families”.
It reported that its KarXT drug demonstrated a “statistically significant and clinically meaningful” reduction in total positive and negative syndrome scale (PANSS) score compared with a placebo and was also well tolerated.
Chief medical officer Stephen Brannan said, “With this information, and following our anticipated end-of-Phase 2 meeting with the FDA in the second quarter of 2020, we will work to initiate a Phase 3 clinical trial of KarXT in patients with schizophrenia by the end of 2020.”
Since the company’s initial public offering in June 2019 its stock has sextupled from its initial price of $16. This has far outstripped growth in the wider biotechnology field. In the past three months, the iShares Nasdaq Biotechnology ETF IBB has gained by 5.5. per cent.
Although biotechnology investing is notoriously volatile, investors and those suffering from the conditions Karuna seeks to treat will hope that this is only the start.