On Friday's news that Biohaven (BHVN +0.31%) withdrew its application for a top investigational drug from an important regulator, investors aggressively traded out of the stock. The clinical-stage biotech was one of the biggest decliners in its industry, exiting Friday with a share price decline of over 15%. This was during a session that was essentially bullish; the S&P 500 index closed 0.6% higher.
Strategic withdrawal
That news came not from Biohaven itself, but from the European Medicines Agency (EMA, the pharmaceutical regulator for the 27-country European Union). In a statement, the EMA revealed that a subsidiary of the company withdrew its application for marketing authorization for troriluzole, branded as Dazluma. It made that move on March 24, the agency added.
Biohaven originally applied for such authorization for Dazluma toward the end of 2023. The investigational drug targets a rare genetic affliction of nerve cells called spinocerebellar ataxia type 3.
According to the EMA, it evaluated Biohaven's provided information about Dazluma and prepared a series of questions for the company. The agency noted that it had several issues that mitigated against approval.
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Key Data Points
If at first you don't succeed...
Although Biohaven hasn't yet made a formal statement about its Dazluma withdrawal, it did send a letter to the EMA stating its reasons for doing so. The agency wrote that in the letter Biohaven "stated that they plan to generate additional data to support a new active substance status" for the drug.
Additionally, according to the EMA, the company intends to "submit a new application once these data are generated."
Regardless, any retreat from a regulatory submission is a significant blow to investor morale. The European Union is huge and sprawling, and therefore has one of the largest patient pools in any jurisdiction throughout the world.
