Does Cobenfy Have the Potential to Become a Top Drug for BMY?

Bristol Myers BMY won FDA approval for xanomelineand trospiumchloride (formerly KarXT), an oral medication for the treatment of schizophrenia in adults, in September 2024.

The drug was approved under the brand name Cobenfy.

The approval of Cobenfyfor schizophrenia broadens BMY’s portfolio and validates the acquisition of Karuna Therapeutics.

Cobenfy represents the first new pharmacological approach to treating schizophrenia in decades. The initial uptake is encouraging, with sales of $62 million in the first half of 2025. BMY expects sales to come in higher in the second half of the year than in the first half.

The company has ongoing registrational trials for Cobenfyin Alzheimer's disease patients. These include studies in Alzheimer's psychosis, agitation and cognition impairment. In addition, enrolment is ongoing in a phase III study in bipolar 1 disorder.

The drug is anticipated to become a meaningful growth driver for BMY’s top line as the company pursues label expansions across new indications.

However, BMY had earlier announced disappointing top-line results from the phase III ARISE study on schizophrenia drug Cobenfy. The study was evaluating the efficacy and safety of the drug as an adjunctive treatment to atypical antipsychotics in adults with inadequately controlled symptoms of schizophrenia. Treatment with Cobenfy as an adjunctive demonstrated a 2.0-point reduction in the Positive and Negative Syndrome Scale total score compared to placebo with an atypical antipsychotic at week six. However, this data did not reach the threshold for statistical significance for the primary endpoint.

BMY is banking on newer drugs to stabilize its revenue base as its legacy drugs face generic competition.

Competition for BMY’s Cobenfy

Developing treatments for diseases like schizophrenia is a complex affair.

AbbVie ABBV was evaluating emraclidine for schizophrenia. The candidate was added to ABBV’s pipeline through the Cerevelacquisition. However, in November 2024, AbbVie announced that its two phase II EMPOWER trials investigating emraclidineas a once-daily, oral monotherapy treatment for adults with schizophrenia who are experiencing an acute exacerbation of psychotic symptoms, did not meet their primary endpoint of showing a statistically significant reduction (improvement) in the change from baseline in the Positive and Negative Syndrome Scale total score compared to the placebo group at week 6.

ABBV is also evaluating emraclidinefor Alzheimer's disease psychosis.

Reviva Pharmaceuticals Holdings, Inc. RVPH is evaluating brilaroxazinein patients with schizophrenia. Revivarecently announced a positive full dataset and successful completion of the late-stage RECOVER open-label extension 1-year study evaluating the long-term safety, tolerability and efficacy of brilaroxazinein patients with schizophrenia.

RVPH plans to meet the FDA to discuss brilaroxazine’spath to approval in the fourth quarter of 2025.

BMY’s Price Performance, Valuation and Estimates

Shares of Bristol Myers have lost 14.5% year to date against the industry’s growth of 3.3%.

From a valuation standpoint, BMY is trading at a discount to the large-cap pharma industry. Going by the price/earnings ratio, BMY’s shares currently trade at 7.78x forward earnings, lower than its mean of 8.48x and the large-cap pharma industry’s 14.56X.

The bottom-line estimate for 2025 has moved up to $6.50 from $6.37 in the past 30 days, while that for 2026 has moved north to $6.07 from $6.02 in the same timeframe.

BMY currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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