Shares of biotech company Biohaven have soared: its drug is closer to approval. Has the upside been exhausted?

Shares of the small biotech company Biohaven soared 25% on October 22. The company announced that the U.S. Food and Drug Administration (FDA) has accepted for review a resubmitted application for approval of its experimental drug to treat a rare inherited disorder that causes a gradual loss of muscle control and coordination. If the drug is approved, the biotech company’s stock price could double, according to RBC Capital Markets analyst Leonid Timashev.

Biohaven shares rose by a quarter on the New York Stock Exchange on October 22, reaching $14.7. This brought the stock close to its largest one-day gain in three years, according to Barron’s.

The rally was triggered by the company’s announcement that the FDA had accepted a resubmitted application for approval of its drug candidate, Vyglxia, intended for spinocerebellar ataxia — a hereditary neurodegenerative disease that causes a gradual loss of muscle control and coordination. This information is contained in documents that Biohaven submitted to the Securities and Exchange Commission (SEC). The regulator plans to convene an advisory committee to evaluate the drug’s risks and benefits, after which it will make a decision on approval in the first quarter of 2027, the filing states. The date of the committee meeting will be announced later.

Biohaven has been trying to get the drug approved for more than three years, according to Barron’s. In July 2023, the FDA refused to even consider the application for approval of Vyglxia (then known as toriluzole): the Phase 3 trial failed to meet its primary endpoint, which, in the regulator’s assessment, precluded a full review.

In late 2024, Biohaven resubmitted its application, supplementing it with the results of a three-year study that compared the condition of patients receiving toriluzole with data from specific groups of patients who did not receive the drug. In February 2025, the FDA accepted the application for review but ultimately rejected it, citing issues that may be inherent in real-world clinical studies, including potential bias, design flaws, and unaccounted-for factors.

Biohaven supplemented its resubmitted application with new analyses supporting the study's key findings, according to documents filed with the SEC.

RBC Capital Markets analyst Leonid Timashev believes that approval of Vyglxia next year could cause the biotech company's stock price to double, according to Barron's.

In September, Biohaven’s stock fell after the FDA suspended the enrollment of new patients in a trial of its experimental epilepsy drug, opakalim, as Barron’s notes. The regulator requested additional information about a metabolite detected in rodent studies.

Since the beginning of the year, the company’s stock price has risen by approximately 30%. In total, the company’s stock has received ten “buy” recommendations from Wall Street analysts. Three others believe the stock should be held, while one analyst advises selling the stock. The average price target is $25.2, which implies upside potential of more than 71% relative to the last closing price.