Pfizer buys Biohaven pharmaceuticals for $11.6 billion

Pfizer said on Tuesday it would pay $11.6 billion to buy Biohaven Pharmaceutical, making a big bet on its ability to boost sales of a new class of migraine drugs.

The boards of directors of both companies approved the deal. Biohaven shares soared about 70% after the announcement to $141.31, while Pfizer rose slightly to $48.83.

The New York drugmaker said Biohaven’s migraine drugs could reach $6 billion in annual sales at their peak.

The key asset Pfizer gains from the acquisition is Biohaven’s already-approved Nurtec ODT, which belongs to a class of migraine treatments called calcitonin gene-related peptide (CGRP) inhibitors. The company also has six other migraine drugs in development.

Nurtec, which generated $462.5 million in sales in 2021, competes with two CGRP-inhibiting pills from AbbVie. The best-selling drugs in the class are the injectable drugs sold by Eli Lilly and Amgen.

Biohaven forecasts Nurtec sales of $825 million to $900 million in 2022. Pfizer said it expects pills to eventually outpace injections.

Pfizer has projected that CGRP-inhibiting pills will eventually make up about 40% of migraine drug prescriptions, up from about 5% currently.

Under the terms of the deal, Pfizer will acquire all of the Biohaven shares it does not already own for $148.50 a share in cash, a 78.6% gain from Monday’s closing price. The company took a 2.6% stake in Biohaven in November.

Pfizer plans to spin off Biohaven’s anti-migraine drugs into a new publicly traded company, the company said. Biohaven shareholders will receive half the value of the new company’s shares for each Biohaven share they currently own.

The acquisition is Pfizer’s biggest since buying cancer drug maker Medivation for $14 billion in 2016.