FDA Approves Bristol Myers Squibb’s Schizophrenia Drug

The Food and Drug Administration approved it Thursday Bristol Myers Squibb‘s long-awaited schizophrenia drug Cobenfy, the first new type of treatment for the debilitating, chronic mental disorder in more than seventy years.

Schizophrenia affects how a person thinks, feels and behaves, and can cause paranoia, delusions, hallucinations and changes in emotions, movements and behavior. These symptoms can disrupt a patient’s daily life, making it difficult to go to school or work, socialize, and perform other daily activities. Most people are diagnosed in their late teens to early thirties.

Bristol Myers Squibb expects the twice-daily pill, which will be sold under the brand name Cobenfy, to be available in late October, executives told CNBC. The drug is a much-needed new option for the nearly three million U.S. adults living with schizophrenia, some medical experts say.

Only 1.6 million of these patients are treated for the condition and 75% of them stop treatment existing medications in the first 18 months as they struggle to find treatments that are effective or easy to tolerate, the drugmaker said.

Cobenfy could also be a huge long-term sales opportunity for Bristol Myers Squibb, which is under pressure to offset the potential loss of revenue from its top-selling treatments that are causing their patents to expire. The drug comes from the $14 billion acquisition of biotech company Karuna Therapeutics late last year.

In a July research note, Guggenheim analysts said they see Cobenfy as a “long-term, multi-billion dollar opportunity” for the company. But they said the drug will likely have a slow launch, so it may not be a meaningful contributor to Bristol Myers Squibb’s revenue in 2024 and 2025.

“I think there is potentially a very transformative moment in the way we treat and talk about schizophrenia. And what you have, unfortunately, is an often underserved population that is not getting the attention that they deserve from a research and health care perspective,” Andrew Miller , founder and former president of research and development of Karuna Therapeutics and now an advisor to Bristol Myers Squibb, told CNBC.

“I think the most important moment will be in five or 10 years, when we look back and say we actually made a difference,” he continued. “We’ve helped people, we’ve improved outcomes, we’ve provided healthcare providers and physicians with another tool that they can use.”

Cobenfy costs $1,850 for a month’s supply or $22,500 per year, excluding insurance and other discounts, Bristol Myers Squibb executives said.

They said the pricing is in line with existing brand-name drugs for oral schizophrenia and that they expect most patients, especially those enrolled in Medicare and Medicaid plans, will have minimal out-of-pocket costs for the drug. According to Bristol Myers Squibb, about 80% of patients with the condition are covered by government insurance.

The company plans to launch a program aimed at helping patients afford Cobenfy, executives added.

It’s still unclear how much that program will increase access for people without insurance.

Cobenfy will have to compete with some existing schizophrenia medications — called antipsychotic treatments — with lower list prices, especially generic copycats of brand-name treatments. For example, patients without insurance can get the generic version of an antipsychotic treatment called Abilify for as little as $16 for 30 once-daily tablets with free coupons from GoodRx.

Existing medications for schizophrenia work by directly blocking dopamine receptors in the brain, which typically improves symptoms in patients.

But they come with a long list of serious potential side effects that could cause patients to stop treatment, including weight gain, excessive fatigue and involuntary, uncontrollable movements. According to WebMD, about a third of people with schizophrenia are also resistant to conventional antipsychotic treatments.

Cobenfy is the first treatment approved for a new class of medications that do not directly block dopamine to improve symptoms of schizophrenia, Dr. Samit Hirawat, chief medical officer of Bristol Myers Squibb, told CNBC.

He said part of Cobenfy is a drug called xanomeline, which activates certain so-called muscarinic receptors in the brain to reduce dopamine activity without causing the side effects associated with antipsychotics. The second part of Cobenfy is called trospium, which reduces the gastrointestinal side effects associated with xanomeline, such as nausea, vomiting, diarrhea and constipation.

“The majority of these patients have already cycled one or two of these products,” Adam Lenkowsky, chief commercialization officer of Bristol Myers Squibb, told CNBC. “So the excitement we hear from doctors is the possibility of having a patient start treatment without seeing the side effects, but also getting unprecedented efficacy.”

Lenkowsky said the company expects Cobenfy will eventually become the standard treatment for schizophrenia as doctors learn more about the drug and become more comfortable prescribing it to patients.

But the price could limit the drug’s use to patients who have already tried and failed other existing treatments, says Nina Vadiei, clinical associate professor of pharmacotherapy and translational sciences at the University of Texas at Austin College of Pharmacy.

“If it were up to me, I wouldn’t necessarily say we should try X number of antipsychotics first. But I know from experience in a hospital setting that that’s probably what will have to happen, mainly because of the cost.” said Vadiei, a clinical psychiatric pharmacist who sees patients with schizophrenia at San Antonio State Hospital.

The approval was based on data from three clinical trials comparing Cobenfy with a placebo, as well as two longer-term studies examining how safe and tolerable the drug is for up to one year. According to Bristol Myers Squibb, Cobenfy met the main goal of the three studies: significantly reducing the symptoms of schizophrenia compared to a placebo.

In the studies, Cobenfy usually led to mild to moderate side effects, which were mainly gastrointestinal and resolved over time, Miller said.

Bristol Myers Squibb said Thursday’s approval for schizophrenia may be just the beginning for Cobenfy.

For example, the company has ongoing late-stage clinical trials investigating Cobenfy’s potential in treating Alzheimer’s disease patients with psychosis. Bristol Myers Squibb said it expects to release data from these studies in 2026.

The company also plans to study Cobenfy’s potential to treat bipolar mania and irritability associated with autism.

“When we think of Cobenfy, we think of it as multiple indications wrapped into one product… because we are actually developing the drug not only for schizophrenia, but also for six other indications,” Hirawat said, referring to other potential applications of the drug .

— CNBC’s Angelica Peebles contributed to this report.