On Monday, BofA Securities adjusted its outlook on Biohaven Pharmaceutical Holding (NYSE:BHVN), increasing the price target to $63.00 from the previous $62.00 while maintaining a Buy rating.
The revision follows a positive study update on the company's troriluzole treatment in spinocerebellar ataxia (SCA).
The analyst from BofA Securities highlighted that after reviewing the market and regulatory landscape for SCA, informed by discussions with two key opinion leaders (KOLs) in movement disorders, they have increased the probability of success for troriluzole's approval to 60% from the previous estimate of 50%. This adjustment is based on three main factors: KOLs' recognition of troriluzole's long-term efficacy as clinically meaningful, a supportive regulatory environment for ultra-rare diseases with no approved therapies, and troriluzole's high safety profile.
Biohaven plans to re-file its New Drug Application (NDA) in the fourth quarter of 2024. The KOLs consulted had mixed opinions on the necessity and value of the FDA convening a pre-approval advisory panel, making it challenging to predict the exact timing of a regulatory catalyst, which is estimated to occur around mid-2025. The analyst also noted potential regulatory risks, including the lack of placebo-controlled benefit and imperfect regulatory comparisons.
If troriluzole is approved, the analyst projects that the drug could achieve peak U.S. sales of over $1.5 billion. They suggest that the value of the asset on a stand-alone basis could surpass Biohaven's current market capitalization if the drug is fully de-risked.
"We increase our PO to $63 (prior $62) to reflect program de-risking + financing and reit. Buy on what we view as attractive risk/reward on BHVN™s 4Q24+ clinical updates," said the analysts.
In other recent news,JPMorgan increased its price target for Biohaven to $68, maintaining an Overweight rating.
Biohaven has also initiated a public offering of its common shares, potentially reaching gross proceeds of approximately $250 million.
Additionally, Biohaven has launched a pivotal Phase 2 study for its new migraine treatment, BHV-2100, following encouraging results in Phase 1 trials. Furthermore, the company plans to file for approval for its lead candidate, BHV-1300, after receiving FDA approval for Multiple Ascending Dose studies in Rheumatoid Arthritis patients.
TD Cowen maintained its Buy rating and a $55.00 price target for Biohaven, reflecting optimism about the company's clinical developments. Other analyst firms such as Leerink Partners and H.C. Wainwrighthave also maintained positive ratings and increased their price targets for Biohaven.
InvestingPro Insights
To complement the analysis on Biohaven Pharmaceutical Holding (NYSE:BHVN), recent data from InvestingPro provides additional context to the company's financial position and market performance. Despite the optimistic outlook from BofA Securities, InvestingPro Tips indicate that Biohaven "suffers from weak gross profit margins" and is "not profitable over the last twelve months." This aligns with the company's current development stage and significant investment in its drug pipeline, including troriluzole.
However, it's worth noting that BHVN has shown a "strong return over the last month" and a remarkable "1 Year Price Total Return" of 98.29% as of the latest data. This performance suggests that investors are responding positively to the company's progress and potential, particularly in light of the recent troriluzole study update.
The company's financial health appears mixed, as InvestingPro data shows that Biohaven "holds more cash than debt on its balance sheet" and "liquid assets exceed short term obligations," which could provide financial flexibility as it moves towards the NDA re-filing for troriluzole in Q4 2024.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for BHVN, providing a deeper understanding of the company's financial position and market dynamics.
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