- Shares jump 13% after selling royalties for up to $500m
- Positive late-stage trial results from schizophrenia drug
- Company retains 3.1% stake in Karuna worth $180m
Shares in FTSE 250 biotherapeutics company PureTech Health (PRTC) jumped 13% to 230p on Thursday after selling a royalty interest in schizophrenia drug KarXT for up to $500 million.
The interest was sold to Nasdaq listed Royalty Pharma (RPRX:NASDAQ) which is the largest buyer of biopharmaceutical royalties and a leading funder of innovation across the life sciences industry.
The deal is structured as a $100 million up-front cash payment and up to $400 million in additional contingent payments based on the achievement of certain regulatory and commercial milestones.
Royalty Pharma will collect a 3% royalty on sales up to $2 billion, while over that level its share rises to 33% with PureTech retaining 67% of the royalty payments.
Royalty Pharma founder and chief executive Pablo Legorreta said: ‘We believe this important therapy will have a significant impact on patients with schizophrenia if approved by the FDA.
‘This medicine is a notable addition to our royalty portfolio and is well aligned with our strategy of investing in breakthrough therapies that address areas of high unmet medical need.’
WHAT IS KARXT?
KarXT was invented by a team at PureTech including its chief innovation officer Eric Elenko who served as founding chief executive of Karuna Therapeutics (KRTX:NASDAQ).
The drug was developed from a shelved Eli Lilly (LLY:NYSE) drug and achieved positive late trial results in August 2022.
Karuna plans to submit a new drug application for KarXT to the US Food and Drug Administration by the middle of 2023 which if approved will be the first new treatment for schizophrenia in over 50 years.
PureTech retains a 3.1% stake in Karuna worth around $180 million after reducing its stake following the positive trial results in August 2022. It has monetised about $681 million from Karuna since it listed in June 2019.
PureTech founder and chief executive Daphne Zohar commented: ‘This agreement will provide the company with additional non-dilutive capital to advance our Wholly Owned Pipeline, including our rapidly maturing clinical programs, towards potential commercialization.
‘Such non-dilutive sources of capital have allowed us to fund our pipeline and operations without having to raise capital from the public markets in over five years, and we are pleased to be able to benefit from the success of our invented programs.’
