Biohaven (BHVN) Shares Drop 1.69% as Lawsuit Over Drug Disclosures Intensifies

Biohaven (BHVN) shares fell 1.69% on Tuesday, marking a fourth consecutive day of declines, with the stock down 6.62% over the past four sessions. The price dropped to its lowest level since April 2023, with an intraday decline of 1.99%, reflecting mounting investor concerns amid evolving legal risks.

The strategy of buying BHVN shares after they reach a recent low and holding for one week resulted in a 15.04% return over the past five years. However, this performance was significantly under the benchmark return of 61.05%, with an excess return of -46.01%. The strategy had a maximum drawdown of 0.00%, a Sharpe ratio of 0.09, and a volatility of 63.57%.

A class action securities lawsuit filed on July 29, 2025, has intensified scrutiny on Biohaven’s clinical and regulatory disclosures. The lawsuit alleges the company misrepresented or concealed material information about two key product candidates—troriluzole for spinocerebellar ataxia and BHV-7000 for bipolar disorder—during a 23-month period. Investors who purchased shares between March 2023 and May 2025 are now central to proceedings that could reshape the company’s financial and reputational landscape.

The litigation claims Biohaven overstated the regulatory viability of troriluzole by downplaying the adequacy of clinical data submitted to regulators, creating a misleading impression of its approval prospects. Similarly, BHV-7000’s clinical potential was allegedly inflated, with weaknesses in its development program reportedly concealed. These allegations, if proven, could trigger regulatory investigations and erode trust in the company’s management.

Legal experts highlight the potential for significant financial exposure should the case proceed. The firm representing plaintiffs, which has a history of securing large settlements in securities cases, argues the misrepresentations directly caused investor losses. The lawsuit also raises broader questions about transparency in biotech firms, where regulatory outcomes for drug candidates often drive market valuations. As the case unfolds, Biohaven’s stock is likely to remain volatile, with outcomes dependent on the strength of evidence and regulatory responses.