RBC Capital upgrades TP and rating on small-cap biotech Biohaven, seeing 70% upside

Investment bank RBC Capital Markets upgraded to "outperform" its rating on shares of Biohaven Ltd, a small cap developer of drugs for epilepsy and kidney disease. The upgrade follows new clinical data that, in RBC’s view, reduces development risk and improves the risk-reward profile. The bank now sees potential for the stock to rise 70% from current levels.

RBC Capital Markets analyst Leonid Timashev upgraded Biohaven’s rating to “outperform” from “sector perform,” CNBC reported.

Timashev also raised the target price on the stock by 144% to $22 per share, according to Yahoo Finance data. It implies upside of about 70% versus the last close. Biohaven shares rose 1.5% to $12.90 per share on Wednesday, January 21.

RBC upgraded the stock after Biohaven released new clinical data on its Kv7 program, which is being tested in patients with epilepsy, CNBC reported. Most participants in the study achieved at least a 50% reduction in seizure frequency, while adverse effects were infrequent.

RBC said that this data provides evidence the drug has activity in the central nervous system, which has been a key concern for investors heading into upcoming late-stage trials, CNBC writes. Biohaven expects to release key results for the Kv7 program in 2026.

While not guaranteeing success, Timashev wrote that the latest data "does take the worst-case scenario off the table," adding that the "Kv7 modulator has potential to show a somewhat improved safety profile over competitors and be a fast follower in a market that can support multiple branded drugs."

The analyst also highlighted recent updates across the rest of Biohaven’s pipeline, including programs targeting thyroid disease and kidney disease.

If late-stage trials are successful, or if earlier-stage assets demonstrate applicability across a wider range of indications, Biohaven shares could rise to $30 per share, Timashev argues. That would imply upside of about 130% versus the Wednesday close.

Biohaven shares are down more than 67% over the last 12 months.

Still, Wall Street sentiment remains broadly upbeat. Eleven analysts rate the stock “buy” versus five who recommend “hold,” according to MarketWatch data. The average target price stands at $20.80 per share, implying upside of about 61%.