In a report released today, William Pickering from Bernstein downgraded Biohaven Ltd. to a Hold, with a price target of $9.00.
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William Pickering has given his Hold rating due to a combination of factors impacting Biohaven Ltd.’s current financial and strategic position. The company is facing significant liquidity challenges, with an estimated cash runway of only three quarters if they manage to reduce their R&D cash costs by 60%. This financial strain is compounded by the expectation that any necessary additional financing will likely be equity-based and on unfavorable terms due to the current share price.
Furthermore, there is uncertainty surrounding the company’s next potential catalyst, the Phase 3 MDD data expected by the end of 2025. Previous trials with a similar mechanism of action did not achieve statistical significance, leading to a low probability of success assigned to Biohaven’s trial. Despite some potential upside risks, such as the successful sale of the degrader platform or positive outcomes in other trials, these are considered unlikely or too distant to influence the current stock rating. Consequently, the updated price target reflects a more conservative valuation given the company’s heightened risk profile.
In another report released yesterday, Bank of America Securities also downgraded the stock to a Hold with a $10.00 price target.