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Item 7. Management’s Discussion and Analysis

2024-02-29 compared with 2023-03-23 · 130 added, 403 removed, 186 unchanged (74% of the section changed)

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You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K, or this Annual Report.

Discussions of 2021 items and year-to-year comparisons between the years ended December 31, 2022 and 2021 that are not included in this Form 10-K can be found within “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022.

In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions.

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"Risk Factors" and under "Cautionary Note Regarding Forward-Looking Statements" in this Annual Report.

We are a global clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of life-changing therapies for people with debilitating neurological and neuropsychiatric diseases, including rare disorders.

Our experienced management team brings with it a track record of delivering new drug approvals for products for diseases such as migraine, depression, bipolar and schizophrenia.

We are advancing a pipeline of therapies for diseases with little or no treatment options, leveraging our proven drug development capabilities and proprietary platforms, including Kv7 ion channel modulation for epilepsy and neuronal hyperexcitability, glutamate modulation for OCD and SCA, myostatin inhibition for neuromuscular diseases, and brain-penetrant TYK2/JAK1 inhibition for immune-mediated brain disorders.

Our portfolio of early- and late-stage product candidates also includes discovery research programs focused on TRPM3 channel activation for neuropathic pain, CD-38 antibody recruiting, bispecific molecules for multiple myeloma, ADCs, and extracellular target degrader platform technology (MoDE™) with potential application in neurological disorders, cancer, and autoimmune diseases.

We are advancing our broad and diverse pipeline, across early and late stage development, including three Phase 3 clinical programs.

We have built a highly experienced team of senior leaders and neuroscience drug developers who combine a nimble, results-driven biotech mindset with capabilities in drug discovery and development.

In addition, we have several preclinical assets in our early discovery program, targeting indications in neuroscience and immunology.

We are a biopharmaceutical company focused on the discovery, development, and commercialization of life-changing treatments in key therapeutic areas, including immunology, neuroscience, and oncology.

We are advancing our innovative portfolio of therapeutics, leveraging our proven drug development experience and multiple proprietary drug development platforms.

Our extensive clinical and preclinical programs include Kv7 ion channel modulation for epilepsy and mood disorders;

extracellular protein degradation for immunological diseases;

TRPM3 antagonism for migraine and neuropathic pain;

TYK2/JAK1 inhibition for neuroinflammatory disorders;

glutamate modulation for OCD and SCA;

myostatin inhibition for neuromuscular and metabolic diseases, including SMA and obesity;

and antibody recruiting, bispecific molecules and ADCs for cancer.

For a full discussion of our programs, including recent developments, refer to "Item 1.

Business" included in this Annual Report on Form 10-K.

Separation from Biohaven Pharmaceutical Holding Company Ltd.

On May 9, 2022, the Board of Directors of the Former Parent approved and directed Former Parent’s management to effect the spin-off of the Kv7 ion channel activators, glutamate modulation and myostatin

inhibition platforms, preclinical product candidates, and certain corporate infrastructure owned by Former Parent.

On October 3, 2022, the Former Parent completed the Distribution to holders of its common shares of all of the outstanding common shares of Biohaven Ltd.

and the spin-off of Biohaven from the Former Parent.

Each holder of Former Parent common shares received one common share of Biohaven for every two the Former Parent common shares held of record as of the close of business, New York City time, on September 26, 2022.

To implement the Spin-Off, the Former Parent transferred the related license agreements, intellectual property and the Former Parent’s corporate infrastructure, including certain non-commercial employee agreements, share-based awards and other corporate agreements to Biohaven Ltd.

Collectively, we refer to the Distribution and Spin-Off throughout this Annual Report on Form 10-K as the "Separation."

In the Distribution, an aggregate of 35,840,459 common shares of the Company were issued.

The aggregate number of common shares issued in connection with the Distribution did not include 2,611,392 common shares issued in connection with Former Parent stock options that were exercised on October 3, 2022 and 924,093 common shares issued in connection with Former Parent restricted stock units that vested on October 3, 2022.

Biohaven Ltd.

is a British Virgin Islands ("BVI") corporation and was a wholly owned subsidiary of Biohaven Pharmaceutical Holding Company Ltd.

prior to the Separation.

Prior to the Separation, the historical combined financial statements of the Company prior to the distribution were prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of Biohaven Pharmaceutical Holding Company Ltd.

On October 3, 2022, the Former Parent completed the Separation from Biohaven Ltd.

As a result of the Separation, Biohaven Ltd.

became an independent, publicly traded company as of October 3, 2022, and commenced regular way trading under the symbol "BHVN" on the NYSE on October 4, 2022.

Biohaven is a British Virgin Islands ("BVI") corporation and was a wholly owned subsidiary of the Former Parent prior to the Separation.

The financial statements for all periods presented, including the historical results of the Company prior to October 3, 2022, are now referred to as "Consolidated Financial Statements." Our financial statements are presented in conformity with generally accepted accounting principles in the United States ("GAAP").

The financial position, results of operations and cash flows of the Company historically operated as part of Biohaven Pharmaceutical Holding Company Ltd.’s financial position, results of operations and cash flows up until the Distribution.

The financial position, results of operations and cash flows of the Company historically operated as part of the Former Parent’s financial position, results of operations and cash flows up until the Distribution.

These historical combined financial statements may not be indicative of the future performance of the Company and do not necessarily reflect what our consolidated results of operations, financial condition and cash flows would have been had we operated as a separate, publicly traded company during the periods presented.

Where we describe historical business activities in this Annual Report on Form 10-K, we do so as if these

transfers had already occurred and the Former Parent's activities related to such assets and liabilities had been performed by Biohaven Ltd.

Where we describe historical business activities in this Annual Report on Form 10-K, we do so as if these transfers had already occurred and the Former Parent's activities related to such assets and liabilities had been performed by Biohaven.

Refer to Note 1, "Nature of the Business and Basis of Presentation," of the Notes to the Consolidated Financial Statements appearing elsewhere in this Annual Report on Form 10-K for further discussion of the underlying basis used to prepare the consolidated financial statements.

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As an independent company, our information technology operating costs may be higher than the costs allocated in the historical combined financial statements.

It is not practicable to estimate the costs that would have been

incurred in each of the periods presented in the historical combined financial statements for the functions described above.

Actual costs that would have been incurred if we operated as a stand-alone company during these periods would have depended on various factors, including the chosen organizational structure, what corporate functions the Company might have performed directly or outsourced and strategic decisions the Company might have made in areas such as executive management, legal and other professional services, and certain corporate overhead functions.

During the transition from the Former Parent, we may incur non-recurring expenses to expand our infrastructure.

Transactions with the Former Parent

We have entered into a Distribution Agreement and various agreements relating to transition services, licenses and certain other matters with the Former Parent.

It is not practicable to estimate the costs that would have been incurred in each of the periods presented in the historical combined financial statements for the functions described above.

decisions the Company might have made in areas such as executive management, legal and other professional services, and certain corporate overhead functions.

Agreements with the Former Parent

We had entered into a Distribution Agreement and various other agreements relating to transition services, licenses and certain other matters with the Former Parent.

These agreements govern our relationship with the Former Parent and include the allocation of employee benefits, taxes and certain other liabilities and obligations attributable to periods prior to, at and after the Separation.

For additional information regarding these agreements, see Note 14, "Related Party Transactions," of the Notes to the Consolidated Financial Statements appearing elsewhere in this Annual Report on Form 10-K.

Clinical-Stage Milestones

Our clinical-stage milestones include the following:

Drug Name Indication 2H2022 1H2023 2H2023

Kv7 channel modulator

Focal Epilepsy Initiated Phase 1 Phase 1 Topline Initiate EEG Study Initiate Phase 2/3

Bipolar disorder Initiated Phase 1 Initiate Phase 2/3

Kv7 channel modulator

Epilepsy and mood disorder File IND

Immune-Mediated Brain

Disorders Initiate Phase 1

Chronic pain disorders File IND

NCE prodrug of riluzole

SCA Regulatory Interaction

OCD Complete Enrollment

Taldefgrobep Alfa

Anti-myostatin adnectin

SMA Initiated Phase 3

Undisclosed File IND

Milestone Achieved

In April 2022, we closed the acquisition from Knopp Biosciences LLC (“Knopp”) of Channel Biosciences, LLC, a wholly owned subsidiary of Knopp owning the assets of Knopp’s Kv7 channel targeting platform, pursuant to a Membership Interest Purchase Agreement, dated February 24, 2022.

The acquisition of the Kv7 channel targeting platform adds the latest advances in ion-channel modulation to our growing neuroscience portfolio.

BHV-7000 (formerly known as KB-3061), the lead asset from the Kv7 platform is an activator of Kv7.2/Kv7.3, a key ion channel involved in neuronal signaling and in regulating the hyperexcitable state in epilepsy.

In June 2022, our Clinical Trial Application for BHV-7000 was approved by Health Canada, and in July we began clinical development.

Dosing has been completed in our Phase 1 SAD/MAD study with BHV-7000 and, in January 2023, the Company reported preliminary safety, tolerability and pharmacokinetic ("PK") data.

In the study, single doses up to 100 mg and multiple doses up to 40 mg daily for 15 days were safe and well-tolerated.

In the pooled, blinded adverse events from the SAD and MAD cohorts occurring in more than 1 subject, mild headache was the most common adverse event reported across all groups (including BHV-7000 and placebo), and a lack of CNS adverse events were observed.

Most adverse events were mild and resolved spontaneously.

No serious or severe adverse events and no dose limiting toxicities were reported.

With respect to preliminary PK results, the Company exceeded target concentrations for efficacy based on the preclinical maximal electroshock ("MES") model, which is clinically validated and predictive of target concentration ranges in humans.

Epilepsy is the initial disease we are targeting with activators from our Kv7 platform.

Epilepsy affects approximately 3.5 million Americans, or more than 1.2% of adults and 0.6% of children in the U.S., and more than 50 million patients worldwide, according to the World Health Organization (“WHO”).

It is the fourth most common neurological disorder, and many patients struggle to achieve freedom from seizures, with more than one third of patients requiring two or more medications to manage their epilepsy.

While the use of anti-seizure medications is often accompanied by dose-limiting side effects, our clinical candidate BHV-7000 is specifically designed to target subtypes of Kv7 potassium channels without engagement of GABA A receptors.

The lack of GABA A -R activity potentially gives BHV-7000 a wide therapeutic window which we expect to result in an improved side effect profile, limiting the somnolence and fatigue often seen in patients receiving anti-seizure medications.

By adding BHV-7000 to our pipeline, we aim to bring this potassium channel modulator as a potential solution to patients with epilepsy who remain uncontrolled on their current regimens.

If our Phase 1 study with BHV-7000 is

successfully completed, we expect to initiate at least one pivotal trial in patients with epilepsy in the second half of 2023.

KCNQ2 Developmental Epileptic Encephalopathy

We are currently exploring BHV-7000 as a potential treatment for KCNQ2 developmental epileptic encephalopathy ("KCNQ2-DEE"), a rare pediatric epileptic encephalopathy first described in 2012 resulting from dominant-negative mutations in the KCNQ2 gene.

BHV-7000 has been granted Rare Pediatric Disease Designation by the FDA for the treatment of KCNQ2-DEE.

Mood Disorders

Approximately 1 in 5 adults in the US are living with neuropsychiatric illnesses that are, in turn, associated with inadequate treatment, poor quality of life, disability, and considerable direct and indirect costs.

There is significant unmet need for novel and effective therapeutic options that are not limited by long latency periods to clinical effects, low response rates, and significant risks and side effects.

Increasing evidence from animal models and clinical trials now suggests that Kv7.2/7.3 targeting drugs offer the potential to treat a spectrum of these neuropsychiatric diseases including, but not limited to, mood disorders, such as major depressive disorder, bipolar disorder and anxiety.

We plan to advance BHV-7000 as a potential treatment for patients with bipolar disorder and intend to start a clinical trial targeting this indication by the end of 2023.

Neuropathic Pain

Neuropathic pain, as defined by the International Association for the Study of Pain, is pain caused by a lesion or disease of the somatosensory nervous system and includes a collection of heterogeneous conditions that are often chronic and debilitating and for which long term therapy is difficult.

In the United States, over 30 million adults are estimated to be living with neuropathic pain.

Previous studies have demonstrated the efficacy of Kv7 targeting drugs in clinical trials for pain indications and in animal models.

Selective Kv7 potassium channel activators represent a promising new approach in the development of non-opioid therapeutic options for neuropathic pain.

In addition to leveraging reduced abuse and addiction risk potential of potassium channel activators, our Kv7 potassium channel platform addresses the complexities of channel subtype physiology through targeted pharmacology to overcome the limitations inherent in unbiased Kv7 activators and is intended to deliver a well-tolerated, highly effective, non-opioid treatment for neuropathic pain.

We are currently evaluating the activity of BHV-7000 and other compounds from our proprietary

series of selective Kv7.2/7.3 activators in multiple preclinical models of neuropathic pain.

BHV-7010 is being developed as a next generation Kv7.2/7.3 activator with improved selectivity over Kv7.4 and differentiated ADME properties that provide flexibility for the treatment of different neurological diseases.

The IND is expected to be submitted in the second half of 2023.

Agreement with Hangzhou Highlightll Pharmaceutical Co.

In March 2023, we entered into an exclusive, worldwide (excluding People’s Republic of China and its territories and possessions) license agreement with Highlightll, whereby we obtained the right to research, develop, manufacture and commercialize Highlightll’s brain penetrant dual TYK2/JAK1 inhibitor program.

As partial consideration for the Highlightll Agreement, we are obligated to pay Highlightll a cash payment of $10,000 and common shares valued at approximately $10,000 as of the agreement execution, upon the completion of certain post-closing activities.

See Note 15, "Subsequent Events," for further detail on the Highlightll Agreement.

Dysregulation of the immune system has been implicated in several neurodegenerative and neuroinflammatory disorders including Parkinson's Disease, Multiple Sclerosis, Alzheimer's Disease, Amyotrophic Lateral Sclerosis and Autoimmune Encephalitis.

Over-active immune cells and microglia driving chronic neuroinflammation results in release of cytokines with activation of leukocytes and is thought to contribute to neuronal injury, death, gliosis, and demyelination.

The TYK2 and JAK1 signal transduction pathways mediate highly complementary immune and inflammatory signaling events.

Targeted, small-molecule therapies that inhibit TYK2 or JAK kinases have separately demonstrated robust efficacy in autoimmune, dermatologic and gastrointestinal disorders.

TYK2 is a validated immune target as evidenced by a recent peripheral program that gained FDA approval, and there are multiple additional peripheral non-CNS programs in clinical development.

Brain penetrant inhibitors of TYK2/JAK1 have the potential to bring this validated immune target to brain disorders.

There are currently no brain penetrant, selective, dual TYK2/JAK1 inhibitors approved for brain disorders.

We expect to advance BHV-8000 (previously TLL-041) into a Phase 1 study in 2023.

The Company is evaluating and has not yet finalized potential clinical trial designs, including size and primary and secondary endpoints.

The most advanced product candidate from our glutamate receptor antagonist platform is troriluzole (previously referred to as trigriluzole and BHV-4157), which is in multiple Phase 3 trials.

Other product candidates include BHV-5500 (lanicemine), which is an antagonist of the glutamate N-methyl-D-aspartate (“NMDA”) receptor, and BHV-5000, which is a prodrug of lanicemine.

Spinocerebellar Ataxia

In May 2022, the Company announced top-line results from the Phase 3 clinical trial evaluating the efficacy and safety of its investigational therapy, troriluzole, in patients with SCA.

The primary endpoint, change from baseline to Week 48 on the modified functional Scale for the Assessment and Rating of Ataxia (f-SARA), did not reach statistical significance in the overall SCA population as there was less than expected disease progression over the course of the study.

In the overall study population (N=213), the troriluzole and placebo groups each had mean baseline scores of 4.9 on the f-SARA and the two groups showed minimal change at the 48-week endpoint with f-SARA scores of 5.1 and 5.2, respectively (p=0.76).

Post hoc analysis of efficacy measures by genotype suggests a treatment effect in patients with the SCA Type 3 (“SCA3”) genotype, which represents the most common form of SCA and accounted for 41% of the study population.

In the SCA3 subgroup, troriluzole showed a numerical treatment benefit on the change in f-SARA score from baseline to Week 48 compared to placebo (least squares (“LS”) mean change difference -0.55, nominal p-value = 0.053, 95% CI:

-1.12, 0.01).

SCA patients treated with troriluzole showed minimal disease progression over the study period.

Further, in patients in the SCA3 subgroup with mild disease severity at baseline, defined as those who were able to walk without assistance at baseline (i.e., f-SARA Gait Item score = 1), troriluzole demonstrated a greater numerical treatment benefit on the change in f-SARA score from baseline to Week 48 compared to placebo (LS mean change difference -0.71, nominal p-value = 0.031, 95% CI:

-1.36, -0.07).

Notably, the f-SARA is a novel, 16-point scale developed in collaboration with FDA as the primary outcome measure for this trial;

the scale was designed to limit subjectivity of the scale and focus on functional aspects of the disease so that significant changes would be considered clinically meaningful.

Across all SCA genotypes, and SCA3 specifically, patient reported falls, as measured by adverse events, reveal reductions of fall risk in the troriluzole group compared to the placebo.

The risk reduction of falls in the troriluzole group combined with the progression of f-SARA scores in the untreated SCA3 group compared to SCA3 patients on troriluzole demonstrates that SCA3 patients

experienced a clinically meaningful improvement in ataxia symptoms on troriluzole treatment.

Given these findings and the debilitating nature of SCA, we intend to interact with the FDA and/or European Medicines Agency ("EMA") in the first half of 2023.

We have not yet decided on the format of such a regulatory interaction but we could seek advice through various formal or informal interactions with regulatory agencies or we could choose to submit an NDA if we believe that is warranted from the results of our ongoing post-hoc analyses.

There are currently no FDA-approved medications for the treatment of SCA or any other cerebellar ataxia, and treatment is supportive.

In general, multidisciplinary care provides supportive measures and the goal of this treatment is to improve quality of life and survival.

Obsessive Compulsive Disorder

We commenced a Phase 2/3 double-blind, randomized, controlled trial to assess the efficacy of troriluzole in adults with OCD in December 2017.

The Phase 2/3 study results were announced in June 2020.

Troriluzole 200 mg administered once daily as adjunctive therapy in OCD patients with inadequate response to standard of care treatment showed consistent numerical improvement over placebo on the Yale-Brown Obsessive Compulsive Scale (Y-BOCS) at all study timepoints (weeks 4 to 12) but did not meet the primary outcome measure at week 12.

Troriluzole treated subjects (n = 111) had a mean Y-BOCS improvement of -3.4 points from baseline versus -2.9 for placebo-treated (n = 115) subjects [difference -0.5 and p-value = 0.451] at week 4, -5.1 points (n = 96) versus -3.6 for placebo-treated (n = 108) subjects [difference -1.5 and p-value = 0.041] at week 8, and -5.9 points (n = 99) versus -4.9 for placebo-treated (n = 102) subjects [difference -1.0 and p-value = 0.220] at week 12.

Troriluzole’s safety profile was generally consistent with past clinical trial experience with its active metabolite, riluzole.

Treatment emergent adverse events (“TEAE”s) were mostly reported to be mild in intensity.

TEAEs that occurred in at least 5% of patients in the troriluzole group, and more frequently in the troriluzole group than in the placebo group, were headache, dizziness, fatigue, somnolence, nausea and nasopharyngitis.

Given the strong signal in the Phase 2/3 proof of concept study and after receiving feedback from the FDA in an End of Phase 2 meeting, in December 2020 we initiated enrollment in a Phase 3 program.

The Phase 3 program will have an estimated total enrollment of 1,300 participants with a primary endpoint of change from baseline on the Y-BOCS total score at week 4, 8 and 10.

The two Phase 3 randomized, double-blind, placebo-controlled trials that make-up our Phase 3 program for OCD are currently ongoing with enrollment expected to be completed in 2023.

In December 2021, the Global Coalition for Adaptive Research ("GCAR") selected troriluzole for

evaluation in Glioblastoma Adaptive Global Innovative Learning Environment - NCT03970447 ("GBM AGILE").

GBM AGILE is a revolutionary patient-centered, adaptive platform trial for registration that tests multiple therapies for patients with newly-diagnosed and recurrent glioblastoma ("GBM"), the most fatal form of brain cancer.

Troriluzole will be evaluated in all patient subgroups of the trial which include newly-diagnosed methylated MGMT, newly-diagnosed unmethylated MGMT, and recurrent GBM.

Troriluzole was selected for inclusion in GBM AGILE based on compelling evidence showing deregulation of glutamate in GBM.

The therapeutic potential of troriluzole in GBM and other oncology indications is supported by several recent clinical and translational research studies conducted with troriluzole and its active moiety.

In July 2022, the Company and GCAR announced that enrollment has commenced in GBM AGILE for the evaluation of troriluzole.

We are developing BHV-5500 (lanicemine), a low-trapping NMDA receptor antagonist.

One potential target indication is neuropathic pain, potentially including Complex Regional Pain Syndrome (“CRPS”).

CRPS is a rare, chronic pain condition typically affecting limbs and triggered by traumatic injury.

Accompanying symptoms also include chronic inflammation and reduced mobility in the affected areas.

Other disorders of interest include post-herpetic neuralgia and diabetic peripheral neuropathy.

We acquired worldwide rights to BHV-5500 and its oral prodrug BHV-5000 under an exclusive license agreement with AstraZeneca AB in October 2016.

Current work is focused on formulation development.

Myostatin Platform

Taldefgrobep Alfa (BHV-2000)

In February 2022, we announced that we entered into a worldwide license agreement with BMS for the development and commercialization rights to taldefgrobep alfa (also known as BMS-986089 and now referred to as BHV-2000), a novel, Phase 3-ready anti-myostatin adnectin.

Myostatin is a natural protein that limits skeletal muscle growth, an important process in healthy muscular development.

However, in patients with neuromuscular diseases, active myostatin can critically limit the growth needed to achieve developmental and functional milestones.

Myostatin inhibition is a promising therapeutic strategy for enhancing muscle mass and strength in a range of pediatric and adult neuromuscular conditions.

Taldefgrobep is a muscle-targeted treatment for neuromuscular disease and offers the opportunity for combination therapy.

In July 2022, we commenced enrollment in a Phase 3 clinical trial of BHV-2000 assessing the efficacy and safety of taldefgrobep alfa in Spinal Muscular Atrophy ("SMA").

SMA is a rare, progressively

debilitating motor neuron disease in which development and growth of muscle mass are compromised, resulting in progressive weakness and muscle atrophy, reduced motor function, impaired quality of life and often death.

The Phase 3 placebo-controlled, double-blind trial is designed to evaluate the efficacy and safety of taldefgrobep as an adjunctive therapy for participants who are already taking a stable dose of nusinersen or risdiplam or have a history of treatment with onasemnogene abeparvovec-xioi, compared to placebo.

The study is not restricted nor limited to patients based on ambulatory status or classification of SMA.

We expect to enroll approximately 180 patients in this randomized, double-blind, placebo-controlled global trial.

In February 2023, we received Fast Track designation from the FDA for taldefgrobep alfa for the treatment of SMA.

In December 2022, we received orphan drug designation from the FDA for taldefgrobep in the treatment of SMA.

In the fourth quarter of 2021, we initiated a Phase 1a/1b trial in multiple myeloma patients using our antibody recruiting molecule BHV-1100 in combination with autologous cytokine induced memory-like natural killer cells and immune globulin to target and kill multiple myeloma cells expressing the cell surface protein CD38.

BHV-1100 is the lead clinical asset from Biohaven’s Antibody Recruiting Molecule ("ARM™") Platform developed from a strategic alliance with PeptiDream Inc.

This open-label single center Phase 1a/1b study will assess the safety and tolerability as well as exploratory efficacy endpoints in newly diagnosed multiple myeloma patients who have tested positive for minimal residual disease (“MRD+”) in first or second remission prior to autologous stem cell transplant (“ASCT”).

We plan to enroll 30 newly diagnosed multiple myeloma patients.

The primary outcome measures are dose limiting toxicities following combination product administration (time frame:

100 days post-combination product administration) and incidence and severity of side effects related to the combination product (time frame:

90 to 100 days post-combination product administration).

We were developing verdiperstat (previously BHV-3241), an oral myeloperoxidase inhibitor for the treatment of neurodegenerative diseases.

One potential target indication is Amyotrophic Lateral Sclerosis ("ALS").

In September 2019, we announced that verdiperstat was selected to be studied in the Phase 3 HEALEY ALS Platform Trial, which is being conducted by the Sean M.

Healey & AMG Center for ALS at Massachusetts General Hospital in collaboration with the Northeast ALS Consortium clinical trial network.

Promising investigational drugs were chosen for the

HEALEY ALS Platform Trial through a competitive process, with the Healey Center providing partial financial support to successful applicants.

The Phase 3 HEALEY ALS Platform Trial of verdiperstat began enrollment in July 2020.

Enrollment in the trial was completed in November 2021.

In September 2022, the Company announced that verdiperstat did not statistically differentiate from placebo on the prespecified primary efficacy outcome, disease progression measured by the ALS Functional Rating Scale-Revised and survival, nor the key secondary efficacy measures during the 24-week study period.

Initial analysis of safety data was consistent with the overall profile of verdiperstat from prior clinical trial experience.

Additional analyses are ongoing, and complete study results will be presented at an upcoming scientific meeting.

At this time, we do not have plans to pursue any additional clinical trials evaluating verdiperstat in ALS and we may evaluate its potential in other disease indications.

Verdiperstat was progressed through Phase 2 clinical trials by AstraZeneca.

Seven clinical studies have been completed by AstraZeneca, including four Phase 1 studies in healthy subjects, two Phase 2a studies in subjects with Parkinson’s disease, and one Phase 2b study in subjects with MSA.

We have entered into an exclusive license agreement with AstraZeneca for the product candidate.

Discovery Research

Kleo Pharmaceuticals, Inc.

and Biohaven Labs

In January 2021, we acquired the remaining approximately 58% of Kleo Pharmaceuticals, Inc.

("Kleo") that we did not previously own.

We have assumed Kleo's laboratory facilities located in Science Park in New Haven, Connecticut.

We are continuing several existing Kleo discovery partnerships, including one with PeptiDream for the development of immuno-oncology therapeutics (See Note 6).

Agreement with Fox Chase Chemical Diversity Center, Inc.

In May 2019, we entered into an agreement with Fox Chase Chemical Diversity Center Inc.

(“FCCDC”) for FCCDC’s TDP-43 assets (the “FCCDC Agreement”).

The FCCDC Agreement provides us with a plan and goal to identify one or more new chemical entity candidates for preclinical development for eventual clinical evaluation for the treatment of one or more TDP-43 proteinopathies.

In connection with the FCCDC Agreement, Biohaven and FCCDC have established a TDP-43 Research Plan that provides for certain milestones to be achieved by FCCDC, and milestone payments to be made by us.

Agreement with University of Connecticut

In October 2018, we entered into an exclusive, worldwide option and license agreement (the "UConn Agreement") with the University of Connecticut ("UConn") for the development and commercialization rights to UC1MT, a therapeutic antibody targeting extracellular metallothionein.

Under this agreement, we had the option to acquire an exclusive, worldwide license to UC1MT and its underlying patents to develop and commercialize throughout the world in all human indications (the "UConn Option").

In September 2022, the Company exercised the UConn Option in exchange for a payment of $0.4 million.

Under the agreement, UConn will be entitled to milestone payments upon the achievement of specified regulatory and commercial milestones, and royalties of a low single-digit percentage of net sales of licensed products.

Artizan Biosciences, Inc.

In December 2020, we entered into an Option and License Agreement (the "2020 Artizan Agreement") with Artizan Biosciences Inc.

("Artizan"), a biotechnology company focused on addressing inflammatory diseases involving the human intestinal microbiota.

Pursuant to the 2020 Artizan Agreement, we acquired an option to obtain a royalty-based license from Artizan to manufacture, use and commercialize certain products.

Artizan will use the proceeds to continue advancing the preclinical research and development of its lead program for inflammatory bowel disease as well as to explore additional disease targets.

In June 2022, we and Artizan executed a non-binding indication of interest which described terms under which we and Artizan would amend the 2020 Artizan Agreement to eliminate certain milestone payments required by us in exchange for limiting our option to the selection of the first licensed product.

In the fourth quarter of 2022, Artizan was unable to secure additional financing to support it's ongoing operations, and, as a result, began reviewing strategic options for the sale of its assets, and secured a small bridge financing to fund operations during the strategic review.

In January, Artizan severed substantially all of its employees and halted the PD program.

Although Artizan anticipates bringing the inflammatory bowel disease program to the clinic in 2023, its ability to do so will be dependent on its access to adequate funding.

Reliant Glycosciences, LLC

In July 2021, we entered into a development and license agreement with Reliant Glycosciences, LLC ("Reliant") for collaboration on a program with Biohaven Labs’ multifunctional molecules to develop and commercialize conjugated antibodies for therapeutic uses relating to IgA nephropathy and treatment of other diseases and conditions.

Under the Agreement, Reliant was entitled to an upfront share payment and will be eligible to receive development milestone payments and royalties of net sales of licensed products.

TRPM3 Antagonists

In January 2022, we entered into an Exclusive License and Research Collaboration Agreement with Katholieke Universiteit Leuven ("KU Leuven") to develop and commercialize TRPM3 antagonists to address the growing proportion of people worldwide living with chronic pain disorders (the "KU Leuven Agreement").

The TRPM3 antagonist platform was discovered at the Centre for Drug Design and Discovery and the Laboratory of Ion Channel Research at KU Leuven.

Under the KU Leuven Agreement,we receive exclusive global rights to develop, manufacture and commercialize KU Leuven's portfolio of small-molecule TRPM3 antagonists.

The portfolio includes the lead candidate, henceforth known as BHV-2100, which is being evaluated in preclinical pain models and will be the first to advance towards Phase 1 studies.

We expect to submit an IND application for BHV-2100 with the FDA in the second half of 2023.

We will support further basic and translational research at KU Leuven on the role of TRPM3 in pain and other disorders.

The Company is evaluating and has not yet finalized potential clinical trial designs, including size and primary and secondary endpoints.

MoDE Platform

In January 2021, we entered into a worldwide, exclusive license agreement with Yale University for the development and commercialization of a novel Molecular Degrader of Extracellular Protein ("MoDE") platform (the "Yale MoDE Agreement").

Under the license agreement, we acquired exclusive, worldwide rights to Yale University's intellectual property directed to its MoDE platform.

The platform pertains to the clearance of disease-causing protein and other biomolecules by targeting them for lysosomal degradation using multi-functional molecules.

In October 2022, we announced advancements in the development of our MoDE extracellular target degrader platform technology licensed from Yale University for various disease indications, including, but not limited to, neurological disorders, cancer, infectious and autoimmune diseases.

Biohaven made further innovations in this ground-breaking technology with new patent applications covering additional targets and functionality.

The Company evaluated the effect of a single dose of immunoglobulin gamma ("IgG") degrader, BHV-1300, in cynomolgus monkeys.

The Company reported 75% reduction of IgG levels from baseline and noted the observation occurred in three days;

the data in this pre-clinical study compares favorably to standard of care therapy efgartigimod, where reduction of IgG levels with efgartigimod was observed to be 50% and had taken 5-7 days.

The Company expects to submit an IND application for BHV-1300 with the FDA in the second half of 2023.

The Company presented preclinical data with a second MoDE targeting galactose deficient IgA ("Gd-

IgA"), which is believed to play a pathogenic role in IgA Nephropathy.

Specific removal of pathogenic Gd-IgA with preservation of normal IgA potentially permits disease remission without incurring an infection risk.

The Company shared preliminary data demonstrating the chimeric antibody-ASGPR ligand conjugate specifically mediated endocytosis of Gd-IgA, as opposed to normal IgA, in an endocytosis assay with HepG2 cells.

Components of Our Results of Operations

To date, the we have not generated any revenue from product sales and we do not expect to generate any revenue from the sale of products in the near future.

To date, we have not generated any revenue from product sales and we do not expect to generate any revenue from the sale of products in the near future.

If our development efforts for our product candidates are successful and result in regulatory approval or additional license agreements with third parties, then we may generate revenue in the future from product sales.

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• payments made in cash, equity securities or other forms of consideration under third-party licensing or other agreements prior to regulatory approval of the product candidate.

We recognize external development costs based on an evaluation of the progress to completion of specific tasks using estimates from our clinical

personnel or information provided to us by our service providers.

We recognize external development costs based on an evaluation of the progress to completion of specific tasks using estimates from our clinical personnel and information provided to us by our service providers.

Our external direct research and development expenses are tracked on a program-by-program basis for our product candidates and consist primarily of external costs, such as fees paid to outside consultants, CROs, CMOs, and central laboratories in connection with our preclinical development, process development, manufacturing and clinical development activities.

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We use internal resources primarily to oversee the research and development as well as for managing our preclinical development, process development, manufacturing and clinical development activities.

Many employees work across multiple programs, and we do not track personnel costs by program.

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

As a result, we expect that our research and development expenses will remain significant over the next several years as we increase personnel costs, conduct late-stage clinical trials, and prepare regulatory filings for our product candidates.

We also expect to incur additional expenses related to milestone and royalty payments payable to third parties with whom we have entered into license agreements to acquire the rights to our product candidates.

We expect that our research and development expenses will remain significant over the next several years as we increase personnel costs, conduct late-stage clinical trials, and prepare regulatory filings for our product candidates.

We also expect to incur additional expenses related to milestones payable to third parties with whom we have entered into license agreements to acquire the rights to our product candidates.

The successful development and commercialization of our product candidates is highly uncertain.

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General and administrative ("G&A") expenses consist primarily of personnel costs, including salaries, benefits and travel expenses for our executive, finance, business, corporate development and other administrative functions;

and share-based compensation expense.

and non-cash share-based compensation expense.

General and administrative expenses also include facilities and other related expenses, including rent, depreciation, maintenance of facilities, insurance and supplies;

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Other Income (Expense)

Gain (Loss) from Equity Method Investment

Prior to our acquisition of Kleo in January 2021, we owned approximately 41.9% of the outstanding shares as of December 31, 2020, and accounted for our investment in Kleo under the equity method of accounting.

As a result, our proportionate share of Kleo’s net income or loss each reporting period was included in other income (expense), net, in our consolidated statement of operations and results in a corresponding adjustment to the carrying value of the

equity method investment on our consolidated balance sheet.

On January 4, 2021, we acquired the rest of the shares of Kleo, and post-transaction we own 100% of the outstanding shares of Kleo.

Other (Expense) Income, Net

Other (expense) income, net during the year ended December 31, 2022 primarily consisted of a $10.0 million impairment loss recognized during the fourth quarter on our Artizan Series A-2 Preferred Stock Investment, partially offset by net investment income of $3.2 million and service revenue from the Transition Service Agreement we entered into with the Former Parent of $4.0 million.

Other (expense) income, net during the year ended December 31, 2021 primarily consisted of a gain recognized upon the Company’s determination that the value of the contingent value right related to our Kleo acquisition was immaterial as of December 31, 2021.

The consideration transferred for the Kleo acquisition included contingent consideration in the form of a contingent value right to receive one dollar in cash for each Kleo share if certain specified Kleo biopharmaceutical products or product candidates receive the approval of the FDA prior to the expiration of 30 months following the effective time of the transaction.

The maximum amount payable pursuant to the contingent value right was approximately $17.3 million.

At December 31, 2021, the Company determined the value of the contingent value right to be immaterial and recognized a gain of $1.5 million related to the contingent value right in other income, net.

Other Income (Expense), Net

Other income (expense), net during the year ended December 31, 2023 primarily consists of net investment income and service revenue from the Transition Service Agreement we entered into with the Former Parent.

Refer to Note 14, "Related Party Transactions," for further discussions of agreements entered into with the Former Parent.

Net investment income is comprised of interest income and net accretion and amortization on investments in addition to realized gains and losses.

Refer to Note 3, "Marketable Securities," for further discussion of our investments.

Other income (expense), net during the year ended December 31, 2022 primarily consisted of a $10.0 million impairment loss recognized during the fourth quarter on our Artizan Series A-2 Preferred Stock Investment, partially offset by net investment income and service revenue from the Transition Service Agreement we entered into with the Former Parent.

Provision for Income Taxes

The income tax expense in the consolidated financial statements has been calculated on a separate return method and is presented as if the Company’s operations were separate taxpayers in the respective jurisdictions up to and including the Separation.

The income tax expense in the consolidated financial statements was calculated on a separate return method and presented as if the Company’s operations were separate taxpayers in the respective jurisdictions up to and including the Separation.

Cash tax payments, income taxes receivable and deferred taxes, net of valuation allowance, are reflective of our actual tax balances prior and subsequent to the Separation.

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Under the current laws of the BVI, the Company and all dividends, interest, rents, royalties, compensation and other amounts paid by the Company to persons who are not resident in the BVI and any capital gains realized with respect to any shares, debt obligations, or other securities of the Company by persons who are not resident in the BVI are exempt from all provisions of the Income Tax Ordinance in the BVI.

We have historically outsourced all of the research and clinical development for its programs under a master services agreement with Biohaven Pharmaceuticals, Inc.

As a result of providing

services under this agreement, BPI was profitable during the years ended December 31, 2022, 2021, and 2020, and BPI is subject to taxation in the United States.

As such, in each reporting period, the tax provision includes the effects of combining the results of operations of BPI.

At December 31, 2022 and 2021, we continued to maintain a full valuation allowance against our net deferred tax assets, comprised primarily of capitalized research and development deductions, research and development tax credit carryforwards, and net operating loss carryforwards, based on management’s assessment that it is more likely than not that the deferred tax assets will not be realized.

We recorded an income tax expense for the year ended December 31, 2022 of $0.4 million and an expense of $1.4 million for the year ended December 31, 2021, which primarily represents U.S.

Federal and state taxes related to BPI’s profitable operations in the United States.

In January 2021, we completed the acquisition of Kleo.

We recorded a full valuation allowance against our Kleo deferred tax assets and periodically review our position.

Due to Kleo's cumulative loss history, we determined that a full valuation allowance on these assets was appropriate.

We will continue to evaluate the need for a valuation allowance on our deferred tax assets until there is sufficient positive evidence to support the reversal of all or some portion of these allowances.

We have historically outsourced all of the research and clinical development for our programs under a master services agreement with Biohaven Pharmaceuticals, Inc.

As a result of providing services under this agreement, BPI was profitable during the years ended December 31, 2023, 2022, and 2021, and BPI is subject to taxation in the United States.

As such, in each reporting period, the tax provision includes the effects of the results of operations of BPI.

At December 31, 2023 and 2022, we continued to maintain a full valuation allowance against our net deferred tax assets, comprised primarily of research and development tax credit carryforwards, and net operating loss carryforwards, based on management’s assessment that it is more likely than not that the deferred tax assets will not be realized.

Our income tax provision/benefit primarily represents Federal and state taxes related to the profitable operations of our subsidiaries in the United States and Ireland.

The income tax benefit recorded during the year ended December 31, 2023 was primarily attributable to our adoption of the guidance contained in a Notice of Proposed Rule Making issued by the United States Internal Revenue Service during the third quarter of 2023 ("the Notice").

The Notice indicates that BPI has the ability to immediately deduct R&D expenditures which were incurred in the US and reimbursed by our foreign parent.

Previously these expenditures were capitalized, as was generally understood to be required under the Tax Cuts and Jobs Act, which was effective for tax years beginning on or after January 1, 2022.

Based on this guidance and its application to our specific facts, we deducted these expenditures on our 2022 tax return, substantially reducing our taxable income in the US and capitalized R&D expenditures, resulting in an increase to our federal net operating loss carryforward of $598.7 million that can be carried forward indefinitely.

Our adoption of the Notice in 2023 also increased our State net operating losses, resulting in the reversal of $0.8 million of state income taxes recorded in 2022.

Results of Operations

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Loss from operations (436,051) (567,932) 131,881

Other (expense) income :

Gain from equity method investment — 5,261 (5,261)

Other (expense) income, net (1,909) 1,209 (3,118)

Total other (expense) income, net (1,909) 6,470 (8,379)

Loss before provision for income taxes (569,841) (212,430) (357,411)

Provision for income taxes 438 1,366 (928)

Net loss $ (570,279) $ (213,796) $ (356,483)

Research and Development Expenses

Year Ended December 31,

In thousands 2022 2021 Change

Direct research and development expenses by program:

BHV-7000 $ 131,006 $ — $ 131,006

Troriluzole 58,769 50,637 8,132

Verdiperstat 13,654 30,664 (17,010)

BHV-1100 852 1,476 (624)

BHV-1200 (COVID 19) 6,033 3,023 3,010

BHV-2000 16,799 820 15,979

Other programs 731 288 443

Unallocated research and development costs:

Personnel related (including non-cash share-based compensation) 170,122 64,308 105,814

Preclinical research programs 25,865 22,592 3,273

Other 13,241 7,678 5,563

Total research and development expenses $ 437,072 $ 181,486 $ 255,586

R&D expenses, including non-cash share-based compensation costs, were $437.1 million for the year ended December 31, 2022, compared to $181.5 million for the year ended December 31, 2021.

The increase of $255.6 million was primarily due to an increase of $131.0 million in expense for BHV-7000, an increase of $16.0 million in expense for BHV-2000, and an increase of $105.8 million in personnel costs.

The $131.0 million increase in expense for BHV-7000 was primarily due to the Kv7 Platform Acquisition which resulted in $93.7 million of expense recorded to R&D, and a $25.0 million milestone expense, both recognized during the second quarter of 2022.

The increase of $105.8 million in personnel costs was primarily due to increases in non-cash share-based compensation expense of $77.0

million, increased headcount to support acquired and late-stage programs, and $5.2 million of one-time employee costs related to the Pfizer acquisition of the Former Parent in the fourth quarter of 2022.

These increases were partially offset by a decrease in program expense for verdiperstat of $17.0 million.

Non-cash share-based compensation expense was $116.4 million for the year ended December 31, 2022, an increase of $77.0 million as compared to the same period in 2021.

Non-cash share-based compensation expense for the year ended December 31, 2022 included $108.7 million amount of expense allocated from the Former Parent, including $61.7 million of expense recognized in connection with the settlement of

outstanding Former Parent stock options and RSUs upon the effectiveness of the Separation.

General and Administrative Expenses

G&A expenses, including non-cash share-based compensation costs, were $130.9 million for the year ended December 31, 2022, compared to $37.4 million for the year ended December 31, 2021.

The increase of $93.4 million was primarily due to increases of $50.9 million in non-cash share-based compensation expense, and $14.1 million of transaction expenses and $8.9 million of one-time personnel expenses related to the Pfizer acquisition of the Former Parent and spin-off of Biohaven Ltd.

as an independent, publicly traded company in 2022.

Non-cash share-based compensation expense was $77.2 million for the year ended December 31, 2022, an increase of $50.9 million as compared to the same period in 2021.

Non-cash share-based compensation expense for the year ended December 31, 2022 included $70.6 million amount of expense allocated from the Former Parent, including $39.7 million of expense recognized in connection with the settlement of each outstanding Former Parent stock option and RSU upon the effectiveness of the Separation.

Other income (expense):

Other income (expense), net 26,500 (1,909) 28,409

Other income (expense), net was a net expense of $1.9 million for the year ended December 31, 2022, compared to other income of $6.5 million for the year ended December 31, 2021.

The change of $8.4 million was primarily due to a $10.0 million impairment loss recognized during the fourth quarter on our Artizan Series A-2 Preferred Stock Investment and the acquisition of Kleo in January 2021, which resulted in a gain of $5.3 million being recognized during 2021 upon our remeasurement to fair value of the existing equity interest in Kleo, partially offset by net investment income of $3.2 million and service revenue from the Transition Service Agreement we entered into with the Former Parent of $4.0 million.

Provision for Income Taxes

We recorded a provision for income taxes of $0.4 million for the year ended December 31, 2022, compared to a provision for income taxes of $1.4 million for the year ended December 31, 2021.

The decrease in income tax expense was primarily attributable to the vesting of share based compensation awards to employees and the Foreign-Derived Intangible Income ("FDII") deduction, offset by the mandatory capitalization of R&D expenses effective January 1, 2022 under the Tax Cuts and Jobs Act.

Comparison of the Years Ended December 31, 2021 and 2020

The following table summarizes our results of operations for the years ended December 31, 2021 and 2020:

Year Ended December 31,

In thousands 2021 2020 Change

Operating expenses:

Research and development $ 181,486 $ 98,460 $ 83,026

General and administrative 37,414 16,046 21,368

Total operating expenses 218,900 114,506 104,394

Loss from operations (218,900) (114,506) (104,394)

Other (expense) income :

Gain (loss) from equity method investment 5,261 (4,162) 9,423

Other income, net 1,209 — 1,209

Total other income (expense), net 26,500 (1,909) 28,409

Loss before provision for income taxes (212,430) (118,668) (93,762)

Provision for income taxes 1,366 — 1,366

Loss before (benefit) provision for income taxes (409,551) (569,841) 160,290

(Benefit) provision for income taxes (1,383) 438 (1,821)

Net loss $ (408,168) $ (570,279) $ 162,111

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Year Ended December 31,

In thousands 2021 2020 Change

In thousands 2023 2022*

Direct research and development expenses by program:

BHV-7000 & BHV-7010

$ 47,327 $ 131,956 $ (84,629)

39,025 — 39,025

BHV-2100 (TRPM3)

12,864 8,255 4,609

Troriluzole 73,080 58,769 14,311

Verdiperstat 30,664 21,036 9,628

BHV-1100 1,476 — 1,476

40,870 16,799 24,071

22,239 — 22,239

1,951 852 1,099

BHV-1200 (COVID 19)

— 6,033 (6,033)

3,064 13,654 (10,590)

Other programs 600 668 (68)

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Total research and development expenses $ 373,281 $ 437,072 $ (63,791)

Research and development expenses were $181.5 million for the year ended December 31, 2021, compared to $98.5 million for the year ended December 31, 2020.

The increase of $83.0 million was primarily due to increases of $8.5 million in direct costs for the troriluzole program, $9.6 million in direct costs for the verdiperstat program, $33.2 million in personnel related costs, and $21.2 million in costs related to our preclinical research programs.

The increase in personnel costs of $33.2 million was primarily a result of hiring additional personnel to support the expanding number of clinical trials and preclinical programs.

Personnel-related costs for the years ended December 31, 2021 and 2020 included non-cash share-based compensation expense of $39.4 million and $18.5 million, respectively.

The $21.2 million increase in preclinical research costs was primarily due to the following:

payment of $2.0 million to Yale University in connection with the Yale MoDE Agreement;

an upfront payment of $5.9 million to Moda Pharmaceuticals LLC in connection with a consulting agreement to further the scientific advancement of technology, drug discovery platforms (including the technology licensed under the Yale MoDE Agreement), product candidates and related intellectual property owned or controlled by the Company;

and a $3.8 million upfront payment to Reliant Glycosciences, LLC in connection with a development and license agreement to develop and commercialize conjugated antibodies for therapeutic uses relating to IgA nephropathy and treatment of other diseases and conditions.

The remainder of the increase primarily related to the rise in the number of ongoing preclinical research programs, including increased costs for outsourced chemistry and research arrangements.

*Certain prior year amounts have been reclassified to conform to current year presentation

R&D expenses, including non-cash share-based compensation costs, were $373.3 million for the year ended December 31, 2023, compared to $437.1 million for the year ended December 31, 2022.

The decrease of $63.8 million was primarily due to a one-time $93.7 million expense to BHV-7000 and BHV-7010 during 2022 for our Kv7 Platform acquisition, a $25.0 million milestone relating to BHV-7000, a decrease of $91.5 million in personnel related costs, and reduced program spend for BHV-1200 and verdiperstat in 2023

compared to 2022.

The decrease was partially offset by increases in direct program spend for additional and advancing clinical trials, including late Phase 2/3 studies and preclinical research programs in 2023, as compared to the same period in the prior year.

The increased program spend in 2023 included recognition of one-time expenses of a $10.0 million cash payment and a $21.8 million non-cash issuance of common shares to acquire rights related to our Highlightll Agreement.

Note 11, "License Agreements" for further discussion of the payments to Highlightll.

Non-cash share-based compensation expense was $16.0 million for the year ended December 31, 2023, a decrease of $100.4 million as compared to the same period in 2022.

Non-cash share-based compensation expense for the year ended December 31, 2022 included $108.7 million of expense allocated from the Former Parent, including $61.7 million of expense recognized in connection with the settlement of outstanding Former Parent stock options and RSUs upon the effectiveness of the Separation in the fourth quarter of 2022.

Non-cash share-based compensation expense was higher in the year ended December 31, 2022 primarily because expense allocated from the Former Parent equity plan was based on equity awards with higher grant date fair value.

General and Administrative Expenses

General and administrative expenses were $37.4 million for the year ended December 31, 2021, compared to $16.0 million for the year ended December 31, 2020 The increase of $21.4 million was primarily due to increased personnel-related expenses of $16.4 million, including non-cash share-based compensation expense, and a $2.0 million increase in expenses related to accounting, legal and other professional fees.

Non-cash share-based compensation expense included in personnel-related costs increased $15.2 million, from $11.0 million for the year ended December 31, 2020 to $26.3 million for the year ended December 31, 2021, primarily due to annual equity incentive awards that were granted by the Formers Parent in the first quarter of 2021.

G&A expenses, including non-cash share-based compensation costs, were $62.8 million for the year ended December 31, 2023, compared to $130.9 million for the year ended December 31, 2022.

The decrease of $68.1 million was primarily due to decreased non-cash share-based compensation costs.

Non-cash share-based compensation expense was $12.8 million for the year ended December 31, 2023, a decrease of $64.4 million as compared to the same period in 2022.

Non-cash share-based compensation expense for the year ended December 31, 2022 included $70.6 million of expense allocated from the Former Parent, including $39.7 million of expense recognized in connection with the settlement of each outstanding Former Parent stock option and RSU upon the effectiveness of the Separation in the fourth quarter of 2022.

Other Income (Expense), Net

Other income (expense), net was a net other income of $6.5 million for the year ended December 31, 2021, compared to net other expense of $4.2 million for the year ended December 31, 2020.

The change of $10.6 million in net other income (expense) was primarily due to a $9.4 million change in gain (loss) on equity investment, primarily due to the acquisition of Kleo Pharmaceuticals, Inc.

in January 2021, which resulted in a gain of $5.3 million being recognized during 2021 upon our remeasurement to fair value of the existing equity interest in Kleo.

The decrease was also due to a $1.2 million increase in other income, net, which was primarily due to a $1.5 million gain recognized in 2021 upon the Company’s determination that the fair value of a contingent value right recorded relating to the acquisition of Kleo Pharmaceuticals was immaterial as of December 31, 2021.

Provision for Income Taxes

We recorded a provision for income taxes of $1.4 million for December 31, 2021 and $0.0 million for the year ended December 31, 2020.

The increase in tax expense for the year ended December 31, 2021 is primarily related to the decrease in the tax deductions arising from stock based compensation awards to employees.

Other income (expense), net was other income of $26.5 million for the year ended December 31, 2023, compared to other expense of $1.9 million for the year ended December 31, 2022.

The increase of $28.4 million in other income (expense), net was primarily due to increased net investment income of $14.5 million and increased service revenue from the Transition Service Agreement we entered into with the Former Parent of $5.2 million in 2023, as compared to the same period in the prior year, as well as a $10.0 million impairment loss recognized during the fourth quarter of 2022 on our Artizan Series A-2 Preferred Stock Investment.

(Benefit) Provision for Income Taxes

We recorded a benefit for income taxes of $1.4 million for the year ended December 31, 2023, compared

to a provision for income taxes of $0.4 million for the year ended December 31, 2022.

The decrease in the income tax provision as compared to 2022 was primarily attributable to the Company adopting the guidance contained in the Notice.

See further discussion of the Notice in "Components of Our Results of Operations" included in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" of this report.

Liquidity and Capital Resources

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We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for our product candidates.

continue to incur significant expenses for at least the next several years as we advance our product candidates from discovery through preclinical development and clinical trials and seek regulatory approval and pursue commercialization of any approved product candidate.

In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution.

In addition, we may incur expenses in connection with the in-license or acquisition of additional product candidates.

Historically, for periods prior to our separation from the Former Parent, we have funded our operations primarily with proceeds allocated to our business from financing arrangements entered into by the Former Parent and through the one-time issuance of contingently redeemable non-controlling interests.

Prior to the Separation, transfers of cash for general operating, investing, and financing activities and net cost allocation from the Former Parent were reflected in net investment from Former Parent in our consolidated balance sheets.

The cash reported on our consolidated balance sheet for periods prior to the Separation represents cash held by Biohaven entities at the end of the period presented.

We expect to continue to incur significant expenses for at least the next several years as we advance our product candidates from discovery through preclinical development and clinical trials and seek regulatory approval and pursue commercialization of any approved product candidate.

We may also incur expenses in connection with the in-license or acquisition of additional product candidates.

Historically, for periods prior to the Separation, we have funded our operations primarily with proceeds allocated to our business from financing arrangements entered into by the Former Parent and through the one-time issuance of contingently redeemable non-controlling interests.

From the Separation through February 29, 2024, we have funded our operations primarily with the cash contribution received from the Former Parent at the Separation and proceeds from the public offerings of our common shares.

Pursuant to the Distribution Agreement, immediately prior to the Separation, the Former Parent made a cash contribution to the Company which resulted in a cash balance of approximately $257.8 million as of October 3, 2022.

Additionally, on October 25, 2022, we completed a public offering of 28,750,000 of our common shares, including the full exercise of the underwriters' option to purchase additional shares, at a public offering price of $10.50 per share.

The offering resulted in net proceeds, after deducting underwriting discounts and expenses of the offering payable by Biohaven, of approximately $282.8 million.

As of December 31, 2022, we had cash and cash equivalents of $204.9 million, excluding marketable securities of $260.5 million and restricted cash of $37.7 million of which $35.2 million related to restricted cash held on behalf of Former Parent and $2.5 million related to collateral held by banks for letters of credit (“LOC”) issued in connection with leased office space in Yardley, Pennsylvania and Cambridge, Massachusetts.

We have incurred recurring losses since our inception and expect to continue to generate operating losses for the foreseeable future.

As of December 31, 2023, we had cash and cash equivalents of $248.4 million and marketable securities of $133.4 million.

Cash in excess of immediate requirements is invested in marketable securities and money market funds with a view to liquidity and capital preservation.

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Net cash used in operating activities $ (331,725) $ (297,689) $ (145,840)

Net cash (used in) provided by investing activities (304,790) 944 (2,697)

Net cash provided by (used in) investing activities

129,830 (304,790) 944

Net cash provided by financing activities 211,908 767,597 138,447

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Net cash used in operating activities was $331.7 million in 2023, $297.7 million in 2022, and $145.8 million in 2021.

The $151.9 million increase in net cash used in operating activities in 2022 was driven primarily by:

• an increase in net loss primarily due to an increase in R&D spending including a $25.0 million milestone payment to Knopp Biosciences, LLC (see Note 6 to the Consolidated Financial Statements), an increase in R&D headcount to support acquired and late-stage programs, and an increase in payments related to accounting, legal and other professional fees associated with the Pfizer acquisition of the Former Parent and spin-off of Biohaven Ltd;

• an increase in prepaid R&D expenses to support our clinical trials;

• increased cash payments for income taxes.

The $69.8 million increase in net cash used in operating activities in 2021 was unfavorably impacted by an increase in net loss primarily due to:

• an increase in R&D spending including upfront payments of $3.7 million for various license agreements (see Note 11 to the Consolidated Financial Statements);

• an increase in headcount to support the Company's growing operations.

The $34.0 million increase in net cash used in operating activities in 2023 was driven primarily by an increase in payments for clinical operations, clinical supply, discovery operations and personnel costs to support our acquired and late-stage programs partially offset by an increase in collections of income tax refunds, collections related to the transition services agreement with Pfizer, and interest received on cash and restricted cash, cash equivalents, and debt securities.

Investing Activities

Net cash used in investing activities was $304.8 million in 2022 and $2.7 million in 2020, and net cash provided by investing activities was $0.9 million in 2021.

The $305.7 million increase in net cash used in investing activities in 2022 was driven primarily by:

• purchases of marketable securities with cash in excess of immediate requirements (see Note 3 to the Consolidated Financial Statements);

• an increase in purchases of equipment to support our discovery programs;

• payment for our acquisition of Channel Biosciences, LLC (see Note 6 to the Consolidated Financial Statements);

• purchase of series A-2 preferred stock of Artizan Biosciences Inc (see Note 11 to the Consolidated Financial Statements).

The $3.6 million increase in net cash provided by investing activities in 2021 was driven primarily by cash acquired from the business acquisition of Kleo Pharmaceuticals, Inc (see Note 6 to the Consolidated Financial Statements).

Net cash provided by investing activities was $129.8 million in 2023, and $0.9 million in 2021, and net cash used in investing activities was $304.8 million in 2022.

The $429.7 million increase in net cash provided by investing activities in 2023 was driven primarily by an increase in proceeds from sales and maturities of marketable securities, a decrease in purchases of marketable securities (see Note 3, "Marketable Securities," to the Consolidated Financial Statements), and a decrease in cash payments for IPR&D asset acquisition.

Financing Activities

Net cash provided by financing activities was $211.9 million in 2023, $767.6 million in 2022, and $138.4 million in 2021.

The $629.2 million increase in net cash provided by financing activities in 2022 was driven primarily by:

• an increase in proceeds from net transfers from Parent prior to and at the Separation for our general operating, investing, and financing activities and net cost allocations and initial capitalization;

• restricted cash held in connection with the execution of the United States Distribution Services Agreement which is legally payable to the Former Parent (see Note 14 to the Consolidated Financial Statements);

• proceeds from the issuance of common shares related to a public offering in October 2022 (see Note 7 to the Consolidated Financial Statements).

The $13.8 million decrease in net cash provided by financing activities in 2021 was driven primarily by a decrease in proceeds from net transfers from Former Parent for our general operating, investing, and financing activities and net cost allocations.

The $555.7 million decrease in net cash provided by financing activities in 2023 was driven primarily by a decrease in proceeds from net transfers from Parent due to the Company operating as a standalone entity for the year ended December 31, 2023 and a decrease in restricted cash held in connection with the execution of the United States Distribution Services Agreement which is legally payable to the Former Parent (see Note 14, "Related Party Transactions," to the Consolidated Financial Statements).

October 2023 Public Offering

On October 5, 2023, we closed an underwritten public offering of 11,761,363 of our common shares, which included the exercise in full of the underwriters' option to purchase additional shares, at a price to the

public of $22.00 per share.

The net proceeds raised in the offering, after deducting underwriting discounts and expenses of the offering payable by us, were approximately $242.4 million.

The net proceeds received from the offering are being used for general corporate purposes.

Equity Distribution Agreement

In October 2023, we entered into an equity distribution agreement pursuant to which we may offer and sell common shares having an aggregate offering price of up to $150.0 million from time to time through or to the sales agent, acting as our agent or principal (the "Equity Distribution Agreement").

Sales of our common shares, if any, will be made in sales deemed to be “at-the-market offerings”.

The sales agent is not required to sell any specific amount of securities but will act as our sales agent using commercially reasonable efforts consistent with its normal trading and sales practices, on mutually agreed terms between the sales agent and us.

We currently plan to use the net proceeds from any at-the-market offerings of our common shares for general corporate purposes.

As of December 31, 2023, we have issued and sold no common shares under the Equity Distribution Agreement.

October 2022 Public Offering

On October 25, 2022, we completed a public offering of 28,750,000 of our common shares, including the full exercise of the underwriters' option to purchase additional shares, at a public offering price of $10.50 per share.

The offering resulted in net proceeds, after deducting underwriting discounts and expenses of the offering payable by Biohaven, of approximately $282.8 million.

The net proceeds from the offering are being used for general corporate purposes.

Funding Requirements

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Our costs will also increase as we:

• continue to advance and expand the development of our clinical-stage assets;

• continue to advance and expand the development of our discovery programs and clinical-stage assets;

• continue to initiate and progress other supporting studies required for regulatory approval of our product candidates, including long-term safety studies, drug-drug interaction studies, preclinical toxicology and carcinogenicity studies;

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• pursue regulatory approvals for our current and future product candidates that successfully complete clinical trials;

• support our sales, marketing and distribution infrastructure to commercialize any future product candidates for which we may obtain marketing approval;

• establish and support our sales, marketing and distribution infrastructure to commercialize any future product candidates for which we may obtain marketing approval;

• hire additional clinical, medical, commercial, and development personnel;

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We expect that we will require additional capital to pursue in-licenses or acquisitions of other product candidates.

If we receive regulatory approval for troriluzole, or our other product candidates, we expect to incur commercialization expenses related to product manufacturing, sales, marketing and distribution,

depending on where we choose to commercialize or whether we commercialize jointly or on our own.

If we receive regulatory approval for our product candidates, we expect to incur commercialization expenses related to product manufacturing, sales,

marketing and distribution, depending on where we choose to commercialize or whether we commercialize jointly or on our own.

Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical product candidates, we are unable to estimate the exact amount of our working capital requirements.

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• the costs, timing and outcome of regulatory review of our product candidates;

• the effect of COVID-19 pandemic on our business operations and funding needs;

• the costs and timing of hiring new employees to support our continued growth;

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• the extent to which we acquire or in-license other product candidates and technologies;

• the timing, receipt and amount of sales of, or milestone payments related to or royalties on, our current or future product candidates, if any;

• other capital expenditures, working capital requirements, and other general corporate activities.

Until such time, if ever, that we can generate product revenue sufficient to achieve profitability, we expect to finance our cash needs through a combination of public and private equity offerings, debt financings, other third-party funding, strategic alliances, licensing arrangements or marketing and distribution arrangements.

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If we raise additional funds through other third-party funding, strategic alliances, licensing arrangements or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.

If we are unable to raise additional funds through equity or debt financings when needed, we will be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.

Contractual Obligations and Commitments

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Since the achievement of these milestones is uncertain and the timing unpredictable, the Company did not include the additional research commitments in the table above.

If all related milestones are achieved, the Company expects these amounts to be paid over the next five years.

If all related milestones are achieved, the Company expects these amounts to be paid over approximately one year.

In addition to the contractual obligations in the table above, under various agreements with third-party licensors and collaborators, we have agreed to make milestone payments and pay royalties and annual maintenance fees to third parties and to meet due diligence requirements based upon specified milestones.

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While our significant accounting policies are described in more detail in Note 2, "Summary of Significant Accounting Policies," in the notes to our financial statements appearing at the end of this Annual Report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.

Valuation and Impairment of Intangible Assets

In-Process Research and Development (“IPR&D”) that the Company acquires in conjunction with the acquisition of a business represents the fair value assigned to incomplete research projects which, at the time of acquisition, have not reached technological feasibility.

The amounts are capitalized and accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment of the projects.

Upon successful completion of each project, the Company will make a determination as to the then-useful life of the intangible asset, generally determined by the period in which the substantial majority of the cash flows are expected to be generated, and begin amortization.

The fair value of acquired intangible assets is primarily determined using an income-based approach referred to as the multi-period excess earnings method utilizing Level 3 fair value inputs.

The market participant valuation assumes a global view considering all potential jurisdictions and indications based on discounted after-tax cash flow projections, risk adjusted for estimated probability of technical and regulatory success.

The Company evaluates IPR&D for impairment at least annually in the fourth quarter and more frequently if impairment indicators exist, by performing a quantitative test that compares the fair value of the IPR&D intangible asset with its carrying value.

If the fair value is less than the carrying amount, an impairment loss is recognized in operating results.

Accrued Research and Development Expenses

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• CMOs in connection with drug substance and drug product formulation of preclinical and clinical trial materials.

We base expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple research institutions and CROs that conduct and manage preclinical studies and clinical trials on our behalf as well as estimates of services and materials consumed by CMOs that manufacture drug substances and products on our behalf.

The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows.

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If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or the amount of prepaid expenses accordingly.

Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the

status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period.

Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period.

To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses.

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Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our consolidated financial statements appearing at the end of this Annual Report.

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2, "Summary of Significant Accounting Policies," to our consolidated financial statements appearing at the end of this Annual Report.

Emerging Growth Company Status

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups (JOBS) Act (the "JOBS Act"), and we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” These exemptions generally include, but are not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

We plan to take advantage of some or all of the reduced regulatory and reporting requirements that will be available to us as long as we qualify as an emerging growth company, except that we have irrevocably elected not to take advantage of the extension of time to comply with new or revised financial accounting

standards available under Section 102(b) of the JOBS Act.

We will, in general, remain as an emerging growth company for up to five full fiscal years following the Distribution.

We would cease to be an emerging growth company and, therefore, become ineligible to rely on the above exemptions, if we:

• have more than $1.235 billion in annual revenue in a fiscal year;

• issue more than $1 billion of non-convertible debt during the preceding three-year period;

• become a “large accelerated filer” as defined in Exchange Act Rule 12b-2, which would occur after:

(i) we have filed at least one annual report pursuant to the Exchange Act;

(ii) we have been an SEC-reporting company for at least twelve months;

and (iii) the market value of our common shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter.

The Jumpstart Our Business Startups (JOBS) Act (the "JOBS Act") permits an “emerging growth company” to take advantage of an extended transition period to comply with new or revised financial accounting standards applicable to public companies until those standards would otherwise apply to nonpublic companies.

As an emerging growth company, we also were exempt from Section 404(b) of the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley), which would require independent auditors to report on the effectiveness of the Company's internal control over financial reporting.

As of June 30, 2023, the market value of our common stock that was held by non-affiliates exceeded $700 million, and as a result, we no longer qualified as an emerging growth company as of December 31, 2023 when we became a large accelerated filer.

Therefore, we are required to comply with new or revised financial accounting standards as of the effective dates applicable to public companies that are not emerging growth companies.

In addition, we are required to comply with Section 404(b) of Sarbanes-Oxley.

Smaller Reporting Company Status

Additionally, we are a “smaller reporting company,” as defined in Rule 12b-2 under the Exchange Act.

As such, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not smaller reporting companies, including, but not limited to, reduced disclosure obligations regarding executive compensation.

We will remain a smaller reporting company as long as either:

(i) the market value of our common shares held by non-affiliates is less than $250 million as of the last business day of our most recently completed second fiscal quarter;

(ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our common shares held by non-affiliates is less than $700 million as of the last business day of our most recently completed second fiscal quarter.

A “smaller reporting company,” as defined in Rule 12b-2 under the Exchange Act, is eligible for exemptions from various reporting requirements applicable to other public companies that are not smaller reporting companies, including, but not limited to, reduced disclosure obligations regarding executive compensation.

As of June 30, 2023, the aggregate market value of our common shares held by non-affiliates exceeded $700 million.

As a result, we became a “large accelerated filer” and no longer qualify as a “smaller reporting company.” However, we are not required to reflect the change in our “smaller reporting company” status, or comply with the associated increased disclosure obligations, until our quarterly report for the three-month period ended March 31, 2024.

We may continue to take advantage of certain reduced disclosures available to smaller reporting companies through the filing of this Annual Report on Form 10-K for the year ending December 31, 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis