Bristol Myers' Schizophrenia Drug Cobenfy Fails Key Clinical Trial

Bristol Myers Squibb's recently acquired schizophrenia drug Cobenfy has failed to meet its primary endpoint in a late-stage clinical trial, casting doubt on the medication's potential as an adjunctive treatment and impacting its commercial outlook. The setback comes just over a year after Bristol Myers completed a $14 billion acquisition to obtain the drug.

Trial Results and Implications

In a study involving nearly 400 participants, Cobenfy did not demonstrate statistically significant improvement when used as an add-on to atypical antipsychotics for schizophrenia treatment. The trial measured symptom severity using a 210-point scale, with Cobenfy showing only a marginal 2-point advantage over placebo.

Dr. Husseini Manji, a professor at Oxford University and co-chair of the U.K. government's Mental Health Goals program, commented on the challenges of the study: "When patients are already receiving treatment, demonstrating additional statistical benefit becomes inherently more difficult." Despite the disappointment, Dr. Manji suggested that the data warranted further investigation.

Bristol Myers plans to conduct additional analyses of the results and discuss them with regulators and the medical community. The company also intends to present more detailed findings at an upcoming medical conference.

Financial Impact and Analyst Reactions

The trial failure has prompted some Wall Street analysts to significantly reduce their sales forecasts for Cobenfy. David Risinger of Leerink Partners slashed his 2030 revenue projection from $5.8 billion to $2.6 billion, citing concerns about the drug's efficacy. Similarly, Sean McCutcheon from Raymond James lowered his estimates and removed the adjunctive schizophrenia opportunity from his model.

However, not all analysts share this pessimistic outlook. William Blair analyst Matt Phipps still sees a "significant commercial opportunity" for Cobenfy in schizophrenia and potentially in Alzheimer's psychosis. Carter Gould of Cantor Fitzgerald argues that the trial's outcome may not be as dire as it appears, noting that Bristol Myers reported underlying trends favoring Cobenfy.

Future Prospects and Ongoing Research

Despite this setback, Cobenfy remains a critical component of Bristol Myers' portfolio, especially as the company faces upcoming patent expirations for blockbuster drugs Eliquis and Opdivo. The pharmaceutical giant is continuing to explore Cobenfy's potential in other indications, including bipolar disorder, autism spectrum disorder, and Alzheimer's-related symptoms.

The trial results have raised concerns about Cobenfy's chances of success in these other areas. However, some industry experts believe that psychiatrists may continue to prescribe the drug for schizophrenia, even without the additional approval as an adjunctive treatment.

As the pharmaceutical community digests these results, all eyes will be on Bristol Myers' next moves and the potential impact on the company's long-term strategy in the neuroscience sector.