Bristol Myers Squibb's (BMY, Financial) new schizophrenia drug, Cobenfy, has been approved by the FDA. This innovative medication lacks the common side effects associated with other antipsychotic drugs. Market projections suggest that Cobenfy's sales could reach $2.8 billion by 2028, with peak sales potentially hitting $6 billion.
According to the World Health Organization, there were approximately 24 million schizophrenia patients globally in 2022. Expert market research estimates that the market for schizophrenia treatments will grow from $8.18 billion in 2023 to $12.97 billion by 2032, at a compound annual growth rate of 5.26%.
As of now, Bristol Myers Squibb's stock price has increased by 1.6%. However, since the beginning of January 2023, its sales have only grown by 1%, and the stock price has dropped around 25% from $67 to $50. In contrast, the S&P 500 index has risen approximately 50% during the same period.
Cobenfy's FDA approval is expected to offer some relief to the underperforming stock. Additionally, Bristol Myers Squibb has spent around $24 billion this year on acquisitions, including Mirati Therapeutics, RayzeBio, and Karuna Therapeutics, strengthening its research pipeline with over 50 drugs in development.
Forbes magazine considers the $24 billion spent on acquisitions well-justified, given Cobenfy's potential annual sales of $6 billion. They predict that Bristol Myers Squibb's earnings growth will rebound starting in 2025. The company’s earnings per share are expected to drop to $0.76 in 2024 from $7.51 last year but should bounce back to $7.30 by 2025.
