By Elsa Ohlen
Bristol Myers Squibb stock jumped after the pharma company won approval for its new schizophrenia drug late Thursday.
"This drug takes the first new approach to schizophrenia treatment in decades," the Food and Drug Administration said.
The drug Cobenfy, previously known as KarXT, is one of an emerging class of drugs known as muscarinic receptor agonists that has drawn the interest of large pharmaceutical companies. It works differently than the drugs used by many Americans today to treat schizophrenia, which have side effects so serious that people often avoid taking them.
Existing drugs such as Thorazine and Seroquel treat schizophrenia symptoms by broadly blocking dopamine receptors, which can cause side effects such as drowsiness, muscle tremors and weight gain. Cobenfy wasn't associated with these common side effects in clinical trial which is a positive for Bristol.
Rival pharma company AbbVie is currently testing a drug, emraclidine, which works in a similar fashion as Cobenfy. Topline data is expected later this year.
Contrary to all antipsychotics currently in use, Cobenfy carries no black box warning -- the strongest warning required by the FDA, added when there are serious risks of adverse effects -- which was a key concern heading into the FDA decision, according to analysts at Mizuho. However, there were several unexpected warnings and precautions on Cobenfy's label, they added.
"We expect Cobenfy and potentially the class to transform the treatment landscape, given the robust efficacy and more benign safety/tolerability profile relative to atypical drugs, which currently dominate the market, " Mizuho analysts led by Uy Ear said.
While Bristol Myers has a significant first-mover advantage, AbbVie's drug emraclidine will likely have cleaner labels with fewer warnings, Uy Ear said. Truist analysts led by Srikripa Devarakonda noted Bristol is at least 2-3 years ahead of the competition. They have a Buy rating on the stock.
Neurocrine Biosciences is also developing a similar drug to treat schizophrenia. It released positive Phase 2 data in August and indicated that a late-stage clinical trial would begin in early 2025.
Schizophrenia affects nearly 24 million people worldwide, including 2.8 million people in the United States, according to Bristol. The company said it expects to make its newly approved drug available to patients by October for a list price of $1,850 a month.
Bristol Myers stock jumped 4.5% to $52.35 in premarket trading Friday after the announcement, among the top performers in the benchmark S&P 500 index.
AbbVie traded largely flat with a thin volume in the early premarket.
Write to Elsa Ohlen at elsa.ohlen@barrons.com
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(END) Dow Jones Newswires
September 27, 2024 08:50 ET (12:50 GMT)
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