Karuna Therapeutics, Inc. (NASDAQ:KRTX) Q3 2023 Earnings Call Transcript

Unidentified Analyst: Hi, thanks for taking my question. This is Rudy on the line for Marc. So can you talk about your current strategy for cognitive impairment in schizophrenia? Are you starting pivotal trials to pursue this as a separate indication? And secondly, can you also provide more color on your pre-commercialization work? How should we think about spending moving into 2024? Thanks.

Bill Meury : Great. Thanks for the question. Andrew will take the first part, and then we’ll take the second part.

Andrew Miller : Yeah. Specifically with respect to cognitive impairment associated with schizophrenia. Obviously, we were able to collect cognitive performance data as an exploratory endpoint as part of the emergent program. That will also be included as we think about future data with respect to EMERGENT-4 and 5 as well as the ARISE program are all opportunities to just further collect cognitive data there, of course, with cognitive data collection and demonstrated benefit in the original studies with [indiscernible] as well in patients with Alzheimer’s and patients with schizophrenia. Going forward, do you think we’re contemplating additional work specifically dedicated towards cognition? And really what that means is studies that are specifically designed, recruited and have primary endpoint that reflects cognition rather than other symptoms of schizophrenia.

So that’s something that’s certainly under consideration for us, we believe there is a broadly applicable potential benefit of KarXT across psychosis and cognition in a number of potential different indications. And I think you’ll expect to hear more from us in 2024, specifically about dedicated development towards cognition of schizophrenia.

Bill Meury : Thanks, Andrew. Will, you want to take the second question?

Will Kane : Sure. Then on the precommercialization word, so first, as we’ve indicated, our leadership is in place from a commercial perspective and the team is really focused on developing the right go-to-market strategies. As we mentioned before, we expect this to be a fully loaded campaign out of the gate. We see great opportunity for KarXT in a marketplace that is eagerly awaiting new treatment options. Our scientific exchange, as we’ve mentioned, has begun. And I think we’ve gone in great form that the collaboration between our account director team and our medical science liaison team. So they’re able to continue that dialogue with clinicians and particularly with payers and clinicians on the MSO side to the extent they have questions that we can react to and provide information to our sales force planning and design work is nearing completion, as I said, that will give us the opportunity to go to market and really address healthcare prescribers, both psychiatry nurse practitioners in psychiatry and a primary care physicians that are obviously very active in this area.

But it also allow us to cover a broader landscape, if you will, to ensure we cover the certified community behavior health centers that we provide adequate reimbursement is important to help the offices get through any prior authorization or step processes that need to be in play. We have full sampling program that’s all designed and ready to roll. So we’re in a very good position. We still have more work to do. Obviously, we’re ways away from a potential approval and we’ll want to obviously find a labeling human form our messaging, et cetera. But I think to this point, I’m very pleased, and we’re in good shape.

Bill Meury : Yeah, I would just second what Will said. We are on track. I would say we’re ahead of schedule as it relates to getting ready. And the beauty here is that the psychiatric community is anticipating KarXT. There’s a great deal of interest here. Of course, we can’t promote it until we get approval, but all systems gone. Thanks for the question.

Operator: Your next question is from the line of Jason Butler with JMP Securities.

Jason Butler : Hi, thanks for taking question. And I’ll add my congrats on the progress. Just another follow-up on commercial prep. Can you maybe speak to what you’re hearing from physicians about how they’re thinking about using the drug early in the launch? And specifically, with regards to dose flexibility, how willing they will be to push the dose to optimize efficacy early in their experience versus taking a slower and gaining experience with tolerability. Thank you.

Bill Meury : Great. Thanks for the question. I’ll just make an opening comment and then turn it over to Will. I’ve been involved with probably seven or eight neuropsychiatry launches over the course of 25 years. And in my experience, psychiatrists are the most depth at dosing and generally follow-up principle of start low and go slow. I think that’s true whether you’re dealing with antidepressants or atypical for schizophrenia or a novel compound like KarXT for schizophrenia. And I would expect that they’ll follow the same practice with KarXT using the label, of course, as guidance as they do with other atypicals. I’ll turn it over to Will, let him sort of add his comments.

Will Kane : Sure, I’ll just add on to that, that we will go to market to enable that flexibility for the prescribing community to tailor the use of the drug per the label, but also for their clinical experience so that they can maximize the patient experience with the product right out of the gate. In terms of the approach of the patient segments, et cetera, it’s a broad-based one, right? There are many patients with schizophrenia, looking for new treatment options. We’ve reiterated that many times in terms of the high rate of non-adherence and discontinuation, whether it’s patients in that have lapsed and therefore, not on any therapy for which KarXT could be a new patient start, if you will, or those that are experiencing adequate efficacy or tolerability effects that are looking for a switch or in the case of this market with the increased use of polypharmacy of 2D2s, there will be some physicians who, even though we will not promote for that until we have an indication they will see the opportunity to potentially add KarXT on to be help on patient who are not adequately addressed from an efficacy perspective.

And so it is a broad-based population. Again, there’s been very little novelty in this area, diagnostically for a long time for decades. And so you know that it really has, I think, captured their interest and they’re already thinking about the breadth of patients that may benefit from the KarXT.

Bill Meury : I think Will is right. If you had another D2 antagonist, you might be thinking about the market more narrowly, a second or a third line type of treatment, but that’s not what we’re talking about here. And I think with you go on the far left of the continuum first episode psychosis, all the way to patients who are not on therapy and who have relapsed, I think the opportunity for KarXT is that broad and it should be that broad given what we’ve seen in the emerging program. Thanks for the question.

Operator: Your next question is from the line of Charles Duncan with Cantor Fitzgerald.