Washington, May 10 (BUS): Pfizer has begun to use the cash flow of COVID-19 by spending $11.6 billion to venture deeper into a new processing area, according to the Associated Press.
The New York-based vaccine and cancer drug maker said Tuesday it will use cash on hand to buy the remainder of Biohaven Pharmaceuticals developed to treat migraines that it doesn’t already own.
Pfizer will pay $148.50 in cash per share of Biohaven, which makes Nurtec ODT to treat and prevent migraines and has a nasal spray in development.
Pfizer Inc generated more than $14 billion in sales during the recently completed first quarter of its COVID-19 Comirnaty vaccine and new birth control pill treatment for the virus, Paxlovid.
Most of that came from Comirnaty, which also had nearly $37 billion in sales last year.
But revenue from Comirnaty, which Pifzer developed with BioNTech, is expected to wane in the coming years, and Pfizer also faces losing patent protection for some key products in its extensive portfolio over the next decade.
These include Eliquis to prevent blood clots and strokes and the Prevnar 13 vaccine to prevent pneumonia and related bacterial diseases.
The company plans to achieve sales of approximately $25 billion by 2030 from new commercial developments.
The deal announced on Tuesday is a step in that direction. US regulators approved Nurtec tablets to treat migraines in February 2020 and to prevent them about a year ago.
Nurtec ODT brought in approximately $124 million in sales in the first quarter, and Biohaven expects product sales of between $825 and $900 million this year.
Last November, Pfizer said it would invest $350 million in Biohaven to help sell Nurtec OTD and spray, zavegepant, outside the United States.
Pfizer Inc said Tuesday that the spray is on track for U.S. acceptance in the current quarter, and an oral gel version is also being developed to prevent chronic migraines.
The deal price announced on Tuesday represents a 33% premium over Biohaven’s 90-day average trading price of $111.70 for Biohaven Pharmaceutical Holding Co. Ltd. Headquartered in New Haven, Connecticut.
The Biohaven deal also includes some other potential treatments in the early stages of development.
Other elements from Biohaven’s final stage development pipeline will move to a new publicly traded company that will retain the Biohaven name.
The boards of both Pfizer and Biohaven have approved the sale, but Biohaven’s shareholders and regulators still need to approve it.
It is expected to close by early 2023, once the new company is completed.
Shares of Biohaven, which have fallen below $100 in recent weeks, surged nearly 70% before the opening bell to $141.50. Pfizer’s stock fell.
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