The proposed deal includes the acquisition of Biohaven’s calcitonin gene-related peptide (CGRP) programme, including rimegepant, zavegepant and a portfolio of five pre-clinical CGRP assets

1200px-Pfizer_World_Headquarters_Entrance

The entrance to Pfizer World Headquarters in Manhattan, New York. (Credit: Coolcaesar/Wikipedia)

Pfizer has signed a definitive agreement to acquire clinical-stage biopharmaceutical company Biohaven Pharmaceuticals for a total consideration of $11.6bn in cash.

Biohaven Pharmaceuticals produces NURTEC ODT (rimegepant), a dual-acting migraine therapy approved for both acute treatment and episodic prevention of migraine in adults.

The proposed deal includes the acquisition of Biohaven’s calcitonin gene-related peptide (CGRP) programme, including rimegepant, zavegepant and a portfolio of five pre-clinical CGRP assets.

The agreement follows an existing collaboration between the two companies initiated last year for the commercialisation of rimegepant and zavegepant outside the US.

As part of the collaboration, Pfizer has acquired a 2.6% stake in Biohaven at a price of $173 per share, by investing $350m.

Under the terms of the current agreement, Pfizer will acquire all outstanding shares of Biohaven it does not already own, at a price of $148.50 per share in cash.

The transaction price of $148.50 indicates around a 33% premium to Biohaven’s volume-weighted average selling price of $111.70 over the three months before the announcement.

Biohaven shareholders are expected to receive 0.5 of a share of New Biohaven, in exchange for each Biohaven common share held.

New Biohaven is a new publicly-traded company that will be created to hold Biohaven’s non-CGRP development stage pipeline compounds.

The transaction, which has been unanimously approved by the boards of directors of Biohaven and Pfizer, is expected to close in early 2023.

It is subject to the New Biohaven spin-off transaction and other customary closing conditions, including receipt of regulatory approvals and approval by Biohaven’s shareholders.

Pfizer internal medicine global president Nick Lagunowich said: “Today’s announcement builds on our legacy of delivering breakthroughs for patients living with complex pain disorders and diseases that disproportionately impact women.

“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.”

In addition to the consideration of $11.6bn, Pfizer is also expected to make payments to settle Biohaven’s third-party debt.

Upon closing of the transaction, New Biohaven will continue to operate under the Biohaven name and will be led by Vlad Coric as chairman and CEO.

New Biohaven is capitalised with $275m of cash and is eligible to receive more than $5.25bn in tiered royalties on net sales of rimegepant and zavegepant in the US.

JP Morgan served as a financial advisor and Ropes & Gray as a legal advisor to Pfizer, while Centerview Partners served as a financial advisor and Sullivan & Cromwell as a legal advisor to Biohaven on the transaction.