RBC downgrades Biohaven to 'sector perform', shares fall
BHVN•RBC cuts rating and price target
Shares of drugmaker Biohaven BHVN.N fell 3.4% to $15.2 in premarket trading after RBC Capital Markets downgraded the stock to "sector perform" from "outperform" and cut its price target to $19 from $23.
The new target implies 21% upside to the stock's last close.
Why RBC sees less near-term upside
RBC said Biohaven's recent Kv7 licensing deal has strengthened its balance sheet and provides funding visibility for future pipeline readouts, but it removes key near-term catalysts and limits upside from the program.
The brokerage said shares have doubled from earlier-year lows and now appear more fairly valued.
Long-term potential remains, but risk is higher
RBC said it still sees long-term potential in Biohaven's antibody-degrader platform, but investors face a higher-risk profile due to limited patient data, less-validated mechanisms and regulatory uncertainties, along with fewer major catalysts over the next 12 months.
The brokerage estimates the Kv7 deal's $350 million upfront payment and an additional $50 million due next year could extend Biohaven's cash runway into 2028 and reduce the need for shareholder dilution.
As of the last close, the shares were up 39% year to date.
