FDA approves Bristol Myers Squibb’s schizophrenia drug

The Food and Drug Administration gave approval Thursday Bristol Myers SquibbCobenfy, the highly anticipated schizophrenia drug, is the first novel treatment for the debilitating, chronic mental disorder in more than seven decades.

Schizophrenia affects the way a person thinks, feels, and behaves and can cause paranoia, delusions, hallucinations, and changes in emotions, movements, and behavior. These symptoms can interfere with a patient’s daily life, making it difficult for them to go to school or work, socialize, and perform other daily activities. Most people are diagnosed in their late teens to early 30s.

Bristol Myers Squibb expects the twice-daily pill, 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 3 million adults in the U.S. living with schizophrenia, some medical experts say.

Only 1.6 million of these patients are treated for the disease and 75% of them stop taking it According to the drug manufacturer, they stop taking medications for the first 18 months because they have difficulty finding treatments that are effective or easily tolerated for them.

Cobenfy could also represent a huge long-term revenue opportunity for Bristol Myers Squibb, which is under pressure to offset potential lost sales from top-selling treatments whose patents are expiring. The drug comes from the whopping $14 billion acquisition of biotech company Karuna Therapeutics late last year.

In a July research note, Guggenheim analysts said they view Cobenfy as a “longer-term, multibillion-dollar opportunity” for the company. However, they said the drug will likely be slow to come to market, so it may not make a significant contribution to Bristol Myers Squibb’s sales in 2024 and 2025.

“I think there may be a truly transformative moment in the way we treat and talk about schizophrenia. And what you have, unfortunately, is an often disadvantaged population that doesn’t get the attention it deserves from a research and health perspective,” Andrew Miller, founder and former president of research and development at 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 given nurses and doctors another tool to use.”

Cobenfy will cost $1,850 for a month’s supply, or $22,500 a year without insurance and other discounts, Bristol Myers Squibb executives said.

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

The company plans to launch a program to help patients afford Cobenfy, executives added.

It is still unclear to what extent this program will improve access for people without insurance.

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

Existing schizophrenia medications work by directly blocking dopamine receptors in the brain, generally improving patients’ symptoms.

However, they come with a long list of serious potential side effects that may cause patients to discontinue 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 approved treatment of a new class of drugs that does not directly block dopamine to improve symptoms of schizophrenia, Dr. Bristol Myers Squibb Chief Medical Officer Samit Hirawat 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 and reduces the gastrointestinal side effects associated with xanomeline, such as nausea, vomiting, diarrhea and constipation.

“The majority of these patients have already taken one or two of these products,” Adam Lenkowsky, chief commercialization officer of Bristol Myers Squibb, told CNBC. “The enthusiasm we are hearing from physicians is the possibility of a patient receiving a treatment without noticing the side effects, but also achieving unprecedented effectiveness.”

Lenkowsky said the company expects Cobenfy to 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 other existing treatments and failed, said 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 need to try X number of antipsychotics first. But I know from experience in a hospital that this probably has to happen primarily because of cost,” said Vadiei, a clinical psychiatric pharmacist who treats patients with schizophrenia at San Antonio State Hospital.

The approval was based on data from three clinical trials that compared Cobenfy with a placebo, as well as two longer-term studies that examined 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 and significantly reduced symptoms of schizophrenia compared to a placebo.

In the studies, Cobenfy mostly resulted in mild to moderate side effects that were primarily gastrointestinal and subsided 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 evaluating Cobenfy’s potential in treating Alzheimer’s patients with psychosis. Bristol Myers Squibb said it expects to publish 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 in one product … because we are developing the drug not only for schizophrenia, but also for six other indications,” Hirawat said, pointing to other possible uses for the drug.

— CNBC’s Angelica Peebles contributed to this report.