Biohaven (BHVN) Could Be 73% Undervalued As Regeneron Deal Expands

Biohaven (BHVN) is back in focus after expanding its oncology collaboration with Regeneron Pharmaceuticals, adding a new clinical supply agreement around BHV-1530 alongside their existing work on BHV-1510.

See our latest analysis for Biohaven.

Set against the latest Regeneron update, Biohaven’s share price has eased slightly over the past month but still shows a strong 90 day share price return of 67.12% and a year to date share price return of 35.06%. In contrast, the 1 year total shareholder return is down 6.81% and the 3 year total shareholder return is down 24.03%, suggesting recent momentum is building from a weaker longer term base.

If this kind of biotech volatility has your attention, it can be useful to scan for other early stage opportunities using a focused screener such as 44 healthcare AI stocks

Biohaven’s sharp 90 day rebound sits against a longer record of weak shareholder returns and ongoing losses. Is this latest move starting to reflect the underlying pipeline, or is it mostly a shift in sentiment around the Regeneron tie up and AI story?

SWS DCF view on Biohaven: what the $54.53 estimate implies

Biohaven is currently trading at $14.64, while the SWS DCF model estimates a future cash flow value of $54.53. On these numbers the stock screens as heavily undervalued relative to that model output.

The SWS DCF model projects Biohaven’s future cash flows and then discounts them back to today’s dollars using a required rate of return. The result is a single estimate of what those future cash flows might be worth in present value terms.

For a company like Biohaven that is unprofitable today, has reported a net loss of $586.841m and makes less than $1m in revenue, a DCF approach leans heavily on assumptions about future revenue expansion and eventual cash generation. The model outcome that places fair value well above the current $14.64 share price reflects those forward looking cash flow expectations rather than current earnings.

Look into how the SWS DCF model arrives at its fair value.

Result: DCF Fair value of $54.53 (UNDERVALUED)

However, Biohaven still faces clinical and regulatory hurdles across its pipeline and continues to report heavy losses, which could easily challenge the current optimism.

Find out about the key risks to this Biohaven narrative.

Another angle on Biohaven’s valuation

While the SWS DCF model points to a fair value for Biohaven of $54.53, the current P/B ratio of 180.9x paints a very different picture. The stock trades at a much higher multiple than the US Biotechs industry average of 2.5x and a peer average of 5.7x.

This kind of gap suggests a high valuation risk if expectations around the Biohaven pipeline or deal activity reset closer to sector norms. The key question for you is whether the current price better reflects the DCF story or this elevated balance sheet multiple.

See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Biohaven for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 50 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

If this Biohaven update leaves you divided between optimism and caution, move quickly from headline impressions to the underlying data and form your own judgment using the 2 key rewards and 5 important warning signs.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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