Biohaven stock is poised to retake its 200-day line Monday after the company's experimental drug slowed progression in a rare disease with no approved treatments.
The biotech company tested its drug, troriluzole, over three years in patients with spinocerebellar ataxia. Patients with this disease lose the ability to control their voluntary muscles, which impacts their ability to walk, talk and move their eyes. There are more than 40 types of spinocerebellar ataxia, or SCA, but no Food and Drug Administration-approved treatments.
Troriluzole slowed progression by 50% to 70% over three years. That represents a delay of 1.5 to 2.2 years in disease progression over the three-year period, Biohaven said in a news release. The results surprised analysts given troriluzole previously failed in several final-phase studies, and the FDA has rejected its approval once before.
"With today's surprisingly robust and overwhelmingly positive outcome and with positive signals that FDA is on board with this approach and (new drug application) filing next quarter, we see no choice but to model this opportunity with launch next year and U.S. revenue going to $250 million by 2030," Piper Sandler analyst Christopher Raymond said in a report.
On today's stock market, Biohaven stock surged 13.7% to 45.94. Shares closed above their 200-day line for the first time since May, according to chart analysis from MarketSurge.
Biohaven Stock Improves On Meaningful Data
Biohaven compared patients' change on the functional SARA scale after one and two years of treatment. The scale measures gait, stance, sitting and speech in patients with SCA. Collectively, multiple analyses of the data showed a clinically meaningful slowing of disease progression.
The company is now planning to submit its request for FDA approval in the fourth quarter. It aims to treat all subtypes of SCA. There are about 15,000 people in the U.S. and 24,000 in Europe and the U.K. with SCA. The rarity of the disease means troriluzole is eligible for priority review in the U.S. That puts potential approval and commercialization in 2025, Biohaven said.
William Blair analyst Myles Minter reiterated his outperform rating on Biohaven stock.
"Overall, we are encouraged by the consistent signals of benefit across measures in the study in a population with extremely limited treatment options in a progressive disease," he said.
Biohaven stock has a strong IBD Digital Relative Strength Rating of 90 out of a best-possible 99. This means shares rank in the top 10% of all stocks in terms of 12-month performance.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
