On September 26, the field of schizophrenia ushered in a historic moment, when KarXT developed by Karuna was approved by the FDA for marketing. This means that Bristol-Myers Squibb’s tens of billions of bets have succeeded in their first battle. On December 22 last year, Bristol-Myers Squibb spent $14 billion to acquire Karuna for KarXT.

KarXT has been approved for marketing, and there is another winner - Zai Lab. Currently, Zai Lab owns the rights to KarXT in Greater China. Considering that there are more than 8 million schizophrenia patients in China, and the introduction cost of Zai Lab is not high, it is expected to obtain sufficient profits. Of course, all this can only be said to have settled, and is not surprising. Most of the existing schizophrenia treatments are old varieties approved in the 1990s. KarXT does not rely on dopaminergic or serotonergic pathways and is the first new mechanism drug in this field in decades. Different mechanisms mean that patients have more choices.

From the perspective of exploration, KarXT has indeed achieved significant clinical efficacy while reducing adverse reactions. A review published in The Lancet called KarXT "the most promising breakthrough in schizophrenia research in the past decade." Therefore, it is expected that KarXT will become a "changemaker". Even before it was approved, KarXT was already famous.

At the time of listing, Karuna's market value was less than US$700 million. However, with the gradual clinical advancement of KarXT and the positive data in the field of schizophrenia, the market value of Karuna has soared, once exceeding 10 billion US dollars. In the end, Bristol-Myers Squibb’s bid for its acquisition was US$14 billion.

Indeed, from the perspective of clinical demand, the schizophrenia market is a market worthy of big pharmaceutical companies’ bets. Schizophrenia is a severe, complex and debilitating mental health disorder characterized by a range of symptoms including delusions, hallucinations, disorganized speech or behavior, delayed speech and blunted affect. This patient population is extremely large. An analysis of data from 129 studies around the world showed that the global incidence of schizophrenia in 2016 was approximately 0.28%. This means that more than 20 million people worldwide are suffering from this disease.

According to a study initiated by the National Health Commission and the Ministry of Science, the domestic incidence rate appears to be higher, reaching 0.6% [1]. Based on a population of 1.4 billion, the number of domestic patients is about 8.4 million. For the patients themselves, this disease is a long-term and continuous torture, which not only endangers their physical and mental health, but also life safety; and for their families and society, this disease also brings a heavy burden. Because families need to take care of themselves and other measures, according to statistics, only 10% to 20% of schizophrenia patients can get a stable job, and most patients are not self-sufficient. Overall, patients with schizophrenia have extremely urgent treatment needs.

However, existing therapeutic drugs have shortcomings such as low compliance and insufficient coverage. Compliance is low because existing treatment drugs involve severe neurological and metabolic side effects, resulting in low patient compliance and difficulty in sustaining treatment. At present, schizophrenia is mainly treated with antipsychotic drugs, including first-generation (typical) antipsychotics, such as haloperidol and chlorpromazine, and second-generation (atypical) antipsychotics, such as risperidone, chlorpromazine, and chlorpromazine. Zapine and clozapine.

In terms of proportion, about 10% of patients use first-generation drugs as first-line treatment, while 90% of patients use second-generation drugs as first-line treatment. However, both types of drugs have major side effects, including male breast enlargement, weight gain, extrapyramidal symptoms, metabolic disorders, and cardiovascular and cerebrovascular diseases. This results in higher discontinuation rates. Data show that for patients treated with existing medications, the compliance rate within 18 months is about 60%, and the discontinuation rate is 74%. The recurrence rate of patients who discontinued the drug was very high, with a recurrence rate of 35% at one year.

Insufficient coverage is mainly caused by the following two reasons. First, some patients lack response to drug treatment, also known as "refractory schizophrenia". This group of patients accounts for 30%. Unfortunately, we still don’t know what the differences are between patients who respond to treatment and those who don’t. Second, there is a lack of effective treatments for negative symptoms. According to different symptoms, schizophrenia is divided into positive and negative groups. Because negative symptoms are not obvious, clinical development is more difficult. Currently, there are no effective drugs on the market for negative patients.

With a large patient population and clinical demand for new treatments, schizophrenia has naturally become a gold-mining area for big pharmaceutical companies. One of the leading theories about the cause of schizophrenia is an imbalance of acetylcholine and dopamine. Existing antipsychotic drugs rely on dopaminergic or serotonergic pathways, so toxic side effects are always inevitable.

KarXT takes a different approach, with its core ingredient being a muscarinic receptor agonist. Activation of muscarinic receptors prevents the release of acetylcholine. As early as the 1990s, multiple studies have demonstrated that stimulating muscarinic receptors can reduce psychotic symptoms and cognitive impairment. Although muscarinic receptor agonists not only stimulate muscarinic receptors in the central nervous system, but also stimulate muscarinic receptors in peripheral tissues, they cause severe side effects and are difficult to make into drugs. But Karuna has found a solution. The KarXT it developed has solved the problem of excessive side effects of such drugs by using a combination of muscarinic receptor agonists and antagonists: KarXT uses the powerful agonist tartaric acid as an auxiliary agent. Using the antagonist trospium chloride, which has no ability to penetrate the blood-brain barrier, the compound preparation not only stimulates muscarinic receptors in the central nervous system, but also inhibits the overactivation of muscarinic receptors in peripheral tissues to the greatest extent. Avoid peripheral toxicity. Karuna's bet worked. So far, Karuna has announced three registration studies, namely EMERGENT-1, EMERGENT-2, and EMERGENT-3.

Without exception, all showed rapid onset of action and significant improvement in positive and negative symptoms. Moreover, in terms of safety, which is the most critical aspect, KarXT is generally well tolerated and its effects are relatively controllable. Based on the net present value calculation of existing indications, KarXT ranks ninth among the top ten most valuable pipelines predicted by Evaluate, with sales expected to reach nearly $2.5 billion in 2030.

With the FDA approval results, the market may be more optimistic. Jefferies, a well-known Wall Street investment bank, published a report on "BMY: KRTX label hits our bulls case". Analysts believe that KarXT's approval result exceeded expectations. The core reason is that KarXT is not labeled with a black box warning, which means that the FDA fully recognizes its safety. Existing schizophrenia treatment drugs all have black box warnings, so KarXT will be more likely to be recognized by doctors and patients in the future.

Obviously, KarXT is expected to bring important boost to the future revenue growth of Bristol-Myers Squibb and Zai Lab. Of course, this isn't the full potential of KarXT. This exploration to meet clinical needs continues. At present, in addition to clinical exploration for patients with negative symptoms, KarXT has also carried out clinical research on auxiliary treatment of schizophrenia. If the final clinical trial is successful, KarXT will become the first drug to comprehensively cover schizophrenia; and its auxiliary treatment characteristics also mean that in addition to competing with existing drugs, it may also form a cooperative relationship to further expand coverage. crowd.

More importantly, the application prospects of KarXT are not limited to the field of schizophrenia, but also include mental illnesses related to Alzheimer's disease, which is also a market with high expectations. Up to 50% of people with Alzheimer's disease show psychiatric symptoms, but to date, the FDA has not approved any drugs specifically to treat the psychiatric symptoms of Alzheimer's disease. These patients can only receive off-label treatment of existing antipsychotic drugs, the effect cannot be guaranteed, and they are often troubled by side effects.

In early exploration, KarXT has shown good efficacy and safety in patients with Alzheimer's-related psychosis. The results of multiple studies will be announced in 2026. By then, expectations for KarXT may continue to heat up. Global antipsychotic drug sales exceeded $14 billion in 2022 and are expected to exceed $26 billion by 2030. Faced with huge market demand and relatively little competition, KarXT, which continues to make progress, seems expected to occupy a larger market share.

Whatever KarXT's ultimate potential, the story it's unfolding so far is inspiring enough. This further reminds pharmaceutical companies that the key to gaining market recognition is to conduct in-depth research on demand and impress the market with sufficiently competitive products.

In the world of innovative medicines, there is no “lay flat” option. Even Zai Lab has promoted the development of KarXT by actually participating in global clinical research, so that it can hope to obtain sufficiently generous returns in the future. In August this year, Zai Lab completed the enrollment of all mainland Chinese patients in UNITE-1, the registrational study of KarXT for schizophrenia. Zai Lab stated that it expects to obtain key data from the study from 2024 to the first half of 2025 and submit a new drug marketing application for KarXT for schizophrenia in mainland China.

Moreover, Zai Lab has been able to harvest blockbuster products such as Igamod and KarXT in the blind box opening process again and again, not just because of "good luck", but because of the release of its comprehensive capabilities accumulated over the years. The market may be hot or cold, and the industry may be crazy or calm, but the nature of competition for innovative drugs will not change. Only through scientific strategic layout and efficient execution can we seize opportunities in the unpredictable market and continue to achieve success. breakthrough. Irrational enthusiasm may make people temporarily forget common sense, but in the end, competition in the innovative pharmaceutical industry will return to common sense. Only an innovative pharmaceutical company that respects business common sense can survive cycles and develop steadily.

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