Shares of Biohaven Pharmaceutical Holding Co. (NYSE:BHVN) dropped by nearly 13% in pre-market action Tuesday morning. The drugmaker's shares are sinking following the release of disappointing phase 2/3 clinical trial results for its experimental Alzheimer's disease drug known as troriluzole.
Specifically, the company announced yesterday that troriluzole failed to beat out placebo at the 48-week mark in patients with mild to moderate Alzheimer's disease on two measures of cognitive decline: the Alzheimer's Disease Assessment Scale-Cognitive Subscale 11 and the Clinical Dementia Rating Scale Sum of Boxes.
As U.S. stock markets were closed Monday for Martin Luther King Jr. Day, Biohaven's shares are reacting to this news today. Although the drugmaker's shares have recovered to some degree since the start of trading today, they are still down by a noteworthy 8% as of 9:38 a.m. EST.
Alzheimer's disease has proven time and again to be a tough nut to crack. Despite numerous pharma companies pouring billions of dollars into research over the past two decades, there are still no disease-modifying drugs approved for this deadly neurodegenerative disorder. Biohaven's once-promising drug candidate appears set to join this long list of failures. That being said, the company did note that it is awaiting additional biomarker data in a subgroup of patients with early-stage disease before making a final call on troriluzole's fate.
Should bargain hunters take advantage of this weakness in Biohaven's shares? The bottom line is that the biopharma had a lot riding on troriluzole's Alzheimer's indication. After all, the drug already posted less-than-stellar trial results in its two other high-value indications (obsessive-compulsive disorder and generalized anxiety disorder). As such, it might be a good idea to wait on additional data in this key indication before buying shares.