Bristol Myers Squibb believes Alzheimer's is the largest marketplace for its newly approved schizophrenia drug, Cobenfywhich is predicted to ultimately generate billions of dollars in revenue.

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

There are nearly 6 million patients with Alzheimer's disease within the U.S., and about half of them suffer from psychosis or symptoms comparable to hallucinations and delusions, Elkins said. Cobenfy might be the primary drug approved specifically for Alzheimer's-related psychosis, Chief Commercialization said Officer Adam Lenkowsky.

Atypical antipsychotics – drugs used to treat various psychiatric disorders – are sometimes used to treat psychosis in Alzheimer's patients, although they aren’t approved for this purpose. However, based on Bristol Myers Squibb, these treatments can increase the chance of death, which shouldn’t be the case with Cobenfy.

It is now estimated that roughly 60 to 70% of patients are affected by Alzheimer's agitation, a symptom that may cause a patient to feel restless and anxious some studies.

Bristol Myers Squibb said Monday that it plans to publish initial trial data on Cobenfy within the treatment of Alzheimer's-related psychosis within the second half of the 12 months, sooner than expected. The company also expects to start Phase 3 trials in Alzheimer's agitation, Alzheimer's cognition and bipolar disorder in 2025, while trials in autism will begin in 2026.

JPMorgan analyst Chris Schott expects Cobenfy sales to succeed in about $5 billion by 2030, with peak sales potential within the $10 billion range for various treatment applications, based on a research note Tuesday. That's an enormous boon for Bristol Myers Squibb as the corporate faces pressure to offset potential lost sales of top-selling treatments whose patents are expiring.

This brings Cobenfy full circle, which, when approved in September, became the primary novel treatment for the roughly 3 million U.S. adults with schizophrenia in many years. The drug comes from Bristol Myers Squibb's whopping $14 billion acquisition of biotech company Karuna Therapeutics in late 2023.

However, the drug's roots lie within the treatment of Alzheimer's disease.

Eli Lilly originally tested a part of the drug – xanomeline – within the Nineties to scale back cognitive decline before shelving it resulting from serious unintended effects including nausea, vomiting, diarrhea and constipation. Xanomeline prompts certain so-called muscarinic receptors within the brain to scale back dopamine activity without causing the unintended effects related to antipsychotics.

Andrew Miller, founder and former president of research and development at Karuna Therapeutics and now an advisor to Bristol Myers Squibb, recognized xanomeline's potential in neuroscience and theorized that combining xanomeline with a second existing drug – trospium – would scale back these unintended effects. He then founded Karuna to develop the mixture to treat schizophrenia.

Other groundbreaking treatments for Alzheimer's have recently come to market, including: Biogenic And Eisai's Lekmbi and Eli LillyThis is Kisunla. These treatments work partly by eliminating toxic plaques within the brain called amyloid, an indicator of Alzheimer's, to slow the decline in memory and pondering skills in patients with early Alzheimer's disease

But because the disease progresses, people experience symptoms comparable to psychosis and agitation, said Elkins of Bristol Myers Squibb.

“Cobenfy fits here,” he said. “If you may do away with the psychosis and the restlessness, people's perception improves. Imagine how impactful this drug might be for caregivers and the healthcare system as a complete for these patients and their families. It's really exciting when you concentrate on it on this context.

The Food and Drug Administration gave approval Thursday Bristol Myers Squibbis eagerly awaited Schizophrenia drug Cobenfy, the primary novel treatment for the debilitating, chronic mental disorder in greater than seven many years.

schizophrenia affects how an individual thinks, feels and behaves and may cause paranoia, delusions, hallucinations and changes in emotions, movements and behavior. These symptoms can interfere with a patient's each day life, making it difficult for them to go to high school or work, socialize, and perform other each day activities. Most individuals are diagnosed from late teens to early 30s.

Bristol Myers Squibb expects the twice-daily pill to be sold under the brand name Cobenfymust be available in late October, executives told CNBC. The drug is a much-needed latest option for the nearly 3 million adults within the U.S. living with schizophrenia, some medical examiners say.

Only 1.6 million of those patients are treated for the disease and 75% of them stop taking it According to the drug manufacturer, they stop taking medications for the primary 18 months because they’ve difficulty finding treatments which are effective or easily tolerated for them.

Cobenfy could also represent an enormous long-term revenue opportunity for Bristol Myers Squibb, which is under pressure to offset potential lost sales of top-selling treatments whose patents are expiring. The drug comes from the whopping $14 billion acquisition of biotech company Karuna Therapeutics late last 12 months.

In a July research note, Guggenheim analysts said they view Cobenfy as a “longer-term, multibillion-dollar opportunity” for the corporate. However, they said the drug will likely be slow to return to market, so it could not make a big 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 – called antipsychotic treatments – with lower list prices, especially generic knockoffs of brand name treatments. For example, patients without health insurance can get the generic version of an antipsychotic called Abilify for as little as $100,000 $16 for 30 tablets once daily with free vouchers 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. Around a third of the people According to WebMD, patients with schizophrenia are also resistant to conventional antipsychotic treatments.

Cobenfy is the first drug approved in a new class of drugs that do not directly block dopamine to improve the 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 corporate expects Cobenfy to eventually turn out to be the usual treatment for schizophrenia as doctors learn more in regards to the drug and turn out to be more comfortable prescribing it to patients.

But the value could limit the drug's use to patients who’ve already tried other existing treatments and failed, said Nina Vadiei, clinical associate professor of pharmacotherapy and translational sciences on 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 the 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.

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