Biohaven’s $11.6 Billion Deal with PfizerMay 25, 2022
Biohaven Pharmaceutical Holding Company, a small innovator with a revolutionary treatment to both treat and prevent migraines called NURTEC® ODT, successfully commercialized its product in the United States and reached a global licensing deal with Pfizer for countries outside the U.S. With its successful product, it made an attractive asset for large pharmaceutical companies looking for new products for their portfolios, but Biohaven is more than a single product company. It also has a pipeline of potential products in development—including potential treatments for obsessive-compulsive disorder and amyotrophic lateral sclerosis—and large pharmaceutical companies aren’t always willing to ascribe value to a company’s pipeline.
When Pfizer, flush with cash from its COVID-19 vaccine, approached Biohaven about an acquisition earlier this year, an S&C team led by Frank Aquila and Scott Crofton helped Biohaven reach an agreement using a pioneering deal structure. Pfizer will acquire Biohaven for $11.6 billion in cash and then spin off to Biohaven’s shareholders an entity, New Biohaven, that retains the pipeline products. New Biohaven will also be capitalized with $275 million of cash and will have certain rights to receive U.S. royalties from Pfizer on annual net sales of NURTEC® and a related product in excess of $5.25 billion.
When completed, this complex transaction may be the first time that a U.S.-listed company biopharma company has spun off pipeline assets.
The complex transaction required the efforts of a multi-disciplinary team, including Davis Wang, the co-head of S&C’s Tax Group; Bob Downes, the co-head of the Capital Markets Group; Nader Mousavi, the co-head of the Intellectual Property and Technology Group: and Matt Friestedt, who leads the Executive Compensation M&A practice.
Sullivan & Cromwell led all law firm advisers in global M&A deals announced in 2021. The Firm advised on deals totaling $662.5 billion worldwide, representing an 11 percent market share, according to Refinitiv. The Firm also topped the rankings in deals with any U.S. party involved.
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