Karuna Therapeutics Inc. (NASDAQ: KRTX) shares skyrocketed on Monday after the firm announced mid-stage results from its schizophrenia treatment. Now shares are on the move again after Karuna said that it would be conducting a secondary offering to capitalize on this massive gain.

The company is offering 2.6 million shares of common stock, with an overallotment option for an additional 390,000 shares. All the shares to be sold in the proposed offering will be sold by Karuna.

The underwriters for the offering are Goldman Sachs, Citigroup, Stifel, and JMP Securities.

The offering is subject to market and other conditions, and there can be no assurances as to whether or when the offering may be completed, or as to the actual size and terms of the offering.

All of this comes after Karuna Therapeutics announced that results from its Phase 2 clinical trial of KarXT for the treatment of acute psychosis in patients with schizophrenia demonstrated a statistically significant and clinically meaningful 11.6 point mean reduction in total Positive and Negative Syndrome Scale score compared to placebo. The study also demonstrated good overall tolerability.

According to the press release, a statistically significant reduction in the secondary endpoints of PANSS-Positive and PANSS-Negative scores were also observed. KarXT was shown to be well tolerated in the Phase 2 trial. Similar discontinuation rates between KarXT and placebo were shown to be 20% and 21%, respectively, and the number of discontinuations due to treatment-emergent adverse events were equal in the KarXT and placebo arms.

Karuna said that it combined xanomeline, a novel muscarinic receptor agonist that preferentially stimulates M1 and M4 muscarinic receptors, with trospium, an approved muscarinic receptor antagonist that does not measurably cross the blood-brain barrier. This confined the effects to peripheral tissues. The Phase 2 study (randomized, double-blind, placebo-controlled) was an inpatient trial made up of 182 adult patients between the ages of 18 and 60. The patients had been diagnosed with DSM-5 schizophrenia and were experiencing acute psychosis, and they were then said to be washed-out of antipsychotic medicines and randomized equally between KarXT and placebo for five weeks. The primary outcome measure of the trial was the change from baseline on the total PANSS score on KarXT versus placebo treatment at week five.

Shares of Karuna Therapeutics were last seen up about 36% at $130.25, with a post-IPO range of $11.24 to $149.89. The consensus analyst price target is $39.00.

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