Schizophrenia drug market for Alzheimer's is the largest for Bristol Myers Squibb.

• The newly approved schizophrenia drug, Cobenfy, has the potential to generate billions of dollars in sales across different uses, with Alzheimer's treatment being the largest market for Bristol Myers Squibb.
• Alzheimer's disease, psychosis, agitation, and cognition, as well as bipolar disease and autism, each have multibillion dollar potential, according to company executives studying various treatment types.
• Alzheimer's-related psychosis trial data from Bristol Myers Squibb will be released earlier than expected, with initial late-stage trial data being made available in the latter part of the year.

Cobenfy, the newly approved schizophrenia drug by the company, is expected to generate billions of dollars in revenue, with Alzheimer's being the largest market for it.

According to company executives, each treatment use being studied for Cobenfy has the potential to generate multibillion dollars in revenue, including those related to Alzheimer's disease, bipolar disease, and autism. However, Alzheimer's disease is considered the largest market opportunity among these treatment uses, as stated by Bristol Myers Squibb CFO David Elkins during an interview with CNBC at the JPMorgan Health Care Conference in San Francisco on Tuesday.

Nearly 6 million patients in the U.S. have Alzheimer's, and approximately half of them experience psychosis, such as hallucinations and delusions, according to Elkins. Cobenfy could be the first drug to receive approval for treating Alzheimer's-related psychosis, said Adam Lenkowsky, Chief Commercialization Officer.

Although not approved for treating psychosis in Alzheimer's patients, atypical antipsychotics are often used for this purpose. However, these treatments can increase the risk of death. In contrast, Cobenfy does not pose such risks, as stated by Bristol Myers Squibb.

Some studies estimate that approximately 60% to 70% of Alzheimer's patients experience agitation, which can manifest as restlessness and anxiety.

Bristol Myers Squibb has announced that it plans to release initial late-stage trial data for Cobenfy in Alzheimer's-related psychosis treatment earlier than expected, during the latter part of the year. Additionally, the company expects to start phase three trials in Alzheimer's agitation, Alzheimer's cognition, and bipolar disorder in 2025, while studies in autism will begin in 2026.

According to a research note on Tuesday, JPMorgan analyst Chris Schott predicts that Cobenfy sales will reach approximately $5 billion by 2030, with a peak sales potential of $10 billion across various treatment uses. This is a significant advantage for Bristol Myers Squibb, which is under pressure to replace revenue from top-selling treatments that will lose their patents.

In September, Cobenfy became the first new treatment option for the 3 million U.S. adults with schizophrenia in many years after being approved. This drug was acquired by Bristol Myers Squibb for $14 billion in the acquisition of biotech company Karuna Therapeutics at the end of 2023.

But the drug's roots are in treating Alzheimer's.

In the 1990s, Eli Lilly tested xanomeline, a drug that activates muscarinic receptors in the brain to decrease dopamine activity, as a potential treatment for cognitive decline. However, the drug was shelved due to severe side effects such as nausea, vomiting, diarrhea, and constipation.

Andrew Miller, a former president of research and development at Karuna Therapeutics and now an advisor to Bristol Myers Squibb, recognized xanomeline's potential in neuroscience and hypothesized that combining it with a second existing medication, trospium, could reduce side effects. He subsequently founded Karuna to develop the combination as a treatment for schizophrenia.

New treatments for Alzheimer's have emerged, such as Leqembi and Kisunla. These treatments target the removal of amyloid plaques in the brain, which are a hallmark of Alzheimer's disease. By doing so, they help slow the decline in memory and thinking in patients with early-stage Alzheimer's.

As their disease progresses, individuals may experience symptoms such as psychosis and agitation, according to Elkins of Bristol Myers Squibb.

"By eliminating psychosis and agitation, Cobenfy can significantly improve patients' cognition. This drug has the potential to greatly benefit caregivers and the healthcare system as a whole. Considering the impact it could have on patients and their loved ones, it's truly an exciting prospect."