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Karuna’s Karxt Platform and Its Potential

Joe McCann of Slingshot Insights interviewed Dr. Andrew Miller PhD (Founder and COO) and Troy Ignelzi (CFO) of Karuna on Wednesday afternoon (10/9/19). On the call they discussed the origins of the company’s KarXT platform, what is driving management’s optimism about the ongoing Phase 2 trial for KarXT, and future potential of the asset. Data is coming by the end of the year in the company’s Phase 2 Schizophrenia Psychosis trial, making this conversation particularly timely for investors. The conversation focused on:

  • Understanding the urgent unmet medical need in Schizophrenia.
  • The origin and history of KarXT.
    • Robust efficacy demonstrated in previous trials with Xanomeline.
    • Rationale and evidence for combining Trospium with Xanomeline for a cleaner side effect profile.
    • The lack of new mechanisms in treating Schizophrenia for 50 years.
  • A detailed review of the Phase 2 trial design and the rigor being put into the study.
  • Key strategic plans for Karuna going forward including partnerships and additional indications for KarXT.
  • KarXT’s robust Intellectual property position.

Below are highlighted quotes from the full interview, available on the Slingshot Insights’ platform. Some of the questions have been reordered and reworded here to improve readability. The unedited version of the conversation and recording is available here.

Q1 Isn’t Schizophrenia well served with currently marketed anti-psychotics? Why do we need something else?

“So, I do think there’s sometimes the perception that this is a well-served market simply because we’ve often heard of many of the medicines that are used. And I think from a commercial perspective, they’ve been very successful historically. But I think if you, and certainly as we talk to KOLs and physicians in this space, I don’t think you’ll find anyone that will tell you that patients are satisfied and well-treated by the treatment options that exist today.”

“There’s a large scale NIH study done a number of years ago to look at the effectiveness and safety of these drugs. And in that study, almost three quarters of patients discontinue their medication within 18 months. And these are patients where they’re diagnosed in late teens, early adulthood as a chronic disorder that they’re treated really for the remainder of their life, but yet they’re cycling through drugs, on almost an annual basis.”

Q2 What are the main areas that current Schizophrenia therapies are inadequate for patients?

“I think there’s kind of four opportunities for differentiation. It’s that positive symptoms, psychosis part, the negative symptom part, the cognitive symptom part. And then I would kind of bucket the safety and tolerability as another aspect.”

Q3 So you are developing KarXT, which is a combination of Xanomeline and Tropsium. Why is this an exciting compound?

“…so every medicine that’s approved for the treatment of schizophrenia fundamentally acts as an antagonist of the dopamine D2 receptor as well as a modulator of variety of serotonin receptors, typically the 5-HT2A receptor. And really what that means is that the clinical profile of these molecules is not particularly differentiated…and I think the lack of innovation in this space, we really refer to, as these products that are marketed are really things that are derivatives in the analogs of previous drugs going all the way back to the first antipsychotic drug chlorpromazine, which was discovered in 1952.”

“And I think the idea of looking at the M1 and M4 receptor subtypes or muscarinic receptor subtypes, it comes back to, that serendipitous clinical discovery of the antipsychotic benefits of xanomeline and that Phase 2 Alzheimer’s study that Lilly ran, which we can talk a little bit about. But I think fundamentally that different mechanism we believe has the opportunity to differentiate potentially on all four of those metrics that I mentioned in response to the previous question. The clinical data I think in our view shows benefit on psychosis, also potential benefit on negative and cognitive symptoms.”

Q4 Xanomeline was study by Eli Lilly previous. What efficacy results did they show?

“What was I think the most interesting findings certainly was a very dramatic and dose dependent reduction in psychosis in those AD patients, both looking at patients who had psychotic symptoms at baseline and showing a remission of those symptoms associated with xanomeline and treatment over placebo or patients who did not have those symptoms at baseline, showing a significant reduction in the onset of those symptoms over the six months of study compared to placebo. And so I think that was a really surprising result to Lilly. Our CEO and chairman is Steve Paul, former head of R&D at Lilly, is actually the senior author on the publication of those Alzheimer’s study results. And I think he would say actually you put the ratings around behavioral neuropsychiatric symptoms into that study more because there was some concern that they might get worse rather than that they would have such a meaningful benefit. And I think that result with xanomeline really inspired many companies and many people to enter this space.”

Q5 Why was the development discontinued given the efficacy demonstrated?

“So muscarinic receptors are expressed in secretory systems, so saliva glands, sweat glands, gastric acid secretion as well as some smooth muscle tissues and the GI tract, the bladder and GI tract in particular. And so they had high rates of excessive salivation and sweating and nausea and vomiting and increased gastrointestinal motility.”

Q6 How is KarTX addressing these side effects without blunting the efficacy shown?

So, our approach is really about that separation between central and peripheral receptors regardless of what particular receptor subtype we’re looking at.

And we really came into that with a pretty agnostic or technology agnostic view about what the solution might be that really led us to come up with, the underlying idea around KarXT being, combination of on the one hand a muscarinic agonist or an activator of those receptors.

On the other hand, a muscarinic antagonist, a blocker of those receptors. The trick being using the agonist, which is the therapeutic target associated with efficacy but also with side effects. But those side effects being due to activation of muscarinic receptors in peripheral tissues as opposed to the brain where the efficacy is coming from, that would allow us to, with a muscarinic antagonist that doesn’t cross the blood brain barrier to block those peripheral side effects and leave that central based efficacy unchanged. That was the idea around KarXT.”

Q7 What are you doing at the technical level to maximize the chance of a clean Phase 2 result?

I think at a high level, one of the most important is we do have remote centralized rating as part of the study. So each patient is rated at the site, by site personnel. And then particularly at screening and baseline there’s a recording of that rating interview. And then it’s re-rated by centralized rater who’s blinded to the study site. The time point in the study, the patient, obviously is not involved in the care of the patient at all. And doesn’t have the same incentives to enroll subjects for instance, that that sites would have. So in real time and screening and baseline, we have that re-rating available to us.

I think all of these things are based on the experience of our team, but also historically in the field. I think one thing that has additionally worked at greatly to our favor is there’s an established networking infrastructure to do these studies given all the historical activity and in antipsychotic drug development. But many of the companies who have historically been in this space are no longer here. And so there’s really not the type of competition for sites and patients that there was, say 10 to 15 years ago. And I think that’s put us in an advantageous position where recruitment has never been an issue for us in this study. And so that’s allowed us to be very picky about what subjects or patients we allow in the study. And so if there’s any question or uncertainty, we fortunately have the luxury of simply declining that patient from entering the study.”

Q8 How well protected is KarTX? Please review the intellectual property position.

I think importantly there’s two patent estates to think about. One is the concept of KarXT, which is the formulation of the two drugs. Basically a muscarinic xanomeline along with a peripherally acting trospium. And then there is a second patent estate that is specific to our formulation and what we’re accomplishing and the actual ratios. And the data that we have so far. And the first patent, the state already has four issued US patents giving us a priority date into 2030, plus patent term extension possibility. And then the second patent family, which has a priority date of 2018 those are still under review, that would actually give us patents through 2039, plus patent term extension.

I’ll just add quickly to that, the other implication because xanomeline was never approved, is KarXT as an NCE, so subject to the data package exclusivity typically associated with new drugs. It also means then that any ANDA challenge or generic challenge to KarXT would have to provide bioequivalence to both components xanomeline and trospium. That really ties directly into our intellectual property portfolio.”

Q9 Why are you confident and optimistic about KarTX’s potential going forward?

“I mean, I think historically, you know, CNS development psychiatry has been underserved, not because of that lack of unmet need. I think there’s a clear and huge need in this space. It’s been the challenge of developing innovative therapeutics. And I think the way that we’ve started this program, developed this program, the big benefit is these tremendous historical clinical datasets that directly, de-risk both the efficacy and safety side for us. And so I think the idea that this is a potentially highly innovative from a mechanism and differentiation perspective, but backed by huge clinical datasets that you would not typically have in Phase Two, I think allows us to feel confident that, we’ve kind of sidestepped the key challenge in many ways.”

Disclosure: Interactive Brokers

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