Biohaven Restructures License Agreement With Bristol-Myers Squibb To Reduce Royalties Payable On Its Migraine Product Candidates; Transaction Financed Through Private Placement With Leading Institutional Investors
NEW HAVEN, Conn., March 12, 2018 /PRNewswire/ -- Biohaven Pharmaceutical Holding Company Ltd. (NYSE: BHVN) ("Biohaven" or the "Company") announced today a restructuring of its global license agreement with Bristol-Myers Squibb Company (NYSE: BMY) ("BMS") for Biohaven's small molecule calcitonin gene-related peptide (CGRP) receptor antagonist platform, which includes its product candidates rimegepant, a potentially best-in-class CGRP receptor antagonist for the acute treatment of migraine, and BHV-3500, a third-generation antagonist for the acute treatment and prevention of migraine. As part of the restructuring, Biohaven will pay BMS an upfront payment of $50 million in return for a low single digit reduction in the royalties payable on net sales of rimegepant and a mid-single digit reduction in the royalties payable on net sales of BHV-3500. Under the original license agreement with BMS, Biohaven was obligated to make tiered royalty payments based on annual worldwide net sales of licensed products upon their approval and commercialization, with percentages in the low- to mid-teens. The upfront payment for the restructuring was financed through a private placement of Biohaven common shares to leading institutional investors.
The restructuring also removes BMS's right of first negotiation to regain its intellectual property rights or enter into a license agreement with Biohaven following the Company's receipt of topline data from its Phase 3 clinical trials with rimegepant, and clarifies that antibodies targeting CGRP are not prohibited as competitive compounds under the non-competition clause of the agreement, thereby permitting Biohaven to potentially license rimegepant or BHV-3500 to a company with a CGRP antibody program. The license agreement, which was originally executed in July 2016, continues to provide Biohaven with exclusive global development and commercialization rights to rimegepant, BHV-3500 and related CGRP molecules, as well as related know-how and intellectual property. Biohaven's obligations to make development and commercial milestone payments to BMS remain unchanged.
Vlad Coric, M.D., Chief Executive Officer of Biohaven, commented, "This license agreement restructuring creates significant value for Biohaven and enhances our strategic flexibility moving forward. We believe the revised agreement, along with our recently announced exclusive license for developing small molecule CGRP receptor antagonists with the Zydis® ODT technology, significantly enhances our position to create shareholder value through the ongoing development of efficacious, differentiated and patient-friendly therapies for both the acute treatment and prevention of migraine. We were pleased to be able to finance this restructuring through investments from a number of leading institutions."
Biohaven is progressing multiple formulations of its small molecule CGRP receptor antagonists in an effort to meet patient needs across the spectrum of acute treatment and prevention of migraine. Biohaven has completed enrollment in two pivotal Phase 3 trials evaluating rimegepant as an acute treatment for patients with migraine. In total, approximately 3,000 patients have been enrolled and topline data for both trials is expected to be received during the first quarter of 2018. A third Phase 3 trial of rimegepant, evaluating a Zydis ODT formulation, commenced in February 2018. A long-term safety trial that allows dosing of rimegepant as frequently as once a day began in August 2017 and currently has over 1,000 patients enrolled and eligible to receive rimegepant for up to one year. Biohaven's BHV-3500 will be concurrently developed for the acute treatment of migraine and the prevention of chronic and episodic migraine, and is scheduled to begin a Phase 1 clinical trial in the first half of 2018.
The restructuring was financed through a $55 million private placement of 2,000,000 Biohaven common shares at a price of $27.50 per share. The shares were placed with leading institutional investors, including both new and existing Biohaven investors. Biohaven intends to use the net proceeds from the private placement to fund the $50 million upfront payment to BMS. The private placement is expected to close on March 14, 2018, subject to customary closing conditions.
The securities sold in the private placement have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the U.S. absent registration or an applicable exemption from registration requirements. As part of the transaction, the Company has agreed to file a resale registration statement on Form S-1 with the Securities and Exchange Commission within 30 days of the closing for purposes of registering the resale of the common shares issued in the private placement.