Karuna Completes $42M Series A

Karuna Pharmaceuticals, focused on targeting muscarinic receptors for the treatment of disorders marked by psychosis and cognitive impairment, today announced the completion of a $42 million Series A financing round, including the issuance of $22 million in shares upon conversion of debt into equity. Participants included ARCH Venture Partners, the Wellcome Trust, Steven Paul M.D., PureTech Health, and other undisclosed investors. Karuna plans to use the proceeds from the financing to advance its lead product candidate, KarXT (Karuna-xanomeline-trospium chloride), including the initiation of a Phase 2 trial in patients with schizophrenia in the third quarter of 2018 and the expansion into other therapeutic areas, including a non-opiate pain indication.

"Karuna has all of the characteristics we look for in a game-changing CNS company. Its lead drug candidate has a unique mechanism of action for treating both psychosis and cognition, as well as an exciting non-opiate application for pain. These are therapeutic indications where there is a profound need for new treatments. We are excited about the clinical data that have already been generated, and we look forward to helping to drive the next chapter of growth," said Robert Nelsen, Co-Founder and Managing Director of ARCH Venture Partners.

KarXT is designed to improve tolerability and unlock the potential of muscarinic cholinergic receptor agonists that selectively target M1/M4 muscarinic cholinergic receptors in the brain while blocking their activation in tissues outside the brain. Karuna is currently completing a second Phase 1 trial using a proprietary co-formulation of xanomeline, a muscarinic agonist Karuna exclusively licensed from Eli Lilly which showed compelling efficacy in patients with schizophrenia and Alzheimer's disease but had peripheral cholinergic side effects, combined with trospium chloride, a muscarinic antagonist that acts only in the periphery (outside of the brain and central nervous system). The initial Phase 1 trial demonstrated a significant and clinically meaningful reduction in pre-specified cholinergic side effects with KarXT compared to xanomeline alone. The Phase 2 trial in patients with schizophrenia is designed to replicate and expand on previous efficacy and safety data with xanomeline in schizophrenia and Alzheimer's disease.

"We greatly appreciate the support of our investors and their confidence in the potential of KarXT to be the first new and highly differentiated medicine in over 50 years for the treatment of psychosis and cognitive impairment in psychiatric and neurological disorders," said Andrew Miller, Ph.D., Co-Founder and Chief Executive Officer of Karuna. "We believe KarXT could be a promising new treatment that safely and effectively addresses the debilitating positive, negative, and cognitive symptoms of patients living with schizophrenia and other central nervous system disorders."

About Karuna Pharmaceuticals
Karuna is a clinical-stage drug development company targeting muscarinic cholinergic receptors for the treatment of psychosis and cognitive impairment across central nervous system (CNS) disorders, including schizophrenia and Alzheimer's disease, as well as neuropathic pain. Karuna's lead product candidate, KarXT, consists of xanomeline, a novel muscarinic acetylcholine receptor agonist that has demonstrated efficacy in placebo-controlled human trials in schizophrenia and Alzheimer's disease without the troubling sedative, metabolic, and neurological side effects of currently prescribed antipsychotic drugs, and trospium chloride, an FDA-approved and well-established muscarinic receptor antagonist that has been shown not to enter the central nervous system (CNS). Karuna has demonstrated improved tolerability of KarXT vs. xanomeline in a placebo-controlled human study and is currently conducting a Phase 1 trial using a proprietary co-formulation of xanomeline and trospium chloride. A Phase 2 trial of safety and efficacy in people with schizophrenia is expected to begin in the third quarter of 2018. Karuna, which was founded by PureTech Health (LSE: PRTC), has a worldwide exclusive license for xanomeline and has a patent portfolio more broadly covering selective muscarinic targeting enabled by the KarXT approach.