AbbVie's Phase 2 clinical trial of emraclidine, an oral monotherapy for schizophrenia, failed to meet its primary endpoint, showing no statistically significant improvement compared to placebo. This outcome has significant implications for the competitive landscape of schizophrenia treatments, particularly benefiting Bristol Myers Squibb's (BMS) newly approved drug, Cobenfy.
Impact on Market Competition
Analysts from Cantor and Truist Securities suggest that AbbVie's setback removes a major competitive overhang for BMS's Cobenfy (formerly KarXT). Olivia Brayer, an analyst at Cantor, noted that an outright failure of emraclidine was unexpected, stating, "Bristol all along has been very vocal about the positive implications from dual targeting M1/M4, and after today, it looks like BMY chose right."
Srikripa Devarakonda, a Truist Securities analyst, summarized the situation as "ABBV's pain is BMY's gain," highlighting the reduced commercial competition for Cobenfy.
Cobenfy's Position and Potential
Cobenfy, approved by the FDA in September, employs a novel mechanism by selectively targeting M1 and M4 receptors in the brain without blocking D2 receptors. This approach differentiates it from traditional antipsychotics and has been positively received. Cantor estimates peak Cobenfy sales could exceed $5 billion, with a significant portion derived from schizophrenia treatment.
Brayer added, "Our guess is Cobenfy could be a [$more than$] $5B franchise, especially if things go well in adjunctive schizophrenia (data in 2025) and Alzheimer's psychosis (data in 2026)."
Broader Implications for Neurocrine Biosciences
The failure of AbbVie's emraclidine trial may also positively influence Neurocrine Biosciences, according to Evercore ISI analyst Cory Kasimov. If Neurocrine can successfully navigate its Phase 3 program for a schizophrenia drug, it could capitalize on the altered competitive landscape. However, Kasimov cautioned, "As demonstrated yet again today, neuro is hard. Really, really hard."
Market Response
Following the announcement, Bristol Myers Squibb's stock (BMY) initially surged, reflecting investor optimism. Conversely, AbbVie's shares (ABBV) experienced a decline. Neurocrine Biosciences (NBIX) also saw a slight increase in its stock value.
