Bristol Myers Squibb receives FDA approval for the first new schizophrenia drug in 30 years

The Food and Drug Administration (FDA) approved Bristol Myers Squibb's schizophrenia drug Cobenfy on Thursday, the first newly approved drug for the disease in about 30 years.

The drug, a combination of xanomeline and trospium chloride taken orally, is an antipsychotic that targets cholinergic receptors rather than the dopamine receptors targeted by current medications, the FDA noted in a news release.

Tiffany Farchione, director of the Division of Psychiatry, Office of Neuroscience in the FDA's Center for Drug Evaluation of Research, noted in a statement that schizophrenia is a leading cause of disability worldwide.

“This drug is the first new approach to treating schizophrenia in decades,” she said. “This approval offers a new alternative to the antipsychotics previously prescribed to people with schizophrenia.”

In a note Friday, analysts at JP Morgan noted that Cobenfy is largely clean-labeled and does not contain a black box common to antipsychotics. An FDA black box label indicates a warning that the drug could cause side effects.

Cobenfy will have a list price of $22,500 per year, but Bristol Myers Squibb expects 80% of eligible patients will be covered by Medicare and Medicaid.

All state Medicaid plans would cover the drug, analysts wrote, but building that coverage could take up to six months or longer.

“With this in mind, we expect Cobenfy to be widely covered by mid-2025 and anticipate strong acceptance among physicians awaiting the muscarinic acid class of drugs, which offer the first new mechanism in this area in recent history and “To largely avoid the serious metabolic side effects associated with topical agents,” they wrote.

The approval also suggests an opportunity in the market for other schizophrenia drugs, analysts said. There are around 2.8 million people living with schizophrenia in the USA and up to 24 million people worldwide.

“[W]“We believe the market is large enough to support multiple drugs valued at over $5 billion over time,” the analysts wrote.

A potential competitor is emraclidine, an antipsychotic drug being studied to treat schizophrenia and Alzheimer's disease. It is being developed by Cerevel Therapeutics, which was acquired by AbbVie in August, and Phase II data is expected within the next six months.