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Biohaven (BHVN) Stock Up on Spin-Off Transaction Finalization

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Shares of Biohaven Ltd. (BHVN - Free Report) surged 47.6% on Oct 5 on investors’ optimism about the company's new direction, following the acquisition of its calcitonin gene-related peptide (CGRP) business by Pfizer (PFE - Free Report) .

Post the acquisition by Pfizer, which was closed on Oct 3, Biohaven is advancing its non-CGRP pipeline compounds, which will focus on targeting neurological and neuropsychiatric diseases, including obsessive compulsive disorder (“OCD”), spinocerebellar ataxia (SCA) and spinal muscular atrophy (SMA). The company also has a cash balance of $257.8 million and currently carries no debt.

To develop candidates targeting these indications, Biohaven is utilizing its multiple proprietary technology platforms which include kv7, glutamate modulation and Myostatin inhibition platforms. Currently, BHVN has three ongoing late-stage studies consisting of taldefgrobep alfa in SMA and two separate late-stage studies evaluating troriluzole in OCD and SCA indications. Data from these late-stage studies are expected over the next two years.

Biohaven is also evaluating early-stage pipeline candidates for focal epilepsy, mood disorders, pain disorders and multiple myeloma indications.

Shares of Biohaven have plunged 91.1% in the year so far compared to the industry’s 25.4% decline.

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Prior to the transaction, management was focused on the company’s CGRP pipeline development. The company’s CGRP development also yielded its sole marketed product Nurtec ODT (rimegepant), which is approved in the United States and the European Union as a treatment for migraine and preventive treatment of episodic migraine.

Following the completion of the transaction, Biohaven can now focus on its non-CGRP pipeline.

Earlier this May, Pfizer announced that it is acquiring the CGRP programs of Biohaven for $148.50 per share or an aggregate equity value of $11.6 billion. The acquisition resulted in Pfizer adding Biohaven’s sole marketed drug Nurtec ODT to its portfolio. Pfizer also added Biohaven’s CGRP programs including zavegepant, an intranasal spray for migraine, currently under FDA review. Following the completion of the transaction, Pfizer owns approximately 3% of Biohaven Ltd.

 

Zacks Rank & Stocks to Consider

Biohaven currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the overall healthcare sector include Codiak BioSciences (CDAK - Free Report) and Novartis (NVS - Free Report) . While Codiak BioSciences sports a Zacks Rank #1 (Strong Buy), Novartis carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, estimates for Codiak BioSciences’ 2022 loss per share have narrowed from $1.94 to $1.81. During the same period, the loss estimates per share for 2023 have narrowed from $2.14 to $1.53. Shares of Codiak BioSciences have lost 11.6% in the year-to-date period.

Earnings of Codiak BioSciences beat estimates in three of the last four quarters and missed the mark just once, witnessing a surprise of 35.40%, on average. In the last reported quarter, CDAK delivered an earnings surprise of 61.54%.

In the past 60 days, estimates for Novartis’ 2022 earnings per share have increased from $6.06 to $6.07. Shares of Novartis have lost 11.6% in the year-to-date period.

Earnings of Novartis beat estimates in three of the last four quarters and missed the mark just once, witnessing a surprise of 1.39%, on average. In the last reported quarter, NVS delivered an earnings surprise of 3.31%.


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