Shares of Biohaven Pharmaceutical Holding Co Ltd. (BHVN) tumbled 6.74% in pre-market trading on Monday, following a significant downgrade from RBC Capital Markets. The sharp decline comes as investors react to the revised outlook for the biopharmaceutical company.

RBC Capital Markets has lowered its rating on Biohaven from Outperform to Sector Perform, signaling a less optimistic view of the company's near-term prospects. Adding to the bearish sentiment, the financial institution also slashed its price target for Biohaven's stock from $54 to $21, representing a substantial 61% reduction in their valuation outlook.

This downgrade and drastic price target cut have evidently spooked investors, leading to the pre-market sell-off. The revised stance from RBC could prompt other investors and analysts to reassess their positions on Biohaven, potentially leading to further pressure on the stock. As the market opens, all eyes will be on Biohaven to see if the stock can recover from this early morning plunge or if the negative sentiment will persist throughout the trading session.