What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-03 compared with 2024-02-29 · 125 added, 100 removed, 216 unchanged (51% of the section changed)

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

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

Prior to the Separation, the historical combined financial statements of the Company were prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of the Former Parent.

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

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

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

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

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

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

Agreements with the Former Parent

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For additional information regarding these agreements, see Note 13, "Related Party Transactions," of the Notes to the Consolidated Financial Statements appearing elsewhere in this Annual Report on Form 10-K.

Recent Developments

The following is a summary of key developments affecting our business in 2024 (excluding updates to our programs, which are discussed in "Item 1.

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

Amendment to Knopp Purchase Agreement

In May 2024, we entered into an amendment to the Purchase Agreement with Knopp (the “Knopp Amendment”).

Under the Knopp Amendment, the parties thereto agreed to replace the scaled high single digit to low teens royalty payment obligations with a flat royalty payment in the mid-single digits for BHV-7000 and the pipeline programs.

The parties also agreed to reduce the success-based payments payable under the Purchase Agreement by removing all commercial sales-based milestones, which were up to $562.5 million, and reducing the developmental and regulatory milestones, which were up to $575 million, to up to $210 million based on regulatory approvals in the United States and EMEA for BHV-7000 ($25 million of which has already been paid) and up to an additional $60 million based on regulatory approval in the United States for the other Kv7 pipeline programs.

We retain the ability to pay these contingent milestone payments in cash or in Biohaven Shares at our election.

In consideration of the revisions to the success-based payment and royalty payment obligations, we agreed to issue to Knopp 1,872,874 Biohaven Shares, valued at approximately $75 million, through a private placement within 60 days of the date of execution of the Knopp Amendment (the “2024 Additional Consideration”) and additional Biohaven Shares with an approximate value of $75 million within 60 days of the first anniversary of execution of the Knopp Amendment (the “2025 Additional Consideration”).

We also gave Knopp the option to request a one-time cash true-up payment from us in December 2024 in the event that Knopp continued to hold the Biohaven Shares representing the 2024 Additional Consideration and the value of such shares has declined, and a one-time cash true-up payment from us in December 2025 in the event that Knopp continues to hold the Biohaven Shares representing the 2025 Additional Consideration and the value of such shares has declined, in each case, subject to certain conditions.

In May 2024, we issued the 2024 Additional Consideration at an approximate value of $66.0 million and the December 2024 cash true-up payment right subsequently expired.

As further consideration for the revisions to the success-based payment and royalty payment obligations in the Knopp Amendment, we issued to Knopp a warrant (the “Warrant”) to purchase 294,195 Biohaven Shares at a purchase price per share of $67.98, subject to certain specified development milestones and the Company achieving a specified market capitalization.

For further discussion of the Knopp Amendment, refer to Note 4, "Fair Value of Financial Assets and Liabilities", Note 6, "Shareholders' Equity, " and Note 10, " License, Acquisitions and Other Agreements" to the accompanying consolidated financial statements included in this Form 10-K.

Components of Our Results of Operations

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We anticipate that our general and administrative expenses, including payroll and related expenses, will remain significant in the future as we continue to support our research and development activities and prepare for potential commercialization of our product candidates, if successfully developed and approved.

We also anticipate increased expenses associated with general operations, including costs related to accounting and legal services, director and officer insurance premiums, facilities and other corporate infrastructure, office-related costs, such as information technology costs, and certain costs to establish ourself as a standalone public company, as well as ongoing additional costs associated with operating as an independent, publicly traded company.

We also anticipate increased expenses associated with general operations, including costs related to accounting and legal services, director and officer insurance premiums, facilities and other corporate infrastructure, and office-related costs, such as information technology costs, and certain costs to establish ourself as a standalone public company, as well as ongoing additional costs associated with operating as an independent, publicly traded company.

Other Income (Expense)

Other Income (Expense), Net

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

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

Other income (expense), net during the year ended December 31, 2024 primarily consists of changes in the fair value of our forward contract and derivative liabilities and net investment income.

The fair value of the forward contracts and derivative liabilities recognized in connection with the Knopp Amendment are determined using a Monte Carlo simulation of the Company's stock price over the respective duration and terms of each instrument being valued.

Refer to Note 4, "Fair Value of Financial Assets and Liabilities" to the accompanying consolidated financial statements included in this Form 10-K for detail on valuation inputs and methodology.

The fair value of these liabilities are recorded on the consolidated balanced sheets with changes in fair value recorded in other income (expense), net in the consolidated statements of operations.

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

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

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

Provision for Income Taxes

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

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

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

Refer to Note 13, "Related Party Transactions," for further discussions of agreements entered into with the Former Parent.

Provision (Benefit) for Income Taxes

As a company incorporated in the BVI, we are principally subject to taxation in the BVI.

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

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

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

As a result of providing services under this agreement, BPI was profitable during the years ended December 31, 2024, 2023, and 2022.

A similar arrangement is also in place for our subsidiary, Biohaven Biosciences Ireland Limited ("BBIL").

Both Companies are subject to taxation in the United States and Ireland, respectively.

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

At December 31, 2024 and 2023, we continued to maintain a full valuation allowance against our net deferred tax assets, comprised primarily of research and development tax credit carryforwards, and net operating loss carryforwards, based on management’s assessment that it is more likely than not that the deferred tax assets will not be realized.

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

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

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

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

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

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

Our income tax provision (benefit) primarily relates to the profitable operations of our subsidiaries in the United States and Ireland.

Results of Operations

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Loss from operations (885,111) (436,051) (449,060)

Other income (expense):

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

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

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

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

Other income, net:

Other income, net

39,424 26,500 12,924

Total other income, net

39,424 26,500 12,924

Loss before provision (benefit) for income taxes (845,687) (409,551) (436,136)

Provision (benefit) for income taxes 735 (1,383) 2,118

Net loss $ (846,422) $ (408,168) $ (438,254)

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Direct research and development expenses by program:

BHV-7000 & BHV-7010

BHV-4157 (Troriluzole)

$ 63,983 $ 73,080 $ (9,097)

BHV-2000 (Taldefgrobep Alfa)

59,710 40,870 18,840

BHV-7000 & BHV-7010 (Kv7)

136,422 47,327 89,095

BHV-2100 (TRPM3)

29,044 12,865 16,179

Troriluzole 73,080 58,769 14,311

BHV-8000 (TYK2/JAK1)

12,697 39,025 * (26,328)

BHV-1300 (IgG Degrader)

30,078 22,239 7,839

BHV-1310 (IgG Degrader)

13,341 1,962 11,379

BHV-1200 (COVID 19)

BHV-1400 (IgA Degrader)

19,572 1,810 17,762

BHV-1600 (β1-AR AAB Degrader)

14,650 254 14,396

BHV-1510 (Trop2)

28,540 — 28,540

BHV-1530 (FGFR3)

14,554 — 14,554

Knopp amendment expense

171,850 — 171,850

Other programs 2,821 5,615 (2,794)

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R&D expenses, including non-cash share-based compensation costs, were $795.9 million for the year ended December 31, 2024, compared to $373.3 million for the year ended December 31, 2023.

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

compared to 2022.

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

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

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

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

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

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

The increase of $422.6 million was largely due to non-cash expense of $171.9 million paid to Knopp for a milestone and royalty buyback related to the BHV-7000 and broader Kv7 platform that was recognized during the three months ended June 30, 2024 (the buyback reduced our potential future milestone payments by $867.5 million, and replaced the scaled high single digit to low teens royalty payment obligations with a flat royalty payment in the mid-single digits for the Kv7 programs).

See further discussion of the Knopp Amendment included in Note 10, "License, Acquisitions and Other Agreements" to the

consolidated financial statements included in this Form 10-K.

The increase in expense was also related to advancing our clinical platforms including four phase 3 starts and one phase 2 start for BHV-7000, follow-on Kv7 assets, preclinical research programs, and increases in direct program spend for additional and advancing multiple clinical development programs in 2024, as compared to the same period in the prior year.

The increase was also due to a $40.2 million increase in personnel costs, primarily due to increased non-cash share based compensation expense and increased headcount to support our expanding clinical and preclinical research programs.

The $28.5 million increase in expense for BHV-1510 was primarily due to the Pyramid Acquisition, which resulted in $10.9 million non-cash of expense recorded to R&D during the year ended December 31, 2024, a $1.5 million milestone payment which became due during the first quarter of 2024, and a $5.7 million non-cash milestone payment which became due during the first quarter of 2024.

The $14.6 million increase in BHV-1530 was related to an upfront cash payment of $6.0 million and non-cash issuance of common shares valued at $8.6 million issuable to GeneQuantum and Aimed Bio for a development and license agreement entered into in the fourth quarter of 2024.

These increases were partially offset by a decrease of $26.3 million related to BHV-8000, primarily due to one-time expenses of $31.8 million to acquire rights related to our Highlightll Agreement incurred during the year ended December 31, 2023.

Refer to Note 10, "License, Acquisitions and Other Agreements" to the consolidated financial statements included in this Form 10-K for further discussion of the Highlightll Agreement.

Non-cash share-based compensation expense was $42.6 million for the year ended December 31, 2024, an increase of $26.6 million as compared to the same period in 2023.

Non-cash share-based compensation expense was higher in the year ended December 31, 2024 primarily due to our annual equity incentive awards granted in the fourth quarter of 2023 and first quarter of 2024.

General and Administrative Expenses

G&A expenses, including non-cash share-based compensation costs, were $89.2 million for the year ended December 31, 2024, compared to $62.8 million for the year ended December 31, 2023.

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

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

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

The increase of $26.5 million was primarily due to increased non-cash share-based compensation costs and increased legal costs.

Non-cash share-based compensation expense was $29.4 million for the year ended December 31, 2024, an increase of $16.6 million as compared to the same period in 2023.

Non-cash share-based compensation expense was higher in 2024 primarily due to our annual equity incentive awards being partially granted in the fourth quarter of 2023 with a greater portion granted in the first quarter of 2024, partially offset by the subsequent year annual equity incentive awards being granted in the first quarter of 2025 and no partial grants from such annual equity incentive awards in the fourth quarter of 2024.

Other Income (Expense), Net

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

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

(Benefit) Provision for Income Taxes

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

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

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

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

Other income (expense), net was other income of $39.4 million for the year ended December 31, 2024, compared to other income, net of $26.5 million for the year ended December 31, 2023.

The increase of $12.9 million in other income (expense), net was primarily related to non-cash changes in the fair value of our forward contract and derivative liabilities recorded in connection with the Knopp Amendment of $17.8 million as well as increased investment income.

The increases were partially offset by a decrease of $9.2 million in other income recognized during the year ended December 31, 2024 as compared to the same period in 2023 related to the Transition Services Agreement entered into with the Former Parent.

See Note 4, "Fair Value of Financial Assets and Liabilities" and Note 10, "License, Acquisitions and Other Agreements " to the accompanying consolidated financial statements included in this Form 10-K for discussion of the forward contract and derivative liabilities recorded in connection with the Knopp Amendment.

Provision (Benefit) for Income Taxes

We recorded a provision for income taxes of $0.7 million for the year ended December 31, 2024, compared to a benefit for income taxes of $1.4 million for the year ended December 31, 2023.

The change in income tax expense for the for the year ended December 31, 2024 as compared to 2023 was primarily attributable to our adoption of the guidance contained in a Notice of Proposed Rule Making issued during the third quarter of 2023 by the United States Internal Revenue Service ("the Notice").

Liquidity and Capital Resources

Since our inception as a business of the Former Parent, we have not generated any revenue and have incurred significant operating losses and negative cash flows from operations.

Since our inception, we have not generated any revenue and have incurred significant operating losses and negative cash flows from operations.

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

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

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

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

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

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

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

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

Through March 3, 2025, we have funded our operations primarily with funding from the Former Parent, proceeds from the sale of its common shares, and the cash contribution received from the Former Parent at the Separation.

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

As of December 31, 2024, we had cash and cash equivalents of $99.1 million and marketable securities of $386.9 million.

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Net cash used in operating activities $ (582,453) $ (331,725)

Net cash provided by (used in) investing activities

Net cash (used in) provided by investing activities

(244,974) 129,830

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Effect of exchange rate changes on cash and cash equivalents and restricted cash 75 (497)

Net increase (decrease) in cash, cash equivalents and restricted cash $ 9,516 $ 165,547 $ (6,449)

Net (decrease) increase in cash, cash equivalents and restricted cash

$ (149,578) $ 9,516

Operating Activities

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

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

Net cash used in operating activities was $582.5 million in 2024 and $331.7 million in 2023.

The $250.7 million increase in net cash used in operating activities in 2024 was driven primarily by an increase in R&D spending to advance our clinical platforms including four Phase 3 starts and one Phase 2 start for BHV-7000, follow-on Kv7 assets, preclinical research programs, and increases in direct program spend for additional and advancing multiple clinical development programs in 2024, as compared to the prior year.

The increase in net cash used in operating activities in 2024 was also due to an increase in personnel costs primarily due to increased headcount to support our expanding clinical and preclinical research programs and an increase in legal costs.

The increases in costs were partially offset by an increase in investment income.

Investing Activities

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

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

Net cash used in investing activities was $245.0 million in 2024, and net cash provided by investing activities was $129.8 million in 2023.

The $374.8 million increase in net cash used in investing activities in 2024 was driven primarily by an increase in purchases of marketable securities with cash in excess of immediate requirements, partially offset by an increase in maturities of marketable securities (see Note 3, "Marketable Securities," to the Consolidated Financial Statements), as compared to the prior year.

Financing Activities

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

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

October 2023 Public Offering

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

public of $22.00 per share.

Net cash provided by financing activities was $677.8 million in 2024 and $211.9 million in 2023.

The $465.9 million increase in net cash provided by financing activities in 2024 was driven primarily by an increase in proceeds from the issuance of common shares from our April 2024 and October 2024 public equity offerings and at-the-market sales of common shares in connection with our Equity Distribution Agreement in 2024, as compared to the prior year.

2024 Public Offerings

On April 22, 2024, we closed an underwritten public offering of 6,451,220 of our common shares, which included the exercise in full of the underwriters' option to purchase additional shares, at the price of $41.00 per share.

The net proceeds raised in the offering, after deducting underwriting discounts and expenses of the offering payable by us, were approximately $247.8 million.

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

We intend to use the net proceeds received from the offering for general corporate purposes.

On October 2, 2024, we closed an underwritten public offering of 6,052,631 of our common shares, which included the exercise in full of the underwriters' option to purchase additional shares, at a price of $47.50 per share.

The net proceeds raised in the offering, after deducting underwriting discounts and expenses of the offering payable by us, were approximately $269.9 million.

We intend to use the net proceeds received from the offering for general corporate purposes.

Equity Distribution Agreement

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

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

October 2022 Public Offering

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

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

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

In August 2024, we entered into an Amendment to the Equity Distribution Agreement pursuant to which we may offer and sell common shares having an aggregate offering price of up to $450.0 million from time to time through or to the sales agent, acting as its agent or principal.

As of December 31, 2024, we sold and issued 4,248,588 common shares under the Equity Distribution Agreement, as amended, for total net proceeds of approximately $146.3 million.

As of December 31, 2024, additional common shares having an aggregate offering price of up to $300.0 million remain available to be issued.

Knopp Amendment

In May 2024, we entered into the Knopp Amendment which reduced our milestone payments by $867.5 million and replaced the high single digit to low teens royalty payment obligations with a flat royalty payment in the mid-single digits for our Kv7 programs.

As consideration, we agreed to issue to Knopp the 2024 Additional Consideration and 2025 Additional Consideration, both non-cash common share payments, as well as agreed to one-time cash true-ups for both the 2024 Additional Consideration and 2025 Additional Consideration.

On May 30, 2024, we issued 1,872,874 common shares valued at $66.0 million to Knopp to settle the forward contract liability related to the 2024 Additional Consideration and recognized a non-cash gain of $9.2 million on settlement.

In addition, the 2024 Additional Consideration True-up was considered settled as of December 2024, with no cash payment due upon expiration.

The Company recognized a gain related to the 2024 Additional Consideration True-Up of $15.5 million.

We expect to issue the common shares representing the 2025 Additional Consideration on or before June 30, 2025, in accordance with the Knopp amendment.

In the event that Knopp continues to hold the shares of our common shares representing the 2025 Additional Consideration on December 1, 2025 and the Market Price declines relative to the respective Reference Price, both as defined in the agreement, we would be responsible for a cash payment equal to the difference.

Knopp Warrant

As further consideration for the revisions to the success-based payment and royalty payment obligations in the Knopp Amendment, we issued to Knopp a warrant to purchase 294,195 of our common shares with a purchase price of $67.98, subject to certain specified development milestones and the Company achieving a specified market capitalization.

As of December 31, 2024, the vesting conditions have not been met and the warrant is still outstanding.

2023 Public Offering

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.

The net proceeds raised in the offering, after deducting underwriting discounts and expenses of the offering payable by the Company, were approximately $242.4 million, which are being used for general corporate purposes.

Funding Requirements

We expect our expenses to increase in connection with our ongoing activities, particularly as we advance and expand preclinical activities, clinical trials and

potential commercialization of our product candidates.

We expect our expenses to increase in connection with our ongoing activities, particularly as we advance and expand preclinical activities, clinical trials and potential commercialization of our product candidates.

Our costs will also increase as we:

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

• incur additional legal, accounting and other expenses in operating as a public company.

We expect that our cash, cash equivalents and marketable securities, as of the date of this Annual Report on Form 10-K, will be sufficient to fund our current forecast for operating expenses, financial commitments and other cash requirements for more than one year.

We expect we will need to raise additional capital until we are profitable.

If no additional capital is raised through either public or private equity financings, debt financings, strategic relationships, alliances and licensing agreements, or a combination thereof, we may delay, limit or reduce discretionary spending in areas related to research and development activities and other general and administrative expenses in order to fund our operating costs and working capital needs.

We expect that our cash, cash equivalents and marketable securities, as of the date of this Annual Report on Form 10-K, will be sufficient to fund operating and financial commitments, and other cash requirements for at least one year after the issuance date of these financial statements.To execute our business plans, we will require funding to support our continuing operations and pursue our growth strategy.

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

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

The terms of any financing may adversely affect the holdings or the rights of our shareholders.

If we are unable to obtain funding, we could be forced to delay, reduce or eliminate some or all of our research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect our business prospects, or we may be unable to continue operations.

We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

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

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

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

If we receive regulatory approval for our product candidates, we expect to incur commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize or whether we commercialize jointly or on our own.

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

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

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

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our existing shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing shareholders.

Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

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

Contractual Obligations and Commitments

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For obligations with cancellation provisions, the amounts included in the preceding table are limited to the non-cancelable portion of the agreement terms or the minimum cancellation fee.

In addition to the amounts above, 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.

In addition to the amounts above, as of December 31, 2024, the Company had remaining maximum research commitments of approximately $1,750, 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.

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

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We do not anticipate making material annual license maintenance payments related to our license agreements in the next 12 months.

For additional details on contingent milestone and royalty payments, see Note 10, "License, Acquisitions and Other Agreements ", to the Consolidated Financial Statements.

Critical Accounting Policies and Significant Judgments and Estimates

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We make estimates of our accrued expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known to us at that time.

We periodically confirm the accuracy of these estimates with the service providers and make adjustments if necessary.

We periodically confirm the accuracy of these estimates with the service

providers and make adjustments if necessary.

Examples of estimated accrued research and development expenses include fees paid to:

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

Cost Allocations

Prior to the distribution on October 3, 2022, we have historically operated as part of the Former Parent and not as separate, publicly traded company.

Accordingly, for periods prior to the distribution, certain shared costs and non-cash share-based compensation expenses have been allocated to us and are reflected as expenses in the accompanying consolidated statement of operations.

Management considers the expense methodology and resulting allocation to be reasonable for all periods presented;

however, the allocations may not be indicative of actual expenses that would have been incurred had we operated as an independent, publicly traded company for the periods presented.

Actual costs that we may have incurred had we been a stand-alone company would depend on a number of factors, including the 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.

Valuation of Forward Contract and Derivative Liabilities

We have accounted for certain consideration agreed to in connection with the Knopp Amendment as forward contracts and derivative liabilities.

The fair value of these liabilities have been determined based on Monte Carlo simulations of Biohaven's share price, which requires judgment and assumptions on the volatility of our share price, discounted to present value using a risk-free rate plus Biohaven specific credit risk as they are payable in either cash or a variable number of shares.

Our expectations of the volatility of Biohaven's share price at the reporting date could be materially different than our actual future volatility, and if so, would mean the estimated fair value could be significantly higher or lower than the fair value determined.

Recently Issued Accounting Pronouncements

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

Emerging Growth Company Status

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

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

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

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

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

Smaller Reporting Company Status

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

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

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

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

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

What changed 10-K

Item 7. Management’s Discussion and Analysis