Biohaven Announces Proposed Public Offering of Common Shares

Rhea-AI Summary

Biohaven (NYSE: BHVN), a global clinical-stage biopharmaceutical company, has announced a proposed public offering of $250 million of its common shares. The company plans to grant the underwriter a 30-day option to purchase up to an additional $37.5 million of common shares. J.P. Morgan and Morgan Stanley are acting as book-running managers for the offering.

Biohaven intends to use the net proceeds for general corporate purposes. The offering is subject to market conditions, and there is no assurance regarding its completion or terms. The shares will be issued under an effective shelf registration statement on Form S-3.

Positive

• Potential to raise up to $287.5 million in capital
• Funds to be used for general corporate purposes, potentially supporting company growth
• Offering managed by reputable financial institutions (J.P. Morgan and Morgan Stanley)

Negative

• Potential dilution of existing shareholders' ownership
• Uncertainty regarding the completion and final terms of the offering
• Market reaction to the offering may negatively impact stock price

Insights

Financial Analyst

Biohaven's proposed $250 million public offering of common shares is a significant capital-raising event that could have substantial implications for the company's financial position and future operations. This move suggests that Biohaven is seeking to bolster its cash reserves, likely to fund ongoing clinical trials, potential commercialization efforts, or other strategic initiatives.

The additional $37.5 million option granted to underwriters could potentially increase the total raised to $287.5 million, providing even more financial flexibility. However, this will also lead to dilution for existing shareholders, which could put short-term pressure on the stock price.

The involvement of major underwriters like J.P. Morgan and Morgan Stanley lends credibility to the offering and may indicate strong institutional interest. The use of proceeds for "general corporate purposes" gives management flexibility but also leaves some uncertainty for investors about specific allocation plans.

Overall, while this offering strengthens Biohaven's balance sheet, investors should closely monitor how effectively the company deploys this capital to advance its pipeline and create long-term value.

Biotech Industry Expert

This public offering is a strategic move for Biohaven, reflecting the capital-intensive nature of biopharmaceutical development, especially for a company with a diverse pipeline targeting both rare and common diseases. The influx of capital could accelerate Biohaven's R&D efforts across multiple programs, potentially shortening timelines to key clinical milestones.

Investors should note that Biohaven's focus on both rare and common diseases presents a balanced risk profile. Rare disease treatments often command premium pricing and enjoy regulatory incentives, while common disease therapies offer larger market potential. This diversification strategy could be attractive to a wide range of investors.

The timing of this offering is important to consider. It may indicate that Biohaven is approaching critical phases in its clinical programs that require significant funding, or it could be capitalizing on favorable market conditions. Either way, it demonstrates management's proactive approach to ensuring adequate funding for the company's ambitious clinical agenda.

Stakeholders should watch for upcoming clinical trial results or regulatory decisions that could validate this capital raise and potentially drive future value creation.

NEW HAVEN, Conn., Sept. 30, 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 that it has commenced an underwritten public offering of $250 million of its common shares. All of the common shares to be sold in the offering will be offered by Biohaven. In addition, Biohaven expects to grant the underwriter a 30-day option to purchase up to an additional $37.5 million of common shares at the public offering price, less underwriting discounts and commissions. The offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed, or the actual size or terms of the offering. Biohaven intends to use the net proceeds received from the offering for general corporate purposes.

J.P. Morgan and Morgan Stanley are acting as 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 J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, or by email at prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com or from the offices of Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014, or by email at prospectus@morganstanley.com.

The shares will be issued pursuant to an effective shelf registration statement on Form S-3. Before investing in the offering, interested parties should read the prospectus and related prospectus supplement for this offering, the documents incorporated by reference therein and the other documents Biohaven has filed with the Securities and Exchange Commission. 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 timing, size and completion of the proposed public offering as well as the expected use of proceeds related thereto 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, changes in market conditions, 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 news 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 size of Biohaven's proposed public offering?

Biohaven (BHVN) has announced a proposed public offering of $250 million of its common shares, with an additional option for the underwriter to purchase up to $37.5 million more.

How does Biohaven plan to use the proceeds from the offering?

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

Who are the book-running managers for Biohaven's public offering?

J.P. Morgan and Morgan Stanley are acting as book-running managers for Biohaven's (BHVN) public offering of common shares.

When is Biohaven's public offering expected to close?

The press release does not specify a closing date for Biohaven's (BHVN) public offering. It states that the offering is subject to market and other conditions, and there is no assurance as to when it may be completed.