Biohaven Pharmaceutical Holding Co Ltd. (BHVN.US) saw its stock plummet 40.22% on Wednesday, hitting a 52-week low after the U.S. Food and Drug Administration (FDA) issued a Complete Response Letter (CRL) rejecting approval for its key drug candidate, Vyglxia (troriluzole). In response, Bank of America downgraded the stock from "Buy" to "Neutral," slashing its price target from $49 to $10 per share.

The New Haven, Connecticut-based biotech firm disclosed late Tuesday that its New Drug Application (NDA) for troriluzole—targeting spinocerebellar ataxia, a group of rare neurodegenerative disorders—had received the FDA's CRL. The drug had previously secured FDA priority review earlier this year, and market optimism grew when regulators canceled an advisory committee meeting related to the NDA in August. However, the unexpected CRL blindsided the company.

"We are deeply disappointed by the FDA Neuroscience Division’s decision on behalf of the patient community," said CEO Vlad Coric. BofA analyst Jason Gerberry noted in a report, "Based on disclosed regulatory interactions, the drug’s path forward appears unclear, and we must conservatively assume no viable approval pathway exists."

Biohaven stated it would continue engaging with the FDA to advance Vyglxia’s approval process and seek discussions on next steps. Concurrently, the company announced a restructuring plan to pause or defer non-priority R&D programs, aiming to cut annual R&D expenses by approximately 60%. Gerberry expressed caution, warning that the restructuring could limit resources for core assets like the Kv7 ion channel activator Opakalim, and removed troriluzole-related projections from his valuation model.