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PureTech Health surges as Karuna investment rockets 442%

The Nasdaq-listed company soared after announcing that its lead asset KarXT reported an above-average result in phase II of trials on schizophrenic patients

PureTech Health plc - PureTech Health rallies over affiliate Karuna Therapeutics’ success
PureTech owns a 31.6% stake in the US company

PureTech Health plc (LON:PRTC) shares shot higher on Tuesday after its 32%-owned investment Karuna Therapeutics Inc (NASDAQ:KRTX) enjoyed a whopping 442% leap overnight.

The Nasdaq-listed biopharma company soared after announcing that its lead asset KarXT reported an above-average result in phase II of trials on schizophrenic patients, paving the way for regulatory approval.

READ: PureTech shares jump as Gelesis approval caps “transformational” six months

Karuna’s stock closed at US$96 on Monday, more than five times higher than Friday’s price, valuing the company at US$2.2bn.

PureTech saw its 31.6% stake in the US company rise to US$580mln from US$130mln at the end of last week, although its share price went up only 13%, compared to the 70% expected by broker Peel Hunt.

“This valuation dislocation is unsustainable in our view,” analysts said in a note.

“We see this as one of the most meaningful catalysts for PureTech in the near to medium term, and a strong result in this very difficult to treat disease.”

Shares in PureTech kept growing on Tuesday, jumping 16% to 289.66p in the morning.

Quick facts: PureTech Health plc

Price: 277 GBX

LSE:PRTC
Market: LSE
Market Cap: £790.4 m
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