Biohaven shares plunged Thursday after the Food and Drug Administration unexpectedly delayed the review date for its rare-disease drug.
The agency was due to make an approval decision on Biohaven's troriluzole in the third quarter. Troriluzole is an experimental treatment for spinocerebellar ataxia, a genetic disorder that affects the cerebellum and spinal cord. It leads to progressive problems with coordination, balance and movement.
Instead, the FDA says it needs three additional months to respond to Biohaven's recent submissions and will hold an advisory committee meeting to weigh the risks and benefits of the drug. Executives expected to be notified earlier, Leerink Partners analyst Marc Goodman said.
William Blair analyst Myles Minter said the FDA called out a "major amendment" to Biohaven's application. But the company doesn't know what body of evidence would have triggered this.
"Management indicated that it didn't submit new information but just provided responses to information asked of the company," Leerink's Goodman said in a client note. "It responded to all requests within the requested time period and the application was past the mid cycle review and all site inspections were complete."
In response, Biohaven stock tumbled 19.5%, ending the regular session at 15.82.
Was Biohaven 'On Its Way To Approval?'
Leerink's Goodman assumed that troriluzole was "probably on its way to approval" because of its favorable benefit/risk profile and the fact there's nothing else approved for SCA.
But RBC Capital Markets analyst Leonid Timashev was less surprised by the FDA move. Troriluzole missed the goals of two placebo-controlled studies. Instead, the company was seeking FDA approval based on real-world evidence. There's a precedent for drugs winning approval based on real-world evidence, but the Center for Drug Evaluation and Research — the FDA division in charge of reviewing Biohaven's application — tends to be conservative, Timashev said.
The "lack of a clear mechanism or biomarker, as well as in light of recent leadership changes and readthroughs from other regulators such as the EMA" could be telling for how the FDA might approach troriluzole, he said.
Timashev rates Biohaven stock an outperform with a 54 price target, but said the FDA news "calls into question the overall regulatory picture for troriluzole."
"We note this delay could be due to staffing shortages at the agency (which would be the most benign reason)," he said. "Though the decision to call an Adcomm suggests that reviewers (or leadership, given the potential change to a more conservative strategy) at the FDA are perhaps more skeptical of the package."
Management Unclear On Delay's Reason
Biohaven noted troriluzole has several FDA designations meant to speed along the review process, including fast track, orphan drug designation and priority review.
"Management is not clear why the (review) date was pushed out 3 months to 4Q25, but it may be due to the changes at the FDA, or it's possible that new questions have resulted from these responses and need to be further vetted," Leerink's Goodman said.
Biohaven had been planning on an advisory committee, but previous higher-ups at the FDA said it wasn't necessary. Advisory committees are panels of experts that make approval recommendations to the FDA based on a review of some drug's benefits and risks.
"Whatever the reason we remain optimistic for approval and continue to be positive on the stock," Goodman said.
He kept his outperform rating on Biohaven shares.
Poorly Rated Stock
Biohaven stock, though, has been under pressure since October 2024. In 2025, shares have lost almost 58% as of Thursday's close.
Shares are trading well below their 50-day and 200-day moving averages, according to MarketSurge. They also have a poor IBD Digital Relative Strength Rating of 4 on a scale of 1-99 measuring a stock's 12-month performance against all other stocks.
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