Intra-Cellular Eyes Gains Approval for Caplyta in Depression Treatment as Stock Soars Unexpectedly
The development of new medications aimed at treating central nervous system disorders presents significant challenges. However, Intra-Cellular Therapies has seen success with its product, Caplyta, which received FDA approval in December 2019 for schizophrenia and expanded to include bipolar disorder in 2021. The pharmaceutical company is now pursuing a third indication, major depressive disorder (MDD), and recently filed a supplemental application with the FDA. The addition of this indication could represent an expansive opportunity valued at over billion, as estimated by Jefferies.
In a recent note, Jefferies analysts rated the chances of FDA approval between 90% to 95%, suggesting that Intra-Cellular stock may be undervalued, referred to as “cheap.” The current trading price sits at approximately , a notable increase from at the year’s start. If the company successfully adds this third indication, Jefferies projects a potential market valuation between billion and billion and possibly more, contingent upon the company’s forecasted peak sales of Caplyta reaching billion. Currently, Intra-Cellular has a market capitalization of about .12 billion.
During the third quarter, Caplyta generated 5 million from its existing indications, marking an over 8% increase compared to the previous quarter, outpacing expectations of 2 million. The company has revised its revenue guidance for 2024 to between 5 million and 5 million.
As the fourth quarter approaches its conclusion, record prescription numbers for Caplyta have been reported, indicating potential Q4 sales of at least 3 million, according to analysts at Jefferies.
It has been nearly five years since Caplyta first received approval for schizophrenia, and Jefferies believes that the company could achieve profitability as early as 2025.
Establishing the Caplyta Brand
The application for MDD treatment relied on data from two Phase III trials demonstrating symptom improvement when Caplyta was used alongside antidepressants, especially in patients who do not respond adequately to monotherapy. Intra-Cellular’s Chief Medical Officer, Suresh Durgam, stated that he anticipates Caplyta could become a primary add-on option for MDD due to the high number of patients needing more than a standalone antidepressant.
Jefferies speculates that the FDA will likely accept this application by February 2025, with a decision expected by October. In anticipation of this approval, the company’s stock may see an upward trend in the first half of the year.
The FDA is expected to evaluate Caplyta against competitors such as Otsuka and Lundbeck’s Rexulti, AbbVie’s Vraylar, and Johnson & Johnson’s Spravato, each of which have produced varied data regarding efficacy in MDD. Spravato is approved for treatment-resistant depression and for managing depressive symptoms in adults with MDD and suicidal tendencies, while Rexulti and Vraylar serve as adjunct treatments for MDD.
According to Jefferies, Caplyta showcases superior efficacy across two adjunct MDD studies, and its safety profile appears to be better than competing antipsychotics.
CEO Sharon Mates emphasized the drug’s value in the mood disorder landscape, given its favorable tolerability. Many patients discontinue antipsychotic medications due to side effects like weight gain and metabolic issues. Caplyta’s design allows for once-daily dosing, with flexibility regarding food intake, and elimination of titration upon initiation.
“We are optimistic that Caplyta can emerge as a preferred medication across a range of major mood disorders,” Mates stated during the third quarter earnings call.
Concerns about competition from Bristol Myers Squibb’s recently approved Cobenfy were downplayed by Mates, who asserted that while additional treatment options for schizophrenia are beneficial, the market dynamics show that many patients frequently switch medications due to dissatisfaction.
“We don’t anticipate any single product will dominate the schizophrenia market,” Mates expressed, adding that Cobenfy is not a contender in Caplyta’s areas for bipolar disorder or the newly proposed MDD indication.
Furthermore, Mates noted that AbbVie’s extension of Vraylar from schizophrenia and bipolar into MDD has demonstrated ample space for diverse treatment options.
Additional Developments
Caplyta is not the sole focus for Intra-Cellular; the company is poised for significant Phase I/II pipeline readouts in 2025 and 2026, targeting ITI-214 for Parkinson’s disease and ITI-333 for opioid use disorder.
Furthermore, Intra-Cellular is advancing a deuterated variant of Caplyta, known as ITI-1284, in an oral disintegrating tablet form intended for sublingual use. This compound is currently in Phase II trials for generalized anxiety disorder and addressing agitation and psychosis in Alzheimer’s disease patients.
Intra-Cellular is also starting two trials focusing on Caplyta for autism pertaining to irritability in pediatric patients. Current market options for this indication include BMS’s Abilify and J&J’s Risperdal, and Jefferies anticipates that Caplyta may provide a more favorable safety profile than existing approvals, potentially unlocking a 0 million to billion market opportunity as these studies conclude in March 2027.