May 10 (Reuters) – Pfizer Inc (PFE.N) said on Tuesday it would pay $ 11.6 billion to buy Biohaven Pharmaceutical Holding Co. (BHVN.N), betting big on its ability to boost sales of -the pill sold in a new class of migraine medications.
The councils of the two companies have approved the deal, they said. Shares of Biohaven jumped 70% to $ 141.31, while Pfizer rose slightly to $ 48.83.
Pfizer is full of money from the once-in-a-lifetime jump in COVID-19 vaccines and therapies, and said it was looking to buy companies or drugs that could add at least $ 25 billion in annual sales by the end of the decade.
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The New York-based drugmaker said Biohaven’s migraine drugs could exceed annual sales of $ 6 billion at their peak.
The main asset that Pfizer gains from the acquisition is the already approved by Biohaven Nurtec ODT, which belongs to a class for the treatment of migraine called calcitonin gene-linked peptide inhibitors (CGRP). The company also has six other migraine drugs under development.
Nurtec, which generated sales of $ 462.5 million in 2021, competes with two CGRP inhibitor pills from AbbVie Inc. The best-selling drugs in the class are injectable drugs sold by Eli Lilly and Co (LLY.N) and Amgen Inc (AMGN.O).
“CGRP oral drugs, although still newer in deep-rooted space, continue to provide strong interventions in disrupting the wider migraine market in the United States,” said Vlad Choric, CEO of BioHaven.
Biohaven forecasts Nurtec sales from $ 825 million to $ 900 million in 2022.
Pfizer said it expects the pills to eventually overtake the injections.
The deal adds “a revolutionary migraine franchise to our portfolio, which we can then improve and provide to even more patients with our commercial capabilities,” said Amir Malik, Pfizer’s chief innovation officer, during a conference call.
Pfizer said it would double the size of Nurtec’s sales department, which would allow it to attract 70,000 additional doctors to the United States. He predicts that pills with CGRP inhibitors will eventually account for about 40% of prescriptions for migraine medications, up from about 5% at present.
Under the terms of the deal, Pfizer will acquire all Biohaven shares it does not yet hold for $ 148.50 per share in cash, a 78.6% premium over Monday’s closing price. He took a 2.6% stake in Biohaven in November.
Pfizer plans to sell Biohaven’s migraine drugs to a new publicly traded company, it said. Biohaven shareholders will receive 0.5 shares of the new company for each share of Biohaven shares they currently hold.
Together with much of the biotechnology sector, shares of Biohaven have fallen sharply in recent months, losing 45% of their value after reaching $ 151.26 in October.
“One burden on the sector is the relative lack of mergers and acquisitions recently, and … we think this news may be exactly what the doctor ordered to restore mood,” said Piper Sandler analyst Christopher Raymond.
The deal with Biohaven is Pfizer’s largest since the purchase of cancer drug maker Medivation for $ 14 billion in 2016.
“Investors will like this deal,” Wells Fargo analyst Mohit Bansal said in a note. “Given Pfizer’s strong balance sheet, this is still a small gain and we would expect more such deals.”
Buying Biohaven is Pfizer’s biggest deal since 2016. Sign up now for FREE unlimited access to Reuters.com
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Report by Manas Mishra in Bengaluru; Edited by Arun Koyur and Bill Bercrot
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