On a very good Friday for the stock market, Biohaven‘s (BHVN 6.33%) performance was exceptional. The clinical-stage biotech‘s share price inflated by over 6% that trading session thanks to regulatory news it delivered in the morning. Even the surging S&P 500 index couldn’t come close to that kind of increase, with its 1.5% gain on the day.

Regulatory progress

Biohaven revealed in a filing with the Securities and Exchange Commission (SEC) that it has been updated on the progress of its New Drug Application (NDA) for troriluzole. The company said that the Food and Drug Administration (FDA) informed it that an advisory committee meeting to discuss the submission at the regulator was no longer necessary.

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Troriluzole is a drug that targets spinocerebellar ataxia, a cluster of inherited and progressive neurological disorders that affect the body’s movement. The development and regulatory application process for the drug has been halting, with the FDA initially refusing to accept the company’s filing. Biohaven ran a new late-stage clinical trial and is using its data for the current NDA.

Although the cancellation of the advisory meeting implies the regulator has, in effect, already reached a decision, it might not necessarily be one favorable to the company. Investors are best advised to wait until the actual decision is rendered to make a decision on whether or not to buy this stock.

Good chance for success, apparently

Having said that, according to research from RBC Capital Markets analyst Leonid Timashev cited by Investor’s Business Daily, around two-thirds of applications where an advisory committee meeting is cancelled ultimately won approval (from 2019 until the present). Given that, the market’s very bullish reaction to the news is understandable.