Biohaven (BHVN) is showing investors some "exciting high risk/high reward opportunities" but there's not enough confidence in any single one to be able to recommend its shares, RBC Capital Markets said in a research note Monday.

RBC downgraded Biohaven to sector perform from outperform and cut the company's price target to $21 from $54.

"While the stock rerating still may leave some room for upside, we are stepping to the sidelines given a setup where we think near term risks outweigh rewards," RBC said.

The investment firm said it has had an "internal debate of whether the company's pipeline is now deeply undervalued, or whether the landscape and risk profile have changed to be less favorable."

RBC said that its checks have indicated some enthusiasm from experts surrounding Biohaven's troriluzole but "ultimately, we cannot get comfortable with the regulatory risk."

Biohaven said last week that the FDA's Office of Neuroscience was extending the target action date for troriluzole's new drug application for the treatment of spinocerebellar ataxia by three months. The FDA's decision on the new drug application is now expected in Q4, the company said.

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