KRTX vs RETA: Which biotech stock to explore in November? - Kalkine Media

November 01, 2022 02:28 AM PDT | By Mridul Gogoi
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Highlights:

  • Karuna Therapeutics (KRTX) posted a net loss of US$ 64.9 million in Q2 2022.
  • RETA stock surged by over 24 per cent YTD.
  • Reata Pharmaceuticals has a market capitalization of US$ 1.18 billion.

Biotech stocks are generally volatile, and when coupled with a tumultuous market, it becomes a double whammy. However, they also have an extra potential when the companies' products get approval and their therapies are dimmed safe to use.

The equity market in the US has been volatile since the start of this year, and almost all sectors have been bruised in recent quarters. So, biotech is no different. A string of macroeconomic factors, rising inflation, and a hounding recessionary fear have adversely impacted the market sentiments bringing in a bear market.

Amid the present situation, we look at two biotech stocks- KRTX and RETA and analyze their performances in recent quarters:

Karuna Therapeutics Inc. (NASDAQ: KRTX)

Karuna Therapeutics is a biopharma firm, which develops therapies to treat neuropsychiatric ailments. One of its flagship products is KarXT, an oral modulator of muscarinic receptors in the central nervous system and numerous peripheral tissues.

In its Q2 2022 financial results, Karuna Therapeutics posted a net loss of US$ 64.9 million compared to US$ 34.4 million in the corresponding quarter in 2021.

The company ended the second quarter of 2022 with US$ 407.4 million in cash and cash equivalents, whereas it had US$ 494.0 million on December 31, 2021.

The KRTX stock jumped over 70 per cent in 2022 while gaining over 58 per cent year-over-year (YoY). As per Refinitiv data, its Relative Strength Index (RSI) value of 53.37 as of October 31, 2022. This indicates that the KRTX stock is in a moderate zone. Karuna Therapeutics has a market cap of US$ 7.6 billion.

Market capitalization of Reata Pharmaceuticals Inc. (NASDAQ: RETA), Karuna Therapeutics Inc. (NASDAQ: KRTX)Source: ©Kalkine Media®; © Canva via Canva.com

Reata Pharmaceuticals Inc. (NASDAQ: RETA)

Reata Pharmaceuticals Inc is a biopharmaceutical firm involved in manufacturing products to cure serious diseases. The US$ 1.18 billion company, Reata Pharmaceuticals, is headquartered in Plano, Texas. 

On a YTD basis, the RETA stock grew over 24 per cent while it gained more than 30 per cent in the current quarter.

In Q2 2022, Reata posted US$ 73.6 million as a GAAP net loss (both basic & diluted). Its GAAP net loss was US$ 72.7 million in Q2 2021.

As of June 30, 2022, Reata Pharmaceuticals had cash & cash equivalents of US$ 481.5 million. While it was US$ 590.3 million on December 31, 2021.

Bottom line:

Irrespective of sectors, investing in the current scenario has become challenging in the equity market. Economic slowdown, propelled by global headwinds, the fastest inflation in decades, and equally aggressive monetary policies by the Federal Reserve to counter it, have rocked the US stock market, forcing investors to run for cover.

Amid all these market uncertainties and volatility, a long-term strategy can salvage any damage for traders. A thorough assessment of the stocks, the companies’ fundamentals, and a bit of a market analysis may help investors to stay protected in the current market conditions.


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