Bristol Myers Squibb (BMY) received a major boost on Thursday with the FDA’s approval of Cobenfy (xanomeline and trospium chloride, KarXT), an oral medication for schizophrenia in adults. This approval, coming without a boxed warning, is being hailed as a significant positive for the company, according to BMO Capital analysts.
The lack of a boxed warning is crucial, as many prior antipsychotic medications have received them due to increased mortality risks, particularly in elderly patients. This absence could significantly enhance Cobenfy’s potential for treating Alzheimer’s-related psychosis, pending further clinical trials. BMO projects peak sales of $2.4 billion for Cobenfy in schizophrenia and a further $3.9 billion in Alzheimer’s-related psychosis, leading them to raise their price target to $53 from $48, while maintaining a Market Perform rating.
The drug will be priced at $1,850 for a 30-day supply or $22,500/year, representing a discount to previous expectations.
While Cobenfy holds a first-mover advantage, Truist Securities highlights that AbbVie Inc (ABBV) is also advancing emraclidine as a treatment for schizophrenia and Alzheimer’s disease-related psychosis. While emraclidine differs from KarXT in its mechanism of action, Truist analysts believe KarXT is ahead by at least two to three years.
Despite its promising potential, Cobenfy’s label does include cautions for urinary retention, elevated heart rate, reduced gastric motility, and angioedema.
William Blair projects peak U.S. sales for Cobenfy to reach approximately $2 billion by 2030, driven solely by its use in treating schizophrenia. However, if the drug is approved for additional indications, such as Alzheimer-related psychosis and adjunctive schizophrenia—both currently in Phase 3 trials—annual sales could rise to around $3 billion to $5 billion, pending positive results.
The news of the FDA approval sent BMY stock up 2.33% to $51.29 at the last check on Friday.
While Cobenfy holds a lot of promise, it is important to note that the drug has not yet been approved for Alzheimer’s-related psychosis. Further clinical trials are necessary before the drug can be marketed for this indication. It is also important to be aware of the potential side effects of Cobenfy, as mentioned in the label.
This development is significant for both Bristol Myers Squibb and for patients suffering from schizophrenia and Alzheimer’s related psychosis. With the potential for further expansion into other indications, Cobenfy could have a major impact on the treatment landscape for these diseases in the coming years.
