Dive Brief:
- Biohaven on Wednesday said it’s selling the rights to its most advanced experimental medicine to South Korea’s SK Biopharmaceuticals in a deal that may be worth as much as $795 million plus future royalties.
- The transaction includes access to Biohaven’s Kv7 ion channel technology and the lead asset to emerge from that platform, a treatment for focal epilepsy called opakalim. The drug is currently in late-stage testing, and topline results from a trial called Rise3 are due before the end of the year.
- As part of the deal, SK agreed to pay $350 million up front along with another $50 million next year, Biohaven said. In addition, SK will pay Biohaven as much as $150 million for reaching certain development and regulatory goals and will take over obligations that may be worth as much as $245 million to the previous owner of opakalim, Knopp Biosciences.
Dive Insight:
Biohaven has been walking a tightrope, trying not to burn through too much cash as it faced research and regulatory setbacks. The agreement with SK offers Biohaven quick funds and the chance to offload risk for opakalim development, but it also deprives the company of the “upside” of marketing what might be a blockbuster product, RBC Capital Markets analyst Leonid Timashev wrote in a note to clients.
“We think this is a fairly surprising deal given this was the company's most mature asset” and just ahead of a pivotal study readout, Timashev wrote. “And the deal at this stage and with SK rather than another partner does not necessarily suggest the asset was being valued at a high premium.”
Still, Leerink Partners analyst Marc Goodman noted that Biohaven executives have been looking for non-dilutive financing and opakalim had the most value to offer. “Biohaven doesn’t see itself as an epilepsy company at its core,” Goodman wrote in a note to clients. “It views itself more as an investor, always looking to maximize the value of its assets.”
Biohaven is in second iteration as a company, led by the same management team. After developing the migraine medication Nurtec ODT, Biohaven sold out to Pfizer in an $11.6 billion deal in 2022. CEO Vlad Coric then unveiled a spinoff with the same name and stock ticker focused on a pipeline of medicines for other disorders.
The journey since 2022 hasn’t been easy. The company has been buffeted by the failure of an experimental depression drug, a Food and Drug Administration rejection of the rare disease medicine Vyglxia and an unsuccessful study in spinal muscular atrophy. It’s slashed research and development costs and recently switched up its scientific leadership team.
Biohaven said the latest deal will help the company focus on what remains a pretty sizable pipeline while giving opakalim the best chance for success with SK’s experienced epilepsy salesforce. If opakalim wins approval, Biohaven is eligible for royalties ranging from the mid-teens to low twenties. The deal offers capital for Biohaven, “while preserving substantial long-term upside,” Coric said in a statement.
