JMP Views Positive Phase 3 Data Equivalent To 'Schizophrenia Blockbuster' For This Stock

JMP Securities raised the price target on Karuna Therapeutics Inc KRTX from $175 to $190 with a Market Outperform rating.
The analysts note Karuna as the top pick ahead of imminent Phase 3 results for KarXT in schizophrenia.
They note that results from the Phase 3 EMERGENT-2 trial are expected within weeks (estimated mid-July to mid-August), with high confidence levels (probability of success ~80%).
"Looking ahead to KarXT's commercial potential, we believe that in addition to robust efficacy, differentiating attributes that can drive adoption are the novel mechanism of action and favorable safety/tolerability profile," JMP writes.
Also See: Amid Russia's Invasion On Ukraine, Karuna Therapeutics Withdraws Guidance On Late-Stage Schizophrenia Trial.
"We also believe that the opportunity for the candidate in additional indications, specifically ADP, remains underappreciated, and positive schizophrenia results should have broader positive read-through," it added.
The increased price target reflects higher U.S. peak penetration sales in schizophrenia (from $1.9 billion in 2028 to around $2.5 billion in 2030) and an increased probability of approval in Alzheimer's disease psychosis (ADP) (from 50% to 60%).
Price Action: KRTX shares closed up 2.45% at $120.65 on Tuesday.