KRTX - Karuna Therapeutics: On The Path To Commercialization But The Market Opportunity Is Mixed
- Karuna's IPO in 2019 was the most successful of the year for a biotech in terms of share price growth.
- The company's lead and only asset - KarXT, indicated for Schizophrenia - surprised the market with best-in-class data causing shares to spike ~400%.
- Now the company has initiated its pivotal Phase 3 trials and I would expect KarXT to win approval this year or early in 2022.
- The CNS market is unpredictable and fragmented - atypical psychotics are competing with generics whereas KarXT has a differentiated MOA.
- I would set a FY21 price target of ~$130 but long term I think Karuna might struggle to make blockbuster sales. $150 may be the stock's glass ceiling.
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Karuna Therapeutics: On The Path To Commercialization, But The Market Opportunity Is Mixed