Connecticut-based Biohaven has been developing what it hopes will be the first medicine for a group of rare, nerve-destroying diseases. The company ran a couple late-stage clinical trials, submitted an approval application to the Food and Drug Administration, and expected a verdict sometime before the end of September.
But the path to approval is now longer, and with an added obstacle, as Biohaven announced late Wednesday that the FDA needs a few more months — as well as the input of outside advisers — before it’s ready to make an approval decision.
Wednesday’s news is a reversal from just a few days ago. Tucked into an earnings report on Monday, Biohaven said that during a recent meeting with the FDA, agency staff hadn’t indicated any intention of holding a so-called advisory committee meeting. Such meetings typically occur when the FDA has outstanding questions or is torn about the data supporting a drug under review.
The medicine, known scientifically as troriluzole, is the most advanced program in Biohaven’s pipeline, and is designed to break down into a molecule that’s already approved in the U.S. and Europe to treat amyotrophic lateral sclerosis, or ALS. The company is betting troriluzole can rewire the brains of people with rare illnesses like “spinocerebellar ataxia,” in addition to those with far more widespread conditions like obsessive compulsive disorder.
For Biohaven, which has no products since selling a portfolio of migraine medications to Pfizer in 2022 for nearly $12 billion, the success of trorilzuole could usher in a new chapter.
Yet the delay announcement appears to have further worn down investor confidence in Biohaven. The company’s share price had already tumbled over the past six months due to a few setbacks, and on Thursday morning it was down another 15%, to trade at roughly $16.75.
One of those setbacks came last month, when the European counterpart to the FDA revealed that Biohaven had withdrawn its marketing application for trorilzuole in late March.
At the time, staff at the European Medicines Agency had concerns about the drug and were leaning toward rejecting it. But Biohaven CEO Vlad Coric said his company ultimately chose to pull back once it was clear the agency didn’t intend on granting a special classification that came with valuable commercial perks.
While Biohaven plans to resubmit for approval in Europe, the disclosure spurred a stock sell-off, costing the company close to $400 million in market value.
The latest updates don’t much affect Biohaven’s stock outlook, though they do raise questions about the “overall regulatory picture” for troriluzole and increase the risk of an FDA rejection, according to Leonid Timashev, an analyst at the investment firm RBC Capital Markets.
Analysts noted the three-month extension could be due to the widespread layoffs that have led to staffing shortages at the FDA. The call for an advisory committee, meanwhile, suggests the agency is now “more skeptical of the package,” Timashev wrote in a note to clients.
Despite the uncertainty, analysts at William Blair and Leerink Partners still expect the FDA will give Biohaven the green light in the end.
“Whatever the reason [for these changes], we remain optimistic for approval and continue to be positive on the stock,” wrote Marc Goodman, of Leerink, in his own client note.
