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Puretech Health affiliate Karuna raises $42m

Puretech Health affiliate Karuna raises $42m

Puretech Health affiliate Karuna raises $42m

Karuna Pharmaceuticals, a neuroscience unit of LSE-listed healthcare venture firm Puretech Health (LSE: PRTC), has completed a  $42m Series A financing comprising the issue of $20m of new equity and $22m on conversion of debt. Participants in the financing included Arch Venture Partners, Wellcome Trust, Dr Steven Paul (a Karuna board director and former CEO of several neuroscience start-ups),  PureTech Health and certain other undisclosed investors. PureTech Health will own 56.8% of Karuna on a fully-diluted basis, as a result of the financing.

Karuna is focussed on drugs targeting muscarinic receptors for the treatment of disorders marked by psychosis and cognitive impairment. The company plans to use the funds to advance its lead product candidate, KarXT into a Phase II trial for  schizophrenia and expand work in other CNS indications.  KarXT (Karuna-xanomeline-trospium chloride) is a proprietary co-formulation of xanomeline, a muscarinic agonist licensed from Lilly, and trospium chloride, a peripheral acting muscarinic antagonist. The concept is to exploit xanomeline’s central activity – it  has shown efficacy in studies in schizophrenia and Alzheimer’s disease – but prevent its problematic peripheral side effects. The formulation improves tolerability by blocking activation in peripheral tissue. The planned Phase II trial is designed to replicate and expand on previous studies with xanomeline in schizophrenia and Alzheimer’s disease. 

Last week Puretech’s 34.9%-owned Nasdaq-quoted affiliate, Restorbio (Nasdaq:TORC), reported top-line results from a Phase IIb trial of 652 elderly patients at increased risk of respiratory tract infections (RTIs). The company claimed the 10mg once daily dose of RTB101 demonstrated a statistically significant and clinically meaningful reduction in the percentage of patients with one or more laboratory-confirmed RTIs during the 16-week treatment period compared to placebo, but a higher dose (10mg twice daily) and a combination at 10mg once daily with Novartis’s mTOR inhibitor Afinitor did not show effectiveness.

Meanwhile, Puretech’s 71.5%-owned subsidiary, Vedanta Biosciences, recently received grant funding from the US non-profit Crohn’s & Colitis Foundation to support development of a microbiome-derived product for inflammatory bowel disease. Vedanta is the first commercial organisation to be awarded funding under the Foundation’s new entrepreneurial investing initiative.  The funding will support development of a product that targets pathogenic bacterial strains that are particularly abundant in Crohn’s disease and may lead to the onset of IBD.

Vedanta has a Phase I trial underway with VE303,  a rationally defined live bacterial consortia for the treatment of recurrent Clostridium difficile (C diff) infection. VE303 is the first known investigational drug consisting of rationally-defined bacterial consortium in powder form to enter the clinic. A Phase II study is expected to start this year. Vedanta has a second drug candidate, VE202, which is subject to a partnership with Janssen Biotech (Johnson & Johnson) and is also expected to enter trials later this year.

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