Why did Biohaven skyrocket 70% after Pfizer's deal?

Migraine pill maker Biohaven Pharmaceutical surged 68% on Tuesday to $140 after drugmaker Pfizer announced to spend $11.6 billion for the acquisition of the company.

Pfizers will pay $148.5 per share in cash, a 33% premium over Biohaven's three-month average stock price, and an even larger 78.6% premium to its closing price on Monday.

With its fame based on the flagship product Nurtec ODT, the first oral pill approved for both acute migraine treatment and prevention, Biohaven is basically the superstar of the migraine market.

However, that's not the only reason why it deserved a 70% gain.

According to Bloomberg, biotech stocks have been way too cheap for quite some time, nearly 200 biotech companies have their reserves worth more than their market value.

As a result, investors have long been waiting for deals to revive the sector, and Pfizer taking the first big step becomes a singal that "perhaps it also will be a harbinger of more biotech dealmaking ahead."