BMS Faces Setbacks as Cobenfy Disappoints in Schizophrenia Trial

Bristol Myers Squibb (BMS) encountered another significant hurdle in its clinical pipeline as its schizophrenia drug Cobenfy failed to meet primary endpoints in a late-stage trial. This setback, coupled with recent disappointments, has raised concerns about the pharmaceutical giant's development strategy and future growth prospects.

Cobenfy's Phase III ARISE Trial Results

Cobenfy, a muscarinic antipsychotic targeting M1 and M4 muscarinic acetylcholine receptors, fell short of expectations in the Phase III ARISE trial. The study evaluated Cobenfy as an adjunctive treatment alongside atypical antipsychotics in patients with schizophrenia. While the drug showed some improvement in symptom severity scores compared to placebo, the effect did not reach statistical significance.

The trial also missed important secondary outcomes, including improvements in personal and social performance. This disappointing result follows Cobenfy's FDA approval in September 2024, which marked the first novel therapy for schizophrenia in over three decades.

Impact on BMS's Pipeline and Market Position

The failure of Cobenfy in the ARISE trial represents BMS's second major setback in recent weeks. Previously, the company announced that Camzyos, its myosin inhibitor, failed to improve disease burden in non-obstructive hypertrophic cardiomyopathy patients.

These consecutive clinical disappointments have prompted analysts to reassess BMS's pipeline potential. Leerink Partners significantly lowered its long-term forecast for Cobenfy, projecting peak sales of $2.6 billion by 2030, down from an earlier estimate of $5.8 billion. This 55% reduction reflects growing skepticism about the drug's market potential.

BMO Capital Markets analysts referred to the Cobenfy news as "Strike 2?" highlighting the mounting challenges in BMS's clinical development efforts. The market responded swiftly, with BMS shares falling 5.9% in premarket trading following the announcement.

Future Outlook and Strategic Implications

Despite the setback, some analysts remain cautiously optimistic about Cobenfy's potential. William Blair estimates peak global sales of $3.7 billion for the drug in schizophrenia, suggesting that while the ARISE trial results may reduce near-term expectations, there could still be significant long-term value.

BMS acquired Cobenfy through its $14 billion purchase of Karuna Therapeutics in December 2023. The recent clinical failures raise questions about the company's acquisition strategy and its ability to effectively integrate and develop acquired assets.

As BMS navigates these challenges, the pharmaceutical industry will be closely watching how the company adjusts its R&D focus and pipeline priorities to maintain its competitive position in the market.