RBC Capital Markets believes that recent January data on Biohaven's epilepsy drug has helped reduced uncertainty around the treatment. The bank upgraded the biopharmaceutical stock to outperform from sector perform. Analyst Leonid Timashev's $22 price target implies an upside of 74% from where Biohaven closed on Tuesday. Timashev pointed to a more compelling risk-reward ratio for the rating change. BHVN 1Y mountain BHVN 1Y chart The upgrade follows new January data on Biohaven's Kv7 drug, aimed to target epilepsy, among other diseases. RBC said that this data provides evidence the drug has activity in the central nervous system, which has been a key concern for investors heading into upcoming late-stage trials. While not guaranteeing success, Timashev wrote that this "does take the worst-case scenario off the table." "Kv7 modulator has potential to show a somewhat improved safety profile over competitors and be a fast follower in a market that can support multiple branded drugs," the analyst added. Timashev also applauded updates to Biohaven's degrader program, which provide evidence of the platform's potential to help treat Graves' disease and kidney diseases such as IgA nephropathy. Meanwhile, Biohaven's management team also has a proven track record of selling companies and strong product launches, he wrote. "While the company still maintains a relatively high risk profile, we think the improved financial position, and discount relative to the platform's opportunity creates a compelling setup into 2H26 catalysts," Timashev added. "If upcoming ph.III readouts from late-stage programs see success, or earlier-stage pipeline programs show data indicative of meaningful differentiation in large potential markets, we could see upside to $30/sh." A price of $30 would indicate upside of nearly 137% for the stock. Shares have ripped more than 16% higher in the past month. However, they have fallen more than 67% over the past year.
