Biohaven Ltd., a New Haven-based bioscience firm, its chief executive officer and its chief financial officer are being sued over allegations that they misled investors about the viability of one of its therapies.
A lawsuit seeking class action status that was filed July 14 in U.S. District Court for the District of Connecticut accuses Biohaven and the two executives of committing “fraud and deceit” by making “materially false and misleading statements regarding the company’s business, operations, and prospects.”
The lawsuit was filed by Pomerantz LLP, a New York City-based law firm, on behalf of its client, Kayla Taylor of Harris County, Texas. The complaint adds that the firm does not yet know the potential size of the class that could be affected.
“While the exact number of class members is unknown to plaintiff at this time and can be ascertained only through appropriate discovery, plaintiff believes that there are hundreds or thousands of members in the proposed class,” the complaint states.
Biohaven issued a statement Monday that said it “denies the allegations stated in the Complaint and will vigorously defend against the lawsuit.”
“Consistent with Company policy, Biohaven will not make any further comments concerning the lawsuit and looks forward to presenting its case in court,” the statement concluded.
According to the lawsuit, the class includes any individual or organization that “purchased or otherwise acquired Biohaven securities between March 24, 2023, and May 14, 2025.”
Among the therapies being developed by Biohaven, it is developing troriluzole to treat spinocerebellar ataxia (SCA), a group of inherited brain disorders, and BHV-7000 to treat bipolar disorder.
The lawsuit claims the defendants “made false and/or misleading statements and/or failed to disclose” that:
- Troriluzole’s regulatory prospects as a treatment for SCA, and/or the “sufficiency of data that Biohaven submitted in support of troriluzole’s regulatory approval,” were overstated.
- BHV-7000’s efficacy and clinical prospects as a treatment for bipolar disorder were also overstated.
- The overstatements, once revealed, were “likely to have a significant negative impact on Biohaven’s business and financial condition; and
- As a result, defendants’ public statements were “materially false and misleading at all relevant times.”
The lawsuit also notes that Biohaven’s stock, which trades on the New York Stock Exchange under the symbol BHVN, rose to $32.06 per share during the class period based on what the plaintiffs consider to be false and misleading statements, before falling dramatically once reports emerged in April 2025 that Biohaven had withdrawn troriluzole’s marketing authorization application with the European Medicines Agency in late March 2025.
“On this news, Biohaven’s stock price fell $3.56 per share, or 15.21%, to close at $19.84 per share on April 25, 2025,” the lawsuit states.
The complaint also cites a second recent drop in the stock price that occurred in May. It notes that Biohaven issued a press release announcing that the U.S. Food and Drug Administration had extended its review of troriluzole for treatment of SCA by three months “to provide time for a full review of Biohaven’s recent submissions related to information requests from the FDA.”
Following this disclosure, Biohaven’s stock price fell $3.84 per share, or 19.53%, to close at $15.82 per share on May 15, 2025.
Monday, the stock was trading at $13.37 per share.
The lawsuit seeks to recover damages “caused by defendants’ violations of the federal securities laws and to pursue remedies” against the company and its top officials.
