HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Event-Driven

<ul>
<li>Due to large patient population and strong clinical demand for new therapies, the future commercialization prospects of effective drugs in the field of schizophrenia would be relatively certain and promising.</li>
<li>Our forecast on the peak sales of KarXT is about US$10 billion. In other words, at this peak sales level, BMS is able to recover the US$14 billion in cost.</li>
<li>Karuna’s P/B is much higher than peers. If investors already have Karuna in portfolio, they may consider taking profits in time.But another rally is possible when KarXT is officially approved.</li>
</ul>


Due to large patient population and strong clinical demand for new therapies, the future commercialization prospects of effective drugs in the field of schizophrenia would be relatively certain and promising.
Our forecast on the peak sales of KarXT is about US$10 billion. In other words, at this peak sales level, BMS is able to recover the US$14 billion in cost.
Karuna’s P/B is much higher than peers. If investors already have Karuna in portfolio, they may consider taking profits in time.But another rally is possible when KarXT is officially approved.


Karuna Therapeutics Inc (KRTX.US) - This Company Is Worth Bristol Myers Squibb Paying a High Premium

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>The weight of the evidence suggests that the lows for this bear market have likely already been established, but that does not mean it will be smooth sailing from here.</li>
<li>The SPX and NDX are both testing important resistance levels (4165-4180 and the YTD downtrend, respectively), making this a logical spot for the indexes to stall and potentially pull back.</li>
<li>Ultimately, we would expect to see support near their 50-day MAs as the market goes through a bottoming process. We remain neutral overall.</li>
</ul>


The weight of the evidence suggests that the lows for this bear market have likely already been established, but that does not mean it will be smooth sailing from here.
The SPX and NDX are both testing important resistance levels (4165-4180 and the YTD downtrend, respectively), making this a logical spot for the indexes to stall and potentially pull back.
Ultimately, we would expect to see support near their 50-day MAs as the market goes through a bottoming process. We remain neutral overall.


S&P 500, Nasdaq 100 Testing Key Resistance Levels; Pause Likely; Buying Biotech

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Bottom-Up

Karuna Therapeutics Inc / Equity Bottom-Up

<ul>
<li>In December 2023, American multinational pharmaceutical company Bristol Myers Squibb has agreed to acquire Karuna Therapeutics for $330 per share in cash, implying a total equity value of $14B.</li>
<li>The special meeting of Karuna’s shareholders to be held on March 12, 2023, to consider and vote on various proposals necessary to approve upcoming M&amp;A deal.</li>
<li>I expect the bidding battle among big pharma to acquire Karuna Therapeutics and its valuable pipeline of transformative medicines to treat schizophrenia and psychosis in Alzheimer’s disease.</li>
</ul>


In December 2023, American multinational pharmaceutical company Bristol Myers Squibb has agreed to acquire Karuna Therapeutics for $330 per share in cash, implying a total equity value of $14B.
The special meeting of Karuna’s shareholders to be held on March 12, 2023, to consider and vote on various proposals necessary to approve upcoming M&amp;A deal.
I expect the bidding battle among big pharma to acquire Karuna Therapeutics and its valuable pipeline of transformative medicines to treat schizophrenia and psychosis in Alzheimer’s disease.


Karuna Therapeutics: Is The Bidding Battle Underway?

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bristol-myers-squibb-co" target="_blank" data-smartkarma-citation="entities:1133:1" rel="noopener">Bristol Myers Squibb Co (BMY US)</a> is acquiring <a href="https://www.smartkarma.com/entities/karuna-therapeutics-inc" target="_blank" data-smartkarma-citation="entities:28720:1" rel="noopener">Karuna Therapeutics Inc (KRTX US)</a> for $330/share in cash for equity value of ~$14B. The transaction is expected to close in 1H24. </li>
<li>Karuna’s lead asset, KarXT has FDA action date of September 26, 2024 for the treatment of schizophrenia in adults. KarXT has peak annual sales potential of $6–7B.</li>
<li>Considering strong clinical efficacy and favorable risk profile of KarXT, the deal seems to be fairly valued. Current market price of Karuna shares of $318.41 represents absolute spread of ~3.6%.</li>
</ul>



Bristol Myers Squibb Co (BMY US) is acquiring Karuna Therapeutics Inc (KRTX US) for $330/share in cash for equity value of ~$14B. The transaction is expected to close in 1H24. 
Karuna’s lead asset, KarXT has FDA action date of September 26, 2024 for the treatment of schizophrenia in adults. KarXT has peak annual sales potential of $6–7B.
Considering strong clinical efficacy and favorable risk profile of KarXT, the deal seems to be fairly valued. Current market price of Karuna shares of $318.41 represents absolute spread of ~3.6%.


Karuna Therapeutics (KRTX US): BMS Acquisition Offers Decent Short-Term Trading Opportunity

<ul>
<li>
<a href="https://www.smartkarma.com/entities/puretech-health-plc" target="_blank" data-smartkarma-citation="entities:22096:1" rel="noopener">PureTech Health (PRTC LN)</a> has confirmed its possible merger with <a href="https://www.smartkarma.com/entities/nektar-therapeutics" target="_blank" data-smartkarma-citation="entities:15060:1" rel="noopener">Nektar Therapeutics (NKTR US)</a>. Uncertainty regarding the actual offer has caused volatility to PureTech shares.</li>
<li>Nektar will be required, by not later than November 3, 2022, to announce a firm intention to make an offer for the company.</li>
<li>Nektar faced a big setback in its lead pipeline assets and is going through tight financial condition. We are not expecting a lucrative takeover offer for PureTech.</li>
</ul>



PureTech Health (PRTC LN) has confirmed its possible merger with Nektar Therapeutics (NKTR US). Uncertainty regarding the actual offer has caused volatility to PureTech shares.
Nektar will be required, by not later than November 3, 2022, to announce a firm intention to make an offer for the company.
Nektar faced a big setback in its lead pipeline assets and is going through tight financial condition. We are not expecting a lucrative takeover offer for PureTech.


PureTech Health (PRTC LN): Possible Combination with Nektar Is Just a Defensive Move

United States

Karuna Therapeutics, Inc. operates as a biotechnology company. The Company develops therapies for the treatment of chronic mental health disorder. Karuna Therapeutics serves patients in the United States.

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Karuna Therapeutics Inc (KRTX US)