Biohaven's Pipeline Potential Outshines Near-Term Setbacks, Says RBC Capital

Biohaven Pharmaceuticals (NYSE:BHVN) has faced a turbulent few months, with its stock price dropping 16% in late March after withdrawing its European application for troriluzole, its lead therapy for spinocerebellar ataxia (SCA). Yet RBC Capital maintains its Outperform rating, arguing that the company’s robust pipeline and upcoming catalysts warrant a $66 price target—a 20% premium to its April 2025 valuation of $19.83. The firm’s optimism hinges on Biohaven’s ability to navigate regulatory hurdles and deliver on its neuroscience and autoimmune therapies, which could unlock billions in peak sales.

A Stock in Crisis, But a Pipeline in Motion

Biohaven’s recent decline stems from the European Medicines Agency’s (EMA) rejection of troriluzole’s marketing application, citing insufficient evidence of efficacy and concerns over its classification as a “new active substance” (NAS). While the setback erased $400 million in market value, RBC analysts stress that the U.S. Food and Drug Administration (FDA) is a far more critical regulator for Biohaven’s near-term success. The FDA’s July 2025 PDUFA date for troriluzole’s SCA approval is a linchpin: if approved, the drug could generate $1.5 billion in U.S. peak sales, according to BofA Securities.

The stock’s 65% drop from its $58 peak in March 造24 reflects investor anxiety over execution risks, but RBC argues the market is underestimating the company’s broader potential.

Pipeline Catalysts: Beyond Troriluzole

Biohaven’s pipeline extends far beyond SCA, with three programs poised to drive long-term value:
1. BHV-1300: A first-in-class IgG-selective degrader targeting autoimmune diseases like Graves’ disease. Phase 1 data show >80% sustained IgG reductions, positioning it as a potential $780 million peak seller (per BofA).
2. BHV-7000: A Kv7 ion channel modulator for epilepsy. With a clean safety profile and pivotal trial results expected in July 2025, this asset could carve out a niche in a $12 billion market.
3. MoDE™ Platform: Biohaven’s proprietary molecular degradation technology underpins therapies like BHV-1400 (for IgA nephropathy) and BHV-2100 (acute migraine). The platform’s precision in targeting pathogenic proteins has drawn partnerships, including a $250 million deal with Merus N.V. to develop bispecific antibody-drug conjugates.

RBC highlights that these programs, combined with troriluzole’s potential, could push Biohaven’s 2025 revenue growth to 24.59%, despite current losses.

Regulatory Crossroads and Financial Risks

While RBC is bullish, the path forward is fraught with risks:
- EMA Resubmission: biohaven plans to reapply for troriluzole’s European approval by late 2025, but the NAS designation remains contentious. If unresolved, the European market—critical for rare disease therapies—could remain closed.
- FDA Scrutiny: The FDA may adopt the EMA’s skepticism, particularly if troriluzole’s efficacy data are deemed marginal compared to existing therapies.
- Cash Burn: Biohaven’s $141 million annual operating loss and reliance on equity raises ($250 million in late 2024) underscore its need for near-term wins to avoid dilution.

RBC’s $66 target contrasts with a $59.85 average analyst target, reflecting cautious sentiment. However, the firm argues that upside catalysts—like a positive FDA decision or BHV-7000 trial results—could narrow the gap.

Conclusion: High-Risk, High-Reward at a Crossroads

Biohaven’s stock is a test of faith in its pipeline’s execution. At its current valuation of $2.1 billion, the market is pricing in significant risks: failure of troriluzole’s FDA approval, delays in key trials, and regulatory pushback on its MoDE platform. Yet RBC’s analysis shows that $66 is achievable if even one of its top programs succeeds. For instance, a BHV-7000 win alone could add 20% to the stock.

Investors must weigh the 75% 12-month return potential against the very real possibility of further setbacks. With the FDA decision looming and multiple 2025 readouts, Biohaven is a “buy the dip” opportunity for those willing to bet on its science. For now, the stock’s valuation appears to undervalue its pipeline—but only time will tell if RBC’s optimism is justified.

Data as of April 2025. Past performance does not guarantee future results.