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Pfizer Inc will pay $11.6 billion to buy migraine pill maker Biohaven Pharmaceutical, marking the biggest deal by the cash-rich drugmaker since 2016 to beef up its portfolio ahead of patent losses for some cancer drugs.

The deal, announced on Tuesday, will give Pfizer access to Biohaven’s approved rimegepant, a potential blockbuster that belong to a class of migraine treatments known as calcitonin gene-related peptide (CGRP) inhibitors.

Flush with about $32 billion in cash on hand after its success with COVID-19 drugs, Pfizer has been looking to add treatments as patents for its top-selling drugs like blood thinner Eliquis near expiration.

Pfizer Q1 revenues jump 77% to $25.7bn on Covid-19 vaccine

The company also expects sales of its COVID-19 vaccines to drop from last year’s highs.

“Investors will like this deal. Given Pfizer’s strong balance sheet, this is still a small acquisition and we would expect more such deals,” Wells Fargo analyst Mohit Bansal said in a note.

The Biohaven deal is its largest since Pfizer’s $14 billion purchase of cancer drugmaker Medivation in 2016.

Pfizer will acquire all Biohaven shares that it does not already own for $148.50 per share in cash, a 78.6% premium to last closing price. It had taken a 2.6% stake in Biohaven in November.

Biohaven shares jumped 70.1% to $141.39 before the bell, while Pfizer was trading flat at $48.60.

With this deal, Pfizer will compete in a crowded market for migraine treatments from other large drugmakers such as Eli Lilly.

Biohaven’s rimegepant, sold as Nurtec ODT in the United States, is approved for use as both a treatment and preventative for migraines and is expected to bring in sales of over $4 billion by 2030. It brought in sales of $462.5 million in 2021.

Biohaven is also developing another CGRP inhibitor and testing two non-CGRP drugs in late-stage studies.

After the deal closes, Biohaven shareholders, including Pfizer, will get 0.5 of a share of a new publicly traded company that will retain Biohaven’s non-CGRP treatments.

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