Biohaven Ltd. shares plunged as much as 44% in premarket trading on Wednesday, November 5, after the company announced that it received a Complete Response Letter (CRL) from the US Food and Drug Administration (FDA) denying its New Drug Application (NDA) for Vyglxia.
The drug is generically known as troriluzole. The main purpose of the drug is to be the first-ever treatment for a rare, debilitating neurodegenerative disease called spinocerebellar ataxia (SCA), which has no approved therapies.
'Flawed' data mentioned by the FDA
The FDA's rejection focused on the clinical data provided by Biohaven. In its CRL, the agency said there were major concerns with the Real-World Evidence (RWE) study that formed the basis of the application, as cited on RTT News.
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The FDA noted “potential bias, design flaws, lack of pre-specification, and unmeasured confounding factors” in the external control study. That was a serious claim, as the company had reported that the study demonstrated Vyglxia reduced the progression of SCA (Sudden Cardiac Arrest) disease by 50-70% relative to untreated controls, as cited on the Biohaven press release reports.
Adding to the company’s setback, the FDA scheduled an advisory committee meeting to publicly review the drug, but did not allow external clinical experts to weigh in, according to FirstWorld Pharma.
Company restructures and slashes its R&D
Biohaven responded quickly to the regulatory setback, announcing a major strategic restructuring. The company will immediately slash its annual direct R&D (Research & Development) spending by about 60% to conserve cash.
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According to Biohaven's press release details, CEO Vlad Coric expressed “extreme disappointment” with the FDA's decision, and mentioned that, “Patients with rare diseases also deserve an efficient, fair, and flexible regulatory process that aligns with the urgency of their high unmet medical needs. The company will request a meeting to discuss a path forward.
Firms like TD Cowen and Barid reduced their price targets. While analysts noted the rejection eliminates Biohaven’s most near-term revenue opportunity, some maintained "Buy" ratings, believing the company's remaining pipeline still holds significant value, as mentioned in BioPharma Dive.
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