Pfizer Spends Rs 88,000 Crore To Buy This Migraine Pill Maker: Biggest Business Deal Since 2016!

Pfizer Inc is going to pay $11.6 billion to buy migraine pill manufacturer Biohaven Pharmaceutical which will be the biggest deal made by the cash-rich drug company since the year 2016 to develop its portfolio after patent losses for some cancer drugs.

Pfizer will get access to rimegepant

Announced on Tuesday, the deal is going to give Pfizer access to Biohaven’s approved rimegepant, a potential mega-success that belongs to the segment of migraine treatments known as calcitonin gene-related peptide (CGRP) inhibitors.

Pfizer Covid-19 drugs became huge successes

Abundant with almost $32 billion in cash on hand after its success with COVID-19 drugs, Pfizer has been trying to add treatments as the patents for its top-selling drugs like its blood thinner Eliquis are near expiration.

The company is also expecting sales of its COVID-19 vaccines to decrease from last year’s highs.

“Investors will like this deal. Given Pfizer’s strong balance sheet, this is still a small acquisition and we would expect more such deals,” Mohit Bansal, Wells Fargo analyst said.

The Biohaven deal is its largest since Pfizer’s $14 billion purchase of cancer drugmaker Medivation in the year 2016.

Pfizer is going to acquire all Biohaven shares that it does not already own at $148.50 per share in cash, a 78.6% premium to the last closing price. It had already bought a 2.6% stake in Biohaven in November.

Biohaven shares went up by 70.1% to $141.39 before the bell, while Pfizer was trading at a $48.60 constant. With this deal, Pfizer will compete in a crowded market for migraine treatments from other big drugmakers such as Eli Lilly.

What is rimegepant?

Biohaven’s rimegepant is sold as Nurtec ODT in the United States and has been approved for use as both a treatment and a preventative for migraines and is expected to yield sales of more than $4 billion by the year 2030. It yeilded the sales of $462.5 million in the year 2021.

Biohaven is also in the process of developing another CGRP inhibitor and is testing two non-CGRP drugs in late-stage studies.

After the deal closes, Biohaven shareholders, including Pfizer, will get 0.5% of a share of a new publicly traded company that will retain Biohaven’s non-CGRP treatments.

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