After the FDA rejected its spinocerebellar ataxia treatment, Biohaven missed out on a $150 million payment from Oberland Capital. Now the company is reshuffling its pipeline to stay alive.
Biohaven is going back to Wall Street to pick up more funds, offering an underwritten $150 million in common stock.
That money would come on top of an additional $250 million the erstwhile drug developer secured this summer with an investment from private equity firm Oberland Capital. That deal would have ballooned with an additional $150 million if Biohaven’s spinocerebellar ataxia (SCA) drug troriluzole had been approved. Instead, the FDA rejected it last week.
Now, the company seems to be making moves to replace the lost windfall, slashing its research and development budget by 60% and refocusing its pipeline on a handful of other assets, while still pushing troriluzole forward if it can.
“Biohaven has requested a Type A meeting to discuss the CRL,” analysts at William Blair wrote to investors after the company’s third-quarter earnings readout Monday. “But given our read of the redacted CRL available in the FDA database, we believe an additional study will be required for potential approval at this stage.”
Biohaven’s stock is down to $7.84, a more than 40% drop since Nov. 4—the day before the rejection—and an 83% decline since this time last year.
Series of Unfortunate Trials
Troriluzole has an at-best checkered history. The molecule—a prodrug of the approved amyotrophic lateral sclerosis (ALS) drug riluzole—flunked a Phase II/III trial for obsessive-compulsive disorder in 2020. The company still chose to run a Phase III trial, but that also failed. In announcing second-quarter earnings this summer, Biohaven said it would stop testing the drug in OCD.
Meanwhile, the company was also developing troriluzole for SCA. In May 2022, the drug candidate was no better than placebo in a Phase III trial. Nevertheless, Biohaven submitted a new drug application for the indication to the FDA, which the regulator summarily rejected, pointing to the inferior trial results.
Biohaven submitted a new NDA for troriluzole in December 2024. From there, the drug had to wait, with the FDA kicking the can down the road for three months, delaying its decision from May to November before ultimately being handed another rejection.
Troriluzole has also failed to show benefit in late-stage trials treating patients with Alzheimer’s and generalized anxiety disorder.
The only recent positive clinical data troriluzole has produced is a Phase III trial, read out in September 2024, that showed the drug slowed SCA progression by 1.5 to 2.2 years compared to treatment with placebo.
Burn Rate
Biohaven’s cash reserves are rapidly dwindling. William Blair noted that the company had $264 million in the bank at the end of the third quarter, compared with $408 million at the end of the previous quarter. The 60% R&D cut was needed, the analysts said, to keep the company alive even past the middle of 2026 at its current burn rate.
“We believe it prudent that Biohaven is prioritizing later-stage clinical assets, implementing a restructure, and moving beyond [troriluzole],” William Blair wrote Nov. 6 in a note to investors.
The pipeline turn involves focusing on a handful of drugs: BHV-1400 for IgA nephropathy, BHV-1300 for Graves’ disease, opakalim for epilepsy and depression and taldefgrobep alfa for obesity and spinal muscular atrophy.
The bad news is that some of those assets have already taken body blows themselves, like when taldefgrobep alfa missed in a Phase III trial for spinal muscular atrophy in November 2024. Although the drug didn’t improve patients’ motor function, they did lose weight and Biohaven promised a Phase II trial for the drug in obesity.
BHV-1300, though, yielded positive data—in a Phase I trial late last year. Similarly, opakalim has shown positive safety data in early-stage trials. BHV-1400 is currently in Phase I trials, initiated last year.
