Absence of Black Box Warning For Bristol Myers' Schizophrenia Treatment Could Enhance Alzheimer's Psychosis Potential

On Thursday, the FDA approved Bristol Myers Squibb & Co’s BMY Cobenfy (xanomeline and trospium chloride, KarXT), an oral medication for schizophrenia in adults.

BMO Capital analyst notes that the FDA approval without a boxed warning is a significant positive for Bristol Myers shares.

The analyst notes that given that many prior antipsychotic medications received black box warnings due to increased mortality risks, particularly in elderly patients, Cobenfy’s absence of such a warning could significantly enhance its potential in treating Alzheimer’s related-psychosis, pending further clinical trials.

BMO projects peak sales of $2.4 billion for Cobenfy in schizophrenia and $3.9 billion in Alzheimer’s related-psychosis, raising the price target to $53 from $48, with a Market Perform rating.

The analyst notes that Cobenfy will be priced at $1,850 for a 30-day supply or $22,500/year, representing a discount to previous expectations.

Truist Securities highlights that AbbVie Inc ABBV is also advancing emraclidine as a treatment for schizophrenia and Alzheimer’s disease-related psychosis.

According to Truist analysts, emraclidine differs from KarXT in its mechanism of action.

Despite emerging competition, Truist points out that KarXT holds a first-mover advantage and is ahead by at least two to three years.

Truist maintains the Buy rating and a price target of $62.

William Blair projects peak U.S. sales for Cobenfy to reach approximately $2 billion by 2030, driven solely by its use in treating schizophrenia.

However, if the drug is approved for additional indications, such as Alzheimer-related psychosis and adjunctive schizophrenia—both currently in Phase 3 trials—annual sales could rise to around $3 billion to $5 billion, pending positive results.

The analyst points out that although the label lacks a black box warning, it does include caution for urinary retention, elevated heart rate, reduced gastric motility, and angioedema.

Price Action: BMY stock is up 2.33% at $51.29 at the last check on Friday.

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