Biohaven stock tumbled Wednesday after the company's experimental protein-degrading drug — which could be used to treat a myriad of immune-related diseases — lagged investor expectations.
The company tested four doses of its drug, BHV-1300, which is meant to break down immunoglobulin G, or IgG, an autoantibody at the center of diseases like rheumatoid arthritis and myasthenia gravis. In healthy volunteers, the doses reduced IgG by up to 37%.
Biohaven called the results "positive," noting that IgG levels began to fall without hours of treatment. But the results fell far short of expectations for 60% lower IgG levels, William Blair analyst Tim Lugo said in a report. Biohaven is going up against Argenx and Immunovant in this space.
On today's stock market, Biohaven stock toppled 12.6% to 33.17. On the flip side, Immunovant stock jumped 4.1%, closing at 29.57, while Argenx shares rose 3.1% to 377.77.
Shares of Biohaven, which have a high Relative Strength Rating of 93, hit their lowest point since November. The RS Rating is a 1-99 measure of a stock's 12-month performance, putting Biohaven stock in the top 7% of all stocks, according to IBD Digital.
Biohaven Stock: Rivaling Argenx, Immunovant
Biohaven says it's still planning additional tests for the drug it calls BHV-1300 and expects to eventually reach at least 70% reductions in IgG. Already, some healthy participants at the lower doses reached 50% to 70% lower IgG levels over four days.
"While investors had originally been expecting 70% reductions, we believe based on recent conversations that there has been a greater appreciation that this is a goal for the program, not for this cut of data at lower doses," RBC Capital Markets analyst Leonid Timashev said in a report to clients.
Timashev kept his outperform rating and 59 price target on Biohaven stock.
The bar doesn't even necessarily have to be 70%. William Blair's Lugo noted Argenx's approved drug, Vyvgart, leads to 50% IgG depletion over five to seven days. And Immunovant has gained almost $1.6 billion in market value since its September 2023 release stating its IgG-lowering drug reduced levels of the autoantibody by 45% to 63%.
"With a more direct mechanism of action, BHV-1300 should lead to faster IgG degradation, supported by this initial data, and may also be more amenable to combination therapy," he said.
Lugo has an outperform rating on Biohaven stock.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
