Biohaven stock surged Friday after the Food and Drug Administration canceled an upcoming meeting to discuss the benefits and risks of its drug, troriluzole.
RBC Capital Markets analyst Leonid Timashev expects the agency to make an approval decision on troriluzole in November. Biohaven tested troriluzole in patients with spinocerebellar ataxia, or SCA, a group of progressive, genetic neurological diseases that cause problems with movement.
"The cancellation of an (advisory committee meeting) likely indicates that the FDA feels it has sufficiently resolved any difficulties in interpreting data pertaining to the safety or efficacy of a drug," Timashev said in a report. "Though whether their conclusion is positive or negative is difficult to determine."
Biohaven stock jumped 6.7%, closing at 15.66.
Biohaven Stock: An Uphill Battle
Biohaven has faced an uphill battle on its journey to win approval for troriluzole. Previously, the FDA refused to accept the company's application for approval based on mixed Phase 3 data. So, Biohaven ran another study for three years.
That study showed troriluzole slowed progression in SCA patients by 50% to 70%. That represented a 1.5- to 2.2-year slowdown in disease progression, William Blair said in a February report.
Roughly two-thirds of drugs where the advisory committee were canceled ultimately won approval, RBC's Timashev said, citing data from 2019 to now. The statistic is "moderately encouraging" for Biohaven, generally suggesting the FDA committee members "feel the underlying benefit/risk of a drug is sufficiently clear that an expert panel is not necessary."
But he still sees the approval as being at risk. The Phase 3 study with mixed results was a randomized placebo-controlled trial, the gold standard of drug development. The new study Biohaven ran used real-world evidence, a less strict approach.
"Based on our analysis, the likelihood of receiving approval with mixed RCT data and RWE studies serving as the primary/substantial source of efficacy is low," he said.
He kept his sector perform rating and 19 price target on Biohaven stock.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
