How Pfizer CEO Bourla's evening call brought Biohaven back into the M&A fold

Pfizer is in the process of buying migraine drug developer Biohaven Pharmaceuticals, upgrading their existing Nurtec ODT licensing agreement to a full-on acquisition. Starting with an April call from Pfizer CEO Albert Bourla, Ph.D., to Biohaven chief exec Vlad Coric, the two companies quickly came to terms on the buyout, a new Securities and Exchange Commission filing shows.

Biohaven and Pfizer originally made contact around 2018 and 2019, the proxy filing shows (PDF). Back then, the New Haven-based company received interest from four multinational biopharma companies, including Pfizer, for a potential full acquisition or a CGRP-focused collaboration.

Given the interest in the CGRP portfolio, Biohaven’s board started considering a spinoff of the non-CGRP pipeline and authorized management to launch a company reorg. But after “continued discussions” with potential partners, Biohaven abandoned that plan and decided to first “demonstrate the value of the CGRP franchise by generating product sales.”

That was before Biohaven won its first FDA go-ahead for oral CGRP inhibitor Nurtec for acute migraine treatment in early 2020. Any serious deal talks with those four large firms had lapsed by the end of 2019, the company said.

Then in late November 2021, Pfizer and Biohaven linked up on a commercialization deal around Nurtec ODT and fellow CGRP candidate zavegepant outside the U.S. Together with that deal, Pfizer also made a $350 million investment in Biohaven and acquired about 3% of the latter’s shares.

For the buyout, the turning point came on the evening of April 11, when Pfizer CEO Albert Bourla rang up Biohaven chief Coric. Bourla offered interest in something that Biohaven had wanted—but ditched—years ago: a potential acquisition of Biohaven and a spinoff of the non-CGRP assets.

Right after the call, Pfizer sent over a non-binding offer, proposing to buy out Biohaven for $157 per share and to hive off the non-CGRP programs with cash funding from Pfizer.

Biohaven turned down Pfizer’s first proposal, leading the New York pharma to sweeten its offer to $159 per share on April 18. In the following days, Pfizer conducted its due diligence covering corporate structure, tax, commercial operations, legal and regulatory matters, among other topics.

Simultaneously, Biohaven was in talks about in-licensing “certain assets” from another multinational biopharma company, a conversation that had started early 2022. The executive team assured the board that it would be able to push that collaboration ahead if the Pfizer takeover fell through.

Cracks showed in the Pfizer deal in late April after AbbVie reported lackluster first-quarter sales of its own oral CGRP products, which pointed to bigger-than-expected pricing pressure on the migraine drug class. Biohaven’s stock plunged, and its internal calculations suggested Nurtec was also likely to miss Wall Street sales estimates for the three-month period.

Pfizer didn’t back away. But the Big Pharma company noticed that its buyout offer based on publicly available information would need an update to reflect additional diluted shares and net debt.

On May 4, Pfizer revised its bid to $150.33 per Biohaven share. Biohaven rejected that proposal again, despite it valuing the company higher.

Two days later, Pfizer went back with a $152-per-share offer. The actual cash payable to shareholders would be lower because of the deal structure.

Then, after agreeing that Pfizer would pay $275 million for the non-CGRP franchise, the two companies came to a per-share price of $148.50 for Biohaven investors. Those were among the final terms they announced on May 10.

Nurtec’s $123.6 million sales in the first quarter did mark a step down from fourth-quarter 2021 despite sequential growth in scripts. But Biohaven said the decline reflected a typical seasonal fluctuation related to patient deductibles, and that the gross-to-net pricing situation could stabilize later.

Meanwhile, Biohaven’s application for zavegepant as an acute migraine therapy was accepted by the FDA in late May. If approved, it would be the first CGRP inhibitor offered in an intranasal formulation.