Karuna Therapeutics initiated with bullish view at Deutsche Bank, here’s why

Deutsche Bank initiated coverage of Karuna Therapeutics with a Buy rating and $227 price target. The analyst believes some investor concerns are overdone, saying KarXT’s novel mechanism should clearly differentiate it versus other antipsychotics on common safety and tolerability issues. gastrointestinal tolerability can be managed in the real-world with dose titration, which psychiatrists are already used to doing frequently with currently available products, the analyst tells investors in a research note. The firm sees the ongoing Alzheimer’s disease psychosis Phase 3s with KarXT as the most meaningful potential upside drivers to shares in the next two years, but says “they are very risky.”