PureTech receives $29m royalty from Karuna schizophrenia treatment

Clinical-stage biotherapeutics company PureTech Health has announced that the schizophrenia treatment it developed, which was later sold to Bristol Myers Squibb, has been approved by US regulators, triggering milestone payment and unlocking potential future royalties.

PureTech advanced its KarXT treatment through its own founded entity Karuna Therapeutics, which was acquired by Bristol Myers Squibb in March.

Along with a royalty agreement with Royalty Pharma made back in March 2023, in which the latter acquired a $500m interest in KarXT, PureTech has received two separate milestone payments totalling $29m.

Under the agreements, PureTech is also entitled to potential future payments related to additional milestones as well as approximately 2% royalties on net annual sales over $2bn.

PureTech said the approval is "further validation" of its business model "and a hallmark of how it creates value both clinically and financially".

Following approval from the US Food and Drug Administration, KarXT will now be marketed as Cobenfy.

"PureTech's monetization of equity holdings in Karuna, including gross proceeds from the BMS acquisition of Karuna, and a strategic royalty agreement with Royalty Pharma have enabled PureTech to generate approximately $1.1bn to date after directing $18.5m toward Karuna's founding and Cobenfy's development," the company said.

"PureTech's business model is designed to repeat and scale this type of outcome, and proceeds from the success of Cobenfy have enabled PureTech to self-fund the advancement of several programmes."