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.