Intra-Cellular Therapies has submitted a supplemental New Drug Application (sNDA) to the FDA for its drug Caplyta (lumateperone) for the treatment of Major Depressive Disorder (MDD) in adults. The approval of this indication could potentially add over $1 billion in sales to the company, but despite this promising development, analysts at Jefferies believe the stock remains undervalued and “cheap.”
Intra-Cellular Therapies, known for its work in central nervous system (CNS) disorders, is expanding the reach of Caplyta, which was first approved by the FDA in 2019 for schizophrenia and later for bipolar disorder. Now, the company aims to gain approval for Caplyta as an adjunctive treatment for MDD, a condition affecting millions globally. Jefferies analysts estimate that this new indication could lead to over $1 billion in additional sales, and they see a 90–95% chance of FDA approval.
Despite Caplyta’s growing clinical success, the stock remains relatively inexpensive. As of now, the stock is trading around $86, up from $70 at the start of 2024. Should Caplyta receive approval for MDD and further expand its market presence, Jefferies suggests that the company’s valuation could rise to between $9 billion and $12 billion. In a more optimistic scenario, where Caplyta reaches peak sales of $5 billion, Intra-Cellular could see its value soar even higher. The company currently has a market capitalization of $9.12 billion.
Caplyta generated $175 million in revenue during the third quarter of 2024 for its schizophrenia and bipolar disorder indications, a figure that surpassed expectations. Intra-Cellular has raised its revenue forecast for 2024, expecting between $665 million and $685 million. With just weeks remaining in the year, the company is on track to achieve record-high prescriptions, which analysts predict could drive fourth-quarter sales to at least $193 million.
It’s been nearly five years since Caplyta was approved for schizophrenia, and Jefferies analysts believe Intra-Cellular could reach profitability by 2025. The success of Caplyta in its current indications, along with its potential approval for MDD, positions Intra-Cellular for significant growth.
The sNDA for Caplyta’s use in MDD is supported by positive results from two Phase III studies, which showed that when added to an antidepressant, Caplyta significantly improved symptoms of depression compared to a placebo. Intra-Cellular’s Chief Medical Officer, Dr. Suresh Durgam, expressed confidence in the drug’s potential to become the first-choice adjunctive therapy for MDD, noting that more than half of MDD patients do not fully respond to antidepressants alone.
Jefferies analysts predict that the FDA will accept the sNDA by February 2025 and issue a decision by October of the same year. In anticipation of this decision, Intra-Cellular’s stock could continue to climb in the first half of 2025.
When comparing Caplyta to other adjunctive treatments for MDD, such as Otsuka and Lundbeck’s Rexulti, AbbVie’s Vraylar, and Johnson & Johnson’s Spravato, Jefferies believes Caplyta’s efficacy stands out. The analysts noted that the other antipsychotic treatments have shown mixed or inconsistent data in MDD, whereas Caplyta demonstrated robust efficacy in two separate studies. Moreover, Caplyta’s safety profile is considered superior, with fewer side effects compared to other antipsychotics.
Intra-Cellular CEO Sharon Mates highlighted the favorable tolerability of Caplyta, which stands out in the mood disorder market. Many patients discontinue current treatments due to issues like weight gain, metabolic disturbances, and motor side effects. Caplyta, however, is a once-daily pill that can be taken with or without food, with no need for dose adjustments when starting treatment.
While Caplyta’s potential for MDD approval is exciting, Intra-Cellular has more in its pipeline. The company is also working on ITI-214, a drug in Phase I/II trials for Parkinson’s disease, and ITI-333, which is being developed for opioid use disorder. Additionally, Intra-Cellular is exploring a deuterated version of Caplyta, ITI-1284, which is an oral disintegrating tablet currently in Phase II trials for generalized anxiety disorder and for treating agitation and psychosis in Alzheimer’s patients.
Intra-Cellular is also studying Caplyta in pediatric patients with irritability associated with autism, a field that could represent a $500 million to $1 billion opportunity. These studies are expected to conclude in March 2027.
Overall, Intra-Cellular’s pipeline and the potential expansion of Caplyta’s indications position the company for future growth. Despite its success so far, analysts believe the company’s stock remains undervalued, offering significant upside as the market recognizes the full potential of its treatments.
