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.
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.