Karuna Therapeutics CEO Dr. Steve Paul told CNBC on Friday that the biotech firm is hopeful its new therapy for schizophrenia will prove effective for patients in a late-stage trial.
"We have to get this compound through phase three to get it to patients," Paul told "Power Lunch." "We're cautiously optimistic given the robustness of the clinical data that we reported this week."
Shares of Karuna soared nearly 400% this week after the Boston-based biotech firm posted positive results Monday for its drug, called KarXT, in a midstage clinical trial.
The company said the drug "demonstrated a statistically significant and clinically meaningful" improvement in symptoms compared with a placebo. Additionally, the firm said the drug was well tolerated by many of the 182 patients in the trial.
The drug could be a game changer for the estimated $11 billion antipsychotic drug market.
About 3.5 million people in the United States are diagnosed with schizophrenia, and it is one of the leading causes of disability worldwide, according to Schizophrenia and Related Disorders Alliance of America, an advocacy group. Symptoms of the illness include disruptions in thought processes, perceptions and emotional responsiveness.
Many drugs for schizophrenia come with troubling side effects such as weight gain, nausea and drowsiness.
Karuna's drug tolerability "is a big win," Paul said Friday.
Paul added the biotech still has more work to do.
Karuna expects to meet with the Food and Drug Administration early next year to "map out the path to get the new medicine to patients," Paul said. It aims to conduct a late-stage trial by the end of next year.