What happened
Shares of Biohaven Pharmaceutical (BHVN -0.47%) rocketed 68% on Tuesday after the biopharmaceutical company struck a deal to be acquired by Pfizer (PFE -3.85%).
So what
Biohaven is a leader in the treatment of migraines -- often intensely painful headaches that affect 1 billion people worldwide. Its Nurtec ODT therapy is used to treat and prevent migraines in adults.
The agreement would see Pfizer purchase Biohaven for roughly $11.6 billion, or $148.50 per share, in cash. Pfizer would also pay off Biohaven's debt and redeem its preferred stock.
Additionally, Biohaven shareowners would receive half a share of New Biohaven -- a company created to house a portion of Biohaven's pre-clinical drug pipeline -- for every Biohaven share they own.
Image source: Getty Images.
"Pfizer's capabilities will accelerate our mission to deliver our migraine medicines to even more patients, while the new R&D [research and development] company is well-positioned to bring value to patients and shareholders by focusing on our innovative pipeline for neurological and other disorders," Biohaven CEO Vlad Coric said in a press release.
The deal is expected to be completed by early next year, pending regulatory and shareholder approval.
Now what
Pfizer has generated tens of billions of dollars from its COVID-19 vaccine and antiviral treatment. The pharmaceutical giant intends to use some of its newfound cash to acquire smaller healthcare companies with high-potential drugs that could bolster its pipeline and offset some of the upcoming patent expirations it faces. Biohaven's innovative migraine therapies could help to do just that.
