Canaccord Sees An 'Intriguing Setup' In Biohaven Following Reaction To Phase 3 News

Biohaven Pharmaceutical Holding Co Ltd BHVN investors took their profits Monday after the firm reported positive Phase 3 data for rimegepant.

One analyst considers the related sell-off an entry point.

The Rating

Canaccord Genuity analyst Sumant Kulkarni maintained a Buy rating on the stock, but lowered his price target from $39 to $34.

The Thesis

Rimegepant achieved co-primary endpoints in an acute migraine trial, but the placebo-adjusted data impressed neither investors nor Kulkarni. However, the analyst found optimism in the candidate’s safety profile, particularly for liver toxicity, as well as the single dose’s demonstration of increasing benefits over time.

“In our view, these factors could help the product find a place for itself in the acute migraine market,” Kulkarni wrote in a note.

He increased the drug’s probability of approval from 75 percent to 90 percent.

Canaccord Genuity anticipates upcoming catalysts in Biohaven’s orally-dissolving tablet of rimegepant and Allergan plc AGN’s Phase 3 results for ubrogepant.

“A comparison of the available Phase data in the two trials for rimegepant (301 and 302) versus Allergan's ubrogepant (ACHIEVE-1 trial data so far) shows that the comparison may be closer than suggested by rimegepant's Phase 2 data,” Kulkarni wrote. “An important caveat is that no head-to-head data exists.”

His model doesn't account for Biohaven’s trigriluzole or BHV-3500 candidates, the latter of which is on track for an investigation new drug application in the first half of 2018 and trial launch in the second half.

Price Action

Biohaven shares closed Tuesday at $22.49, down 2 percent.

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