Bristol Myers Squibb says Alzheimer's is the biggest market for new schizophrenia drug

Bristol Myers Squibb believes Alzheimer’s is the largest market for its newly approved schizophrenia drug, Cobenfy, which it expects to eventually generate billions of dollars in revenue.

In an interview, company executives said each treatment use they are studying for Cobenfy has multibillion dollar potential, including Alzheimer’s disease psychosis, Alzheimer’s agitation and Alzheimer’s cognition, bipolar disease and autism. But Alzheimer’s is the “really large market here,” Bristol Myers Squibb CFO David Elkins told CNBC on Tuesday at the JPMorgan Health Care Conference in San Francisco.

There are nearly 6 million patients in the U.S. with Alzheimer’s, and around half of them have psychosis, or symptoms such as hallucinations and delusions, Elkins said. Cobenfy could be the first drug specifically approved for Alzheimer’s-related psychosis, said Chief Commercialization Officer Adam Lenkowsky. 

Atypical antipsychotics – medication used to treat a range of psychiatric disorders – are often used to treat psychosis in Alzheimer’s patients even though they are not approved for that purpose. But those treatments can increase the risk of death, and Cobenfy does not, according to Bristol Myers Squibb. 

Meanwhile, Alzheimer’s agitation, a symptom that can cause a patient to feel restless and worried, is estimated to affect around 60% to 70% of patients with the disease, according to some studies. 

Bristol Myers Squibb on Monday said it plans to release initial late-stage trial data for Cobenfy in Alzheimer’s-related psychosis treatment during the latter part of the year, which is earlier than expected. The company also expects to start phase three trials in Alzheimer’s agitation, Alzheimer’s cognition and bipolar disorder in 2025, while studies in autism will begin in 2026. 

JPMorgan analyst Chris Schott expects Cobenfy sales to reach about $5 billion by 2030, with a peak sales potential in the $10 billion range across multiple treatment uses, according to a research note on Tuesday. That is a huge boon to Bristol Myers Squibb as it faces pressure to offset the potential loss of revenue from top-selling treatments that will see their patents expire. 

It’s a full-circle moment for Cobenfy, which became the first novel type of treatment for the roughly 3 million U.S. adults with schizophrenia in decades after it won approval in September. The drug comes from Bristol Myers Squibb’s whopping $14 billion acquisition of biotech company Karuna Therapeutics at the end of 2023. 

But the drug’s roots are in treating Alzheimer’s.

Eli Lilly originally tested one part of the drug – xanomeline – in the 1990s to reduce cognitive decline before shelving it due to severe side effects such as nausea, vomiting, diarrhea and constipation. Xanomeline activates certain so-called muscarinic receptors in the brain to decrease dopamine activity without causing the side effects associated with antipsychotics. 

Andrew Miller, founder and former president of research and development of Karuna Therapeutics and now an advisor to Bristol Myers Squibb, saw xanomeline’s potential in neuroscience and theorized combining xanomeline with a second existing medication – trospium – to reduce those side effects. He went on to launch Karuna to develop the combination as a schizophrenia treatment.

Other breakthrough treatments for Alzheimer’s recently entered the market, including Biogen and Eisai’s Leqembi and Eli Lilly‘s Kisunla. Those treatments work in part by clearing toxic plaques in the brain called amyloid, a hallmark of Alzheimer’s, to slow the decline in memory and thinking in patients in the earliest stages of Alzheimer’s 

But as people progress through their disease, they experience symptoms such as psychosis and agitation, Bristol Myers Squibb’s Elkins said. 

“That’s where Cobenfy fits it,” he said. “If you can get rid of the psychosis, the agitation, people’s cognition improves. Just imagine for the caregivers and health-care system overall, how impactful this drug could be for those patients and their loved ones. It’s really exciting when you think about it in that context.”