Karuna Therapeutics (NASDAQ:KRTX), a biotech focused on psychiatric and neurological conditions, dropped ~8% intraday Wednesday after a regulatory disclosure indicated that its Chief Financial Officer Troy Ignelzi sold more than $3 worth of company stock.
According to an SEC Form 4 filed on Tuesday, Ignelzi has sold 15K KRTX shares at $227.05 – $233.20 to cut his stake by ~60%. The sales conducted in eight transactions from Sep. 30 to Oct. 04 are worth ~$3.4M in total.
Commenting on the development, Mizuho analyst Uy Ear with a Buy rating on KRTX, argues that the sale could imply “less confidence in the potential takeout of the company, at least in the near-term.”
Ear noted that according to the company Ignelzi sold shares he held for more than two years for “tax planning and management of concentration risk.”
“We have not heard any concern about the clinical programs for KarXT or other fundamentals of the company that would lead to the stock’s weakness,” Mizuho read.
KRTX shares have added more than 64% YTD, partly driven by sharp gains in August following positive late-stage data for experimental schizophrenia therapy KarXT.