Biohaven is betting hundreds of millions it can hustle ahead of rivals in a blockbuster race. A quick M&A deal could pay off backers big time

Biohaven $BHVN may not have anything like the market caps of its rivals at Allergan $AGN and Eli Lilly $LLY, but they’re not letting the David vs. Goliath status of their competition stop them from making a big bet on a fast win for a new oral drug to treat acute migraine. And they’re backed by a group that has an eye on a potential buyout.

The biotech has acquired a priority review voucher from GW Research for $105 million, looking to shave 4 months off their marketing application for rimegepant — a year after they managed to disenchant its investors with their positive Phase III data, which failed to dramatically break away from the placebo group.

Biohaven says it plans to submit their application some time in the next few months, which would provide a decision from the FDA before year’s end. That would put them right alongside their direct rivals at Allergan, which submitted their application for ubrogepant, which now faces a Q4 PDUFA deadline.

Both drugs are oral CGRP receptor antagonists, both in-licensed from pharma giants. Allergan, which recently experienced a big setback on a late-stage drug, got its therapy from Merck. And Biohaven bagged a licensing deal with Bristol-Myers Squibb.

Biohaven negotiated a $200 million financing deal with Royalty Pharma to pay for the PRV as well as tee up $75 million if the FDA provides a stamp of approval. Diving into the SEC filing, the biotech made clear that Royalty is set to buy $200 million in shares in 2 batches. And they’re not looking for interest. If a change of control — or a buyout — comes along anytime in the next few years, RP gets a payback of 1.5 to 2x on the shares. If no approval comes with no buyout, the payback is 2x, or $400 million.

Biohaven and its rivals are following a wave of newly approved injectable CGRP drugs from Eli Lilly, Teva and Amgen/Novartis, which took the lead in that arena. Lilly is also angling ahead with lasmiditan, an oral selective serotonin 5-HT1F agonist which it submitted last November.

These oral drugs are being positioned to take away market share from generic triptans, which typically have a transient effect. The migraine market has long been considered wide open to drug developers advancing better solutions for millions of patients.

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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