The biggest pharmaceutical company in the world is about to become much bigger, as they have purchased Biohaven Pharmaceutical Holding Co. for a whopping $11.6 billion cash – to gain an approved migraine medication.
According to Bloomberg, Pfizer will pay $148.50 per share for all the outstanding stock belonging to Biohaven, which is based in New Haven, Connecticut.
Pfizer and other shareholders will receive half a share of New Biohaven for every share of Biohaven they hold – a new publicly traded company – set to retain compounds currently in development that are not used in the migraine medication.
Pfizer has made a huge amount of money during the covid pandemic, and especially the covid vaccines, which have been largely force-fed to the public against their will. Because of this “success” the Big Pharma giant has plenty of resources to start to diversify, now that the pandemic appears to be coming to an end.
Pfizer has acquired the drug Rimegepant, which is sold as Nurtec ODT in the United States and known as Vydura in Europe. Zavegepant is a migraine nasal spray and has been submitted to U.S regulators.
Sales could peak at around $6 billion per year in profits for Pfizer and they plan to double the number of sales representatives to promote the drug – wanting it to reach an additional 70,000 health care providers, said Angela Hwang, president of Pfizer’s pharmaceutical unit, during an interview over a call.
“It comes back to the scale of the machinery that we have and the depth of the expertise we have in primary care.”
Pfizer and Biohaven agreed in November to collaborate on selling the two drugs outside the U.S. At the time, Pfizer invested $350 million to acquire 2.6% of Biohaven’s common stock for $173 a share. Pfizer will also gain five other CGRP assets that are still in lab studies.
The purchase “appears to be an auspicious financial move — investing more of its Covid-19-driven windfall to forge future growth,” Bloomberg Intelligence pharma analyst John Murphy said in a note. In light of the companies’ existing agreement on migraine drugs “this looks like a commercial decision based on a more detailed assessment of available data.”
Pfizer will also pay to settle Biohaven’s third-party debt and redeem all outstanding shares of the company’s redeemable preferred stock, according to the statement.
Biohaven shares soared as much as 70%, after having fallen more than 40% since early November. Pfizer’s offer price is about a third more than the stock’s weighted average selling price of $111.70 over the last three months, according to the statement. The companies expect the transaction to close by early 2023.
Pfizer gained 0.9% at 11:19 a.m. in New York.
JPMorgan Chase & Co. acted Pfizer’s financial adviser for the transaction with Ropes & Gray LLP as its legal adviser. Centerview Partners was Biohaven’s financial adviser, and Sullivan & Cromwell LLP was its legal adviser.
If Pfizer’s previous history is anything to go by, this is not a good thing for everyday Americans – Big Pharma just got a lot bigger.