In a previous discussion on April 28, I speculated that Biogen Inc. (BIIB, Financial) might be one of the companies interested in acquiring Biohaven Pharmaceutical Holding Co. Ltd. (BHVN, Financial), a New Haven, Connecticut-based biopharma. As it turns out, it was the right transaction, but wrong buyer.
On Tuesday, Pfizer Inc. (PFE, Financial) announced it is purchasing Biohaven for $11.6 billion in a deal that gives the New York-based company complete ownership of the promising oral migraine drug Nurtec. Last fall, Pfizer bought a stake in Biohaven that created a partnership between the two companies on the highly-touted treatment.
Along with Nurtec, Pfizer gets Biohaven’s entire calcitonin gene-related peptide (CGRP) pipeline, including the nasal spray migraine medication zavegepant, as well as five preclinical treatments also aimed at migraines. The remainder of Biohaven’s assets will be spun off into a new publicly traded company named New Biohaven, led by the latter’s current management team.
Mizuho analysts said in a May 10 note they don't think investors assign much value to Biohaven’s non-CGRP assets.
"From Biohaven's non-CGRP portfolio, we are still expecting top-line troriluzole data in spinocerebellar ataxia in mid-2022 and topline verdiperstat data in ALS in 2H22," the analysts added. "Those data readouts will likely significantly impact how investors value New Biohaven."
Pfizer thinks Nurtec could hit $6 billion in peak annual sales. MedCity News reported that analysts at William Blair wrote in a research note the acquisition is a good deal for both it and Biohaven.
“We view today’s news of Pfizer’s proposed acquisition of Biohaven and spinoff of the non-CGRP assets into New Biohaven as a clear validation of the value of Nurtec ODT, which has become a leader in the migraine space, and the broader CGRP portfolio in the treatment of migraine,” they wrote. “We believe the scale of Pfizer’s commercial capabilities will enable the company to realize more value from the asset, while the spinoff will allow the Biohaven team to continue developing innovative therapies in a more R&D-focused company."
Biohaven shares were up nearly 70% to about $141, a nice premium for investors who owned the stock last week at about $84, but much less a reward for those who bought Biohaven a year ago when it was at more than $151. Meanwhile, Pfizer was up 48 cents to $49.15.
Even after this deal, Pfizer is sitting on boatloads of cash from sales of its Covid products, giving the company the resources to cut more deals to go on top of Biohaven and recent acquisitions ReViral, Arena Pharmaceuticals and Trillium Therapeutics. Biohaven is the first major decision coming from Chief Financial Officer David Denton, who was on the job only eight days when the acquisition was announced.
Who could Pfizer be looking at now? Chief Business Innovation Officer Aamir Malik said the company is focusing on diversifying. He said when it comes to future deals, the company is "agnostic to size.”
