Biohaven Pharmaceuticals CEO Vlad Coric, MD

Pfizer has agreed to acquire the parent company of Biohaven Pharmaceuticals for $11.6 billion cash, the companies said today, in a deal intended to expand the buyer’s portfolio and pipeline with therapies for migraine, led by the FDA-approved rimegepant, marketed under the brand name Nurtec® ODT.

The planned acquisition of Biohaven Pharmaceutical Holding comes six months after Pfizer signed an up-to-$1.24 billion global agreement with Biohaven to commercialize Rimegepant and another migraine drug in development, zavegepant, outside the U.S.

Rimegepant is a small molecule calcitonin gene-related peptide (CGRP) receptor antagonist approved in the U.S. for both the acute treatment of migraine and preventive treatment of episodic migraine in adults. In the European Union, Rimegepant is approved under the trade name, Vydura® for both acute treatment of migraine and prophylaxis of episodic migraine.

Rimegepant generated $190 million in net product revenue during the first quarter of this year, up nearly triple (182%) from Q1 2021, and $462.509 million in net product revenue last year, up 441% from 2020—of which $190 million came during the fourth quarter of 2021, up 40% from Q4 2020.

Under its commercialization agreement with Biohaven, Pfizer agreed to pay $500 million upfront—$150 million cash and $350 million in Biohaven equity purchased at a 25 percent market premium, giving Pfizer a 2.6% stake in Biohaven’s common stock. Pfizer also agreed to pay up to $740 million in payments tied to achieving milestones, and tiered double-digit royalties to Biohaven on net sales outside of the U.S. Pfizer also agreed to compensate Biohaven for related royalties on ex-U.S. net sales owed under its license and funding agreements with Bristol-Myers Squibb and Royalty Pharma.

“Today’s announcement builds on our legacy of delivering breakthroughs for patients living with complex pain disorders and diseases that disproportionately impact women,” Nick Lagunowich, Global President, Pfizer Internal Medicine, said in a statement.

Stock surge

Biohaven investors signaled approval of the acquisition, with a buying surge that sent shares of the company soaring 68% in trading today, to $140.00 from yesterday’s close of $83.14. Shares of Pfizer rose nearly 2%, to $49.49 from $48.64.

Headquartered in New Haven, CT, Biohaven ended 2021 with a workforce of 928 employees, according to its Form 10-K annual report for 2021.

Lagunowich said Nurtec ODT, has become the number-one prescribed migraine medicine in its class in the U.S.—which when coupled with Biohaven’s CGRP pipeline “offers hope for patients suffering from migraine worldwide.”

The pipeline includes five preclinical CGRP assets as well as zavegepant (BHV3500), a third-generation CGRP small molecule CGRP receptor antagonist that according to Biohaven is potentially suitable for multiple routes of delivery, including nasal, subcutaneous, inhalation, or oral administration. According to Pfizer and Biohaven, Zavegepant is on track for second-quarter approval (based on the submission of a New Drug Application in March 2022) in the U.S. as an intranasal spray for the acute treatment of migraine and in development as an oral soft gel for chronic migraine prevention.

As a result of Pfizer’s planned acquisition, Biohaven said, it will not discuss its first quarter 2022 financial results via conference call, opting instead to issue a press release and file a quarterly Form 10-Q report with the U.S. Securities and Exchange Commission today.

Pfizer said it expected to finance the transaction with existing cash on hand.

That should prove easier for Pfizer than almost any other time in recent years, since the pharma giant finished the first quarter with a 77% year-over-year jump in revenues, to $25.661 billion—of which more than half (51.5%) consisted of the $13.227 billion in revenues from direct sales and alliance revenue from COVID-19 vaccine Comirnaty®, co-developed and co-marketed with BioNTech.

33% premium

Pfizer agreed to acquire all outstanding shares of Biohaven it does not already own for $148.50 per share cash, an approximately 33% premium to Biohaven’s volume weighted average selling price of $111.70 over the three months before the announcement of the acquisition deal.

For each Biohaven share they own, Pfizer and other Biohaven common shareholders will also receive a half share of New Biohaven, a new publicly traded company that will retain Biohaven’s non-CGRP development stage pipeline compounds.

The new Biohaven company to be spun out will be capitalized with $275 million cash—and will also have the right to receive tiered royalties from Pfizer on any annual net sales of rimegepant and zavegepant in the U.S. that exceed $5.25 billion.

New Biohaven will operate under the Biohaven name, and be headed by Vlad Coric, MD, as Chairman and CEO. Other members of the current Biohaven’s management team will also join the new company.

Completion of the New Biohaven spin-off transaction is among conditions of the acquisition deal, as well as customary closing conditions that include regulatory approvals and approval by Biohaven’s shareholders.

The boards of both Biohaven and Pfizer have unanimously approved the transaction, which is expected to close by early 2023.

“Pfizer’s capabilities will accelerate our mission to deliver our migraine medicines to even more patients, while the new R&D company is well positioned to bring value to patients and shareholders by focusing on our innovative pipeline for neurological and other disorders,” Coric stated. “We believe this transaction represents significant future value creation for patients and our collective shareholders.”

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