Karuna Therapeutics Announces Proposed Public Offering of Common Stock

Rhea-AI Summary

Karuna Therapeutics has announced a public offering of $400 million of common stock, with an additional $60 million option for underwriters. The offering will be managed by Goldman Sachs, J.P. Morgan, and Morgan Stanley. Proceeds will support the company’s initiatives in psychiatric and neurological conditions. The offering is subject to market conditions, and specifics will be detailed in a prospectus supplement filed with the SEC. This initiative highlights Karuna's commitment to expanding its capabilities, though actual outcomes hinge on market acceptance and completion of the offering.

Positive

• The offering aims to raise $400 million to support growth initiatives.
• Potential for an additional $60 million from underwriters enhances financial flexibility.

Negative

• Shares offered are subject to market conditions, creating uncertainty.
• The offering could lead to shareholder dilution.

BOSTON--(BUSINESS WIRE)-- Karuna Therapeutics, Inc. (NASDAQ: KRTX), a clinical-stage biopharmaceutical company driven to create and deliver transformative medicines for people living with psychiatric and neurological conditions, today announced that it has commenced an underwritten public offering of $400.0 million of its common stock. Karuna also intends to grant the underwriters a 30-day option to purchase an additional $60.0 million of its common stock. All the shares in the proposed offering are to be sold by Karuna.

Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, and Morgan Stanley & Co. LLC are acting as joint book-running managers for the offering. The offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.

The shares are being offered by Karuna pursuant to an effective shelf registration statement that was previously filed with the Securities and Exchange Commission (“SEC”). The offering is being made only by means of a written prospectus and prospectus supplement that form a part of the registration statement. A preliminary prospectus supplement and accompanying prospectus relating to and describing the terms of the offering will be filed with the SEC and will be available on the SEC’s website at www.sec.gov.

When available, copies of the preliminary prospectus supplement relating to these securities may also be obtained from the offices of Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, NY 10282, or by telephone at (866) 471-2526, or by email at prospectus-ny@ny.email.gs.com; J.P. Morgan Securities LLC, Attention: Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, or by telephone at (866) 803-9204, or by email at prospectus-eq_fi@jpmchase.com; or Morgan Stanley & Co. LLC, 180 Varick St, 2nd Floor, New York, NY 10014. The final terms of the offering will be disclosed in a final prospectus supplement to be filed with the SEC.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any offer or sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

About Karuna Therapeutics

Karuna Therapeutics is a clinical-stage biopharmaceutical company driven to create and deliver transformative medicines for people living with psychiatric and neurological conditions.

Forward Looking Statements

This press release contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including among other things, the size and completion of the proposed public offering, and other statements identified by words such as “could,” “expects,” “intends,” “may,” “plans,” “potential,” “should,” “will,” “would,” or similar expressions and the negatives of those terms. Forward-looking statements are not promises or guarantees of future performance, and are subject to a variety of risks and uncertainties, many of which are beyond our control. Actual results could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties, which include, without limitation, market risks, the final terms of the offering, and uncertainties and the satisfaction of customary closing conditions for an offering of securities. There can be no assurance that Karuna will be able to complete the public offering on the anticipated terms, or at all. These and other risks are described under the heading “Risk Factors” in Karuna’s most recent Annual Report on Form 10-K filed with the SEC and in other filings that Karuna makes with the SEC. Karuna’s actual results could differ materially from the results described in or implied by such forward-looking statements. Forward-looking statements speak only as of the date hereof, and, except as required by law, Karuna undertakes no obligation to update or revise these forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230320005664/en/

Investors:

Alexis Smith

+1 (518) 338-8990

asmith@karunatx.com

Media:

Bob Josefsberg

+1 (646) 734-3584

bjosefsberg@karunatx.com

Source: Karuna Therapeutics, Inc.

FAQ

What is the size of the public offering by Karuna Therapeutics (KRTX)?

Karuna Therapeutics has commenced a public offering of $400 million of common stock.

What is the purpose of Karuna Therapeutics' public offering?

The proceeds are intended to support growth initiatives in psychiatric and neurological conditions.

Who is managing the public offering for Karuna Therapeutics (KRTX)?

Goldman Sachs, J.P. Morgan, and Morgan Stanley are the joint book-running managers for the offering.

What are the risks associated with the public offering by Karuna Therapeutics (KRTX)?

The offering is subject to market conditions, and there is no assurance of completion or the final terms, posing risks of dilution for existing shareholders.

When will details about the public offering by Karuna Therapeutics be available?

Details will be disclosed in a prospectus supplement that will be filed with the SEC.