RBC Capital cuts Biohaven stock price target to $54

On Tuesday, RBC Capital Markets adjusted its outlook on Biohaven Pharmaceutical (TADAWUL:2070) Holding Company (NYSE:BHVN), lowering the price target to $54 from the previous $61. Despite this change, the firm maintained its Outperform rating on the company’s shares. The adjustment follows Biohaven’s first-quarter earnings report for the year 2025, released earlier on the same day. According to InvestingPro data, BHVN currently trades at $19.48, significantly below its 52-week high of $55.70, suggesting potential upside if the company executes on its pipeline.

The RBC Capital analyst expressed confidence in Biohaven’s prospects, highlighting a series of potential catalysts expected throughout 2025. The company’s strategic approach, which includes running multiple parallel phase III programs, is anticipated to start yielding results soon. Key readouts are expected from phase III trials in major depressive disorder (MDD) and obsessive-compulsive disorder (OCD), along with a Prescription Drug User Fee Act (PDUFA) decision in spinocerebellar ataxia (SCA). InvestingPro analysis reveals that while the company maintains strong liquidity with a current ratio of 2.33, it faces challenges with rapid cash burn, a crucial factor for investors monitoring its clinical programs.

According to the analyst, these developments could significantly impact Biohaven’s stock performance. Further clinical and regulatory milestones are also on the horizon for Biohaven, with major updates in spinal muscular atrophy (SMA) and epilepsy not far behind. While acknowledging the significant risks due to mixed or limited human efficacy data across these programs, the analyst believes that the potential for a 50%-70% upside in the key programs offers a favorable reward/risk scenario, especially given Biohaven’s market capitalization of $2 billion.

The revised price target of $54 reflects updates to the analyst’s model, accounting for the company’s cash burn and recent financing activities. Despite the reduction in the target price, the analyst’s commentary underscores a belief in the strong potential of Biohaven’s pipeline and its ability to provide substantial returns.

In other recent news, Biohaven Ltd. has secured a significant investment agreement with Oberland Capital Management LLC for up to $600 million. This funding is intended to support the clinical trials and potential commercialization of troriluzole, a treatment candidate for spinocerebellar ataxia. The initial tranche of $250 million is expected by April 2025, with additional funds contingent on reaching regulatory milestones, including anticipated FDA approval. Meanwhile, at Biohaven’s 2025 Annual Meeting of Shareholders, directors Vlad Coric, M.D., and Kishan Mehta were re-elected, and Ernst & Young LLP was ratified as the company’s independent auditors for the fiscal year. In the realm of analyst ratings, Piper Sandler has maintained an Overweight rating on Biohaven, citing the potential of its diverse pipeline, including the promising IgG degrader platform. Conversely, Morgan Stanley (NYSE:MS) has adjusted its price target for Biohaven from $69 to $63, while maintaining an Overweight rating, primarily due to revised expectations following the company’s recent financial disclosures. Bernstein analysts have expressed concern about regulatory uncertainties due to FDA staff cuts, noting Biohaven as vulnerable given its approaching priority review date for troriluzole.

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