Dive Brief:

• Biohaven shares fell by more than 10% Thursday after the company revealed that the Food and Drug Administration has placed a partial hold on an experimental epilepsy medicine it recently sold off rights to in a licensing deal.
• In a regulatory filing, Biohaven disclosed that the FDA has requested additional data related to a “metabolite,” or drug-related substance, that was identified in rodent studies of its treatment opakalim. The agency instructed Biohaven to pause recruitment in an ongoing late-stage trial until it can provide more information. Dosing will continue for those already involved in that study, “RISE-2.”
• Importantly, the hold doesn’t affect a separate late-stage trial, “RISE-3,” that’s fully enrolled. That study is still expected to produce results later this year in what is a “key event” for Biohaven, wrote William Blair analyst Myles Minter. Should opakalim succeed in testing and win approval, Biohaven will be eligible for milestone payments and sales royalties from licensing partner SK Pharmaceuticals.

Dive Insight:

Biohaven is the second iteration of a company that sold itself to Pfizer in 2022. Afterwards, the same management team spun out a new entity with the same name and a pipeline of medicines for multiple different diseases.

That journey, though, has been riddled with setbacks. One rare disease drug it had been banking on was controversially rejected by regulators. Another failed a trial in spinal muscular atrophy, while a third fell short in depression. The company has restructured, slashed research and development costs and switched up scientific leadership, but has still seen its cash reserves dwindle.

Opakalim, also known as BHV-7000, could be part of the solution. Though the drug previously fell short in a study in depression, Biohaven sees it as a next-generation, selective treatment for focal epilepsy and a medicine that could have promise treating pain.

Last month, Biohaven chose to boost its cash reserves by licensing opakalim to South Korea’s SK Biopharmaceuticals in a deal worth up to $795 million overall. That deal lowered the financial upside for Biohaven, but provided an immediate $350 million payout. It was “prudent but necessary,” William Blair analyst Minter wrote.

In its regulatory filing, Biohaven said it fully disclosed all clinical and nonclinical data to SK before the deal was signed. That disclosure suggests SK “was comfortable with any issues” regarding the metabolite flagged by the FDA, Minter added.

Still, the hold may set back opakalim’s progress. The pause in RISE-2 enrollment delays a readout that could be “ultimately necessary for an approval,” wrote RBC Capital Markets analyst Leonid Timashev. He also noted that the FDA’s requirement for additional data “adds risk,” as there’s the chance a “concerning signal” might emerge.

Biohaven has dosed more than 1,200 patients with opakalim so far and the drug has been “well-tolerated to date,” it wrote in the regulatory filing.