Neurosterix nabs $105M, recruits Karuna veterans for schizophrenia push

Neurosterix has raised $105 million to move its oral schizophrenia candidate into mid-stage trials, pairing the financing with the appointments of three former Karuna Therapeutics leaders who helped bring Cobenfy to market.

Spun out from Swiss biotech Addex Therapeutics in 2024, Neurosterix touts a pipeline of selective allosteric modulators for neuropsychiatric disorders. The new cash infusion will primarily fuel the planned mid-stage development of NTX-253, a muscarinic M4 positive allosteric modulator (PAM) designed as a highly selective treatment for schizophrenia.

The fundraise was led by RTW Investments with participation from GV and Janus Henderson Investors, among others, according to a Thursday release. Neurosterix’s series B is a sharp uptick from its $63 million series A raised in April 2024, when the company was spun out.

Addex, which announced the latest raise Wednesday evening but did not itself participate in the round, now holds an 8.5% equity interest in the company. “The closing of this significant financing is a huge endorsement of the allosteric approach pioneered by Addex in schizophrenia as well as other neuropsychiatric disorders,” Addex CEO Tim Dyer said in the release.

NTX-253 is designed to fine-tune muscarinic signaling in the brain to potentially reduce psychosis symptoms while avoiding complications tied to typical dopamine antagonists, such as movement disorders and metabolic side effects. Neurosterix has already wrapped early-stage testing and plans to advance the asset into Phase 2 trials.

The schizophrenia space saw the approval of the first muscarinic-targeting treatment—and the first new schizophrenia therapy in 35 years—in September 2024, when Bristol Myers Squibb got an FDA greenlight to market Cobenfy. The drug targets both M1 and M4 muscarinic acetylcholine receptors in the central nervous system. BMS picked up Cobenfy in its $14 billion buyout of Karuna Therapeutics.

Alongside the funding, Neurosterix announced the appointments of three ex-Karuna leaders: Andrew Miller as executive chair of the board of directors; Edmund Harrigan as an independent director; and Stephen Brannan as chair of the clinical advisory board.

In parallel with BMS’ Karuna purchase and late-stage development of Cobenfy, AbbVie also chased the muscarinic system via its $8.7 billion acquisition of Cerevel Therapeutics. The deal’s centerpiece emraclidine, a M4 receptor PAM, ultimately failed two mid-stage schizophrenia trials, racking up $3.5 billion in impairment charges for the pharma company.

Neurosterix believes its approach to fine-tune brain signaling is highly precise and selective, and can potentially provide safer, more effective treatments for people with schizophrenia, plus mood and anxiety disorders.

BMS’ commercial rollout of Cobenfy has been slower than expected, with the drug failing to meet sales expectations. While several factors have played a role in the disappointing launch, Mizuho Securities Graig Suvannavejh believes part of the issue is Cobenfy’s tolerability profile.

“. . . the side effects, the GI adverse events, are likely to be in the real world much worse than what was reported in the Phase 3 studies,” he recently told BioSpace.