<p>Schizophrenia is a complex psychiatric disorder, with cognitive impairment representing a critical unmet medical need. Current treatments primarily address positive symptoms, failing to effectively improve cognitive function and negative symptoms. This narrative review examines the current landscape of novel schizophrenia therapeutics following the discontinuation of iclepertin development, critically evaluates the most promising current candidates, and identifies priority research areas for future drug development. A comprehensive literature review was conducted covering developments from 2020 to 2025, with emphasis on Phase II and Phase III clinical data for novel mechanisms beyond traditional dopamine D₂ receptor antagonism. The landscape has been dramatically reshaped by two pivotal developments: the U.S. Food and Drug Administration (FDA) approval of xanomeline/trospium (KarXT, Cobenfy^®) in September 2024 as the first nondopaminergic antipsychotic, and the failure of iclepertin in Phase III trials in January 2025. The most compelling therapeutic approaches continue to be serotonin–dopamine activity modulators (brilaroxazine) and emerging M₄ selective agonists (NBI-1117568). Moreover, recent evidence suggests a more cautious outlook for TAAR1 agonists, with systematic analyses revealing significant placebo response challenges in recent trials. While iclepertin’s discontinuation represents a significant setback for GlyT1 inhibition strategies, the approval of KarXT and advancing pipeline candidates offer potential for therapeutic advances. Critical challenges include escalating placebo responses that compromise trial assay sensitivity, underscoring the need for improved patient stratification, refined trial methodology, and outcome measures that accurately capture real-world benefit.</p>