Biohaven Ltd. shares tumbled Friday after the company withdrew its European marketing application for Dazluma, an experimental treatment for spinocerebellar ataxia, a rare genetic brain disorder that impairs nerve cells. The withdrawal came after the European Medicines Agency (EMA) expressed concerns about the drug's effectiveness and classification.
The Connecticut-based pharmaceutical company lost nearly $400 million in market value as its stock dropped approximately 16% to around $19.50 per share following the announcement. The EMA revealed that Biohaven had withdrawn its application on March 24, after the agency's main drug review committee indicated that marketing authorization couldn't be granted based on available data.
Regulatory Concerns and Company Response
According to the EMA, two primary issues led to the provisional negative opinion. First, regulators were not convinced of Dazluma's proven effectiveness in treating spinocerebellar ataxia. Second, and perhaps more critically for commercial purposes, the agency questioned Biohaven's request for "new active substance" classification, which would provide significant market advantages.
The EMA noted that Dazluma breaks down into riluzole in the body, a molecule already approved in Europe and the United States for amyotrophic lateral sclerosis (ALS) patients. Regulators were not persuaded that the drug differs significantly from plain riluzole, challenging Biohaven's claim for novel status.
In an emailed statement, Biohaven CEO Vlad Coric explained the company's decision: "We ultimately pulled the approval application once it became clear the committee didn't intend on bestowing that classification." Coric emphasized that Biohaven remains committed to the Dazluma program and plans to resubmit to the EMA within approximately three months with "appropriate data" or further arguments addressing the new active substance issue.
Impact on U.S. Regulatory Prospects
The European setback raises questions about Dazluma's pending application with the U.S. Food and Drug Administration (FDA). Biohaven has submitted for FDA approval with a decision expected between July and September 2025.
Leonid Timashev, an analyst at RBC Capital Markets, noted that the European withdrawal "adds risk to the U.S. review, as it calls into question whether the FDA would be similarly strict." He added that FDA approval is considered "critical to helping the stock recover," explaining the "outsized stock move" following the news.
Charles Duncan of Cantor Fitzgerald offered a more optimistic view, describing the situation as "a speed bump, but not ultimately a roadblock, on the European approval front."
Biohaven's Strategic Position
The regulatory challenge comes at a pivotal time for Biohaven, which completed the sale of its portfolio of migraine medications to Pfizer for nearly $12 billion in late 2022. Since this major transaction, the company has been working to establish its next commercial success.
Biohaven has built a diverse research pipeline with more than a dozen experimental medicines targeting various disease categories, including oncology, immunology, and neuroscience. However, the Dazluma program represents one of its most advanced candidates, making this regulatory setback particularly significant for the company's near-term prospects.
About Spinocerebellar Ataxia
Spinocerebellar ataxia is a group of rare genetic disorders characterized by progressive problems with movement, including poor coordination, unsteady gait, and speech difficulties. These conditions result from damage to the cerebellum and spinal cord, with symptoms typically worsening over time.
Currently, treatment options for spinocerebellar ataxia are limited, primarily focusing on managing symptoms rather than addressing the underlying disease process. This represents a significant unmet medical need that Biohaven's Dazluma aims to address, potentially offering patients a dedicated therapeutic option for this debilitating condition.
