Karuna Therapeutics, led by former Lilly research leader, opens Carmel office

Karuna Therapeutics Inc., a publicly traded biopharmaceutical company headquartered in Boston, has chosen Carmel for a second office after being drawn by central Indiana’s talent pool.

The 11-year-old company, which is led by former Eli Lilly and Co. executives, moved into a roughly 5,000-square-foot office at 11711 N. Meridian St. in early March.

Karuna Therapeuticsis is a clinical-stage biopharmaceutical company that works to develop novel therapies focused on alleviating psychosis, cognitive impairment and pain in patients with schizophrenia, Alzheimer’s and other neuropsychiatric disorders.

The company filed its initial public offering in June.

“We’ve had a rather meteoric last year,” Karuna President and CEO Steven Paul said. “We feel the talent base for doing drug discovery in central Indiana—primarily due to (Eli) Lilly—is incredible.”

Paul is the former executive vice president for science and technology at Lilly and former president of the Lilly Research Laboratories. After 17 years at Lilly, he’s now directing Karuna as it attempts to bring its lead product, KarXT, to market. KarXT, or xanomeline, is in clinical trials as a treatment of acute psychosis in patients with schizophrenia.

Lilly developed xanomeline for patients with schizophrenia and Alzheimer’s disease in the 1990s but, dropped it because the drug caused unwanted side effects even though it showed signs of promise.

Alan Breier, formerly Eli Lilly’s chief medical officer, is Karuna’s chief clinical adviser and chair of the company’s scientific advisory board.

“Because of my ties to Indianapolis and the fact that we have been able to hire a number of my ex-Lilly colleagues in CNS drug discovery, (Carmel) has turned out to be a great location to plant ourselves and our discovery and research efforts,” Paul said.

Though he declined to say how many employees will be stationed in the Carmel offices, Paul said opening a location near his Carmel home was a convenient way to expand the company. The company has 25 employees overall.

The company also expanded its Boston headquarters in January from 4,175 square feet to more than 11,000 square feet.

Karuna has yet to bring in any revenue, yet alone a profit, but it raised more than $430 million in 2019, providing enough funds to operate for at least three years. Most of those funds, about $310 million, came from its IPO and a follow-up public offering.

The company reported a loss of $7.8 million in the fourth quarter and a loss of $44 for all of 2019, compared to $8.3 million and $17.5 million for the prior-year period.

The company could quickly turn profitable if KarXT does well in Phase III trials that are expected to take place by the end of the year. If successful, the drug has blockbuster potential as the first novel schizophrenia treatment in decades.