Why Did Biohaven Stock Collapse in Premarket Today? FDA Rejects Its Lead Drug Vyglxia

Biohaven Ltd. (NYSE: BHVN) experienced a dramatic premarket collapse on November 5, 2025, with shares plunging approximately 40-44% to $8.38 as of 8:55:49 AM EST, down from the previous close of $14.85. The steep decline followed the company’s announcement that the U.S. Food and Drug Administration issued a Complete Response Letter (CRL) rejecting the New Drug Application for Vyglxia (troriluzole), its lead asset intended to treat spinocerebellar ataxia (SCA), a rare neurodegenerative disease.

The rejection represents a significant setback for the biotechnology company and has triggered immediate strategic restructuring measures.

FDA Flags Study Design Issues Despite Promising Efficacy Results

The FDA’s Complete Response Letter rejected Vyglxia despite what Biohaven characterized as compelling clinical data from its troriluzole development program, which represented the first industry trials to generate therapeutic potential data in SCA patients. The application included a three-year real-world evidence study (Study 206-RWE) showing troriluzole slowed SCA disease progression by 50-70% compared to matched untreated external controls, along with a greater than 50% reduction in fall risk and delayed progression to wheelchair dependency.

The study achieved statistical significance on its prespecified primary endpoint and eight consecutive secondary endpoints across independent external control groups from the United States and Europe.

However, the FDA cited inherent issues with real-world evidence and external control studies, including potential bias, design flaws, lack of pre-specification, and unmeasured confounding factors. Biohaven’s CEO Vlad Coric expressed extreme disappointment, noting that the FDA had previously reviewed and provided feedback on the study’s statistical analysis plan and protocol before approval.

The company emphasized that FDA meeting minutes from March 2024 indicated “a large and robust treatment effect would be needed to overcome the biases of an externally controlled trial,” criteria Biohaven believes its data clearly met.

Adding to the company’s frustration, the FDA initially planned but then cancelled an Advisory Committee meeting weeks before it was scheduled, preventing clinical experts from publicly weighing in on the treatment effect. Biohaven is now requesting an urgent meeting with the FDA to discuss potential next steps, particularly given the large number of patients currently being treated in the expanded access program for this disease that has no approved treatment options.

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Biohaven Announces Cost Cuts and Refocuses on Core Pipeline

Prior to the FDA announcement, Biohaven stock had already been under significant pressure, with year-to-date returns down 62.65% and one-year returns declining 72.12%, compared to the S&P 500’s gains of 15.13% and 18.54% respectively. The stock had traded in a 52-week range of $12.79 to $54.98, with a market capitalization of approximately $1.476 billion before the premarket collapse.

The company carries a high beta of 3.45, indicating significant volatility, and reported negative earnings per share of -$7.46 with no P/E ratio due to its pre-profitability status as a clinical-stage biotechnology company.

In response to the CRL, Biohaven immediately announced strategic portfolio and cost-optimization measures, including an approximately 60% reduction in annual direct R&D expenditure (excluding personnel and stock-based compensation). The company will prioritize three key late-stage clinical programs: extracellular degraders for IgA nephropathy (BHV-1400) and Graves’ disease (BHV-1300); Opakalim, a Kv7 ion channel activator in pivotal trials for adult focal epilepsy and depression; and Taldefgrobep alfa, a myostatin-activin pathway inhibitor for spinal muscular atrophy and obesity.

Non-priority programs will be paused or delayed to maintain the company’s cash runway and focus resources on programs with the greatest potential for value generation, with new data from priority programs expected to be presented at a healthcare conference in January 2026.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.