What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-02-29 compared with 2023-03-23 · 567 added, 528 removed, 901 unchanged (55% of the section changed)

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Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and not be detected.

Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2022, our disclosure controls and procedures were effective at the reasonable assurance level.

Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December

31, 2023, our disclosure controls and procedures were effective at the reasonable assurance level.

Management's Report on Internal Control over Financial Reporting

This Annual Report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm as allowed by the SEC during the transition period for newly public companies.

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023 based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").

Based on that evaluation, management has concluded that the Company's internal control over financial reporting was effective as of December 31, 2023.

Report of Independent Registered Public Accounting Firm

The effectiveness of our internal control over financial reporting as of December 31, 2023 has been audited by Ernst & Young LLP., an independent registered public accounting firm, as stated in their report, which is included below.

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Biohaven Ltd.

Opinion on Internal Control Over Financial Reporting

We have audited Biohaven Ltd.’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Biohaven Ltd.

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and our report dated February 29, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

/s/ Ernst & Young LLP

Hartford, Connecticut

February 29, 2024

Changes in Internal Controls over Financial Reporting

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OTHER INFORMATION

On March 21, 2023, Biohaven, through its wholly owned subsidiary Biohaven Therapeutics Ltd., entered into a License Agreement (the “Highlight II Agreement”) with Hangzhou Highlightll Pharmaceutical Co.

(“Highlightll”).

Pursuant to the Highlightll Agreement, Highlightll granted Biohaven exclusive worldwide rights, excluding the People’s Republic of China and its territories and possessions, to research, develop, manufacture and commercialize Highlightll’s brain penetrant dual TYK2/JAK1 tyrosine kinase (“TYK2/JAK1”) inhibitor program.

Biohaven plans to conduct a Phase 1 study of this product candidate, which will now be referred to as BHV-8000, for the treatment of brain disorders.

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

Under the terms of the Highlightll Agreement, Biohaven will also be obligated to make milestone payments to Highlightll totaling up to $200 million upon the achievement of specified developmental, regulatory and commercial milestones for a first indication, up to $100 million upon the achievement of specified developmental, regulatory and commercial milestones for a second indication, and up to $650 million upon the achievement of specified sales-based milestones.

No additional milestone payments will be due for any indications beyond the first and second indications.

In addition, Biohaven will pay Highlightll tiered royalties ranging from mid single-digit to low teens based on net sales of any approved products based on BHV-8000, subject to specified reductions.

Under the terms of the Highlightll Agreement, Biohaven may pursue development and commercialization of BHV-8000 for all indications, except, for a period of five years from the date of the first commercial sale of the first licensed product, the prevention, treatment or diagnosis of any disorders that cause inflammation in the bones, muscles, joints, respiratory system, gastro-intestinal system and skin.

Highlightll has agreed not to develop or commercialize, for a period of five years from the date of the first commercial sale of the first licensed product, any TYK2/JAK1inhibitor program for the prevention, treatment or diagnosis of any neurological disorder.

Biohaven is now solely responsible, and has agreed to use commercially reasonable efforts, for all development, regulatory and commercial activities related to BHV-8000.

Biohaven may sublicense its rights under the Highlightll Agreement, subject to Highlightll’s prior written consent.

Biohaven is also now responsible for the prosecution and maintenance of the patents related to BHV-8000 and licensed products, and has the first right to prosecute infringement of the patents and defend challenges to the validity or enforceability of the patents in all countries other than the People’s Republic of China and its territories and possessions.

The Highlightll Agreement terminates on a country-by-country basis and product-by-product basis upon the expiration of the royalty term for a product in a country.

Each royalty term begins on the date of the first commercial sale of a licensed product in a particular country and ends on the later of 10 years from such first commercial sale or the expiration of the last to expire of the applicable patents in that country.

The Highlightll Agreement may be terminated earlier in specified situations, including termination for uncured material breach of the Highlightll Agreement by either party, termination by Highlightll in specified circumstances, termination by Biohaven in entirety or on a country-by-country basis with advance notice and termination upon a party’s insolvency or bankruptcy.

The Highlightll Agreement also contains customary representations, warranties and covenants by both parties, as well as customary provisions relating to indemnification, confidentiality and other matters.

The foregoing description of the terms of the Highlightll Agreement is qualified in its entirety by reference to the full text of the Highlightll Agreement, which Biohaven expects to file as an exhibit to its Quarterly Report on Form 10-Q for the three months ending March 31, 2023.

During the quarter ended December 31, 2023, none of our directors or officers adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408 of Regulation S-K.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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001-41477) filed on August 10, 2022) .

10.8 + Offer Letter dated February 21, 2017 by and between Biohaven Pharmaceuticals, Inc.

and Elyse Stock (incorporated by reference to Exhibit 10.8 to the Company's Form 10 (File No.

001-41477) filed on August 10, 2022) .

10.8 + Employment Agreement dated February 1, 2014 by and between Biohaven Pharmaceuticals, Inc.

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10.17 + Amended and Restated Offer of Employment, by and between Biohaven Pharmaceuticals, Inc.

and Bruce Car .

and Bruce Car (Incorporated by reference to E xhi bit 10.18 to the Company's Form 10-K (File No.

001-41477 ) filed on March 23, 2023 ) .

Development and License Agreement, dated as of March 21, 2023, by and between Hangzhou Highlightll Pharmaceutical Co.

and Biohaven Therapeutics LTD.

(incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q (File No.

001-41477) filed on May 12, 2023).

Amendment to Development and License Agreement dated March 21, 2023, dated as of April 14, 2023, by and between Hangzhou Highlightll Pharmaceutical Co.

and Biohaven Therapeutics LTD.

(incorporated by reference to Exhibit 10.

2 to the Company's Form 10-Q (File No.

001-41477) filed on May 12, 2023).

10.20 + Form of Nonstatutory Share Option Grant Notice (Early Exercise) and Share Option Agreement under the 2022 Equity Incentive Plan (incorporated by reference to Exhibit 10.

3 to the Company's Form 10-Q (File No.

001-41477) filed on May 12, 2023).

10.21 + Form of Amendment to Share Option Grant Notice and Option Agreement under the 2022 Equity Incentive Plan (incorporated by reference to Exhibit 10.

4 to the Company's Form 10-Q (File No.

001-41477) filed on May 12, 2023).

Second Amendment to Development and License Agreement dated March 21, 2023, dated as of December 10 , 2023, by and between Hangzhou Highlightll Pharmaceutical Co.

and Biohaven Therapeutics LTD.

21.1 Subsidiaries of the Registrant.

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32.1 * Certifications of Principal Executive Officer and Principal Financial Officer under Section 906 of the Sarbanes-Oxley Act.

97 Incentive Compensation Recovery Policy.

101 The following materials from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2023 formatted in Inline XBRL (Extensible Business Reporting Language):

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BIOHAVEN LTD.

March 23, 2023

February 29, 2024

/s/ VLAD CORIC, M.D.

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(Principal Executive Officer)

March 23, 2023

February 29, 2024

Vlad Coric, M.D.

/s/ MATTHEW BUTEN Chief Financial Officer

(Principal Financial Officer) March 23, 2023

(Principal Financial Officer) February 29, 2024

Matthew Buten

1 unchanged sentence

CLARK Chief Accounting Officer

(Principal Accounting Officer) March 23, 2023

(Principal Accounting Officer) February 29, 2024

/s/ GREGORY H.

Director March 23, 2023

CHILDS Director March 23, 2023

GREGORY Director March 23, 2023

/s/ MICHAEL HEFFERNAN Director March 23, 2023

Michael Hefferenan

Director February 29, 2024

CHILDS Director February 29, 2024

GREGORY Director February 29, 2024

/s/ MICHAEL HEFFERNAN Director February 29, 2024

Michael Heffernan

/s/ ROBERT J.

HUGIN Director March 23, 2023

/s/ KISHEN MEHTA Director March 23, 2023

/s/ IRINA ANTONIJEVIC Director March 23, 2023

HUGIN Director February 29, 2024

/s/ KISHEN MEHTA Director February 29, 2024

/s/ IRINA ANTONIJEVIC Director February 29, 2024

Irina Antonijevic

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Consolidated Balance Sheets

Consolidated Statements of Operation s

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Loss

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generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 29, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

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Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accounting for Research and Development Costs and Related Prepaid and Accrued Costs

Description of the Matter

As discussed in Note 2 to the consolidated financial statements, the Company recognizes estimated ongoing research costs based on management’s analysis of the progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs.

During 2023, the Company incurred $373.3 million in research and development expense.

As of December 31, 2023, the Company recorded prepaid expenses of $35.2 million which included prepayment for certain clinical trial costs and recorded $29.5 million for accrued clinical trial costs.

Auditing management’s accounting for research and development costs was challenging due to the estimation required by management to determine the cost incurred for the services rendered on or prior to the balance sheet date for preclinical development activities, preclinical and clinical studies and drug substance and drug product formulation for preclinical and clinical trial material.

The Company has contracts with multiple clinical research organizations (“CROs”) that conduct and manage studies on its behalf, as well as contract manufacturing organizations (“CMOs”) that perform manufacturing activities.

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

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of relevant controls over the Company’s accounting for research and development costs, including controls over the determination of estimates of the progress completed, expected milestones or expected service period and the completeness and accuracy of the data used in determining prepaid and accrued research and development expenses estimate.

To evaluate the completeness, measurement and valuation of the research and development costs and related prepaid and accrued costs, our audit procedures included, among others, reading certain contracts with CROs and CMOs to evaluate the financial and other relevant contractual terms, testing the accuracy and completeness of the underlying data used by management to estimate the recorded balances, and testing the mathematical accuracy of the calculation of the accrued or prepaid balances.

We also evaluated management’s estimates of progress, expected milestones, or expected service period for a sample of clinical trials and manufacturing efforts by making direct inquiries of the Company’s research and development personnel who oversee the research and development program.

Further, we requested direct confirmation of total contract value, costs incurred, amounts invoiced, invoices unpaid and expected service period as of December 31, 2023, from a sample of CROs and CMOs.

To evaluate the completeness of the accrued research and development costs we also examined invoices received from a sample of vendors and a sample of cash disbursements made to third-party service providers subsequent to December 31, 2023, to the extent such invoices were received, or payments were made prior to the date that the financial statements were issued.

/s/ Ernst & Young LLP

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Hartford, Connecticut

March 23, 2023

February 29, 2024

BIOHAVEN LTD.

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Commitments and contingencies (Note 12)

Contingently redeemable non-controlling interests — 60,000

Shareholders' Equity:

Net investment from Former Parent — 34,691

Preferred shares, no par value;

10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2022;

no shares authorized, issued and outstanding as of December 31, 2021

10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2023 and 2022

Common shares, no par value;

200,000,000 shares authorized, 68,190,479 shares issued and outstanding as of December 31, 2022;

no shares authorized, issued and outstanding as of December 31, 2021

200,000,000 shares authorized as of December 31, 2023 and 2022;

81,115,723 and 68,190,479 shares issued and outstanding as of December 31, 2023 and 2022, respectively

887,528 615,742

Additional paid-in capital 39,804 13,869

Accumulated deficit ( 499,292 ) ( 91,124 )

Accumulated other comprehensive income 284 —

Accumulated other comprehensive (loss) income

Total shareholders' equity 427,975 538,771

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Loss from operations ( 436,051 ) ( 567,932 ) ( 218,900 )

Other (expense) income :

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

Other (expense) income, net ( 1,909 ) 1,209 —

Total other (expense) income, net ( 1,909 ) 6,470 ( 4,162 )

Loss before provision for income taxes ( 569,841 ) ( 212,430 ) ( 118,668 )

Provision for income taxes 438 1,366 —

Other income (expense):

Gain from equity method investment

Other income (expense), net

26,500 ( 1,909 ) 1,209

Total other income (expense), net

26,500 ( 1,909 ) 6,470

Loss before (benefit) provision for income taxes

( 409,551 ) ( 569,841 ) ( 212,430 )

(Benefit) provision for income taxes

( 1,383 ) 438 1,366

Net loss $ ( 408,168 ) $ ( 570,279 ) $ ( 213,796 )

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Net loss $ ( 408,168 ) $ ( 570,279 ) $ ( 213,796 )

Other comprehensive income, net of tax:

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustments ( 497 ) 429 —

Net unrealized losses related to available-for-sale debt securities ( 145 ) — —

Other comprehensive income 284 — —

Net unrealized gain (loss) related to available-for-sale debt securities

148 ( 145 ) —

Other comprehensive (loss) income

( 349 ) 284 —

Comprehensive loss $ ( 408,517 ) $ ( 569,995 ) $ ( 213,796 )

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Common Shares

Shares Amount Net Investment from Former Parent Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income Total Shareholders' Equity

Balances as of December 31, 2019 — $ — $ 14,451 $ — $ — $ — $ 14,451

Net loss — — ( 118,668 ) — — — ( 118,668 )

Net transfers from Former Parent 120,998 120,998

Shares Amount Net Investment from Former Parent Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive (Loss) Income

Total Shareholders' Equity

Balances as of December 31, 2020 — $ — $ 16,781 $ — $ — $ — $ 16,781

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Balances as of December 31, 2022 68,190,479 615,742 — 13,869 ( 91,124 ) 284 538,771

Net loss — — — — ( 408,168 ) — ( 408,168 )

Issuance of common shares, net of offering costs 11,761,363 242,425 — — — — 242,425

Issuance of common shares as payment for license agreement

721,136 21,814 — — — — 21,814

Issuance of common shares under 2022 Equity Incentive Plan and employee share purchase plan

442,745 7,547 — ( 2,852 ) — — 4,695

Non-cash share-based compensation expense — — — 28,787 — — 28,787

Other comprehensive loss

— — — — — ( 349 ) ( 349 )

Balances as of December 31, 2023

81,115,723 $ 887,528 $ — $ 39,804 $ ( 499,292 ) $ ( 65 ) $ 427,975

The accompanying notes are an integral part of these consolidated financial statements.

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Issuance of Former Parent common shares as payment for license and consulting agreements — 1,779 7,929

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

Issuance of common shares as payment for license agreement

Gain from equity method investment

— — ( 5,261 )

Other non-cash items ( 5,683 ) 726 ( 3,408 )

Changes in operating assets and liabilities:

Prepaid expenses, income tax receivable, and other current assets ( 41,336 ) ( 9,073 ) ( 2,419 )

Other non-current assets — ( 109 ) ( 5,594 )

Prepaid expenses, income tax receivable, and other current and non-current assets

27,176 ( 41,336 ) ( 9,182 )

Accounts payable 4,874 5,928 1,025

Accrued expenses and other current liabilities 6,804 7,882 14,855

Other non-current liabilities — 1,939 1,913

Accrued expenses and other current and non-current liabilities

( 7,437 ) 6,804 9,821

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

Cash flows from investing activities:

Proceeds from maturities of marketable securities

Proceeds from sales of marketable securities

Purchases of marketable securities ( 194,121 ) ( 259,716 ) —

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Payment for IPR&D asset acquisition — ( 35,000 ) —

Payments for leasehold improvements — — ( 1,600 )

Cash acquired in business acquisition — — 1,882

Purchase of Artizan preferred stock — ( 4,000 ) —

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

Cash flows from financing activities:

Net transfers from Former Parent — 449,130 138,052

Restricted cash due to Former Parent 35,212 — —

Change in restricted cash due to Former Parent

( 35,212 ) 35,212 —

Proceeds from issuance of common shares 243,225 283,804 —

Proceeds from sale of contingently redeemable non-controlling interests — — 60,000

Payments of issuance costs ( 800 ) ( 1,000 ) —

Other 451 395 —

Proceeds from issuance of common shares under 2022 Equity Incentive Plan and employee share purchase plan

4,695 451 395

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

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Cash paid for interest $ — $ — $ 107

Cash paid for income taxes $ 38,165 $ 16,594 $ 2,758

Cash (received) paid for income taxes

$ ( 33,300 ) $ 38,165 $ 16,594

The accompanying notes are an integral part of these consolidated financial statements.

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(“we,” “us," "our," "Biohaven" or the “Company”) was incorporated in Tortola, British Virgin Islands in May 2022.

Biohaven is 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.

Biohaven's 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.

The company is advancing a pipeline of therapies for diseases with little or no treatment options, leveraging its proven drug development capabilities and proprietary platforms, including Kv7 ion channel modulation for epilepsy and neuronal hyperexcitability, glutamate modulation for Obsessive-Compulsive Disorder ("OCD") and spinocerebellar ataxia ("SCA"), myostatin inhibition for neuromuscular diseases, and brain-penetrant Tyrosine Kinase 2/Janus Kinase 1 ("TYK2/JAK1") inhibition for immune-mediated brain disorders.

Biohaven's 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, antibody drug conjugates ("ADCs"), and extracellular target degrader platform technology ("MoDE") with potential application in neurological disorders, cancer, and autoimmune diseases.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations.

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

The Company is advancing its innovative therapeutic portfolio of therapeutics, leveraging its proven drug development experience and multiple, proprietary drug development platforms.

Biohaven's extensive clinical and preclinical programs include Kv7 ion channel modulation for epilepsy and mood disorders;

extracellular protein degradation for immunological diseases;

Transient Receptor Potential Melastatin 3 ("TRPM3") antagonism for migraine and neuropathic pain;

Tyrosine Kinase 2/Janus Kinase 1 ("TYK2/JAK1") inhibition for neuroinflammatory disorders;

glutamate modulation for obsessive-compulsive disorder (“OCD”);

and spinocerebellar ataxia ("SCA");

myostatin inhibition for neuromuscular and metabolic diseases, including spinal muscular atrophy ("SMA") and obesity;

and antibody recruiting, bispecific molecules and antibody drug conjugates ("ADCs") for cancer.

The Company is subject to risks and uncertainties common to companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations.

Product candidates currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval, prior to commercialization.

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(the "Former Parent"), Pfizer Inc.

(“Pfizer”) and a wholly owned subsidiary of Pfizer

(“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), which provided for the acquisition by Pfizer of the Former Parent through the merger of Merger Sub with and into the Former Parent (the “Merger”).

In connection with the Merger Agreement, the Former Parent and Biohaven Ltd.

entered into a Separation and Distribution Agreement, dated as of May 9, 2022 (the “Distribution Agreement”).

In connection with the Distribution Agreement, the Board of Directors of the Former Parent approved and directed the Former Parent’s management to effect the Spin-Off of the business, operations, and activities that are not the CGRP Business (as defined below), including the Kv7 ion channel activators, glutamate modulation, MPO inhibition and myostatin inhibition platforms, preclinical product candidates, and certain corporate infrastructure currently owned by the Former Parent.

To implement the Spin-Off, the Former Parent transferred the related license agreements, intellectual property and corporate infrastructure, including certain non-commercial employee agreements, share-based awards and other corporate agreements (the "Business") to Biohaven Ltd., through a series of internal restructuring transactions.

Descriptions of historical business activities in these Notes to Consolidated Financial Statements are presented as if these transfers had already occurred, and the Former Parent’s activities related to such assets and liabilities had been performed by the Company.

On October 3, 2022, the Former Parent completed the distribution (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 (the “Spin-Off”) described in Biohaven’s Information Statement (the “Information Statement”) attached as Exhibit 99.1 to Biohaven’s Registration Statement on Form 10, as amended (Reg.

001-41477), which was declared effective by the Securities and Exchange Commission ("SEC") on September 22, 2022 (the “Form 10”).

(“Pfizer”) and Bulldog (BVI) Ltd., a wholly owned subsidiary of Pfizer (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), which provided for the acquisition by Pfizer of the Former Parent through the merger of Merger Sub with and into the Former Parent (the

In connection with the Merger Agreement, the Former Parent and Biohaven entered into a Separation and Distribution Agreement, dated as of May 9, 2022 (the “Distribution Agreement”).

In connection with the Distribution Agreement, the Board of Directors of the Former Parent approved and directed the Former Parent’s management to effect the Spin-Off (as defined below) of the business, operations, and activities that are not the calcitonin gene-related peptide ("CGRP") Business (as defined below), including the Kv7 ion channel activators, glutamate modulation, myeloperoxidase ("MPO") inhibition and myostatin inhibition platforms, preclinical product candidates, and certain corporate infrastructure owned by the Former Parent.

To implement the Spin-Off, the Former Parent transferred the related license agreements, intellectual property and corporate infrastructure, including certain non-commercial employee agreements, share based awards and other corporate agreements (the "Business") to Biohaven, through a series of internal restructuring transactions.

Descriptions of historical business activities in these Notes to the Consolidated Financial Statements are presented as if these transfers had already occurred, and the Former Parent’s activities related to such assets and liabilities had been performed by the Company.

On October 3, 2022, the Former Parent completed the distribution (the “Distribution”) to holders of its common shares of all of the outstanding common shares of Biohaven and the spin-off of Biohaven from the Former Parent (the “Spin-Off”) described in Biohaven’s Information Statement (the “Information Statement”) attached as Exhibit 99.1 to Biohaven’s Registration Statement on Form 10, as amended (Reg.

001-41477), which was declared effective by the Securities and Exchange Commission (the "SEC") on September 22, 2022.

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

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

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

See Note 9, "Non-Cash Share-Based Compensation" for discussion

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 to be issued in connection with Former Parent restricted stock units that vested on October 3, 2022.

See Note 9, "Non-Cash Share-Based Compensation," for discussion of the Legacy Equity Award Settlement Plan.

As a result of the Distribution, Biohaven became an independent, publicly traded

BIOHAVEN LTD.

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Nature of the Business and Basis of Presentation (Continued)

of the Legacy Equity Award Settlement Plan.

As a result of the Distribution, Biohaven Ltd.

became an independent, publicly traded company.

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

The Spin-Off generally resulted in (a) the Company directly or indirectly owning, assuming, or retaining certain assets and liabilities of the Former Parent and its subsidiaries related to the Former Parent’s pipeline assets and businesses and (b) the Former Parent directly or indirectly owning, assuming, or retaining all other assets and liabilities, including those associated with the Former Parent’s platform for the research, development, manufacture and commercialization of calcitonin gene-related receptor antagonists, including rimegepant, zavegepant and the Heptares Therapeutics Limited preclinical CGRP portfolio and related assets (the “CGRP Business”).

The Separation generally resulted in (a) the Company directly or indirectly owning, assuming, or retaining certain assets and liabilities of the Former Parent and its subsidiaries related to the Former Parent’s pipeline assets and businesses and (b) the Former Parent directly or indirectly owning, assuming, or retaining all other assets and liabilities, including those associated with the Former Parent’s platform for the research, development, manufacture and commercialization of calcitonin gene-related receptor antagonists, including rimegepant, zavegepant and the Heptares Therapeutics Limited preclinical CGRP portfolio and related assets (the “CGRP Business”).

In connection with the Separation, the Company entered into various agreements relating to transition services, licenses and certain other matters with the Former Parent.

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Basis of Presentation

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," and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.

Periods Prior to the Separation

On October 3, 2022, the Company became a standalone publicly traded company, and its financial statements are now presented on a consolidated basis.

Prior to the Separation on October 3, 2022, the Company’s historical combined financial statements were prepared on a standalone basis and were derived from the Former Parent's consolidated financial statements and accounting records.

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", and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission (“SEC”).

Periods Prior to the Separation

For periods prior to the Separation from the Former Parent, the consolidated financial statements present, on a historical basis, the combined assets, liabilities, expenses and cash flows directly attributable to the Business, which have been prepared from the Former Parent’s consolidated financial statements and accounting records, and are presented on a stand-alone basis as if the operations had been conducted independently from the Former Parent.

The consolidated statements of operations for periods prior

to the Separation include all costs directly related to the Business, including costs for facilities, functions and services utilized by the Company.

The consolidated statements of operations periods prior to the Separation also include allocations for various expenses related to the Former Parent’s corporate functions, including research and development, human resources, information technology, facilities, tax, shared services, accounting, finance and legal.

For periods prior to the Separation, the consolidated financial statements present, on a historical basis, the combined assets, liabilities, expenses and cash flows directly attributable to the Business, which have been prepared from the Former Parent’s consolidated financial statements and accounting records, and are presented on a stand-alone basis as if the operations had been conducted independently from the Former Parent.

The consolidated statements of operations for periods prior to the Separation include all costs directly related to the Business, including costs for facilities, functions and services utilized by the Company.

The consolidated

statements of operations for periods prior to the Separation also include allocations for various expenses related to the Former Parent’s corporate functions, including research and development, human resources, information technology, facilities, tax, shared services, accounting, finance and legal.

These expenses were allocated on the basis of direct usage or benefit when specifically identifiable, with the remainder allocated on a proportional cost allocation method primarily based on employee labor hours or direct expenses.

Management believes the assumptions underlying the consolidated financial statements periods prior to the Separation, including the expense methodology and resulting allocation, are reasonable for all periods presented.

Management believes the assumptions underlying the consolidated financial statements for periods prior to the Separation, including the expense methodology and resulting allocation, are reasonable for all periods presented.

However, the allocations may not include all of the actual expenses that would have been incurred by the Company and may not reflect its consolidated results of operations, financial position and cash flows had it been a standalone company during the periods presented.

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Actual costs that might have been incurred had the Company been a standalone company would depend on a number of 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.

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 Distribution.

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

The income tax amounts in the consolidated financial statements for the periods prior to the Separation were calculated on a separate return method and is presented as if the Company’s operations were separate taxpayers in the respective jurisdiction.

Therefore, tax expense, cash tax payments, and items of current and deferred taxes may not be reflective of the Company's actual tax balances prior to or subsequent to the Distribution.

The consolidated balance sheets for periods prior to the Separation include assets and liabilities that have been determined to be specifically identifiable or otherwise attributable to the Company, including certain assets that were historically held at the corporate level in the Former Parent.

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All intercompany transactions between the Company and the Former Parent are considered to be effectively settled in the consolidated financial statements at the time the transactions are recorded.

The total net effect of these intercompany transactions considered to be

The total net effect of these intercompany transactions considered to be settled is reflected in the consolidated statement of cash flows within financing activities as “Net transfers from Former Parent.” See Note 14, "Related Party

BIOHAVEN LTD.

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Nature of the Business and Basis of Presentation (Continued)

settled is reflected in the consolidated statement of cash flows within financing activities and in the consolidated balance sheets as “Net investment from Former Parent.” See Note 14, "Related Party Transactions", for additional information regarding related party transactions.

For periods prior to the Separation, our equity balance in these consolidated financial statements represents the excess of total assets over liabilities.

Net investment from Former Parent was primarily impacted by contributions from the Former Parent, which are the result of net funding provided by or distributed to Former Parent.

Transactions," for additional information regarding related party transactions.

For periods prior to the Separation, the Company's equity balance in these consolidated financial statements represents the excess of total assets over liabilities.

Net investment from Former Parent is primarily impacted by contributions from the Former Parent, which are the result of net funding provided by or distributed to the Former Parent.

As a result of the Separation, the Company’s Net investment from Former Parent balance was reclassified to common shares.

The Net investment from Former Parent balance reclassified to common shares included separation-related adjustments of $ 27,811 .

The Net investment from Former Parent balance reclassified to common shares during the fourth quarter of 2022 included Separation-related adjustments of $ 27,811 .

The adjustments related primarily to differences in the amount of assets and liabilities transferred to the Company upon the Separation and the amount of the transferred assets and liabilities reported in the Company’s combined balance sheet as of September 30, 2022.

Additional separation-related adjustments could be recorded in future periods.

Cash on the consolidated balance sheet for periods prior to the Separation represents cash balances from the standalone entities established to operate the Business.

Going Concern

In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

Through March 23, 2023, the Company has funded its operations primarily with proceeds from its Former Parent, its recent public offering as discussed in Note 7, "Shareholders' Equity", and the cash contribution received from the Former Parent at the Separation as discussed below.

The Company has incurred recurring losses since its inception and expects to continue to generate operating losses for the foreseeable future.

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 $ 257,799 as of October 3, 2022.

Additionally, on October 25, 2022, the Company completed a public offering of its common shares which resulted in net proceeds to the Company

of approximately $ 282,804 .

See Note 7, "Shareholders' Equity", for further detail on the public offering.

Accordingly, as of the date of issuance of these consolidated financial statements, the Company expects its existing cash, cash equivalents and marketable securities will be sufficient to fund operating expenses, financial commitments and other cash requirements for at least one year after the issuance date of these financial statements.

Through February 29, 2024, the Company has funded its operations primarily with funding from the Former Parent, proceeds from the public offerings of its common shares (refer to Note 7, "Shareholders' Equity"), and the cash contribution received from the Former Parent at the Separation (refer to Note 14, "Related Party Transactions.") The Company has incurred recurring losses since its inception and expects to continue to generate operating losses for the foreseeable future.

As of the date of issuance of these consolidated financial statements, the Company expects its existing cash, cash equivalents and marketable securities will be sufficient to fund operating expenses, financial commitments and other cash requirements for at least one year after the issuance date of these financial statements.

To execute its business plans, the Company will require funding to support its continuing operations and pursue its growth strategy.

Until such time as the Company can generate significant revenue from product sales or royalties, if ever, it expects to finance its operations through the sale of public or private equity, debt financings or other capital sources, including collaborations with other companies or other strategic transactions.

Until such time as the Company can generate significant revenue from product sales or royalties, if ever, it expects to finance its operations through the sale of public or private equity,

debt financings or other capital sources, including collaborations with other companies or other strategic transactions.

The Company may not be able to obtain financing on acceptable terms, or at all.

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Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting periods.

Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the valuation of intangible assets, determining the allocations of costs and expenses from the Former Parent and the accrual for research and development expenses.

Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, determining the allocations of costs and expenses from the Former Parent and the accrual for research and development expenses.

In addition, management’s assessment of the Company’s ability to continue as a going concern involves the estimation of the amount and timing of future cash inflows and outflows.

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Actual results could differ from those estimates.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Summary of Significant Accounting Policies (Continued)

Reclassifications

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Restricted Cash

Restricted cash held on behalf of the Former Parent on the consolidated balance sheet as of December 31, 2022 represents cash held by the Company on behalf of the Former Parent related to the execution of the United States Distribution Services Agreement (the “Distribution Services Agreement”).

Pursuant to the terms of the Distribution Services Agreement, which was entered into by the Company and the Former Parent in connection with the Separation, the Company is continuing to serve as the Former Parent’s distributor and agent for the distribution of the pharmaceutical product Nurtec ODT in the United States.

As of December 31, 2022, the Company recorded a related payable of $ 35,212 as Due to Former Parent on the consolidated balance sheet as the balance was legally payable to the Former Parent.

Restricted cash held on behalf of the Former Parent on the consolidated balance sheet represents cash held

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Summary of Significant Accounting Policies (Continued)

by the Company on behalf of the Former Parent related to the execution of the United States Distribution Services Agreement (the “Distribution Services Agreement”).

Pursuant to the terms of the Distribution Services Agreement, which was entered into by the Company and the Former Parent in connection with the Separation, the Company continued to serve as the Former Parent’s distributor and agent for the distribution of the pharmaceutical product Nurtec ODT in the United States.

The Distribution Services Agreement was terminated during the second quarter of 2023, and, as such, restricted cash held on behalf of the Former Parent on the consolidated balance sheet was $ 0 as of December 31, 2023.

Refer to Note 14, "Related Party Transactions," for further information on the agreements entered into by the Company and the Former Parent in connection with the Separation.

Restricted cash included in other current assets includes employee contributions to the Company's employee share purchase plan held for future purchases of the Company's outstanding shares.

Restricted cash included in other current assets primarily includes employee contributions to the Company's employee share purchase plan held for future purchases of the Company's outstanding shares.

See Note 9, "Non-Cash Share-Based Compensation," for additional information on the Company's employee share purchase plan.

The Company did not have an employee share purchase plan as of December 31, 2021.

Restricted cash included in other assets in the consolidated balance sheets represents collateral held by banks for a letter of credit ("LOC") issued in connection with the leased office space in Yardley, Pennsylvania and a LOC issued in connection with the leased office space in Cambridge, Massachusetts.

Restricted cash included in other non-current assets in the consolidated balance sheets represents collateral held by banks for a letter of credit ("LOC") issued in connection with the leased office space in Yardley, Pennsylvania and a LOC issued in connection with the leased office space in Cambridge, Massachusetts.

See Note 12, "Commitments and Contingencies," for additional information on the real estate leases.

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Marketable Securities

We invest our excess cash balances in marketable securities of highly rated financial institutions and investment-grade debt instruments.

We invest our excess cash balances in marketable securities of highly rated financial institutions, which consist of investment-grade debt instruments.

We seek to diversify our investments and limit the amount of investment concentrations for individual institutions, maturities and investment types.

We classify marketable debt securities as available-for-sale and, accordingly, record such securities at fair value.

We classify marketable debt securities as available-for-sale and, accordingly, record such securities at fair value on the consolidated balance sheets.

We classify these securities as current assets as these investments are intended to be available to the Company for use in funding current operations.

Unrealized gains and losses on our marketable debt securities that are deemed temporary are included in accumulated other comprehensive income as a separate component of stockholders’ equity.

Unrealized gains and losses on our marketable debt securities that are deemed temporary are included in accumulated other comprehensive income as a separate component of shareholders’ equity.

If any adjustment to fair value reflects a significant decline in the value of the security, we evaluate the extent to which the decline is determined to be other-than-temporary and would mark the security to market through a charge to our consolidated statement of operations.

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Our consolidated financial statements include the operations of acquired businesses after the completion of the acquisitions.

We account for acquired businesses

BIOHAVEN LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Summary of Significant Accounting Policies (Continued)

using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date and that the fair value of acquired In-Process Research and Development ("IPR&D") be recorded on the balance sheet.

We account for acquired businesses using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date and that the fair value of acquired In-Process Research and Development ("IPR&D") be recorded on the balance sheet.

Transaction costs are expensed as incurred.

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Fair value of IPR&D and contingent consideration is generally estimated by using a probability-weighted discounted cash flow approach.

Equity Method Investments

Investments in non-public companies in which the Company owns less than a 50% equity interest and where it has the ability to exercise significant influence over the operating and financial policies of the investee are accounted for using the equity method of accounting.

The Company's proportionate share of the net income or loss of the equity method investment is included in other income (expense), net in the consolidated statement of operations and results in a corresponding adjustment to the carrying value of the investment on the consolidated balance sheet.

Dividends received reduce the carrying value of the investment.

As of December 31, 2020, the Company owned approximately 42 % of the outstanding shares of Kleo Pharmaceuticals, Inc.

("Kleo"), which was accounted for as an equity method investment.

In January 2021, the Company acquired the remaining 58 % of Kleo's common shares that it did not previously own and ceased accounting for Kleo as an equity method investment.

See Note 6, "Acquisitions" for additional details.

Property and Equipment

Property and equipment are recorded at cost and depreciated or amortized using the straight-line method over the estimated useful lives of the respective assets.

As of December 31, 2022 and December 31, 2021, the Company's property and equipment consisted of office buildings and land, office and lab equipment, computer hardware and software, and furniture and fixtures.

As of December 31, 2023 and December 31, 2022, the

BIOHAVEN LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Summary of Significant Accounting Policies (Continued)

Company's property and equipment consisted of building and land, office and lab equipment, computer hardware and software, furniture and fixtures, and leasehold improvements.

The fixed assets have the following useful lives:

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Furniture and fixtures 3 years

Leasehold improvements

Shorter of the useful life or remaining lease term

Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in loss from operations.

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Upon successful completion of each project, the asset is classified as a definite-lived intangible and 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 Company evaluates IPR&D for impairment at least annually, or 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.

The Company reviews amounts capitalized as acquired IPR&D for impairment annually, as of November 30, and whenever events or changes in circumstances indicate that the carrying value of the assets might not be recoverable.

If impairment indicators are present, the Company performs 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.

The Company believes no impairment of its acquired IPR&D existed as of December 31, 2022 or December 31, 2021.

The Company did not record any impairment charges relating to its acquired IPR&D for the years ended December 31, 2023, 2022 or 2021.

If we acquire an asset or group of assets that do not meet the definition of a business under applicable accounting standards, the acquired IPR&D is expensed on its acquisition date, unless it has an alternative future use.

Future costs to develop these assets are recorded to research and development expense as they are incurred.

In January 2021, in connection with our acquisition of Kleo, we recorded intangible assets consisting of

BIOHAVEN LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Summary of Significant Accounting Policies (Continued)

IPR&D assets of $ 18,400 , which included an oncology therapeutic candidate entering Phase I clinical trials and a COVID-19 therapeutic candidate in the planning stage for clinical development, and goodwill of $ 1,390 .

See Note 6, "Acquisitions" for additional details.

In January 2021, in connection with our acquisition of Kleo Pharmaceuticals, Inc.

(“Kleo”), we recorded intangible assets consisting of IPR&D assets of $ 18,400 , which included an oncology therapeutic candidate entering Phase I clinical trials and a Multimodal Antibody Therapy Enhancer ("MATE") conjugation asset in the planning stage for clinical development, and goodwill of $ 1,390 .

Impairment of Long-lived Assets

The Company monitors its long-lived assets for indicators of impairment.

The Company reviews its long-lived assets for indicators of impairment annually, as of November 30, and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

If such indicators are present, the Company assesses the recoverability of affected assets by determining whether the carrying value of such assets is less than the sum of the undiscounted future cash flows of the assets.

If such assets are found not to be recoverable, the Company measures the amount of such impairment by comparing the carrying value of the assets to the fair value of the assets, with the fair value generally determined based on the present value of the expected future cash flows associated with the assets.

The Company believes no impairment of long-lived assets existed as of December 31, 2022 or December 31, 2021.

The Company did not record any impairment charges relating to its long-lived assets for the years ended December 31, 2023, 2022 or 2021.

Fair Value Measurements

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Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Summary of Significant Accounting Policies (Continued)

are considered observable and the last is considered unobservable:

• Level 1— Quoted prices in active markets for identical assets or liabilities.

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• Level 3— Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The carrying values of other current assets, accounts payable, and accrued expenses approximate

their fair values due to the short-term nature of these assets and liabilities.

The carrying values of other current assets, accounts payable, and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities.

The Company determines if an arrangement contains a lease at the inception of a contract.

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Other real estate leases contain one fixed lease payment that includes real estate taxes, common area maintenance and insurance.

These fixed payments are considered part of the lease payment and included in the right-of-use assets and lease liabilities.

These fixed payments are considered

part of the lease payment and included in the right-of-use assets and lease liabilities.

For its real estate leases, which are accounted for as operating leases, the Company has elected the practical expedient to include both the lease and non-lease components as a single component.

In addition, payments made by the Company for improvements to the underlying asset, if the payment relates to an asset of the lessor, are recorded as prepaid rent within other non-current assets in the consolidated balance sheets prior to lease commencement and on commencement, reclassified to the right-of-use asset.

As of December 31, 2022, the Company had restricted cash of $ 2,398 included in other non-current assets in the consolidated financial statements, which represents collateral held by banks for letters of credit issued in connection with the leased office space in Yardley, Pennsylvania and Cambridge, Massachusetts.

All restricted cash is invested in time deposits.

See Note 12, ‘‘Commitments

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Summary of Significant Accounting Policies (Continued)

and Contingencies’’ for additional information on real estate leases.

As of December 31, 2023, the Company had restricted cash of $ 2,400 included in other non-current assets and $ 250 included in other current assets in the consolidated financial statements, which represents collateral held by banks for letters of credit issued in connection with the leased office space in Yardley, Pennsylvania and Cambridge, Massachusetts.

Restricted cash is generally invested in time deposits and short-term money market funds.

See Note 12, "Commitments and Contingencies," for additional information on real estate leases.

Research and Development Costs

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Research and development expenses consist of costs incurred in performing research and development activities, including salaries, non-cash share-based compensation and benefits, third-party license fees, rent and operating expenses for leased lab facilities, and external costs of vendors engaged to conduct clinical development activities and clinical trials as well as to manufacture clinical trial materials.

Non-refundable prepayments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized.

Prepayments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized.

Such amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered or the services rendered.

The Company has entered into various research and development-related contracts.

These agreements are cancellable, and related payments are recorded as research and development expenses as incurred.

These agreements are cancellable, and related expenses are recorded as research and development expenses are incurred.

The Company records accruals for estimated ongoing research costs.

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The Company's historical accrual estimates have not been materially different from the actual costs.

Foreign Currency Translation

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Summary of Significant Accounting Policies (Continued)

Foreign Currency

The financial statements of our subsidiaries with functional currencies other than the U.S.

dollar are translated into U.S.

dollars using period-end exchange rates for assets and liabilities, historical exchange rates for stockholders’ equity and weighted average exchange rates for operating results.

Translation gains and losses are included in accumulated other comprehensive income, net of tax, in shareholders’ equity.

Foreign currency transaction gains and losses are included in other expense in the consolidated statement of operations.

The Company's aggregate foreign currency transaction losses were immaterial for the years ended December 31, 2022, 2021 and 2020.

dollars using period-end exchange rates for assets and liabilities, historical exchange rates for shareholders’ equity and weighted average exchange rates for operating results.

The resulting translation gains and losses are included in accumulated other comprehensive (loss) income, net of tax, in shareholders’ equity.

dollar functional currency subsidiaries, foreign currency assets and liabilities are remeasured into U.S.

dollars at end-of-period exchange rates, except for nonmonetary balance sheet accounts which are remeasured at historical exchange rates.

Revenues and expenses are remeasured at average exchange rates in effect during each period, except for those expenses related to the nonmonetary balance sheet amounts which are remeasured at historical exchange rates.

Gains or losses from foreign currency remeasurement are included in other income (expense), net in the consolidated statement of operations.

The Company's aggregate foreign currency transaction gains and losses and effects of foreign currency remeasurements were immaterial for the years ended December 31, 2023, 2022 and 2021.

Share-Based Compensation

The Company measures share options and restricted share unit awards granted to employees, non-employees, and directors based on the fair value on the

date of the grant and recognizes compensation expense of those awards, over the requisite service period, which is generally the vesting period of the respective award.

The Company measures share options and restricted share unit awards granted to employees, non-employees, and directors based on the fair value on the date of the grant and recognizes compensation expense of those awards, over the requisite service period, which is generally the vesting period of the respective award.

Forfeitures are accounted for as they occur.

Generally, the Company issues share options with only service-based vesting conditions and records the expense for these awards using the straight-line method.

Generally, the Company issues share options and restricted share units with only service-based vesting conditions and records the expense for these awards using the straight-line method.

The Company also issues share options with performance-based vesting conditions and records expense for these awards when the Company concludes that it is probable that the performance condition will be achieved.

The Company classifies non-cash share-based compensation expense in its consolidated statement of operations in the same manner in which the award recipient's payroll costs are classified or in which the award recipient's service payments are classified.

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The Company lacks a sufficient history of company-specific historical and implied volatility information for its shares.

Therefore, it estimates its expected share price volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price.

The expected term of all of the Company's stock options has been determined utilizing the "simplified" method.

Therefore, it

estimates its expected share price volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price.

The expected term of all of the Company's share options has been determined utilizing the "simplified" method.

The risk-free interest rate is determined by reference to the U.S.

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The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company's tax returns.

Deferred tax assets and liabilities are determined on the basis of

Deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

Changes in deferred tax assets and liabilities are recorded in the provision for income taxes.

The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense.

Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.

The provision for income taxes includes the

BIOHAVEN LTD.

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Summary of Significant Accounting Policies (Continued)

the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

Changes in deferred tax assets and liabilities are recorded in the provision for income taxes.

Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.

The provision for income taxes includes the effects of applicable tax reserves, or unrecognized tax benefits, as well as the related net interest and penalties.

effects of applicable tax reserves, or unrecognized tax benefits, as well as the related net interest and penalties.

Net Loss per Share

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The Company maintains a portion of its cash deposits in government insured institutions in excess of government insured limits.

The Company deposits its

cash in financial institutions that it believes have high credit quality and has not experienced any losses on such accounts.

The Company deposits its cash in financial institutions that it believes have high credit quality and has not experienced any losses on such accounts.

The Company's cash management policy permits investments in U.S.

federal government and federal agency securities, corporate bonds or commercial paper, supranational and sovereign obligations, certain qualifying money market mutual funds, certain repurchase agreements, and places restrictions on credit ratings, maturities, and concentration by type and issuer.

The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash in excess of government insured limits and in the event of default by corporations and governments in which it holds investments in cash equivalents and short-term debt securities, to the extent recorded on the consolidated balance sheet.

The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash in excess of government insured limits and in the event of default by

corporations and governments in which it holds investments in cash equivalents and short-term debt securities, to the extent recorded on the consolidated balance sheets.

Segment Information

The Company manages its operations as a single segment, the development of therapies targeting neurological diseases, including rare disorders, for the purposes of assessing performance and making operating decisions.

The Company manages its operations as a single segment, the development of therapies targeting areas including neuroscience, immunology and oncology.

for the purposes of assessing performance and making operating decisions.

Consistent with our operational structure, the Company's chief decision maker manages and allocates resources at a consolidated level.

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In 2023 and 2022, materially all the Company's long-lived assets were held in the United States.

Recently Adopted Accounting Pronouncements

Effective January 1, 2022 the Company adopted ASU No.

2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the Financial Accounting Standards Board ("FASB") Emerging Issues Task Force), which provides guidance on modifications or exchanges of a freestanding equity-classified written call option that is not within the scope of another topic.

An entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument, and provides further guidance on measuring the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange.

ASU 2021-04 also provides guidance on the recognition of the effect of a modification or an exchange of a freestanding equity-

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The amendments in ASU No.

2023-07 apply to public entities, including those with a single reportable segment, and are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact ASU No.

2023-07 will have on its consolidated financial statements

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, to improve the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction.

The ASU also includes certain other amendments to improve the effectiveness of income tax disclosures.

The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued or made available for issuance.

The Company is currently evaluating the impact ASU No.

2023-09 will have on its consolidated financial statements.

BIOHAVEN LTD.

1 unchanged sentence

(Amounts in thousands, except share and per share amounts)

Summary of Significant Accounting Policies (Continued)

classified written call option that remains equity classified after modification or exchange on the basis of the substance of the transaction, in the same manner as if cash had been paid as consideration.

The guidance has been applied prospectively and did not have a material effect on the consolidated financial statements of the Company.

Recently Issued Accounting Pronouncements

In June 2022, the FASB issued ASU No.

2022-03, Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, to clarify the guidance in Topic 820

when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security.

The ASU also introduced new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820.

The amendments in ASU 2022-03 are effective for fiscal years beginning after December 15, 2023.

The Company does not expect ASU No.

2022-03 to have a material effect on its consolidated financial statements.

Marketable Securities

The amortized cost, gross unrealized holding gains, gross unrealized holding losses and fair value of debt securities available-for-sale by type of security at December 31, 2022 was as follows:

The amortized cost, gross unrealized holding gains, gross unrealized holding losses and fair value of debt securities available-for-sale by type of security at December 31, 2023 and December 31, 2022 is as follows:

Amortized Cost Allowance for Credit Losses Net Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

4 unchanged sentences

treasury bills 113,908 — 113,908 27 — 113,935

agency bonds 41,734 — 41,734 — ( 24 ) 41,710

Total $ 167,316 $ — $ 167,316 $ 34 $ ( 31 ) $ 167,319

The Company had no available-for-sale debt securities at December 31, 2021.

The fair values of debt securities available-for-sale by classification in the consolidated balance sheet were as follows:

December 31, 2022

Debt securities

corporate bonds $ 142,697 $ — $ 142,697 $ 25 $ ( 135 ) $ 142,587

Foreign corporate bonds 36,766 — 36,766 9 ( 32 ) 36,743

treasury bills 89,308 — 89,308 17 ( 5 ) 89,320

agency bonds 41,734 — 41,734 — ( 24 ) 41,710

Total $ 310,505 $ — $ 310,505 $ 51 $ ( 196 ) $ 310,360

The fair values of debt securities available-for-sale by classification in the consolidated balance sheets were as follows:

December 31, 2023 December 31, 2022

Cash and cash equivalents $ 33,902 $ 49,896

1 unchanged sentence

Total $ 167,319 $ 310,360

The net amortized cost and fair value of debt securities available-for-sale at December 31, 2022 are shown below by contractual maturity.

The net amortized cost and fair value of debt securities available-for-sale at December 31, 2023 and December 31, 2022 are shown below by contractual maturity.

Actual maturities may differ from contractual maturities because securities may be restructured, called or prepaid, or the Company intends to sell a security prior to maturity.

December 31, 2022

Net Amortized Cost Fair Value

December 31, 2023 December 31, 2022

Net Amortized Cost Fair Value Net Amortized Cost Fair Value

Due to mature:

Less than one year $ 167,316 $ 167,319 $ 310,505 $ 310,360

Total $ 310,505 $ 310,360

BIOHAVEN LTD.

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Marketable Securities (Continued)

Summarized below are the debt securities available-for-sale the Company held at December 31, 2022 that were in an unrealized loss position, aggregated by the length of time the investments have been in that position:

Summarized below are the debt securities available-for-sale the Company held at December 31, 2023 and December 31, 2022 that were in an unrealized loss position, aggregated by the length of time the investments have been in that position:

Less than 12 months

4 unchanged sentences

Foreign corporate bonds 1 7,173 ( 7 )

Total 7 $ 36,710 $ ( 31 )

December 31, 2022

Debt securities

corporate bonds 16 $ 104,508 $ ( 135 )

Foreign corporate bonds 3 31,886 ( 32 )

treasury bills 1 9,762 ( 5 )

1 unchanged sentence

Total 24 $ 187,866 $ ( 196 )

The Company did no t have any investments in a continuous unrealized loss position for more than twelve months as of December 31, 2022.

The Company did no t have any investments in a continuous unrealized loss position for more than twelve months as of December 31, 2023 or December 31, 2022.

The Company reviewed the securities in the table above and concluded that they are performing assets generating investment income to support the needs of the Company’s business.

2 unchanged sentences

Net Investment Income

Sources of net investment income included in other expense, net under other income (expense) in the consolidated statements of operations for the years ended December 31, 2022 were as follows:

Gross interest income from debt securities available-for-sale, money-market funds, and cash $ 3,235

Gross investment income includes interest income from debt securities available-for-sale, money-market funds, cash, and restricted cash.

Net investment income included in other income (expense), net in the consolidated statements of operations for the years ended December 31, 2023 and December 31, 2022 were as follows:

Debt securities (including realized losses)

$ 10,490 $ 1,454

Other investments

7,432 $ 1,781

Gross investment income (including realized losses)

17,922 $ 3,235

Investment expenses ( 236 ) ( 27 )

Net investment income $ 17,686 $ 3,208

The Company had no net investment income during the year ended December 31, 2021 and 2020.

The Company had no net investment income during the year ended December 31, 2021.

BIOHAVEN LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Marketable Securities (Continued)

We utilize the specific identification method in computing realized gains and losses on sales of debt securities.

The proceeds from the sale of debt securities available-for-sale and the related gross realized losses for the year ended December 31, 2023 were as follows:

Proceeds from sales

Gross realized losses

The Company had no sales of debt securities during the years ended December 31, 2022 or 2021.

6 unchanged sentences

See Fair Value Measurements in Note 2, "Summary of Significant Accounting Policies," for a brief description of the type of valuation information (“valuation inputs”) that qualifies a financial asset or liability for each level.

Financial assets measured at fair value on a recurring basis on the consolidated balance sheet at December 31, 2022 were as follows:

BIOHAVEN LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Fair Value of Financial Assets and Liabilities (Continued)

Financial assets measured at fair value on a recurring basis on the consolidated balance sheets at December 31, 2023 and December 31, 2022 were as follows:

Fair Value Measurement Using:

10 unchanged sentences

corporate bonds — 40,210 — 40,210

Marketable securities Foreign corporate bonds — 7,173 — 7,173

Other non-current assets

Money market funds

1,900 — — 1,900

Total assets $ 70,973 $ 157,445 $ — $ 228,418

December 31, 2022

Cash equivalents Money market funds $ 72,866 $ — $ — $ 72,866

Cash equivalents U.S.

treasury bills — 39,948 — 39,948

Cash equivalents U.S.

corporate bonds — 9,948 — 9,948

Marketable securities U.S.

treasury bills — 49,372 — 49,372

Marketable securities U.S.

corporate bonds — 132,639 — 132,639

Marketable securities U.S.

agency bonds — 41,710 — 41,710

1 unchanged sentence

Total assets $ 72,866 $ 310,360 $ — $ 383,226

The Company had no financial liabilities measured at fair value on a recurring basis as of December 31, 2022 and no financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2021.

There were no securities transferred between Level 1, 2, and 3 during the year ended December 31, 2022.

BIOHAVEN LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Fair Value of Financial Assets and Liabilities (Continued)

The Company had no financial liabilities measured at fair value on a recurring basis as of December 31, 2023 or December 31, 2022.

There were no securities transferred between Level 1, 2, and 3 during the years ended December 31, 2023 or December 31, 2022.

The following is a description, including valuation methodology, of the financial assets and liabilities measured at fair value on a recurring basis:

5 unchanged sentences

Marketable Securities

Quoted prices for identical assets in active markets are considered Level 1 and consist of on-the-run U.S.

Treasury bills.

The fair values of the Company’s Level 2 debt securities are obtained from quoted market prices of debt securities with similar characteristics, quoted prices from identical assets in inactive markets, or discounted cash flows to estimate fair value.

On a quarterly basis, the Company compares the prices of its Level 2 debt securities to prices provided by a secondary source.

Variances over a specified threshold are identified and reviewed to confirm the price provided by the primary source represents an appropriate estimate of fair value.

The Company did not adjust any of the prices at December 31, 2022.

Contingent Value Right Liability

On January 4, 2021, the Company acquired Kleo Pharmaceuticals, Inc.

(“Kleo”) (see Note 6 for additional

information).

Included in the purchase consideration transferred was 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 is approximately $ 17,300 , and the fair value of the contingent value right was $ 1,457 as of the acquisition date.

The Company recorded the contingent value right in other non-current liabilities on the consolidated balance sheets.

The fair value of the contingent value right was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.

The Company used a discounted cash flow approach to value the contingent value right liability.

As inputs into the initial valuation, the Company considered the probability of FDA approval within the 30 months period, which we estimated at approximately 10 %, the amount of the payment, and a discount rate of approximately 7 % determined using an implied credit spread adjusted based on companies with similar credit risk.

At December 31, 2021,the Company determined the value of the contingent value right to be immaterial and recognized a gain of $ 1,457 related to the contingent value right in other income (expense) in the consolidated statements of operations during the fourth quarter of 2021.

The value of the contingent value right continues to be immaterial with no value included on the consolidated balance sheet as of December 31, 2022.

BIOHAVEN LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Fair Value of Financial Assets and Liabilities (Continued)

Financial Instruments Not Measured at Fair Value on the Consolidated Balance Sheets

The carrying value and estimated fair value classified by level of fair value hierarchy for financial instruments carried on the consolidated balance sheets at adjusted cost or contract value at December 31, 2022 and 2021 were as follows:

Carrying Fair Value Measurement Using:

Value Level 1 Level 2 Level 3 Total

December 31, 2022

Series A-2 Preferred Stock investment (1)

— N/A N/A N/A N/A

December 31, 2021

Series A-2 Preferred Stock investment (1)

6,000 N/A N/A N/A N/A

(1) It was not practical to estimate the fair value of this investment as it represents Series A-2 Preferred Stock of an unlisted company.

On a routine basis the Company determined if additional preferred shares of the unlisted company had been issued and adjusted the carrying value of its Series A-2 Preferred Stock investment accordingly.

The Series A-2 Preferred Stock investment was recorded in other non-current assets on the consolidated balance sheet at December 31, 2021.

As of December 31, 2022, due to concerns related to Artizan's inability to fund its future operations, the Company determined its investment in Artizan to be fully impaired.

Accordingly, the Company had no balance on its consolidated balance sheet relating to its investment in Artizan as of December 31, 2022.

See Artizan under Note 11, "License Agreements" for additional details on the Series A-2 Preferred Stock investment.

Balance Sheet Components

3 unchanged sentences

Building and land $ 11,728 $ 12,297

Leasehold improvements

Computer hardware and software 875 780

7 unchanged sentences

Depreciation expense was $ 3,369 , $ 1,361 and $ 673 for the years ended December 31, 2023, 2022 and 2021, respectively.

As of both December 31, 2022 and 2021, computer software costs included in property and equipment were $ 760 and $ 760 , respectively, net of accumulated amortization of $ 464 and $ 211 , respectively.

Depreciation and amortization expense for capitalized computer software costs were not material for the years ended December 31, 2022 or 2021.

Equipment not yet in service primarily consisted of lab equipment that had not been placed into service as of December 31, 2022.

Equipment not yet in service primarily consisted of lab equipment that had not been placed into service as of December 31, 2023 or 2022.

Other Non-current Assets

1 unchanged sentence

As of December 31, 2023 As of December 31, 2022

Series A-2 Preferred Stock Investment $ — $ 6,000

Operating lease right-of-use assets $ 31,385 $ 34,928

1 unchanged sentence

Other non-current assets $ 33,785 $ 37,513

In December 2020, the Company entered into a Series A-2 Preferred Stock Purchase Agreement with Artizan Biosciences Inc.

Under the agreement, the Company paid Artizan 61,494 shares of the Former Parent’s common shares valued at $ 6,000 , which were issued in January 2021.

In exchange, the Company acquired 34,472,031 shares of series A-2 preferred stock of Artizan.

In June 2022, the Company entered into an Amendment to the Series A-2 Preferred Stock Purchase Agreement with Artizan.

Under the Amendment, the Company made a cash payment of $ 4,000 in exchange for 22,975,301 additional shares of series A-2 preferred stock of Artizan.

The Company determined that it was not practical to estimate the fair

BIOHAVEN LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Balance Sheet Components (Continued)

value of this investment as it represents Series A-2 Preferred Stock of an unlisted company.

As of December 31, 2022, due to concerns related to Artizan's inability to fund its future operations, the Company determined its investment in Artizan to be fully impaired.

Accordingly, during the fourth quarter of 2022 the Company recognized an impairment loss of $ 10,000 in other income (expense) on the consolidated statement of operations.

See Note 11, “License Agreements” for additional details on the Artizan Agreement.

Accrued Expenses and Other Current Liabilities

3 unchanged sentences

Accrued clinical trial costs 29,501 17,788

Operating lease liability - current portion

Other accrued expenses and other current liabilities 6,200 8,696

1 unchanged sentence

$ 39,846 $ 44,106

Contingently Redeemable Non-controlling Interest

In September 2020, the Company's Asia-Pacific subsidiary, BioShin Limited (“BioShin”), authorized, issued and sold 15,384,613 BioShin Series A Preferred Shares at a price of $ 3.90 per share for a total of $ 60,000 to a group of investors led by OrbiMed, with participation from Cormorant Asset Management LLC, HBM Healthcare Investments Ltd, Surveyor Capital (a Citadel Company), and Suvretta Capital Management, LLC (the "BioShin Investors").

The BioShin Series A Preferred Shares contained both a call option by the Company and a put option held by the BioShin Investors.

Due to the contingently redeemable features, the Company had classified the BioShin Series A Preferred Shares in mezzanine equity since the redemption was out of the Company's control.

In November 2021, the Company, Biohaven Therapeutics Ltd.

(“BTL”), Atlas Merger Sub and BioShin entered into an Agreement and Plan of Merger (the “BioShin Merger Agreement”).

The BioShin Merger Agreement provided for the merger of Atlas Merger Sub with and into BioShin, with BioShin surviving the merger as a wholly owned indirect subsidiary of the Former Parent, in accordance with Section 233 of the Cayman Islands Companies Act.

As a result of the satisfaction of the closing conditions described in the BioShin Merger Agreement, on January 6, 2022, each Series A

convertible preferred share of BioShin, no par value, other than Excluded Shares (as defined in the BioShin Merger Agreement), was converted into the right to receive 0.080121 of the Former Parent’s common shares and was removed from mezzanine equity.

No Series A convertible preferred shares of BioShin were outstanding following the closing.

On January 4, 2021, the Company acquired Kleo Pharmaceuticals, Inc.

Kleo is a development-stage biopharmaceutical company focused on advancing the field of immunotherapy by developing small molecules that emulate biologics.

The transaction was accounted for as the acquisition of a business using the acquisition method of accounting.

The total fair value of the consideration transferred was $ 20,043 which primarily consisted of the issuance of a total of 115,836 common shares of the Former Parent to Kleo stockholders and 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 Food and Drug Administration (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 $ 17,300 .

At December 31, 2021, the Company determined the value of the contingent value right to be immaterial and recognized a gain of $ 1,457 related to the contingent value right in other income (expense) during the fourth quarter of 2021.

The value of the contingent value right continues to be immaterial with no value included on the consolidated balance sheet as of December 31, 2022.

Prior to the consummation of the transaction, the Company owned approximately 41.9 % of the outstanding shares of Kleo and accounted for it as an equity method investment.

As part of the transaction, the Company acquired the remainder of the shares of Kleo, and post-transaction the Company owns 100 % of the outstanding shares of Kleo.

The carrying value of the Company’s investment in Kleo was $ 1,176 immediately prior to the acquisition date.

The Company determined the fair value of the existing interest was $ 6,437 , and recognized a gain from its equity method investment during the first quarter of 2021 of $ 5,261 on the consolidated statement of operations as a result of remeasuring to fair value the existing equity interest in Kleo.

In connection with the transaction, we recorded:

net working capital of $ 573 ;

property and equipment of $ 1,257 ;

intangible assets consisting of in progress research and development assets of $ 18,400 which include an oncology therapeutic candidate entering

Kv7 Platform Acquisition

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

In consideration for the Kv7 Platform Acquisition, on April 4, 2022, the Company made an upfront payment

BIOHAVEN LTD.

2 unchanged sentences

Acquisitions (Continued)

Phase I clinical trials and a Multimodal Antibody Therapy Enhancer ("MATE") conjugation asset;

debt assumed of $ 1,577 ;

and goodwill of $ 1,390 .

Kleo’s employees, other than its President and Chief Financial Officer, were retained as part of the transaction.

In connection with the transaction agreement, the Former Parent filed a registration statement permitting Kleo stockholders to offer and sell the common shares of the Former Parent issued in the transaction.

Kv7 Platform Acquisition

In consideration for the Kv7 Platform Acquisition, on April 4, 2022, the Company made an upfront payment comprised of $ 35,000 in cash and 493,254 common shares of the Former Parent, valued at approximately $ 58,747 , issued through a private placement.

comprised of $ 35,000 in cash and 493,254 common shares of the Former Parent, valued at approximately $ 58,747 , issued through a private placement.

The Company has also agreed to pay additional success-based payments comprised of (i) up to $ 325,000 based on developmental and regulatory milestones through approvals in the United States, EMEA and Japan for the lead asset, BHV-7000 (formerly known as KB-3061), (ii) up to an additional $ 250,000 based on developmental and regulatory milestones for the Kv7 pipeline development in other indications and additional country approvals, and (iii) up to $ 562,500 for commercial sales-based milestones of BHV-7000.

1 unchanged sentence

The Company accounted for this purchase as an asset acquisition as substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable asset, IPR&D.

The IPR&D asset has no alternative future use and relates to intellectual property rights related to the Kv7 platform lead, now BHV-7000.

The IPR&D asset has no alternative future use and relates to intellectual property rights related to the Kv7 platform.

There was no material value assigned to any other assets or liabilities acquired in the acquisition.

As such, during the second quarter of 2022, the Company recorded a charge to research and development (" R&D ") expense in the accompanying consolidated statement of operations of $ 93,747 .

During the year ended December 31, 2022, the Company recorded $ 25,000 to R&D expense in the

consolidated statement of operations for a regulatory milestone payment which became due to Knopp during the second quarter.

During the year ended December 31, 2022, the Company recorded $ 25,000 to R&D expense in the consolidated statement of operations for a regulatory milestone payment which became due and was paid to Knopp during 2022.

Excluding the milestone payment noted above, the Company has not recorded any of the possible contingent consideration payments to Knopp as a liability in the accompanying consolidated balance sheet, as none of the future events which would trigger a milestone payment were considered probable of occurring at December 31, 2023.

Pyramid Acquisition

In January 2024, the Company acquired Pyramid Biosciences, Inc.

("Pyramid"), pursuant to an Agreement and Plan of Merger, dated January 7, 2024 ("the Pyramid Agreement").

In consideration for the Pyramid acquisition, Biohaven made an upfront payment of $ 10,000 in common shares of the Company.

Biohaven has also agreed to make additional success-based payments comprised of (i) up to $ 10,000 based on developmental and regulatory milestones for

the lead asset, BHV-1510 (formerly known as PBI-410), (ii) up to an additional $ 30,000 based on developmental and regulatory milestones for a second asset (formerly known as PBI-200) and (iii) up to $ 40,000 for commercial sales-based milestones of BHV-1510.

Contingent developmental and regulatory milestone payments may be paid in cash or Biohaven common shares at the election of Biohaven and commercial sales-based milestones are to be made in cash.

During the first quarter of 2024, the Company incurred $ 5,000 of R&D expense related to a regulatory milestone which became due under the Pyramid Agreement.

Shareholders' Equity

Issuance of Common Shares in connection with the Separation from the Former Parent

On October 3, 2022, the Former Parent completed the Distribution to holders of its common shares and the spin-off of Biohaven.

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.

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 to be issued in connection with Former Parent share options that were exercised on October 3, 2022 and 924,093 common shares to be issued in connection with Former Parent restricted share units that vested on October 3, 2022.

See Note 9, "Non-Cash Share-Based Compensation" for discussion of the Legacy Equity Award Settlement Plan.

Issuance of common shares for the Highlightll Agreement

In March 2023, the Company and Hangzhou Highlightll Pharmaceutical Co.

("Highlightll") entered into an exclusive, worldwide (excluding People's Republic of China and its territories and possessions) license agreement (the "Highlightll Agreement") pursuant to which Biohaven obtained the right to research, develop, manufacture and commercialize Highlightll's brain penetrant dual TYK2/JAK1 inhibitor program.

In connection with the Highlightll Agreement, in December 2023, the Company issued 721,136 common shares valued at $ 21,814 .

See Note 11, "License Agreements," for further detail on the Highlightll Agreement.

Issuance of Common Shares for the October 2023 Offering

In October 2022, the Company commenced a public offering of 25,000,000 of its common shares at a price of $ 10.50 per share, pursuant to a registration statement on Form S-1 filed with the SEC, which was declared effective by the SEC on October 20, 2022.

The Company also granted the underwriters a 30-day option to purchase up to an additional 3,750,000 common shares.

On October 25, 2022, the Company closed the offering, including a full exercise of the underwriters' option to purchase additional shares.

In October 2023, the Compan y completed an underwritten public offering of 11,761,363 of its common shares, including the exercise in full of the underwriters' option to purchase additional common shares, at a price to the public of $ 22.00 per share, pursuant to a registration statement on Form S-3 filed with the SEC.

The net proceeds raised in the offering, after deducting underwriting discounts and expenses of the offering payable by the Company, were approximately $ 242,425 .

Equity Distribution Agreement

In October 2023, the Company entered into an equity distribution agreement pursuant to which the Company may offer and sell common shares having an aggregate offering price of up to $ 150,000 from time to time through or to the sales agent, acting as its agent or principal (the "Equity Distribution Agreement").

Sales of the Company's 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 the Company's sales agent

BIOHAVEN LTD.

1 unchanged sentence

(Amounts in thousands, except share and per share amounts)

Accumulated Other Comprehensive Income

Shareholders’ equity included the following activity in accumulated other comprehensive income (loss) for the years ended December 31, 2022:

Shareholders' Equity (Continued)

using commercially reasonable efforts consistent with its normal trading and sales practices, on mutually agreed terms between the sales agent and the Company.

The Company currently plans to use the net proceeds from any at-the-market offerings of its common shares for general corporate purposes.

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

Issuance of Common Shares for the October 2022 Offering

The Company also granted the underwriters a 30-day option to purchase up to an additional 3,750,000 common shares.

On October 25, 2022, the Company closed the offering, including a full exercise of the underwriters' option to purchase additional shares.

The net proceeds raised in the offering, after deducting underwriting discounts and expenses of the offering payable by the Company, were approximately $ 282,804 .

Issuance of Common Shares in connection with the Separation from the Former Parent

On October 3, 2022, the Former Parent completed the Distribution to holders of its common shares and the spin-off of Biohaven.

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

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 share options that were exercised on October 3, 2022 and 924,093 common shares issued in connection with Former Parent restricted share units that vested on October 3, 2022.

See Note 9, "Non-Cash Share-Based Compensation," for discussion of the Legacy Equity Award Settlement Plan.

Accumulated Other Comprehensive (Loss) Income

Shareholders’ equity included the following activity in accumulated other comprehensive (loss) income for the years ended December 31, 2023 and 2022:

Net unrealized investment gains (losses):

Beginning of period balance $ ( 145 ) $ —

Other comprehensive loss (1)

Other comprehensive income (loss) 1)

Amounts reclassified from accumulated other comprehensive income (loss) (2)

Other comprehensive income (loss)

End of period balance 3 ( 145 )

1 unchanged sentence

Beginning of period balance 429 —

Other comprehensive income (1)

Other comprehensive (loss) income (1)

End of period balance ( 68 ) 429

Total beginning of period accumulated other comprehensive income 284 —

Total other comprehensive income (loss) 284

Total end of period accumulated other comprehensive income $ 284

(1) There was no tax on other comprehensive income (loss) during the period.

No amounts were reclassified from accumulated other comprehensive income during the years ended December 31, 2022, 2021 or 2020.

The Company had no accumulated other comprehensive income (loss) included in shareholders' equity as of December 31, 2021.

Total other comprehensive (loss) income

Total end of period accumulated other comprehensive (loss) income

$ ( 65 ) $ 284

(1) There was no tax on other comprehensive income (loss) and immaterial tax on amounts reclassified from accumulated other comprehensive (loss) income during the period.

(2) Amounts reclassified from accumulated other comprehensive (loss) income for specifically identified debt securities are included in other income (expense), net in the consolidated statements of operations.

No amounts were reclassified from accumulated other comprehensive (loss) income during the years ended December 31, 2022 or 2021.

The Company had no accumulated other comprehensive (loss) income included in shareholders' equity as of December 31, 2021.

Non-Cash Share-Based Compensation

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In September 2022, the Company's shareholders approved the 2022 Equity Incentive Plan (the "2022 Plan"), which became effective on October 3, 2022.

The 2022 Plan provides for the grant of incentive share options, nonstatutory share options, share appreciation rights, restricted share awards, restricted share unit awards ("RSUs"), performance-based share awards and other share-based awards.

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Non-Cash Share-Based Compensation (Continued)

2022 Plan provides for the grant of incentive share options, nonstatutory share options, share appreciation rights, restricted share awards, restricted share unit awards ("RSUs"), performance-based share awards and other share-based awards.

Upon the effectiveness of the 2022 Plan, there were 9,190,000 common shares reserved for issuance under the 2022 Plan.

As of December 31, 2022, there were 166,250 shares of the Company's common shares available for future grants under the 2022 Plan.

As of December 31, 2023, the 2022 Plan allows for a maximum of 11,917,619 shares of the Company's common shares to be reserved and available for grants.

Also as of December 31, 2023, there were 173,899 shares of the Company's common shares available for future grants under the 2022 Plan.

The number of shares reserved for issuance under the 2022 Plan automatically increases on January 1 of each calendar year by 4 % of total common shares outstanding as of December 31 of the prior year, beginning October 3, 2022 through January 1, 2032.

January 2023, the number of common shares reserved for future issuance under the 2022 Plan automatically increased by 2,727,619 common shares.

In January 2024, the number of common shares reserved for future issuance under the 2022 Plan automatically increased by 3,244,628 common shares.

Legacy Equity Award Settlement Plan

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The share options and RSUs granted under the Legacy Plan also immediately vested and settled as a result of the Spin-off, and the Company determined that no incremental compensation should be recognized related to these awards.

Non-cash share-based compensation under the Former Parent’s non-cash share-based compensation plans was measured at the grant date based on the fair

Non-cash share-based compensation under the Former Parent’s non-cash share-based compensation plans was measured at the grant date based on the fair value of the award and was recognized as expense over the requisite service period of the award (generally three to four years ) using the straight-line method.

The Company measures non-cash share-based compensation at the grant date based on the fair value of the award and is recognized as expense over the requisite service period of the award (generally three years ) using the straight-line method.

Non-cash share-based compensation expense, consisting of expense for stock options, RSUs, and the 2022 Employee Share

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Non-Cash Share-Based Compensation (Continued)

value of the award and was recognized as expense over the requisite service period of the award (generally three to four years ) using the straight-line method.

Non-cash share-based compensation expense was classified in the consolidated statements of operations as follows:

Purchase Plan (the "ESPP"), was classified in the consolidated statements of operations as follows:

Year Ended December 31,

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Research and development expenses

Allocated from Former Parent excluding the Acceleration $ 46,976 $ 39,381 $ 18,475

Allocated from Former Parent related to the Acceleration 61,749 — —

Allocated from the Former Parent excluding the Acceleration

$ — $ 46,976 $ 39,381

Allocated from the Former Parent related to the Acceleration

2022 Equity Incentive Plan 15,985 7,654 —

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General and administrative expenses

Allocated from Former Parent excluding the Acceleration 30,951 26,258 11,025

Allocated from Former Parent related to the Acceleration 39,691 — —

Allocated from the Former Parent excluding the Acceleration

— 30,951 26,258

Allocated from the Former Parent related to the Acceleration

2022 Equity Incentive Plan 12,802 6,535 —

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All share option grants are awarded at fair value on the date of grant.

The fair value of share options is estimated using the Black-Scholes option pricing model.

Stock options generally expire 10 years after the grant date.

The fair value of share options is

estimated using the Black-Scholes option pricing model.

Share options generally expire 10 years after the grant date.

The aggregate intrinsic value of share options is calculated as the difference between the exercise price of the share options and the fair value of the Company's common shares for those share options that had exercise prices lower than the fair value of the Company's common shares at December 31, 2023.

The total intrinsic value of outstanding share options for the year ended December 31, 2022 was $ 61,639 .

The total intrinsic value of outstanding share options for the years ended December 31, 2023 and 2022 was $ 356,369 and $ 61,639 , respectively.

The total intrinsic value of share options exercised for the year ended December 31, 2023 was $ 7,756 .

The tax benefit from share options exercised for the years ended December 31, 2023 and 2022 was not material.

The assumptions that the Company used to determine the grant-date fair value of share options granted under the 2022 Plan were as follows, presented on a weighted average basis:

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The following table is a summary of the Company's share option activity for the year ended December 31, 2023:

Outstanding as of October 3, 2022 0 $ —

Outstanding as of December 31, 2022 8,959,215 $ 7.00

2,929,616 $ 24.57

Exercised (1)

( 299,756 ) $ 7.68

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Vested and expected to vest as of December 31, 2023 11,379,429 $ 11.48 8.99 $ 356,369

(1) Includes 4,057,121 share options that were granted and exercised under the Legacy Plan on October 3, 2022

The weighted average grant date fair value per share of share options granted under the Company’s share option plans during the years ended December 31, 2023 and 2022 was $ 18.01 and $ 4.97 , respectively.

The Company expects approximately 6,632,553 of the unvested share options to vest over the requisite service period.

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As discussed above, in connection with the Distribution, on October 3, 2022, 924,093 RSUs were granted and settled into 924,093 common shares under the Legacy Equity Award Settlement Plan.

No additional RSUs were granted under the 2022 Plan during the year ended December 31, 2022.

No additional RSUs were granted under the 2022 Plan during the years ended December 31, 2023 or 2022.

The Company’s RSUs are considered nonvested share awards and require no payment from the employee.

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Compensation cost is recorded based on the market price of the Company’s common shares on the grant date and is recognized on a straight-line basis over the requisite service period.

As of December 31, 2022, there was no unrecognized compensation cost related to Company RSUs that are expected to vest.

No fair value was assigned to the RSUs vested during the year ended December 31, 2022, as all RSUs vested were related to the RSUs granted and settled under the Legacy Equity Award Settlement Plan.

The following table is a summary of the RSU activity for the year ended December 31, 2022:

Weighted Average Grant Date Fair Value

Unvested restricted shares outstanding as of October 3, 2022 — $ —

Granted 924,093 $ —

Forfeited — $ —

Vested ( 924,093 ) $ —

Unvested restricted shares outstanding as of December 31, 2022 — $ —

There were no unvested restricted share units outstanding as of December 31, 2023 and 2022.

No restricted share units were granted, forfeited, or vested, in the year ended December 31, 2023.

Employee Share Purchase Plan

In September 2022, the Company's board of directors approved the rules and procedures of the 2022 Employee Share Purchase Plan (the "ESPP") approved by shareholders of the Company on September 28, 2022.

Upon the effectiveness of the ESPP, 393,769 shares were authorized to be issued under purchase rights granted to eligible employees.

In September 2022, the Company's board of directors approved the rules and procedures of the 2022 Employee Share Purchase Plan approved by shareholders of the Company on September 28, 2022.

The ESPP allows each eligible employee who is participating in the plan to purchase shares by authorizing payroll deductions of up to 15 % of eligible earnings.

Unless the participating employee has previously withdrawn from the offering, accumulated payroll deductions will be used to purchase shares on the last business day of the offering period at a price equal to 85% of the fair market value of the shares on the first business day or the last business day of the offering period, whichever is lower.

Under applicable tax rules, an employee may purchase no more than $25

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Non-Cash Share-Based Compensation (Continued)

worth of ordinary shares, valued at the start of the offering period, under the ESPP in any calendar year.

Unless the participating employee has

previously withdrawn from the offering, accumulated payroll deductions will be used to purchase shares on the last business day of the offering period at a price equal to 85% of the fair market value of the shares on the first business day or the last business day of the offering period, whichever is lower.

Under applicable tax rules, an employee may purchase no more than $25 worth of ordinary shares, valued at the start of the offering period, under the ESPP in any calendar year.

There is no minimum holding period associated with shares purchased pursuant to this plan.

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The number of shares reserved for issuance under the ESPP automatically increases on January 1 of each calendar year by 1 % of total common shares outstanding as of December 31 of the prior year, beginning October 3, 2022 through January 1, 2032.

As of December 31, 2023, the ESPP allows for a maximum of 1,075,673 shares of the Company's common shares to be reserved and available for issuance under the ESPP.

As of December 31, 2023, 916,484 shares remained available for future issuance under the ESPP.

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The purchase price discount and the look-back feature cause the ESPP to be compensatory and the Company to recognize compensation expense.

The compensation cost is recognized on a straight-line basis over the requisite service period.

The compensation

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Non-Cash Share-Based Compensation (Continued)

cost is recognized on a straight-line basis over the requisite service period.

The Company values ESPP shares using the Black-Scholes model.

The Company recognized compensation expense of $ 1,341 for the year ended December 31, 2023.

The Company did not recognize material compensation expense related to the ESPP for the year ended December 31, 2022.

As of December 31, 2023, there was $ 638 of unrecognized non-cash share-based compensation expense related to the ESPP, which is expected to be recognized over the remaining offering period ending May 31, 2024.

During the year ended December 31, 2022, no shares were issued under the ESPP.

During the year ended December 31, 2023, 159,189 shares were issued under the ESPP.

Net Loss Per Share

Basic and diluted net loss per share attributable to common shareholders of Biohaven Ltd.

was calculated as follows:

Basic and diluted net loss per share attributable to common shareholders of Biohaven was calculated as follows:

Year Ended December 31,

2023 2022 2021

Net loss attributable to Biohaven Ltd.

$ ( 408,168 ) $ ( 570,279 ) $ ( 213,796 )

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71,200,527 44,741,316 39,375,944

Net loss per share attributable to Biohaven Ltd.—basic and diluted $ ( 12.75 ) $ ( 5.43 ) $ ( 3.01 )

Net loss per share—basic and diluted

$ ( 5.73 ) $ ( 12.75 ) $ ( 5.43 )

(1) Prior to the Spin-Off from the Former Parent on October 3, 2022, Biohaven Ltd.

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Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common shareholders of the Company is the same.

The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common shareholders for the periods indicated because including them would have had an anti-dilutive effect:

The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to

common shareholders for the periods indicated because including them would have had an anti-dilutive effect:

Year Ended December 31,

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The following is a summary of all license agreements that the Company has entered into.

As of December 31, 2022, the Company has potential future

developmental, regulatory, and commercial milestone payments under these agreements of up to approximately $ 30,125 , $ 529,850 , and $ 582,950 ,

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License Agreements (Continued)

respectively.

As of December 31, 2022 the Company has not made any developmental, regulatory, or commercial milestone payments under these agreements.

As of December 31, 2023, the Company has potential future developmental, regulatory, and commercial milestone payments under these agreements of up to approximately $ 101,800 , $ 547,350 , and $ 1,270,450 , respectively.

Yale Agreements

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For the years ended December 31, 2023, 2022 and 2021, the Company did not record any material expense or make any milestone or royalty payments under the Yale Agreement.

In January 2021, the Company 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").

In January 2021, the Company entered into a worldwide, exclusive license agreement with Yale University for the development and commercialization of

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License Agreements (Continued)

a novel Molecular Degrader of Extracellular Protein ("MoDE") platform (the "Yale MoDE Agreement").

Under the Yale MoDE Agreement, the Company acquired exclusive, worldwide rights to Yale University's intellectual property directed to its MoDE platform.

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Under the Yale MoDE Agreement, the Company may develop products based on the MoDE platform.

The Yale MoDE Agreement

includes an obligation to pay a minimum annual royalty of up to $ 1,000 per year, and low single digit royalties on the net sales of licensed products.

The Yale MoDE Agreement includes an obligation to pay a minimum annual royalty of up to $ 1,000 per year, and low single digit royalties on the net sales of licensed products.

If the Company grants any sublicense rights under the Yale MoDE Agreement, it must pay Yale University a low single-digit percentage of sublicense income that it receives.

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Under the Yale MoDE Agreement, the Company entered into a sponsored research agreement (the “Yale MoDE SRA”), which included funding of up to $ 4,000 over the life of the agreement.

Excluding the upfront payments above, the Company recorded research and development expense related to the Yale MoDE Agreement of $ 2,666 and $ 150 for the years ended December 31, 2022 and 2021, respectively.

The Company recorded research and development expense related to the Yale MoDE SRA of $ 1,333 , $ 2,666 and $ 150 for the years ended December 31, 2023, 2022 and 2021, respectively.

For the years ended December 31, 2023, 2022 and 2021, the Company did not make any milestone or royalty payments under the Yale MoDE Agreement.

In May 2023, the Company entered into an additional sponsored research agreement with Yale University (the "2023 Yale SRA"), which included funding of up to $ 612 over the life of the agreement.

For the year ended December 31, 2023, the company recorded $ 367 in research and development expense related to the 2023 Yale SRA.

ALS Biopharma Agreement

In August 2015, the Company entered into an agreement (the "ALS Biopharma Agreement") with ALS Biopharma and Fox Chase Chemical Diversity Center Inc.

("FCCDC"), pursuant to which ALS Biopharma and FCCDC assigned the Company their worldwide patent rights to a family of over 300 prodrugs of glutamate modulating agents, including troriluzole, as well as other innovative technologies.

("FCCDC"), pursuant to which ALS Biopharma and FCCDC assigned the Company their worldwide patent rights to a family of over 300 prodrugs of glutamate

modulating agents, including troriluzole, as well as other innovative technologies.

Under the ALS Biopharma Agreement, the Company is obligated to use commercially reasonable efforts to commercialize and develop markets for the patent products.

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If the Company abandons its development, research, licensing or sale of all products covered by one or more claims of any patent or patent application assigned under the ALS Biopharma Agreement, or if the Company ceases operations, it has agreed to reassign the applicable patent rights back to ALS Biopharma.

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License Agreements (Continued)

For the years ended December 31, 2023, 2022 and 2021, the Company did no t record any expense or make any milestone or royalty payments under the ALS Biopharma Agreement.

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The Company has also agreed to pay royalties in two tiers, with each tiered royalty in the range from 0 - 10 % of net sales of products licensed under the 2016 AstraZeneca Agreement.

If the Company receives revenue from sublicensing any of its rights under the 2016 AstraZeneca Agreement, the Company is also obligated to pay a portion of that revenue to AstraZeneca.

If the Company receives revenue from sublicensing any of its rights

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License Agreements (Continued)

under the 2016 AstraZeneca Agreement, the Company is also obligated to pay a portion of that revenue to AstraZeneca.

The Company is also required to reimburse AstraZeneca for any fees that AstraZeneca incurs related to the filing, prosecution, defending, and maintenance of patent rights licensed under the 2016 AstraZeneca Agreement.

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2018 AstraZeneca License Agreement

In September 2018, the Company entered into an exclusive license agreement (the "2018 AstraZeneca Agreement") with AstraZeneca, pursuant to which AstraZeneca granted the Company a license to certain

patent rights for the commercial development, manufacture, distribution and use of any products or processes resulting from development of those patent rights, including BHV-3241 (verdiperstat).

In September 2018, the Company entered into an exclusive license agreement (the "2018 AstraZeneca Agreement") with AstraZeneca, pursuant to which AstraZeneca granted the Company a license to certain patent rights for the commercial development, manufacture, distribution and use of any products or processes resulting from development of those patent rights, including BHV-3241 (verdiperstat).

Under the 2018 AstraZeneca Agreement, the Company paid AstraZeneca an upfront cash payment of $ 3,000 and 109,523 shares valued at $ 4,080 on the date of settlement and is obligated to pay milestone payments to AstraZeneca totaling up to $ 55,000 upon the achievement of specified regulatory and commercial milestones and up to $ 50,000 upon the achievement of specified sales-based milestones.

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The Company is solely responsible, and has agreed to use commercially reasonable efforts, for all development, regulatory and commercial activities related to verdiperstat.

The Company may sublicense its rights under the agreement and, if it does so, will be obligated to pay a portion of any milestone payments received from the sublicense to AstraZeneca in addition to any milestone payments it would otherwise be obligated to pay.

The Company may sublicense its rights under the agreement and, if it does so, will be obligated to pay a portion of any milestone payments received from the sublicense to AstraZeneca in addition

to any milestone payments it would otherwise be obligated to pay.

The 2018 AstraZeneca Agreement terminates on a country-by-country basis and product-by-product basis upon the expiration of the royalty term for such product in such country and can also be terminated if certain events occur, e.g., material breach or insolvency.

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The FCCDC Agreement provides the Company 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.

As consideration, the

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License Agreements (Continued)

Company issued 100,000 of the Former Parent's common shares to FCCDC valued at $ 5,646 .

As consideration, the Company issued 100,000 of the Former Parent's common shares to FCCDC valued at $ 5,646 .

In addition, the Company is obligated to pay FCCDC milestone payments totaling up to $ 3,000 with $ 1,000 for each additional NDA filing.

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The Company is also responsible for the prosecution and maintenance of the patents related to the TDP-43 assets.

The FCCDC Agreement terminates on a country-by-country basis and product-by-product basis upon expiration of the royalty term for such product in such country and can also be terminated if certain events occur, e.g., material breach or insolvency.

The FCCDC Agreement terminates on a country-by-country basis and product-by-product basis upon expiration of the royalty term for such product in such

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License Agreements (Continued)

country and can also be terminated if certain events occur, e.g., material breach or insolvency.

The Company did no t record any material research and development expense or make any milestone payments related to the FCCDC Agreement in the consolidated statements of operations during the years ended December 31, 2023, 2022 and 2021.

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In September 2022, the Company exercised the UConn Option in exchange for a payment of $ 400 .

Under the UConn Agreement, UConn is entitled

to milestone payments upon the achievement of specified developmental and regulatory milestones of up to $ 30,100 and commercial milestones of up to $ 50,000 , and royalties of a low single-digit percentage of net sales of licensed products.

Excluding the payment made in connection with the exercise of the UConn Option, for the years ended December 31, 2022, 2021 and 2020, the Company did no t record any research and development expense or make any milestone payments related to the UConn Agreement.

Under the UConn Agreement, UConn is entitled to milestone payments upon the achievement of specified developmental and regulatory milestones of up to $ 30,100 and commercial milestones of up to $ 50,000 , and royalties of a low single-digit percentage of net sales of licensed products.

Excluding the payment made in connection with the exercise of the UConn Option in September 2022, for the years ended December 31, 2023, 2022 and 2021, the Company did no t record any research and development expense or make any milestone payments related to the UConn Agreement.

Artizan Agreement

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the Company is also responsible for the prosecution, maintenance and enforcement of Artizan’s patents.

The Company will pay

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License Agreements (Continued)

Artizan development milestones of $ 20,000 for the first licensed compound to achieve U.S.

The Company will pay Artizan development milestones of $ 20,000 for the first licensed compound to achieve U.S.

marketing authorization and $ 10,000 for each subsequent U.S.

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The 2021 Artizan Agreement terminates on a country-by-country basis on the later of 10 years from the first commercial sale of licensed product in such country or the expiration of Artizan’s patents in such country and can also be terminated if certain events occur, e.g., material breach or insolvency.

In June 2023, the 2020 Artizan Agreement and 2021 Artizan Agreement were both terminated.

In June 2022, the Company entered into an amendment (the "Amendment") to the Series A-2 Preferred Stock Purchase Agreement with Artizan.

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The Artizan Side Letter required Artizan to commit at least 80 % of the funds raised in the A-2 Extension Raise to a certain program and to raise $ 35,000 of additional capital within a certain time.

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License Agreements (Continued)

As of December 31, 2022, due to concerns related to Artizan's inability to fund its future operations, the Company determined its investment in Artizan to be fully impaired.

Accordingly, during the fourth quarter of 2022 the Company recognized an impairment loss of $ 10,000 in other income (expense) on the consolidated statements of operations.

For the years ended December 31, 2022, 2021 and 2020, excluding the upfront payments above, the Company did no t record any research and development expense or make any milestone payments related to the 2020 Artizan Agreement and the 2021 Artizan Agreement.

Moda Agreement

On January 1, 2021, the Company entered into a consulting services agreement (the "Moda Agreement") with Moda Pharmaceuticals LLC ("Moda") 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.

Under the Moda Agreement, the Company paid Moda an upfront cash payment of $ 2,700 and 37,836 shares of the Former Parent valued at approximately $ 3,243 .

In addition, Moda will be eligible to receive additional development milestone payments of up to $ 81,612 and commercial milestone payments of up to $ 30,171 .

The Moda Agreement has a term of four years and may be terminated earlier by the Company or Moda under certain circumstances including, for example, the Company's discontinuation of research on the MoDE platform or default.

For the years ended December 31, 2022 and 2021, excluding the upfront payments above, the Company did no t record any material research and development expense or make any milestone payments related to the Moda Agreement.

Accordingly, during the fourth quarter of 2022 the Company recognized an impairment loss of $ 10,000 in other income (expense),net on the consolidated statements of operations.

For the years ended December 31, 2023, 2022 and 2021, excluding the upfront payments above, the Company did no t record any research and development expense or make any material milestone payments related to the 2020 Artizan Agreement and the 2021 Artizan Agreement.

Reliant Agreement

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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, the Company receives exclusive global rights to develop, manufacture and commercialize KU Leuven's portfolio

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License Agreements (Continued)

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.

Under the KU Leuven Agreement, the Company receives 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.

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

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In addition, KU Leuven will be eligible to receive mid-single digit royalties on net sales of products resulting from the collaboration.

For the year ended December 31, 2023, the Company recorded $ 3,250 to R&D expense in the consolidated statements of operations related to developmental milestones which became due to KU Leuven during 2023.

Excluding the upfront payments discussed above, for the year ended December 31, 2022, the Company did no t record any material research and development expense related to the KU Leuven Agreement.

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There were no upfront or contingent payments to BMS related to the Taldefgrobep Alfa License Agreement.

For the year ended December 31, 2022, the Company did no t record any material expense or make any milestone or royalty payments under the Taldefgrobep Alfa License Agreement.

For the years ended December 31, 2023 and 2022, the Company did no t record any material expense or make any milestone or royalty payments under the Taldefgrobep Alfa License Agreement.

Agreement with Hangzhou Highlightll Pharmaceutical Co.

In March 2023, the Company entered into the Highlightll Agreement pursuant to which Biohaven obtained the right to research, develop, manufacture and commercialize Highlightll’s brain penetrant dual TYK2/JAK1 inhibitor program.

In connection with the Highlightll Agreement, the Company was obligated to pay Highlightll a cash payment of $ 10,000 and 721,136 common shares (collectively, "the Highlightll Upfront Payments"), upon the completion of certain post-closing activities.

In December 2023, the Company entered into

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License Agreements (Continued)

a second amendment to the Highlightll Agreement, which granted the Company an exclusive option and right of first refusal to any Selective TYK2 Inhibitor being developed by or on behalf of Highlightll or its affiliates and provided for the payment of the Highlightll Upfront Payments.

As a result, the Company made a $ 10,000 cash payment and issued 721,136 shares, valued at $ 21,814 , to Highlightll during the fourth quarter of 2023, which was recorded as R&D expense during the year ended December 31, 2023.

Under the Highlightll Agreement, the Company is obligated to make milestone payments to Highlightll totaling up to $ 200,000 upon the achievement of specified developmental, regulatory and commercial milestones for a first indication, up to $ 100,000 upon the achievement of pre-specified developmental, regulatory and commercial milestones for a second indication, and up to $ 650,000 upon the achievement of specified sales-based milestones.

Additionally, the Company has agreed to make tiered royalty payments as a percentage of net sales starting at mid single digits and peaking at low teens digits.

During the royalty term, if the Company offers to include China clinical sites in its Phase 3 study sufficient for submission to Chinese National Medical Products Administration and Highlightll, at its sole discretion, agrees, then Highlightll will pay royalties in the low tens digits to the Company on China sales upon approval.

The Highlightll Agreement terminates on a country-by-country basis upon expiration of the royalty term and can also be terminated if certain events occur, e.g., material breach or insolvency.

Excluding the Highlightll Upfront Payments discussed above, for the year ended December 31, 2023, the Company did not record any material milestone or royalty payments related to the Highlightll Agreement.

Commitments and Contingencies

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Lease Agreements

The Former Parent’s leases primarily consisted of lab and office space that was attributed to the Company in connection with the Spin-Off.

For periods prior to Separation, lease costs were allocated to the Company based on a proportional cost allocation method.

Company's leases post-separation consist of lab and office space for use in its operations.

The Company's leases primarily consist of lab and office space for use in its operations.

Its leases generally have lease terms of 1 to 10 years, some of which include options to extend for up to 5 to 10 years or on a month-to-month basis.

The Company includes extension options that are reasonably certain to be exercised as part of determination of lease terms.

As of December 31, 2022, none of the Company's lease terms included the extension option as the Company has determined that it is unlikely to exercise the extension option.

As of December 31, 2023, none of the Company's lease terms

included the extension option as the Company has determined that it is unlikely to exercise the extension option.

For periods prior to Separation, lease costs were allocated to the Company based on a proportional cost allocation method.

Allocated operating lease cost for periods prior to Separation and actual operating lease cost was $ 5,874 , $ 1,158 and $ 264 for the years ended December 31, 2023, 2022 and 2021, respectively.

The Company currently has three short-term real estate leases with immaterial lease expense.

The Company currently has one short-term real estate leases with immaterial lease expense.

The Company had immaterial sublease income and there are no sale-leaseback transactions.

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$ — $ 31,342 $ 478

(1) This figure excludes $ 2,850 of opening adjustments to the right-of-use operating asset due to leasehold improvements originally classified in other non-current assets and transferred to the right-of-use operating asset at lease commencement in 2020.

Operating cash flows paid for operating leases were immaterial for all periods prior to the Separation, and $ 780 for the year ended December 31, 2022.

Operating cash flows paid for operating leases were immaterial for all periods prior to the Separation, and were $ 4,854 and $ 780 for the years ended December 31, 2023 and December 31, 2022.

Supplemental balance sheet information related to leases is as follows:

BIOHAVEN LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Commitments and Contingencies (Continued)

In thousands, except remaining lease term and discount rate December 31, 2023 December 31, 2022

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27,569 30,581

$ 30,877 $ 33,600

Weighted average remaining lease term (in years) 8.21 9.08

Weighted average discount rate 6.47 % 6.55 %

BIOHAVEN LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Commitments and Contingencies (Continued)

The following table summarizes maturities of operating lease liabilities as of December 31, 2023:

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Research Commitments

The Former Parent has entered into agreements with several CROs to provide services in connection with the Company’s preclinical studies and clinical trials.

Research commitments entered into by the Former Parent and related to the Company were transferred to the Company upon separation.

As of December 31, 2022, the Company had remaining maximum research commitments in excess of one year of approximately

$ 18,750 , which are variable based on number of trial participants, and contingent upon the achievement of certain milestones of the clinical trials covered under the agreements.

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

The Company has entered into agreements with several CROs to provide services in connection with the Company’s preclinical studies and clinical trials.

As of December 31, 2023, the Company had remaining maximum research commitments in excess of one year of approximately $ 9,025 , which are variable based on number of trial participants, and contingent upon the achievement of certain milestones of the clinical trials covered under the agreements.

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

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties.

In addition, the Company has entered into indemnification agreements with members of its board of directors and executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service.

In addition, the Company has entered into indemnification agreements with members of its board of directors and executive officers that will require the Company, among other things, to indemnify them

against certain liabilities that may arise by reason of their status or service.

The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited.

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License Agreements

The Former Parent entered into license agreements with various parties that are directly attributed to the Company under which it is obligated to make contingent and non-contingent payments (see Note 11).

Upon the October 3, 2022 separation from the Former Parent, license agreements entered by the Former Parent and related to the Company were transferred to the Company.

Sixth Street Financing Agreement

In August 2020, the Former Parent and Biohaven Pharmaceuticals, Inc., (together with the Former Parent the "Borrowers"), entered into a financing agreement, as amended, with Sixth Street Specialty Lending, Inc., as administrative agent, and the lenders party thereto (the "Lenders") pursuant to which the Lenders agreed to extend a senior secured credit facility to the Borrowers (as amended, the “Sixth Street Financing Agreement”).

The Sixth Street Financing Agreement provided for term

The Company has entered into license agreements with various parties for which it is obligated to make contingent and non-contingent payments.

See Note 11, "License Agreements," for additional details.

Other Agreements

Under the Moda Agreement, the Company paid Moda an upfront cash payment of $ 2,700 and 37,836 shares of the Former Parent valued at approximately $ 3,243 .

In addition, Moda will be eligible to receive additional development milestone payments of up to $ 81,612 and commercial milestone payments of up to $ 30,171 .

For the years ended December 31, 2023, 2022 and 2021, excluding the upfront payments above, the Company did no t record any material research and development expense or make any milestone payments related to the Moda Agreement.

Legal Proceedings

From time to time, in the ordinary course of business, the Company is subject to litigation and regulatory examinations as well as information gathering requests, inquiries and investigations.

BIOHAVEN LTD.

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Commitments and Contingencies (Continued)

loans in an aggregate principal amount up to $ 750,000 , plus any capitalized interest paid in kind, and was accounted for as third-party, long-term debt by the Former Parent.

The Company was a co-obligor, jointly and severally with the Former Parent on its third-party long-term debt obligation under the Sixth Street Financing Agreement.

The Former Parent’s third-party debt and related interest expense are not reflected in the consolidated financial statements because the Company had not agreed to pay a specified amount of the borrowings on the basis of its arrangement with the Former Parent, nor was the Company expected to pay any portion of the Former Parent’s third-party debt, and the borrowings were not specifically identifiable to the Company.

On October 3, 2022, an affiliate of Pfizer, on behalf of the Former Parent, repaid in full all of the indebtedness and other obligations and liabilities owed by the Former Parent, including prepayment penalties.

In connection with the termination and repayment in full of the indebtedness and other obligations and liabilities under the Sixth Street Financing Agreement, all related liens and security interests granted by or arising under the Sixth Street Financing Agreement were automatically released and discharged.

Legal Proceedings

From time to time, in the ordinary course of business, the Company is subject to litigation and regulatory examinations as well as information gathering requests, inquiries and investigations.

As of December 31, 2022, there were no matters which would have a material impact on the Company’s financial results.

December 31, 2023, there were no matters which would have a material impact on the Company’s financial results.

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As a company incorporated in the British Virgin Islands (“BVI”), the Company is principally subject to taxation in the BVI.

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.

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

The Company, including the Former Parent for periods prior to the Separation, has 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, 2023, 2022 and 2021, and BPI is subject to taxation in the United States.

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At December 31, 2023 and 2022, the Company continued to maintain a full valuation allowance against its net deferred tax assets, which are 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.

The Company recorded an income tax provision during the years ended December 31, 2022, 2021 and 2020 of $ 438 , $ 1,366 and $ 0 respectively, which primarily represents U.S.

Federal and state taxes related to the Company’s profitable operations of BPI in the U.S.

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

The Company recorded an income tax benefit during the year ended December 31, 2023 of $ 1,383 and income tax provisions of $ 438 and $ 1,366 during the years ended December 31, 2022 and 2021, respectively, which primarily represent Federal and state taxes

related to the Company’s profitable operations in the U.S.

Loss before provision for income taxes consisted of the following:

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The provision for income taxes consisted of the following:

BIOHAVEN LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Income Taxes (Continued)

Year Ended December 31,

2023 2022 2021

Current income tax provision:

Current income tax (benefit) provision:

BVI $ — $ — $ —

Foreign ( 1,383 ) 438 1,366

Total current income tax provision 438 1,366 —

Total current income tax (benefit) provision

( 1,383 ) 438 1,366

Deferred income tax provision (benefit):

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Total deferred income tax provision (benefit) — — —

Total provision for income taxes $ 438 $ 1,366 $ —

Total (benefit) provision for income taxes

$ ( 1,383 ) $ 438 $ 1,366

A reconciliation of the BVI statutory income tax rate of 0% to the Company's effective income tax rate is as follows:

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Effective income tax rate ( 0.3 ) % 0.1 % 1.0 %

BIOHAVEN LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Income Taxes (Continued)

The Company's income tax (benefit) provision primarily represents Federal and state taxes related to the profitable operations of its subsidiaries in the United States and Ireland.

The income tax benefit recorded during the year ended December 31, 2023 was primarily attributable to the 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 its foreign parent.

Previously these expenditures were capitalized, as was generally 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 the Company's specific facts, Biohaven deducted these expenditures on its 2022 tax return, substantially reducing its taxable income in the US and capitalized R&D expenditures, resulting in an increase to its federal net operating loss carryforward of $ 598.7 million that can be carried forward indefinitely.

The Company's adoption of the Notice in 2023 also increased its State net operating losses, resulting in the reversal of $ 0.8 million of state income taxes recorded in 2022.

Net deferred tax assets (liabilities) consisted of the following:

2 unchanged sentences

Tax credits 111,660 60,340

Accrued bonus 3,440 —

Non-cash share-based compensation 1,298 18,246

R&D capitalization 887 142,269

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Deferred tax liabilities:

Depreciation ( 648 ) —

Intangible assets and other — ( 5,102 )

( 7,523 ) ( 648 )

Total deferred tax liabilities ( 7,523 ) ( 648 )

Net deferred tax asset (liability) $ — $ —

In January 2021, the Company completed the acquisition of Kleo.

The Company recorded a full valuation allowance against its Kleo deferred tax assets and periodically reviews its position.

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

As of December 31, 2023, and 2022, the Company had foreign net operating loss carryforwards of $ 847,582 and $ 69,214 , respectively.

As of December 31, 2023, and 2022, the Company had federal and state research and development and orphan drug credits of $ 111,660 and $ 60,340 , respectively, which begin to expire in 2039.

BIOHAVEN LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Income Taxes (Continued)

Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2023 and 2022 were due primarily to generation of net operating losses and tax credit carryforwards.

Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2022 and 2021 were due primarily to generation of nondeductible research expenses and tax credit carryforwards.

Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2021 and 2020 were due primarily to the acquisition of Kleo, an increase in the amount of carryforward tax credits for research and development, and an increase in future tax deductions for share awards to employees.

Year Ended December 31,

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and certain state jurisdictions.

state income tax returns are subject to tax examinations for the tax year ended December 31, 2019 and subsequent years.

federal and state income tax returns are subject to tax examinations for the tax year ended December 31, 2019 and

BIOHAVEN LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Income Taxes (Continued)

subsequent years.

The federal tax return for BPI is currently under audit by the IRS for the period ended December 31, 2019.

8 unchanged sentences

Amounts received in connection with the Transition Services Agreement are recorded as other income on the consolidated statement of operations, as they are outside of the normal operating business of the Company.

For the year ended December 31, 2022, the Company recorded $ 4,024 in other income reflecting transition services provided to the Former Parent, of which $ 2,748 was included as a receivable in other current assets on the consolidated balance sheet as of December 31, 2022.

For the year ended December 31, 2023, the Company recorded $ 9,250 in other income (expense), net on the consolidated statements of operations reflecting transition services provided to the Former Parent, of which $ 396 was included as a receivable in other current assets on the consolidated balance sheet as of December 31, 2023.

For the year ended December 31, 2022, the Company recorded $ 4,024 in other income (expense), net on the consolidated statements of operations reflecting transition services provided to the Former Parent, of which $ 2,748 was included as a receivable in other current assets on the consolidated balance sheet as of December 31, 2022.

United States Distribution Services Agreement.

The Company entered into a United States Distribution Services Agreement with the Former Parent, pursuant to which the Company shall continue to serve as the Former Parent’s distributor and agent for the distribution of the pharmaceutical product Nurtec ODT in the United States for a limited period of time following the Spin-Off.

Under the Distribution Services

BIOHAVEN LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Related Party Transactions (Continued)

Agreement, the Former Parent and Pfizer Inc.

The Company entered into a United States Distribution Services Agreement with the Former Parent, pursuant

to which the Company shall continue to serve as the Former Parent’s distributor and agent for the distribution of the pharmaceutical product Nurtec ODT in the United States for a limited period of time following the Spin-Off.

Under the Distribution Services Agreement, the Former Parent and Pfizer Inc.

have agreed to indemnify the Company for, among other things, losses resulting from the conduct of the distribution business or actions taken at the direction of the Former Parent.

As the Company is acting as an agent of the Former Parent for services performed under the Distribution Services Agreement, no amounts for revenues or expenses relating to the services performed thereunder are included on the Company's consolidated financial statements.

As of December 31, 2022, the Company recorded restricted cash held on behalf of Former Parent of $ 35,212 and Due to Former Parent of $ 35,212 on the consolidated balance sheet primarily relating to cash held in connection with the execution of the Distribution Services Agreement which is legally payable to the Former Parent.

As the Company was acting as an agent of the Former Parent for services performed under the Distribution Services Agreement, no amounts for revenues or expenses relating to the services performed thereunder were included on the Company's consolidated financial statements.

The Company did not hold any restricted cash on behalf of the Former Parent as of December 31, 2023.

Outsourcing & Employee Transfer Agreements.

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Relationship with the Former Parent prior to the Separation

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 $ 257,799 as of October 3, 2022.

Prior to the Separation, the Company did not historically operate as a standalone business and the consolidated financial statements are derived from the consolidated financial statements and accounting

records of the Former Parent.

Pursuant to the Distribution Agreement, immediately prior to the Separation the Former Parent made a cash contribution to the Company which

BIOHAVEN LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Related Party Transactions (Continued)

resulted in a cash balance of approximately $ 257,799 as of October 3, 2022.

The following disclosure summarizes activity between the Company and the Former Parent prior to the Separation, including the affiliates of the Former Parent that were not part of the Spin-Off.

4 unchanged sentences

Year Ended December 31,

2022 2021 2020

Research and development $ 146,521 $ 70,929

5 unchanged sentences

Non-Cash Share-Based Compensation

As discussed in Note 9, "Non-Cash Share-Based Compensation", prior to the Separation, Biohaven employees participated in the Former Parent’s non-cash share-based compensation plans, the costs of which, including those related to the Acceleration, have been allocated to the Company and recorded in research and development and general and administrative expenses

As discussed in Note 9, "Non-Cash Share-Based Compensation," prior to the Separation, Biohaven employees participated in the Former Parent’s non-cash share-based compensation plans, the costs of which, including those related to the Acceleration, have been allocated to the Company and recorded in research and development and general and administrative expenses in the consolidated statements of operations for periods prior to the Separation.

BIOHAVEN LTD.

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Related Party Transactions (Continued)

in the consolidated statements of operations for periods prior to the Separation.

Net Transfers From Former Parent

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(1) The amounts for the year ended December 31, 2022 represent activity through the date of Separation.

(2) Refer to Note 1 for further details on separation related adjustments.

(2) Refer to Note 1, "Nature of the Business and Basis of Presentation," for further details on separation related adjustments.

Related Party Agreements

License Agreement with Yale

On September 30, 2013, the Company entered into the Yale Agreement with Yale (see Note 11 for details).

License Agreements with Yale

On September 30, 2013, the Company entered into the Yale Agreement with Yale (see Note 11, "License Agreements," for details).

The Company’s Chief Executive Officer is one of the inventors of the patents that the Company has licensed from Yale and, as such, is entitled to a specified share of the glutamate product-related royalty revenues that may be received by Yale under the Yale Agreement.

In January 2021, the Company entered into the Yale MoDE Agreement with Yale (see Note 11 for details).

In January 2021, the Company entered into the Yale MoDE Agreement with Yale (see Note 11, "License Agreements," for details).

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

As part of consideration for this license, the Company paid Yale University an upfront cash payment of $ 1,000 and 11,668 common shares of the Former Parent valued at approximately $ 1,000 .

For the years ended December 31, 2022, 2021 and 2020, the Company recorded $ 3,420 , $ 458 and $ 138 , respectively, in research and development expense related to the Yale MoDE Agreement and Yale Agreement (the "Yale Agreements").

As of December 31,

2022, the Company did not owe any amounts to Yale, which is related to the Yale MoDE SRA.

Subsequent Events

Agreement with Hangzhou Highlightll Pharmaceutical Co.

In March 2023, the Company and Hangzhou Highlightll Pharmaceutical Co.

("Highlightll") entered into an exclusive, worldwide (excluding People’s Republic of China and its territories and possessions) license agreement (the "Highlightll Agreement") whereby Biohaven 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, the Company is 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.

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share amounts)

Subsequent Events (Continued)

and commercial milestones for a second indication, and up to $ 650,000 upon the achievement of specified sales-based milestones.

Additionally, the Company has agreed to make tiered royalty payments as a percentage of net sales starting at mid single digits and peaking at low teens digits.

During the royalty term, if the Company offers to include China clinical sites in its Phase 3 study sufficient for submission to Chinese National Medical Products Administration ("NMPA") and Highlightll, at its sole discretion, agrees, then Highlightll will pay royalties in the low tens digits to the Company on China sales upon approval.

The Highlightll Agreement terminates on a country-by-country basis upon expiration of the royalty term and can also be terminated if certain events occur, e.g., material breach or insolvency.

Under the Yale MoDE Agreement, the Company entered into the Yale MoDE SRA (see Note 11, "License Agreements," for details), which included funding of up to $ 4,000 over the life of the agreement.

In May 2023, the Company entered into an additional sponsored research agreement with Yale University (the "2023 Yale SRA"), which includes funding of up to $ 612 over the life of the agreement.

For the years ended December 31, 2023, 2022 and 2021, the Company recorded $ 2,942 , $ 3,420 and $ 458 , respectively, in research and development expense, including certain administrative expenses, related to the Yale MoDE Agreement and the Yale MoDE SRA, the Yale Agreement, and the 2023 Yale SRA (the "Yale Agreements").

As of December 31, 2023, the Company did not owe any amounts to Yale.

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 9A. Controls and Procedures