FDA Rejects Biohaven's Troriluzole, Prompting R&D Restructuring and Raising Questions About RWE Use

The U.S. Food and Drug Administration (FDA) has rejected Biohaven Pharmaceutical's request for approval of troriluzole, a therapy intended for treating spinocerebellar ataxia, a rare neurological disorder. This decision has led the company to announce significant changes to its research and development strategy, including substantial cost-cutting measures.

FDA Rejection and Real-World Evidence Concerns

Biohaven's application for troriluzole was based on real-world evidence (RWE) following a phase 3 trial that failed to meet its primary endpoint in 2023. The company had previously touted positive three-year RWE findings in September 2024. However, the FDA's complete response letter cited several issues inherent to RWE and external control studies, including potential bias, design flaws, lack of pre-specification, and unmeasured confounding factors.

The rejection comes after a three-month delay in the FDA's decision and highlights the ongoing challenges in using RWE for regulatory approvals. Biohaven CEO Vlad Coric, M.D., commented on the broader implications, stating, "Real-world evidence is an important research approach to assessing and delivering new therapies for complex rare diseases but, despite FDA policy initiatives supporting such tools, the front-line review divisions are not yet embracing FDA policy for the use of real-world evidence or the application of regulatory flexibility for rare disease."

Biohaven's Strategic Response and Pipeline Prioritization

In response to the setback, Biohaven has announced a significant restructuring of its R&D activities:

1. The company plans to reduce its annual direct R&D spending by 60%, excluding personnel costs.

2. Biohaven will prioritize late-stage programs with the highest potential for value generation over the next year, including:

   • BHV-1400 for IgA nephropathy
   • BHV-1300 for Graves' disease
   • Opakalim for adult focal epilepsy and depression
   • Taldefgrobep alfa for obesity and spinal muscular atrophy

3. Some programs may be paused or delayed to extend the company's cash runway, which stood at $408.2 million as of June.

Market Reaction and Future Outlook

The news of the FDA rejection had an immediate impact on Biohaven's stock, which dropped 44% in premarket trading on Wednesday, from $13.95 to $7.76. Despite this setback, Biohaven remains committed to finding a path forward for troriluzole and has requested a formal meeting with the FDA to discuss the evidence required for a future filing.

The rejection of troriluzole and the subsequent restructuring at Biohaven may have broader implications for the pharmaceutical industry, particularly in the use of real-world evidence for rare disease drug approvals. As companies and regulators continue to navigate this complex landscape, the industry will be watching closely to see how future applications incorporating RWE are received by the FDA.