Why Is Biohaven Pharmaceutical (BHVN) Stock Up Today?

Based in New Haven, Connecticut, biotech company Biohaven Pharmaceutical (NYSE:BHVN) is soaring today after announcing its acquisition by Pfizer (NYSE:PFE). Currently, BHVN stock is up nearly 70% on an otherwise lukewarm day for the markets.

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This morning, news broke that Pfizer will purchase the drugmaker for “nearly $12 billion” as part of the deal. Probably best-known for its migraine medication, Biohaven and its Nurtec drug fit naturally with the company’s primary care background. According to Investor’s Business Daily, Pfizer already owns the international rights to Nurtec.

As part of the deal, assets unrelated to Biohaven’s migraine operations will be transferred into a new, separate company called New Biohaven. Pfizer will pay $148.50 per share of BHVN stock, a hefty premium over yesterday’s close of $83.14.

So, what else do you need to know about Biohaven lately?

BHVN Stock Soars on Pfizer Acquisition

Today’s sale announcement comes as part of a larger news item: Biohaven’s fiscal first-quarter earnings.

For the period, Biohaven reported $124 million in Nurtec sales, below analyst consensus estimates. The company did manage to raise expectations in some regards, however. For example, the company expects growth to accelerate later in the year, with between $825 million and $900 million in full-year revenue. Biohaven attributed its quarterly decline to seasonal conditions “related to renewed patient deductibles and prescription reauthorizations.”

In a call with analysts today, Pfizer announced that its peak sales for Nurtec could reach over $6 billion. The biopharma giant plans to double the sales representatives assigned to the migraine treatment.

Pfizer Internal Medicine President Nick Lagunowich commented further on the deal.

“We believe Pfizer is uniquely positioned to help the portfolio reach its full potential given our leading scale and capabilities, including comprehensive field force engagement with primary care physicians, specialists and health systems delivering the right information at the right time.”

After the acquisition, New Biohaven will be entitled to receive more than $5.25 billion in “royalties tied to U.S. sales of Nurtec.”

On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines


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