Schizophrenia drug Cobenfy, a key component in Bristol Myers Squibb’s plan to navigate a transition period of major loss of exclusivity, has hit a phase 3 setback.

Cobenfy as an adjunctive treatment to atypical antipsychotics failed to show superior efficacy versus placebo with atypicals when used in patients with inadequately controlled schizophrenia, according to results from the phase 3 Arise trial, Bristol Myers said Tuesday.

The trial logged a numerical improvement, with adjunctive Cobenfy showing a 2-point reduction compared with placebo on the primary endpoint of reduction in the Positive and Negative Syndrome Scale (PANSS) total score at week 6. However, the number didn’t reach statistical significance. PANSS is a clinician-administered tool used to assess schizophrenia symptoms.

Approved by the FDA to treat schizophrenia in September 2024, Cobenfy boasts a novel mechanism, targeting cholinergic receptors rather than dopamine receptors. The drug was the centerpiece in BMS’ $14 billion acquisition of Karuna Therapeutics, and it’s one of the most closely watched blockbuster hopefuls in the Big Pharma company’s portfolio.

However, following the Arise trial flop, Leerink Partners analysts have dramatically lowered their 2030 sales estimate for Cobenfy from $5.8 billion to $2.6 billion.

Removal of the adjunctive treatment indication is just one element. The Leerink team argued that the failure “demonstrates that Cobenfy’s efficacy is modest,” and that a twice-daily antipsychotic with modest efficacy has “far less potential” than originally thought.

Analysts at Citi appeared less concerned. While the Citi team lowered its Cobenfy 2030 sales estimate by $600 million to $2.8 billion to reflect the eliminated adjunctive opportunity, the analysts suggested that it’s still possible for Cobenfy to reach over $5 billion in annual sales with the help of additional indications.

One such indication could be Alzheimer’s disease psychosis, in which Jefferies analyst Akash Tewari sees potential for Cobenfy to hit $4 billion in peak sales alone. In that area, BMS expects readouts from the phase 3 Adept-2 trial this year, and from the Adept-1 and -4 studies in 2026.

Tewari argued that the Arise setback doesn’t necessarily bode ill for Cobenfy’s Adept readouts given the drug’s phase 2 performance in Alzheimer’s psychosis and how statistically “well-powered” the Adept-2 trial is.

To Tewari, Arise was a risky trial from the outset because there had not been any positive phase 3 trial in the adjunctive schizophrenia setting before. Besides, in its Tuesday release, BMS noted that Cobenfy appeared to have better efficacy in patients who were not on background risperidone. In those non-risperidone patients, Cobenfy led to a nominal 3.4 reduction in PANSS versus placebo.

Even with a negative trial, there could still be some off-label use of Cobenfy as an adjunct, Tewari noted, based on similar clinical practice of combining existing D2 agonists.

Nevertheless, the Arise trial marks another blow to BMS’ new drug portfolio in the span of days. Last week, BMS said its heart med Camzyos flunked in a non-obstructive hypertrophic cardiomyopathy (HCM) phase 3 trial.

Camzyos was the crown jewel in BMS’ $13.1 billion buyout of MyoKardia in 2020. Non-obstructive HCM represents about a third of the overall HCM market.

Following the negative readout, Leerink analysts lowered their 2030 Camzyos forecast from $3.1 billion to $2.6 billion.

BMS is counting on the likes of Cobenfy and Camzyos to steady the ship as several key legacy brands, including Revlimid, Pomalyst, Opdivo and Pfizer-partnered Eliquis, are losing patent protection this decade.