Pfizer Offers $11.6B to Buy Biopharma Co.

Source: Streetwise Reports   05/10/2022

Shares of Biohaven Pharmaceutical Holding Co. Ltd. traded almost 70% higher after the company reported it agreed to be acquired by Pfizer Inc. for $148.50 per share in cash plus future royalty opportunities.

Commercial-stage biopharma firm Biohaven Pharmaceutical Holding Co. Ltd. (BHVN:NYSE), which has developed a portfolio of best-in-class therapies to treat neurological and neuropsychiatric diseases, and global pharmaceutical company Pfizer Inc. (PFE:NYSE), today announced that “the companies have entered into a definitive agreement under which Pfizer will acquire Biohaven, the maker of NURTEC^® ODT, an innovative dual-acting migraine therapy approved for both acute treatment and episodic prevention of migraine in adults.”

The report stated Pfizer will purchase all outstanding common shares of Biohaven that it does not already own for $148.50 per share in cash. The companies stated that the $148.50 cash offering price represents a 33% premium over Biohaven’s three-month volume weighted average selling price of $111.70.

The total value of the acquisition in estimated to total around $11.6 billion. Additionally, Pfizer will be required to redeem of all outstanding shares of Biohaven’s preferred stock and settle Biohaven’s third party debt.

Under the terms of the agreement, existing Biohaven common shareholders will also receive 0.5 shares of “New Biohaven” shares in exchange for each share owned. New Biohaven is to be capitalized with $275 million in cash and New Biohaven will be eligible to receive tiered royalties on any annual net sales of rimegepant and zavegepant in the U.S. in excess of $5.25 billion from Pfizer.

Nick Lagunowich, Global President, Pfizer Internal Medicine commented, “Today’s announcement builds on our legacy of delivering breakthroughs for patients living with complex pain disorders and diseases that disproportionately impact women…NURTEC^® ODT, which is already the #1 prescribed migraine medicine in its class in the U.S., coupled with Biohaven’s CGRP pipeline, offers hope for patients suffering from migraine worldwide.”

“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,” Lagunowich added.

The report noted that in November 2021 the two companies signed a collaboration agreement to market rimegepant and zavegepant outside the U.S. At that time, Pfizer purchased 2.6% of Biohaven’s common stock at a price of $173 per share for a total of $350 million.

Biohaven’s Chairman and CEO Vlad Coric, M.D. remarked, “We are excited to announce Pfizer’s proposed acquisition of Biohaven, recognizing the market leadership of NURTEC^® ODT, our breakthrough all in one migraine therapy, and the untapped potential of our CGRP franchise…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.”

The report advised that both Biohaven’s and Pfizer’s respective Boards of Directors have already unanimously approved the transaction. The report indicated that Pfizer plans to finance the acquisition with existing cash on hand and mentioned that the transaction is expected to close by early 2023, subject to several conditions including approval by Biohaven’s shareholders, the spin-off of the New Biohaven entity, ordinary closing conditions and receipt of necessary regulatory approvals.

Upon closing, the “New Biohaven” will continue to operate under the Biohaven name and Dr. Vlad Coric will continue to serve in the role of Chairman and CEO along with other members of the present executive management team.

About forty million people in the U.S. and around one billion people worldwide suffer from migraine of which about 75% are women. When a migraine attack occurs, the debilitating condition typically lasts for between 4 to 72 hours. Migraine symptoms typically occur in combination and often include moderate to severe throbbing headaches, sensitivity to light or sound and nausea.

The company explained that “rimegepant targets a root cause of migraine by reversibly blocking CGRP receptors, thereby inhibiting the biologic cascade that results in a migraine attack.” The U.S. Food and Drug Administration (FDA) first approved NURTEC® ODT (Rimegepant) for the acute treatment of migraine in February 2020 and in May 2021 approved the drug for preventive treatment of episodic migraine. Biohaven added that NURTEC^® ODT is now the top prescribed migraine treatment in its class and since its U.S. cumulative launch has generated approximately $650 million in net revenue from more than two million filled prescriptions.

Biohaven described zavegepant as “a third generation, high affinity, selective and structurally unique, small molecule CGRP receptor antagonist from Biohaven’s NOJECTION™ Migraine Platform and the only CGRP receptor antagonist in clinical development with both intranasal and oral formulations.”

The company advised that in a Phase 2/3 dose-ranging study that enrolled more than 1,000 patients, intranasal delivered zavegepant demonstrated statistical superiority versus placebo and met its preestablished primary endpoints of 2-hour freedom from pain and freedom from a patients’ most bothersome symptom of either nausea, or hypersensitivity to sound (phonophobia) or light (photophobia). The firm said it intends to submit a New Drug Application (NDA) for zavegepant to the FDA in Q2/22.

Biohaven is a commercial-stage biopharmaceutical company headquartered in New Haven, Conn. The firm’s drug portfolio and activities are focused on developing innovative therapies for treating debilitating neurological and neuropsychiatric diseases, including rare disorders.

The firm’s portfolio includes and FDA-approved treatment for acute and preventive treatment of migraine, NURTEC® ODT (rimegepant), and several other late-stage product candidates in its pipeline that are being developed to address amyotrophic lateral sclerosis, migraine treatment, obsessive-compulsive disorder and spinocerebellar ataxia, focal epilepsy and neuronal hyperexcitability and neuromuscular diseases.

Pfizer is based in New York and is a research-based global biopharma company involved in the discovery, development, manufacture and marketing of pharmaceuticals, vaccines and other healthcare products. The firm is presently highly focused on develop mRNA vaccines for SARS-CoV-2. Pfizer’s global portfolio includes many well-known brand prescription medications including Celebrex, Eliquis, Lipitor, Prevnar 13, Pristiq, Viagra and Xeljanz. The company’s shares trade on the NYSE and has a market cap of about $275 billion.

Biohaven Pharma began the day with a market cap of around $5.9 billion with approximately 70.53 million shares outstanding and a short interest of about 6.7%. BHVN shares opened 71% higher today at $142.40 (+$59.26, +71.28%) over yesterday’s $83.14 closing price. The stock has traded today between $140.71 and $144.00 per share and is currently trading at $140.73 (+$57.59, +69.27%).

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