Pfizer to buy rest of Biohaven for $11.6B

Pfizer Inc. agreed to buy the rest of Biohaven Pharmaceutical Holding Co. for about $11.6 billion, deploying its pile of cash earned from Covid-19 sales to acquire a new migraine drug.

Pfizer said it would pay $148.50 a share in cash for the Biohaven shares that it doesn't already own, a nearly 79% premium to Monday's closing price of $83.14 for the New Haven, Conn., drugmaker.

Through the deal, Pfizer will gain Biohaven's migraine drug Nurtec, a potential blockbuster that analysts say could add billions of dollars in yearly sales to a big drugmaker facing several costly patent expirations in the coming years.

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Pfizer executives have said they want to find $25 billion in additional revenue from deals by 2030 to offset sales lost due to lost patents on aging products.

Investors expected Pfizer would use cash accumulated from sales of the company's Covid-19 antiviral Paxlovid and vaccine Comirnaty to help pay for deal making.

Paxlovid and Comirnaty are estimated to combine for about half of the approximate $100 billion in company sales this year, Pfizer has said.

In March, Pfizer completed a $6.7 billion acquisition of Arena Pharmaceuticals and its experimental drug for inflammatory bowel disease. Pfizer recently said it would acquire privately held respiratory virus drugmaker Reviral Ltd.

Pfizer and Biohaven earlier this year completed an agreement under which Pfizer gained commercialization rights to migraine drug Nurtec outside the U.S. and bought a 2.6% stake in Biohaven.

Biohaven began selling Nurtec in 2020 as a treatment for acute migraines.

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Nurtec has since been approved for prevention of migraines. Analysts project the drug could have as much as $4 billion in yearly sales by 2030.

Migraine treatment lacked innovation for decades before drugmakers began launching a new class of drugs, known by the initials CGRP, in recent years.

Nurtec is part of the CGRP class, but it is the only oral one approved to treat and prevent migraines. Analysts and doctors say the twin applications could make Nurtec more appealing to patients than competing drugs.

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Yet analysts warn that Nurtec could face pricing pressure as other companies launch competing products.

Pfizer said Biohaven shareholders, including Pfizer, would also receive shares in a new publicly traded company that would retain Biohaven's non-CGRP development-stage pipeline compounds.

Pfizer said it plans to fund the Biohaven deal with cash on hand, adding that it expects to complete the transaction by early 2023.

Shares of Biohaven jumped about 75% in premarket trading Tuesday.