New drug for depression phase II trial failed, Biohaven (BHVN.US) plunges nearly 13% in pre-market trading! Why is Wall Street collectively defending it?

Despite Wall Street analysts defending Biohaven in response to the announcement released on Christmas Eve, the biotech company (BHVN.US) still dropped nearly 13% in pre-market trading on Fridaya Phase II clinical trial for their anti-depression candidate BHV-7000 was declared a failure. The company, headquartered in New Haven, Connecticut, announced on Wednesday that due to BHV-7000 (opakalim) failing to meet the primary endpoint in a Phase II proof-of-concept study for severe depressive disorder, they will no longer conduct any clinical trials for psychiatric candidate drugs in their pipeline. Citigroup analyst Samantha Semenkow gave Biohaven a "buy" rating. She believed that while the depression trial data for BHV-7000 was disappointing, investors had "extremely low expectations for the success of this study." William Blair's Myles Minter shared a similar view. He noted that while the trial's failure to reach the endpoint was disappointing, their firm gave Biohaven an "in-line with market" rating due to the "increasing difficulty in conducting clinical trials in recent years and the enhanced placebo effect." With the setback in this clinical trial, Biohaven is shifting focus to the first half of 2026 when they will announce topline data for one of two key studies, evaluating the efficacy of 25mg and 50mg doses of opokalim (BHV-7000) in patients with intractable focal epilepsy. Citigroup analyst Semenkow pointed out that investors are now more focused on the late-stage research data for BHV-7000 in epilepsy indications, with the key data expected to be released in the first half of 2026. Raymond James analyst Christopher Raymond also shared a similar stance, suggesting investors "continue to focus on the potential opportunities in the focal epilepsy space." Meanwhile, Leerink analyst Marc Goodman acknowledged in his report that the disappointing trial data was "expected" but still maintained an "outperform market" rating for Biohaven. Goodman emphasized that the data disclosure is one of several key catalysts that the company hopes will drive stock price growth in the next 6 to 9 months. At the same time, RBC Capital Markets analyst Leonid Timashev gave a "market perform" rating and pointed out that the current setback may be a one-time eventessentially clearing obstacles for higher probability catalyst events in 2026.