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PureTech Health’s Karuna Snags $42M Series A for Schizophrenia Drug

Xconomy Boston — 

[Updated August 3, 9:00am ET, see note below.] With $42 million in new investment, Karuna Pharmaceuticals, a PureTech Health company based in Boston, now has the funds to test in a Phase 2 clinical trial a drug for a disease where many have previously failed: schizophrenia.

Karuna’s lead candidate, KarXT, is a combination of two compounds: xanomeline, licensed from Eli Lilly (NYSE: LLY), and trospium chloride, which is meant to counteract side effects of the first. Both agents target a type of muscarinic cholinergic receptor. Cholinergic receptors are part of the nervous system and bind to a neural signaling chemical called acetylcholine. Some in the Alzheimer’s field say that the disease may be caused by a decreased production of acetylcholine and Alzheimer’s drug developers shouldn’t ignore the cholinergic system.

Indeed, xanomeline has already been tested in people with Alzheimer’s, but caused a lot of side effects. Karuna says KarXT’s second component, trospium chloride (already FDA approved for another indication) is meant reduce adverse effects by blocking the receptor in the peripheral nervous system (outside of the brain). PureTech says the Phase 2 trial of KarXT should start this quarter.

Other experimental cholinergic drugs have failed in Alzheimer’s and schizophrenia and approved ones for Alzheimer’s are generally seen as only short-term fixes. It’s worth noting though that KarXT is designed to act on a different kind of cholinergic receptor, the M1/M4 muscarinic cholinergic receptors.

Karuna also plans to explore other areas for the drug, including pain—another high-risk area of drug development.

[Updated with more information about PureTech] PureTech (LON: PRTC) is a Boston-based company that forms biotech startups and is developing its own drugs. Besides PureTech, other investors in Karuna’s Series A round of financing include Arch Venture Partners, the Wellcome Trust, and others. Karuna says that the financing includes the issuance of $22 million in shares, which represents debt that is being converted into equity.