Biohaven sinks as FDA declines to approve lead drug; BofA downgrades

[FDA Headquarters - White Oak Campus]
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Shares of Biohaven (BHVN [https://seekingalpha.com/symbol/BHVN]) plunged ~37% to reach a new 52-week low on Wednesday after the company said the U.S. FDA issued a Complete Response Letter in response to its marketing application for its lead asset Vyglxia (troriluzole), rejecting the drug's approval.

Bank of America downgraded the stock to Neutral from Buy and lowered its price target to $10 from $49 per share in reaction.

Late Tuesday, the New Haven, Connecticut-based biotech said that it received the CRL for its new drug application (NDA), which was granted the FDA’s priority review early this year for spinocerebellar ataxia, a group of rare neurodegenerative disorders.

In August, the regulator revoked a previously announced advisory committee meeting scheduled in connection with the NDA, raising the hopes for the drug’s potential approval.

However, the CRL has caught the company by surprise, with CEO Vlad Coric noting that "We are extremely disappointed on behalf of patients by this action from the Office of Neuroscience at FDA.”

“Based on the detailed regulatory interactions outlined in the press release, we believe the pathway forward is unclear, but we are also prudent to assume that there is no viable path to market,” Bank of America analyst Jason Gerberry wrote.

However, the company said it will continue to engage the FDA as it looks to advance Vyglxia’s regulatory path further and expects to meet with the agency to discuss its next actions.

Concurrently, Biohaven (BHVN [https://seekingalpha.com/symbol/BHVN]) announced a restructuring initiative to pause or delay its non-priority pipeline programs and achieve about a 60% reduction in annual R&D expenditure [https://seekingalpha.com/pr/20293522-fda-issues-complete-response-letter-for-biohavens-vyglxia-troriluzole-new-drug-application].

Gerberry was not convinced, as he removed troriluzole from his valuation model and argued that the reorganization plan would constrain resources for the company’s three key assets, including Opakalim, its Kv7 ion channel activator.

_Update 12.34 PM ET: Adds latest stock price move and details on BofA downgrade _

MORE ON BIOHAVEN

* Biohaven: Despite Troriluzole Program Delay, FDA Review On Track For Q4 2025 [https://seekingalpha.com/article/4816367-biohaven-despite-troriluzole-delay-fda-review-on-track]
* Biohaven is a new Buy at Citi on potential FDA nod for lead asset [https://seekingalpha.com/news/4495736-biohaven-stock-is-new-buy-citi]
* Gilead, Moderna to see upside if RFK Jr. leaves HHS: RBC [https://seekingalpha.com/news/4493839-gilead-moderna-to-see-upside-if-rfk-jr-leaves-hhs-rbc]
* Seeking Alpha’s Quant Rating on Biohaven [https://seekingalpha.com/symbol/BHVN/ratings/quant-ratings]
* Historical earnings data for Biohaven [https://seekingalpha.com/symbol/BHVN/earnings]