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Biohaven’s Migraine Drug Offsets Bottom-Line Headache
Stock Analysis & Ideas

Biohaven’s Migraine Drug Offsets Bottom-Line Headache

Biohaven Pharmaceutical (BHVN) closed 5.44% lower on Monday, August 9 after it released tepid second-quarter 2021 results. The commercial-stage biotechnology company reported a loss of $3.23 per share, wider than the prior-year quarter’s loss of $3.08, due to higher operating expenses.

Nonetheless, strong uptake of Biohaven’s oral CGRP drug for migraine, Nurtec ODT, singlehandedly pulled the company through the second quarter with a staggering 858% year-over-year growth in revenue. Notably, revenues from Nurtec ODT contributed 100% of the company’s revenue of $92.9 million in the second quarter. (See Biohaven stock chart on TipRanks)

During the earnings call, management at Biohaven noted that Nurtec ODT has witnessed strong uptake since its launch in March 2020. Sales of the drug kept increasing during the first half of 2021.

The FDA even approved a label update of Nurtec ODT in May, to mention that it prevents migraines, making it the first FDA-approved, oral CGRP drug for preventive treatment.

The issuance of an orally dissolving tablet patent (expiring on 2039) for Nurtec ODT — as well as other ODT CGRP inhibitors — buoyed investor confidence, despite the company’s bottom-line performance.

Analyst’s Take

After evaluating Biohaven’s earnings commentary and outlook, Mizuho Securities analyst Vamil Divan reiterated a Buy rating on the stock. Furthermore, he raised the price target to $137 from $134.

He said, “management commentary on the Nurtec uptake to date, including the boost the product has received from its recent approval in migraine prevention, leave us bullish on the company’s outlook.”

Moreover, three pipeline drugs — verdiperstat (as a potential treatment for multiple system atrophy), troriluzole (as a treatment for amyotrophic lateral sclerosis) and zavegepant (as a treatment of acute migraine) — are also in the works.

Divan said, “Along with continued uptake of Nurtec ODT in acute migraine treatment, the launch in the preventive indication is off to a solid start, in our view.”

He noted that Nurtec ODT’s NBRx (new-to-brand, a measure which reports the amount of patients who are prescribed a drug for the first time) share in the oral CGRP market is around 55.9% currently. The analyst pegs Nurtec ODT sales at $380 million for 2021.

Consensus among analysts for Biohaven is a Strong Buy based on eight Buys and two Holds. The average Biohaven price target of $132.25 implies 12.3% upside potential to current levels over the next 12 months.

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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