Biohaven shares plunge after US FDA declines to approve brain disorder drug

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By Siddhi Mahatole

(Reuters) -Shares of Biohaven fell more than 40% on Wednesday after the U.S. Food and Drug Administration declined to approve its experimental treatment for a rare brain disorder.

The company said late on Tuesday the FDA had issued a so-called “complete response letter” citing concerns with Biohaven’s use of real-world evidence and external control studies to support the marketing application for Vyglxia, also known as troriluzole.

The agency flagged potential bias, design limitations, and unmeasured or missing data.

Wall Street analysts said while the letter was disappointing, the outcome was unsurprising to many investors considering uncertainties around the evolving regulatory environment in the U.S.

“The outcome is clearly disappointing given troriluzole showed greater than 50% disease slowing over 3 years … and did so without liver toxicity,” said William Blair analyst Myles Minter.

Biohaven said it plans to meet with the FDA to discuss a potential path forward for approval.

RBC Capital Markets analyst Leonid Timashev said the company faces a “difficult road ahead without additional trial data”, though he noted the FDA has reversed controversial decisions in the past, citing its recent turnaround on Stealth Biotherapeutics’ elamipretide.

Vyglxia is being developed to treat spinocerebellar ataxia (SCA), a rare neurodegenerative disorder that affects movement and balance, and currently has no approved therapies.

In July 2023, the FDA declined to review the company’s marketing application based on a 2022 late-stage study of the drug, which failed to meet the main goal.

Following the latest setback, Biohaven said it is restructuring its business priorities and aims to reduce annual direct research and development spending by about 60%.

(Reporting by Siddhi Mahatole in Bengaluru; Editing by Devika Syamnath)