🔒Two years after selling its migraine assets to Pfizer in $13B deal, New Haven-based biopharma trying to broaden its impact

The old saying is, “If at first you don’t succeed, try, try again.”

But what if at first you do succeed … say, to the tune of $13 billion?

Meet Biohaven 2.0.

The original version, call it Biohaven 1.0, was spun out of Yale University in 2013 and went public four years later.

Founded by Dr. Vlad Coric, the New Haven biopharmaceutical company successfully developed two migraine treatments, the drug rimegepant — known as Nurtec ODT in the United States and Vydura in the European Union — and the nasal spray zavegepant.

Fast-forward to 2022, when pharmaceutical giant Pfizer Inc. completed its $11.6 billion acquisition of those migraine therapeutic assets, while also paying off Biohaven’s debt, bringing the total deal value to $13 billion.

The purchase also included about 1,000 Biohaven workers becoming Pfizer employees, leaving the New Haven company with about 300 people on staff mostly doing research and development.

For most startups, a deal of that magnitude would send them back to the drawing board. Biohaven seems to have just reloaded.

“So, we had the sale to Pfizer of the migraine assets about two years ago,” and then “we spun off the rest of the pipeline” into a new and separate company, Coric, Biohaven’s CEO, said in a recent interview with Hartford Business Journal. “The company’s valuation at the time was like $300 million or $400 million when we spun out, and in a short two years we’re already above $5 billion now.”

In fact, according to Yahoo! Finance, Biohaven’s market capitalization is more than $5.3 billion.

“We’re trying to create a much more impactful, broader pipeline company — Biohaven 2.0 here,” Coric said. “And that is not just one thing, it’s multiple things.”

Robust pipeline

When Coric says Biohaven wants a “broader pipeline company,” he’s not kidding.

The company now is working to develop 12 therapeutics to treat 21 different medical disorders.

Three of those drugs, which would treat seven different disorders, have reached Phase 3 of development, the final testing phase before a drug can be brought to market.

Those drugs include:

• BHV-4157, or Troriluzole, which is being developed to treat obsessive-compulsive disorder, as well as spinocerebellar ataxia, a degenerative genetic neurological disorder.
• BHV-2000, a myostatin called Taldefgrobep Alfa, being developed to treat spinal muscular atrophy, a rare pediatric disorder, and
• BHV-7000, a Kv7 activator, to treat two forms of epilepsy, along with bipolar disorder and major depressive disorder.

That’s just a small portion of the drugs in development.

“This is quite a robust pipeline,” Coric said, “and there’s some really exciting areas that we’re focused in on. One is immunology. We have a number of immune modulating agents to treat diseases like Parkinson’s or Alzheimer’s and multiple sclerosis, and then some more common diseases like rheumatoid arthritis and others.”

He noted that the drug being developed to treat the rare pediatric disorder also is being investigated as a better alternative to GLP-1 obesity drugs like Ozempic.

“People are focused on all these weight-loss drugs, but unfortunately when you take these GLP agents you lose muscle,” Coric said. “And losing muscle isn’t good, because when you lose muscle you actually lose commensurate bone mass.”

Biohaven’s drug actually helps increase muscle mass, he said.

Along with those drugs, Biohaven is developing another migraine treatment, which Coric described as a novel potential pain medication “that’s not addictive and non-opiate.”

He adds that his company is capable of handling all the different drug pipelines in their various stages of development.

“You hear a lot about large pharma not having deep pipelines,” Coric said. “Biohaven has been this productive, efficient, R&D small company innovating and putting out a lot of pipeline assets.”

Major validation

The challenge, he said, is to make sure the company can fund all the research and development, which is a major roadblock in the bioscience and pharmaceutical industries.

That was the impetus for a recent public offering. In October, Biohaven announced the sale of more than 6 million of its common shares at $47.50 per share.

The gross proceeds from that offering were approximately $287.5 million, before deducting underwriting discounts, commissions and expenses.

“If you look at our filings, you’ll see some pretty marquee funds that are supporting Biohaven,” Coric said, citing Fidelity Investments, T. Rowe Price, Janus Henderson Investors and BlackRock.

The company has been able to attract marquee investors despite the fact that, as investors are generally made aware, “past performance does not indicate future success,” he said.

Investors are drawn to Biohaven because it now has a track record of successfully developing drugs and providing a return on investment, Coric said.

Still, Coric’s enthusiasm for Biohaven remains tempered by the fact that science does not always cooperate.

The reality is, getting a drug to market is incredibly difficult and expensive. It’s estimated that 90% of clinical drug development fails. Biohaven, for example, announced in 2022 that one of its drug candidates aimed at helping patients suffering from ALS proved to be ineffective against the disease in a clinical trial.

And for a drug that does make it across the finish line, it typically takes 10 to 15 years and up to $2 billion in investment to get federal approval for clinical use, according to research experts.

Biohaven reported a $499.3 million loss during the first six months of this year, according to its latest quarterly report, as it spent significantly ($470.8 million) on research and development. It reported $18.5 million in operating revenue during that time period.

“The hard part about what we do is that the science will always humble you,” Coric said. “We are running experiments that we don’t know the outcomes for, and everything will not work. … Investors and others will look at it day-to-day, week-to-week, but in science, advances occur over long periods of time.”

‘A startup again’

A lot hinges on the success of the drugs currently being developed, of course, but Biohaven is prepared for future growth.

The company has acquired multiple key downtown New Haven properties in the past few years, including 209 Church St., which it bought for $2.35 million in May. The building is next door to its headquarters at 215 Church St.

In early 2022, Biohaven bought the former landmark Quinnipiack Club at Church and Orange streets for $4.1 million.

Asked about the property acquisitions, Coric said they represent keeping one eye on the future.

“We are a startup again, and we have to be very careful about not letting our infrastructure costs get too high, so we make appropriately sized investments,” he said. “We are actually now on three contiguous lots in New Haven. The goal won’t be to develop those in the next six months or so, but if we continue to make progress like we are, and all these pipeline assets, or the majority of them continue to advance and grow value for us, we ultimately are going to need to hire more people. We’re going to need to have more lab space, and so we now have contiguous property in New Haven to grow.”

Future plans could include hiring a commercial sales staff, if and when a new drug hits the market.

“R&D is the engine that drives all these studies,” he said. “So, when we get a next drug approved, we will have to prepare for a launch again and be able to hire a commercial organization. But we’re not quite there.”