Skip to content
Subscriber Only
Max Nisen

Migraine-Drug Deal Hype Turns Into a Giant Headache

An investment thesis that depends on a buyer expensively bucking an M&A trend deserves extra skepticism, as Biohaven’s plunge shows.

A cautionary tale of dashed buyout dreams.

A cautionary tale of dashed buyout dreams.

Photographer: Gabriel Bouys/AFP/Getty Images

Biohaven Pharmaceutical Holding Co. has rapidly transformed from one of biotech’s darlings into a cautionary tale of overheated M&A hype. 

Shares of the developer of migraine treatments surged in April after Bloomberg News reported that the company was considering a sale;  the stock then took another leg up earlier this month when Biohaven canceled plans to attend a Goldman Sachs health-care conference, fueling speculation a takeover was imminent. All those gains evaporated this week when the company instead announced that it was selling more shares, something that wouldn’t happen if a deal was in sight. As of midday Tuesday, the stock was down 35 percent from its highs: