Bristol Myers Gets US Nod for First New Schizophrenia Drug Type in Decades

Bristol Myers Squibb Co. gained US approval for the first new type of schizophrenia drug in seven decades, opening a fresh avenue of treatment for millions with the serious mental disorder.

The medication, to be sold under the name Cobenfy, gained Food and Drug Administration clearance Thursday to treat patients with the illness that often produces hallucinations and delusions.

The approval is a win for Bristol, which made a big bet when it agreed to buy Karuna Therapeutics for $14 billion last year to bring in the treatment. If commercially successful, the product could help Bristol answer difficult questions about its future as key drugs face stiff competition and new pricing pressure. Two of its biggest sellers — the blood-thinner Eliquis and cancer immunotherapy Opdivo — will lose patent exclusivity in the coming years.

The new schizophrenia treatment could change how investors think of a company largely known for cancer therapies, said Samit Hirawat, Bristol’s chief medical officer. The approval “puts us on the map that we’re not just an oncology company,” he said.

Analysts estimate the twice-daily pill, also known as KarXT, will generate $1 billion in annual revenue by 2027. The drug was cleared without a black box warning — the FDA’s strongest caution for severe side effects. All other antipsychotic treatments for schizophrenia carry such warnings, Jefferies analyst Akash Tewari said in a note Wednesday, and avoiding one would be “an important differentiator.”

Getting the government to pay for the drug will be critical to its success. About 80% of US schizophrenia patients get their health care through the Medicare or Medicaid health programs — a greater share than many other drugs, said Adam Lenkowsky, Bristol’s chief commercialization officer.

Bristol said the monthly wholesale acquisition cost for Cobenfy is $1,850, though how much patients pay out of pocket will vary based on factors like insurance coverage. Patients on Medicaid, for example, are expected to pay less than $10 for a month’s supply, the company said.

Schizophrenia typically shows up during the late teens and early 20s. Because the symptoms overlap with other conditions, like post-traumatic stress disorder or bipolar disorder, many patients are initially misdiagnosed. An estimated 2.8 million US adults and 24 million people worldwide have the condition.

New Approach

For decades, schizophrenia treatments largely focused on dopamine receptors that affect movement, emotions and the brain’s reward system. But many people don’t respond to those drugs, and due to side effects like weight gain and drowsiness, less than half of patients keep taking them.

— With assistance from Bill Haubert