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Pfizer buys migraine partner Biohaven for $11.6B, betting on CGRP drugs in grand return to neuroscience

Pfizer is channeling the large windfall it’s made from COVID-19 products into dealmaking. Six months after partnering up with Biohaven Pharma on its migraine drug, Pfizer has decided it wants more.

The Big Pharma will spend $11.6 billion to buy the remaining Biohaven shares that it doesn’t already own along with the company’s CGRP inhibitor portfolio. Marketed migraine drug Nurtec ODT will be the deal’s crown jewel.

Pfizer expects to grow Biohaven’s oral CGRP franchise to more than $6 billion in peak sales, Aamir Malik, Pfizer’s chief business innovation officer, said on a conference call Tuesday. This will contribute to Pfizer’s existing plan to add $25 billion in risk-adjusted revenues by 2030 through business development, he said.

The buyout follows a Nurtec commercialization deal the companies penned in November 2021. At the time, Pfizer promised up to $1.24 billion in upfront and milestone payments for Nurtec’s ex-U.S. rights. That included a $350 million investment that gave Pfizer a 2.5% stake in Biohaven.

Now, Pfizer is paying $148.5 apiece for the rest of Biohaven shares, an offer that represents a 33% premium to Biohaven’s volume-weighted average selling price over the past three months. Biohaven closed yesterday at $83.14 per share and is already trading up today, at around $142.60.

Through the deal, Pfizer is taking control of a large CGRP portfolio. In addition to Nurtec and five preclinical CGRP candidates, Biohaven said that in March it filed zavegepant with the FDA as an intranasal spray for acute migraine treatment. Thanks to its quick effect, Biohaven has positioned the drug as “the EpiPen of migraine,” CEO Vlad Coric, M.D., said during the call. The drug is also being developed as an oral soft gel for chronic migraine prevention.

Not all of Biohaven is joining Pfizer. The non-CGRP projects will stay with the New Haven, Connecticut-based company. Biohaven’s existing shareholders, including Pfizer, will receive 0.5 of a new share for each of company’s old shares. The new entity will retain Biohaven’s name and its CEO Coric, alongside other executives.

The new Biohaven has a glutamate platform including troriluzole in phase 3 trials for obsessive-compulsive disorder and spinocerebellar ataxia. In addition, it has verdiperstat tablet for amyotrophic lateral sclerosis, also in late-stage development.

After the acquisition, the new Biohaven will still be entitled to receive royalties tied to U.S. sales of Nurtec and zavegepant in excess of $5.25 billion.

Pfizer is doubling down on Nurtec at a time when the oral CGRP migraine drug has come under some gross-to-net pricing pressure in the U.S. In the first quarter, Nurtec sales reached $123.6 million, a large 35% decline over the fourth quarter of 2021 despite an 8% sequential growth in scripts, Biohaven said Tuesday.

Biohaven said the quarterly decline was “largely driven by seasonality related to renewed patient deductibles and prescription reauthorizations” plus a patient support program.

Based on the first-quarter performance, Biohaven expects Nurtec’s full-year haul to fall between $825 million and $900 million. The range falls below industry watchers’ prior expectations.

Nurtec’s situation mirrors that of AbbVie’s rival CGRP drug Ubrelvy, suggesting a classwide problem. During the first quarter, Ubrelvy collected $138 million in sales, a 25% decrease from the previous quarter.

Pfizer reviewed the gross-to-net pressure as part of its due diligence process, Angela Hwang, Pfizer’s biopharmaceuticals business chief, said during Tuesday’s call. While the pricing situation isn’t uncommon during the first few years of a drug’s launch, Pfizer is “compelled” by Nurtec’s long-term potential, she said.

Pfizer will double Nurtec’s sales team and leverage its existing capabilities to reach 70,000 additional primary care physicians and OBGYNs, an area that remains underpentrated by Biohaven, Hwang said. It also expects to significantly expand the nonpromotional field-based medical affairs teams by eight-fold, she said. And the company’s real-world evidence team will leverage its global footprint to better understand Nurtec’s impact on health systems and real-world utilization patterns.

Ultimately, Pfizer aims to increase oral CGRPs’ share among oral migraine drugs to over 40% from 5% in 2021.

“We believe Pfizer is uniquely positioned to help the portfolio reach its full potential given our leading scale and capabilities, including comprehensive field force engagement with primary care physicians, specialists and health systems delivering the right information at the right time,” Nick Lagunowich, president of Pfizer Internal Medicine, said in a statement.

The Biohaven deal marks a comeback for Pfizer in the neuroscience arena after a downsizing in 2018. At the time, the New York pharma divested most of its neuroscience R&D programs into a new firm called Cerevel Therapeutics.

Pfizer said it’ll fund the Biohaven transaction with existing cash and expects to wrap up the deal by early 2023.

The deal comes on the heels of Pfizer’s $6.7 billion acquisition of Arena Pharmaceuticals to get its hands on the latter’s S1P modulator for inflammatory diseases. In a smaller purchase unveiled last month, Pfizer is buying respiratory syncytial virus specialist ReViral for $525 million.

Biohaven likely won’t be Pfizer’s last M&A move in the near term thanks to its large cash pile from BioNTech-partnered COVID-19 vaccine Comirnaty and oral antiviral Paxlovid. SVB Securities analysts in December projected Pfizer could have $175 billion in M&A firepower by the end of 2022.

To further fuel the speculation that Pfizer may be on the lookout for large transactions, the company recently brought on former CVS chief financial officer David Denton as its own CFO. Denton steered CVS’s $69 billion acquisition of Aetna.

“We’ve also said we are agnostic to size. So if the right larger opporunity presents itself, we certainly have the capital and capabilities to pursue it,” Pfizer’s Malik said. “But we’ve also been clear that we’re going to focus on drive out top-line growth over the back half of the decade rather than large deals that are anchored on cost synergies.”