Biohaven Announces Pricing of $250 Million Public Offering of Common Shares

Rhea-AI Summary

Biohaven (NYSE: BHVN) has announced the pricing of its public offering of 5,263,158 common shares at $47.50 per share. The company expects to raise approximately $250 million in gross proceeds before deducting underwriting discounts and expenses. Biohaven has also granted underwriters a 30-day option to purchase up to an additional 789,473 shares at the public offering price. The offering is set to close on October 2, 2024, subject to customary conditions.

The company plans to use the net proceeds for general corporate purposes. J.P. Morgan, Morgan Stanley, Jefferies, and TD Cowen are acting as joint lead book-running managers for the offering. The shares will be issued under an effective shelf registration statement on Form S-3.

Positive

• Successful pricing of $250 million public offering
• Potential for additional capital through underwriters' option
• Strengthening of company's financial position for general corporate purposes

Negative

• Potential dilution of existing shareholders' ownership
• Increase in outstanding shares may impact earnings per share

Insights

Financial Analyst

Biohaven's $250 million public offering of common shares is a significant capital raise that will bolster the company's financial position. Pricing at $47.50 per share, slightly below the current market price, indicates strong investor interest while minimizing dilution. The additional $37.5 million from the overallotment option could further strengthen their cash reserves.

This capital infusion will provide Biohaven with substantial runway to advance its clinical-stage pipeline across rare and common diseases. The "general corporate purposes" designation for use of proceeds offers flexibility but may also suggest a lack of immediate, specific capital needs. Investors should monitor how effectively management deploys this capital to drive value creation.

The involvement of major underwriters like J.P. Morgan and Morgan Stanley lends credibility to the offering. However, the dilutive effect of issuing 5.26 million new shares (potentially up to 6.05 million with the overallotment) will impact existing shareholders. The market's reaction to this dilution versus the improved financial position will be important to watch in the short term.

Biotech Industry Specialist

This capital raise is a strategic move for Biohaven, reflecting the capital-intensive nature of biopharmaceutical development. With a diverse pipeline spanning rare and common diseases, the additional $250 million provides important funding to advance multiple clinical programs simultaneously.

The timing of this offering is noteworthy, coming after recent positive clinical data readouts which likely contributed to favorable pricing. It's a common strategy for biotech firms to capitalize on positive momentum to secure funding. This cash infusion reduces near-term financing risk and potentially extends Biohaven's operational runway by 12-18 months, depending on burn rate.

Investors should focus on upcoming clinical milestones and potential catalysts that could be accelerated or expanded with this new funding. Key areas to watch include their CGRP franchise expansion, glutamate modulation platform and myostatin inhibition programs. The market will be looking for clear communication from management on how this capital will translate into value-driving events in the pipeline.

NEW HAVEN, Conn., Oct. 1, 2024 /PRNewswire/ -- Biohaven Ltd. (NYSE: BHVN),a global clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of life-changing therapies to treat a broad range of rare and common diseases, today announced the pricing of its underwritten public offering of 5,263,158 of its common shares at a price to the public of $47.50 per share.  In addition, Biohaven has granted the underwriters a 30-day option to purchase up to an additional 789,473 common shares at the public offering price, less underwriting discounts and commissions.  The gross proceeds from the offering are expected to be approximately $250 million before deducting underwriting discounts and commissions and offering expenses payable by Biohaven.  The offering is expected to close on October 2, 2024, subject to satisfaction of customary closing conditions. Biohaven intends to use the net proceeds received from the offering for general corporate purposes.

J.P. Morgan, Morgan Stanley, Jefferies and TD Cowen are acting as the joint lead book-running managers of the offering.

The offering is being made only by means of a prospectus supplement and the accompanying prospectus, copies of which, when available, may be obtained from the offices of the following: J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone at (866) 803-9204, or by email at prospectus-eq_fi@jpmchase.com; from Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014, or by email at prospectus@morganstanley.com; Jefferies LLC, Attention: Equity Syndicate Prospectus Department, 520 Madison Avenue, New York, NY 10022, by telephone at (877) 821-7388, or by email at Prospectus_Department@Jefferies.com; or TD Securities (USA) LLC, 1 Vanderbilt Avenue, New York, NY 10017, by telephone at (855) 495-9846 or by email at TD.ECM_Prospectus@tdsecurities.com.

The shares will be issued pursuant to an effective shelf registration statement on Form S-3.  Copies of the registration statement can be accessed through the SEC's website at www.sec.gov.  This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the applicable securities laws of such state or jurisdiction.

Forward-looking Statements

This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The use of certain words, including "continue", "plan", "will", "believe", "may", "expect", "anticipate" and similar expressions, is intended to identify forward-looking statements. Investors are cautioned that any forward-looking statements, including statements regarding the expected closing of the public offering and the expected use of proceeds therefrom are not guarantees of future performance or results and involve substantial risks and uncertainties. Actual results, developments and events may differ materially from those in the forward-looking statements as a result of various factors including: Biohaven's ability to complete the offering of its common shares on the proposed terms, or at all, and Biohaven's expectations related to the use of proceeds from the offering of its common shares. Additional important factors to be considered in connection with forward-looking statements are described in Biohaven's filings with the Securities and Exchange Commission, including within the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations". The forward-looking statements are made as of the date of this new release, and Biohaven does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Investor Contact:

Jennifer Porcelli
Vice-President, Investor Relations
jennifer.porcelli@biohavenpharma.com
201-248-0741

Media Contact:

Mike Beyer
Sam Brown Inc.
mikebeyer@sambrown.com
312-961-2502

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SOURCE Biohaven Ltd.

FAQ

What is the price per share for Biohaven's (BHVN) public offering?

Biohaven (BHVN) has priced its public offering at $47.50 per common share.

How many shares is Biohaven (BHVN) offering in its public offering?

Biohaven (BHVN) is offering 5,263,158 common shares, with an option for underwriters to purchase an additional 789,473 shares.

When is the expected closing date for Biohaven's (BHVN) public offering?

The public offering for Biohaven (BHVN) is expected to close on October 2, 2024, subject to customary closing conditions.

How much does Biohaven (BHVN) expect to raise from the public offering?

Biohaven (BHVN) expects to raise approximately $250 million in gross proceeds from the public offering before deducting underwriting discounts and expenses.

What will Biohaven (BHVN) use the proceeds from the public offering for?

Biohaven (BHVN) intends to use the net proceeds from the public offering for general corporate purposes.