Biohaven Shares Plummet 40% as FDA Rejects Vyglxia, 290M Trading Volume Ranks 454th

Market Snapshot

Biohaven (BHVN) shares plummeted 40.22% on November 5, 2025, closing at a significant loss after the U.S. Food and Drug Administration (FDA) rejected its New Drug Application (NDA) for Vyglxia, a treatment for spinocerebellar ataxia (SCA). , . , ranking Biohaven 454th in dollar trading volume for the day. The sharp drop reflects investor disappointment over the FDA’s rejection and the company’s announced restructuring, including a 60% reduction in annual direct R&D spending.

Key Drivers

The FDA’s rejection of Vyglxia, Biohaven’s flagship drug candidate, was the primary catalyst for the stock’s collapse. The agency issued a Complete Response Letter (CRL) citing concerns about the validity of (RWE) and external-control studies used in Biohaven’s NDA. Specifically, the FDA highlighted potential biases, design flaws, and unmeasured confounding factors in the three-year Study 206-RWE, which demonstrated a 50–70% slowing of SCA progression in treated patients. Despite the study achieving statistical significance in its primary and secondary endpoints, the FDA’s skepticism over the reliability of RWE—particularly in comparison to traditional randomized controlled trials—undermined the drug’s approval prospects. This regulatory setback eliminated Biohaven’s most immediate revenue opportunity, as Vyglxia would have been the first FDA-approved treatment for SCA, a rare with no existing therapies.

Biohaven’s response to the CRL further amplified market concerns. The company announced a 60% reduction in annual direct R&D spending, prioritizing three late-stage clinical programs while deprioritizing non-essential initiatives. This restructuring, though intended to conserve cash, signals a scaled-back pipeline and increased reliance on a limited number of high-risk projects. Analysts noted that the cuts could delay or deprioritize other promising candidates, such as extracellular degraders for and , opakalim for epilepsy and depression, and taldefgrobep alfa for and obesity. The announcement also raised questions about Biohaven’s financial runway, .

Market reactions to the FDA’s decision were mixed, with analysts emphasizing both the severity of the setback and the company’s long-term potential. TD Cowen analyst Tyler Van Buren reduced his price target for Biohaven from $50 to $15 while maintaining a “Buy” rating, acknowledging the degrader platform’s value despite the rejection. Similarly, Baird’s cut his target to $42 from $52, citing the platform’s potential to justify a “multiple of the current stock price.” However, RBC’s noted the “difficult road ahead” without additional trial data, though he referenced the FDA’s past reversals of controversial decisions, . These divergent views underscore the uncertainty surrounding Biohaven’s ability to rework its NDA for Vyglxia and the broader regulatory landscape for RWE-based submissions.

The rejection also drew comparisons to recent regulatory trends, particularly the FDA’s increasing scrutiny of real-world evidence. William Blair analyst highlighted that the FDA’s concerns mirrored its earlier issues with UniQure’s Huntington’s disease drug application, which relied on natural history comparisons. This pattern suggests a tightening of evidentiary standards, particularly for rare diseases with limited patient populations. Biohaven’s CEO, , emphasized the company’s commitment to working with the FDA to address the CRL’s concerns but acknowledged the challenge of aligning with the agency’s evolving expectations. The outcome raises broader questions about the feasibility of RWE as a primary endpoint in drug approvals, particularly for conditions lacking robust historical data.

Biohaven’s strategic pivot to focus on its degrader platform and three key programs reflects a recognition of the need to diversify its value proposition. However, the company’s reliance on these programs introduces new risks, as each faces its own regulatory and clinical hurdles. The 60% R&D cut, while cost-effective in the short term, may limit flexibility to adapt to unforeseen challenges. Additionally, the FDA’s CRL has created a regulatory gap between Biohaven’s submitted data and the agency’s evidentiary requirements, necessitating a potentially costly and time-consuming rework of its NDA for Vyglxia. Investors will closely monitor the outcome of Biohaven’s planned meeting with the FDA and any subsequent steps, such as supplementary studies or revised trial designs, which could determine the drug’s future and the company’s viability.

In summary, , the company’s strategic restructuring, and broader regulatory skepticism toward RWE. While analysts remain divided on the long-term implications, the immediate impact underscores the high-stakes nature of drug development and the critical role of regulatory alignment in biotech success.