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Item 1A. Risk Factors

2026-03-02 compared with 2025-03-03 · 106 added, 76 removed, 1075 unchanged (14% of the section changed)

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• Credit risk with respect to our investments or the financial institutions at which we deposit funds could adversely affect us.

• The terms of the Note Purchase Agreement (as defined below) and our level of indebtedness could adversely affect our business and financial condition and limit our ability to plan or, or respond to, changes in our business.

Risks Related to the Development of Our Product Candidates

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Any of the foregoing could adversely impact, possibly materially, our business and operations.

The terms of the Note Purchase Agreement (as defined below) and our level of indebtedness could adversely affect our business and financial condition and limit our ability to plan for, or respond to, changes in our business.

On April 28, 2025, we and our subsidiaries, including Biohaven Therapeutics Ltd.

(the “Issuer”), entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with the purchasers party thereto (the “Purchasers”) and Beetlejuice SA LLC, an affiliate of Oberland Capital Management LLC, as purchaser agent.

Pursuant to the Note Purchase Agreement, the Purchasers purchased senior secured notes from the Issuer in an initial tranche for an aggregate purchase price of $250.0 million.

In addition, the Purchasers may purchase additional senior secured notes from the Issuer in a second tranche in up to three purchases on or before June 30, 2026 for an aggregate purchase price of $150.0 million, subject to the satisfaction of certain conditions, including the receipt of approval from the FDA for troriluzole.

The Purchasers may also purchase, at the Issuer’s option and subject to the approval of each Purchaser agreeing to participate therein, in its sole discretion, additional notes from the Issuer in up to four purchases for an aggregate purchase price of $200.0 million.

In addition to the approximately $250.0 million of indebtedness that we have incurred under the Note Purchase Agreement, we may incur a significant amount of additional indebtedness under the Note Purchase Agreement, which could adversely affect our business.

As consideration under the Note Purchase Agreement, the Purchasers have the right to receive payments from us equal to, initially, 6.25% of the global net sales of troriluzole, subject to increase or decrease, following December 31, 2030, depending on whether the aggregate payments made to the Purchasers as of that date equal or exceed the Total Funded Amount (as defined in the Note Purchase Agreement).

We are also obligated to pay to the Purchasers a milestone payment equal to 35% of the Funded Amount (as defined in the Note Purchase Agreement) upon the approval by the FDA or EMA of troriluzole or our other products.

In addition, if the aggregate payments to the Purchasers as of December 31, 2030 do not equal or exceed the amount of the Total Funded Amount, then we will be obligated to make a one-time payment to the Purchasers in an amount equal to 100% of the Total Funded Amount as of December 31, 2030, less the aggregate amount of our previous payments, excluding any Milestone Payments made for approvals of product candidates other than troriluzole, to the Purchasers as of December 31, 2030.

See Note 6, “Notes Payable,” to the accompanying consolidated financial statements included in this Form 10-K for more information about the Note Purchase Agreement.

Our level of indebtedness could affect our business in the following ways, among other things:

• make it more difficult for us to satisfy our contractual and commercial commitments;

• require us to use a substantial portion of our cash flow from operations to make payments under the Note Purchase Agreement, which would reduce funds available for working capital, capital expenditures and other general corporate purposes;

• limit our ability to complete acquisitions and limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions and other investments or general corporate purposes;

• heighten our vulnerability to economic downturns or downturns in our business or our industry;

• place us at a disadvantage compared to those of our competitors that may have proportionately less indebtedness;

• limit management’s discretion in operating our business;

• limit our flexibility in planning for, or reacting to, changes in our business, the industry in which we operate or the general economy.

The Note Purchase Agreement could have important negative consequences to holders of our common shares.

To secure our obligations under the Note Purchase Agreement, we and certain of our subsidiaries have granted the Purchaser Agent, for the benefit of the Purchasers, a security interest in our cash and equity interests and in specific assets related to troriluzole.

Failure to pay amounts owed to the Purchasers when due would result in a default under the Note Purchase Agreement and could result in foreclosure on all or substantially all of those assets, which would have a material adverse effect on our business and results of operations.

In addition, payment requirements under the Note Purchase Agreement will increase our cash outflows.

Our business may not generate cash flows from operations in the future that are sufficient to service our indebtedness, pay the revenue interest liability, make necessary capital expenditures and support our growth strategies.

If we are unable to generate such cash flows, we may be required to pursue one or more alternatives, such as obtaining additional equity capital on terms that may be onerous or highly dilutive, selling assets or restructuring our indebtedness.

We may have to relinquish valuable rights to troriluzole, our intellectual property or future revenue streams, or grant licenses on terms that are not favorable to us.

In addition, an increase in the royalty rate on global net sales of troriluzole under the Note Purchase Agreement could result in

additional payments by us to the Purchasers and, as a result, harm our cash flows, financial condition and results of operations.

Our ability to refinance our indebtedness will depend on the capital and credit markets and our financial condition at such time.

If prevailing interest rates or other factors at the time of refinancing result in higher interest rates upon refinancing, then the expense relating to the refinancing would increase.

Any of the foregoing risks could materially adversely affect our financial condition, cash flows and results of operations.

The Note Purchase Agreement contains affirmative and negative covenants and events of default, which may prevent us from capitalizing on business opportunities and taking certain corporate actions, and includes a Put Option (as defined below) in favor of the Purchasers, which could have a material adverse effect on our business, financial condition and results of operations.

The Note Purchase Agreement contains affirmative and negative covenants and events of default, including covenants and restrictions that, among other things, restrict our ability to incur indebtedness, grant liens, merge or consolidate, dispose of assets, make investments, make acquisitions, enter into certain transactions with affiliates, pay dividends or make distributions, repurchase stock and enter into restrictive agreements, in each case, subject to certain exceptions set forth in the Note Purchase Agreement.

For example, the Note Purchase Agreement includes a financial statement delivery covenant and in the event that our audited financial statements, are subject to any qualification, emphasis of matter or statement as to “going concern” or scope of audit, subject to certain exceptions, we would be in breach of our financial statement delivery covenant.

Additionally, the Purchasers have an option (the “Put Option”) to terminate the Note Purchase Agreement and to require us to repurchase the Notes upon enumerated events such as payment defaults, covenant defaults, material breaches of representations and warranties, cross defaults to material debt, bankruptcy and insolvency defaults, material judgment defaults, a key man event or a change of control.

The Purchasers’ right to repayment under the Note Purchase Agreement is senior to the rights of the holders of our common shares.

If the Purchasers were to exercise the Put Option or otherwise declare an event of default under the Note Purchase Agreement, that could significantly harm our business, financial condition and results of operations and could cause the price of our common shares to decline.

Risks Related to the Development of Our Product Candidates

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We expect that a substantial portion of our efforts and expenses over the next few years will be devoted to the development of our product candidates;

specifically, completion of our Phase 3 clinical trials of troriluzole in OCD, completion of clinical trials for BHV-7000, including Phase 2/3 studies in epilepsy and a Phase 2 study in MDD, completion of a Phase 2/3 clinical trial of troriluzole in glioblastoma, execution of a Phase 2 clinical trial for BHV-2000 in metabolic disorders, completion of Phase 2 studies for BHV-2100 in pain and migraine, initiation of a Phase 2/3 clinical trial for BHV-8000 in Parkinson's Disease, completion of Phase 1 clinical trials for BHV-1300, BHV-1400, BHV-1600, BHV-1510, and initiation of Phase 1 clinical trials for BHV-1310 and BHV-1530.

specifically, completion of our Phase 2/3 studies for opakalim in epilepsy, completion of our Phase 2 clinical trial for BHV-2000 in metabolic disorders, and completion of our Phase 1 clinical trials for BHV-1300 and BHV-1400.

As a result, our business currently depends heavily on the successful development, regulatory approval and, if approved, commercialization of these product candidates.

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Clinical testing is expensive and can take many years to complete, and delay or failure can occur at any time during the clinical trial process.

For example, in September 2021, we reported negative topline results from our Phase 3 clinical trial evaluating verdiperstat compared to placebo for the treatment of participants with MSA.

In September 2022, we reported negative

topline results from the Phase 2/3 HEALEY ALS Platform trial evaluating verdiperstat compared to placebo for the treatment of participants with ALS.

At this time, we have no plans to continue development of verdiperstat in ALS, and we are evaluating whether or not to pursue any additional clinical trials evaluating verdiperstat in other disease indications.

For example, in March 2025, we reported negative topline results from our Phase 2/3 clinical trial with opakalim for the acute treatment of manic episodes associated with bipolar disorder.

No additional studies in bipolar indications are currently planned.

In addition, the results generated to date in preclinical studies or clinical trials for our product candidates do not ensure that later preclinical studies or clinical trials will demonstrate similar results.

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• changes in regulatory requirements, policies and guidelines;

• delays or failure to reach agreement on acceptable terms with prospective clinical research organization (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly

among different CROs and trial sites;

delays in patient enrollment and variability in the number and types of patients available for clinical trials;

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• the potential for approval policies or regulations of the FDA, EMA, NMPA or the applicable foreign regulatory agencies to significantly change in a manner rendering our clinical data insufficient for approval.

For example, with respect to our randomized, controlled clinical trial of troriluzole for the treatment of SCA, we undertook discussions with the FDA regarding the acceptability of the primary endpoint and necessary secondary endpoints, including our proposal to use a modified SARA scale.

In our first Phase 2/3 clinical trial, the FDA stated that while certain items measured by the SARA scale appeared capable of reflecting a clinically meaningful benefit for patients depending on how the scoring of those items is defined, the use of the SARA scale was not appropriate as a primary endpoint in the trial.

Based on our post-hoc analyses of data from the open-label extension phase of the trial, we proposed modifications to the SARA scale that we believe may address some of these shortcomings.

Based on feedback received from the FDA, we incorporated trial design modifications that include utilization of a modified SARA scale.

However, notwithstanding the feedback that we have received from the FDA, there remains substantial risk that the FDA or any foreign regulatory agency may nevertheless conclude that results obtained using the modified SARA scale would not be an adequate basis for approval.

In addition, in our Phase 3 clinical trial ("Study BHV4157-206") evaluating the efficacy and safety of troriluzole in adult patients with SCA, the primary endpoint, change from baseline to week 48 on the modified SARA scale, did not reach statistical significance in the overall SCA population as there was less than expected disease progression over the course of the study.

Post-hoc analysis of efficacy measures by genotype suggests a treatment effect in patients with the SCA Type 3 ("SCA3") genotype.

There is substantial risk that the FDA, EMA, NMPA or the applicable foreign regulatory agency may disagree with the interpretation of our data, and there can be no assurance that any such regulatory agency will find the data sufficient to support approval, or that we will not be required to conduct additional testing on the safety and efficacy of troriluzole.

For example, in our Phase 3 clinical trial ("Study BHV4157-206") evaluating the efficacy and safety of troriluzole in adult patients with SCA, the primary endpoint, change from baseline to week 48 on the modified SARA scale, did not reach statistical significance in the overall SCA population as there was less than expected disease progression over the course of the study.

Post-hoc analysis of efficacy measures by genotype suggested a treatment effect in patients with the SCA Type 3 ("SCA3") genotype.

In May 2023, we presented further analysis of Study BHV4157-206 by prespecified genotype strata that revealed consistent treatment effects of troriluzole in SCA3, which represented 41% of study participants.

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In July 2023, the FDA informed us that it would not review the recently submitted NDA application for troriluzole given that the study's primary endpoint was not met and thus, would not permit a substantive review.

In September 2024, we announced positive topline results from pivotal Study BHV4157-206-RWE (NCT06529146) demonstrating the efficacy of troriluzole on the mean change from baseline in the f-SARA after 3 years of treatment.

Furthermore, in September 2024, we announced positive topline results from pivotal Study BHV4157-206-RWE (NCT06529146) demonstrating the efficacy of troriluzole on the mean change from baseline in the f-SARA after 3 years of treatment.

Study BHV4157-206-RWE was designed, in discussion with the FDA, to assess the effectiveness of troriluzole in SCA after 3 years of treatment as measured by the change from baseline in the f-SARA.

The study achieved the primary endpoint and showed statistically significant improvements on the f-SARA at years 1 and 2 and 3 and we submitted an NDA to the FDA in the fourth quarter of 2024 for all of SCA.

In October 2023, the EMA informed us that our MAA for troriluzole (Dazluma) in the treatment of SCA has been validated and is now under review by EMA's CHMP.

In the fourth quarter of 2024, we completed a clarification meeting with the CHMP Rapporteurs.

The MAA documents were subsequently updated with a broader indication to include all SCA genotypes, in light of the new positive BHV4157-206-RWE study data.

In November 2025, we received a Complete Response Letter ("CRL") for the NDA seeking approval of troriluzole for SCA.

In the CRL, the FDA recommended that we meet with the Division of Neurology 1 within the FDA's Office of Neuroscience to discuss the evidence that will be needed to support a future NDA for the treatment of SCA with troriluzole.

Following receipt of the CRL, we have requested a Type A meeting with the FDA to initiate an appeal process, given the large number of patients who are currently being treated in the

expanded access program.

We remain committed to working with the FDA to find a path forward for our NDA and plan to meet with the FDA to discuss potential next steps.

We generally plan to seek regulatory approval to commercialize our product candidates in the United States, the EU and other key global markets, which requires compliance with numerous and varying regulatory requirements of such other countries regarding safety, efficacy, chemistry, manufacturing and controls, clinical trials, commercial sales, pricing and distribution of our product candidates.

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If we fail to obtain approval in any jurisdiction, the geographic market for our product candidates could be limited.

price we intend to charge for our products, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate.

Moreover, even if we were to obtain approval to market any product candidate we develop, regulatory authorities may approve any of our product candidates for fewer or more limited indications than we request, may not approve the price we intend to charge for our products, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate.

Any of the foregoing scenarios could materially harm the commercial prospects for our product candidates.

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Clinical trials often fail to demonstrate efficacy or safety of the product candidate studied for the target indication.

For example, in September 2021 we reported negative topline results from a Phase 3 clinical trial to evaluate the efficacy and safety of verdiperstat in participants with MSA.

Results of the trial showed that verdiperstat did not statistically differentiate from placebo on the prespecified primary efficacy measure, nor on the key secondary efficacy measures.

In September 2022, we reported negative topline results from the Phase 2/3 HEALEY ALS Platform trial evaluating verdiperstat compared to placebo for the treatment of participants with ALS.

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

For example, in March 2025, we reported negative topline results from our Phase 2/3 clinical trial with opakalim for the acute treatment of manic episodes associated with bipolar disorder.

No additional studies in bipolar indications are currently planned.

Moreover, undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label, the limitation of commercial potential or the delay or denial of regulatory approval by the FDA or a foreign regulatory agency.

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Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.

Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable products.

Our spending on current and future research and development programs and product candidates for specific indications

may not yield any commercially viable products.

If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.

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We are exposed to potential product liability and professional indemnity risks that are inherent in the research, development, manufacturing, marketing, and use of pharmaceutical products.

The current and future use of product

candidates by us in clinical trials, and the sale of any approved products in the future, may expose us to liability claims.

The current and future use of product candidates by us in clinical trials, and the sale of any approved products in the future, may expose us to liability claims.

These claims might be made by patients that use the product, healthcare providers, pharmaceutical companies, or others selling such products.

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In doing so, we face and will continue to face intense competition from a variety of businesses, including large, fully integrated, well-established pharmaceutical companies who already possess a large share of the market, specialty pharmaceutical and biopharmaceutical companies, academic institutions, government agencies and other private and public research institutions in the United States, the EU and other jurisdictions.

With respect to troriluzole, which we are currently developing for the treatment of ataxias and other neurologic disorders, with SCA as our initial indication, there are currently no approved drug treatments for SCA in the United States.

We are also developing troriluzole for the potential treatment of OCD and other indications.

If we continue to pursue these indications, we would face substantial competition from companies that develop or sell products that treat OCD.

Many of the companies which we are competing with or which we may compete with in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved drugs than we do.

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federal government will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.

Further, there have been several recent U.S.

congressional inquiries and proposed and enacted state and federal legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the costs of drugs under Medicare and reform government program reimbursement methodologies for drug products.

HHS has already started the process of soliciting feedback on some of these measures and, at the same time, is immediately implementing others under its existing authority.

The IRA, enacted in August 2022, among other things directs HHS to negotiate the price of certain single-source drugs and biologics covered under Medicare and imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

These provisions have started to take effect progressively starting in fiscal year 2023, although the Medicare drug price negation program is currently subject to legal challenges.

The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years.

HHS has issued and will continue to issue and update guidance as these programs are implemented.

In January 2025, President Trump revoked several Biden-era executive orders which included efforts to lower the cost of prescription drugs for people on Medicare and Medicaid, increasing protections for Medicaid enrollees and enhancing the Affordable Care Act.

Notably, Biden’s Executive Order 14087, which ordered the testing of three new Medicare and Medicaid pricing negotiation models, was revoked.

It is currently unclear how the IRA will be implemented, but it could have a significant impact on companies in the pharmaceutical industry that are within its scope.

The Company does not currently have any drugs that are impacted by the IRA.

Our products, if they receive regulatory approval, will subject to pressures from pharmaceutical market access and pricing controls in the U.S., the EU and other regions around the world that may result in lower prices and lower reimbursement rates.

Our future revenues and profit margins could be negatively affected as a result of laws and regulations relating to the pricing and reimbursement of pharmaceutical products.

For example, the Inflation Reduction Act of 2022 (the “IRA”) directs (i) the federal government to negotiate prices for select high-cost Medicare Part D (beginning in 2026) and Part B (beginning in 2028) drugs that are more than nine years (for small-molecule drugs) or 13 years (for biologics) from their initial FDA approval, (ii) manufacturers to pay a rebate for Medicare Part B and Part D drugs when prices increase faster than inflation and (iii) the formation of the Part D Manufacturer Program which replaced the Part D CGDP and established a two thousand dollar cap for out-of-pocket costs for Medicare beneficiaries as of January 2025, with manufacturers being responsible for 10% of costs up to the two thousand dollar cap and 20% after that cap is reached.

If any of our products receive FDA approval, it is possible that they could be selected by the U.S.

Department of Health and Human Services (“HHS”) for price negotiation.

In the case of medicines that treat rare diseases, the IRA, as amended by the One Big Beautiful Bill Act (“OBBBA”), excludes from the price negotiation any drug or biologic that is designated for one or more rare diseases or conditions under section 360bb of title 21 of the Federal Food, Drug, and Cosmetic Act and for which the only approved indication (or indications) is for one or more such rare diseases or conditions (“Orphan Drug Exclusion status”).

We will continue to evaluate the impact of the IRA, OBBBA, and HSS actions on our products, including with respect to Orphan Drug Exclusion status, in the U.S.

as well as similar government price erosion mechanisms in Europe, Japan and in other countries that may result in reductions in pharmaceutical product pricing.

At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

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The Chevron doctrine gave deference to regulatory agencies in litigation against the FDA and other agencies.

As a result, more companies may bring lawsuits against the FDA to challenge longstanding decisions and policies of the FDA, which could undermine the FDA’s authority, lead to uncertainties in the industry and disrupt the FDA’s normal operations, which could delay the FDA’s review of our applications.

As a result, more companies may bring lawsuits against the FDA to challenge

longstanding decisions and policies of the FDA, which could undermine the FDA’s authority, lead to uncertainties in the industry and disrupt the FDA’s normal operations, which could delay the FDA’s review of our applications.

In the EU, similar political, economic and regulatory developments may affect our ability to profitably commercialize any of our product candidates, if approved.

In addition to continuing pressure on prices and cost containment measures,

legislative developments at the EU or member state level may result in significant additional requirements or obstacles that may increase our operating costs.

In addition to continuing pressure on prices and cost containment measures, legislative developments at the EU or member state level may result in significant additional requirements or obstacles that may increase our operating costs.

The delivery of healthcare in the EU, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than EU, law and policy.

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• HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”) enacted as part of the American Recovery and Reinvestment Act of 2009, and its implementing regulations, and as amended again by the Modifications to the HIPAA Privacy, Security, Enforcement and Breach Notification Rules Under HITECH and the Genetic Information Nondiscrimination Act;

Other Modifications to the HIPAA Rules, commonly referred

to as the Final HIPAA Omnibus Rule, published in January 2013, which imposes certain obligations, including mandatory contractual terms, on covered entities subject to HIPAA (i.e., health plans, healthcare clearinghouses and certain healthcare providers), as well as their business associates that perform certain services for or on their behalf involving the use or disclosure of individually identifiable health information, to safeguard the privacy, security and transmission of individually identifiable health information from any unauthorized use or disclosure;

Other Modifications to the HIPAA Rules, commonly referred to as the Final HIPAA Omnibus Rule, published in January 2013, which imposes certain obligations, including mandatory contractual terms, on covered entities subject to HIPAA (i.e., health plans, healthcare clearinghouses and certain healthcare providers), as well as their business associates that perform certain services for or on their behalf involving the use or disclosure of individually identifiable health information, to safeguard the privacy, security and transmission of individually identifiable health information from any unauthorized use or disclosure;

• the FDCA, which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices;

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The applicable period is seven years in the United States and ten years in the EU.

The European exclusivity period can be reduced to six years if a drug no longer meets the criteria for orphan drug designation or if the drug is

sufficiently profitable so that market exclusivity is no longer justified.

The European exclusivity period can be reduced to six years if a drug no longer meets the criteria for orphan drug designation or if the drug is sufficiently profitable so that market exclusivity is no longer justified.

Orphan drug exclusivity may be lost if the FDA or the EMA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.

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If a prolonged government shutdown occurs in the future, it could significantly impact the ability of the FDA to timely review and process our submissions.

In addition, FDA-regulated industries, such as ours, face substantial uncertainty in regard to the regulatory environment we will face as we proceed with research and development efforts under the new presidential Administration in the U.S.

For example, recent personnel reduction measures have significantly impacted and could continue to impact the FDA’s ability to hire and retain key personnel, which could result in delays or limitations on our ability to obtain guidance from the FDA on our product candidates in development and obtain the requisite regulatory approvals in the future.

Moreover, the new Administration has proposed action to freeze or reduce the budget of the NIH as relates to its funding for medical research, which could in turn decrease the ability of facilities that rely on NIH funding to enroll and conduct clinical trials or increase the costs to us of conducting clinical trials.

Moreover, during 2025 there was significant disruption and uncertainty in NIH funding and related research support as a result of federal budget proposals and policy changes.

The Administration’s fiscal year 2026 budget request proposed substantial reductions in NIH’s overall funding levels and caps on indirect cost reimbursements that, if implemented, would have markedly reduced the number of new research grants and support for ongoing studies.

Although Congress did not adopt the most severe cuts as proposed, funding uncertainties, pauses in grant awards, and legal challenges to proposed policies contributed to delays and disruptions in NIH grantmaking and research support.

These developments could in turn decrease the ability of facilities that rely on NIH funding to enroll and conduct clinical trials or increase the costs to us of conducting clinical trials.

State governments may attempt to address or react to changes at the federal level with changes to their own regulatory frameworks in a manner that is adverse to our operations.

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As the global regulatory and tax environment evolves, we may be subject to new or different statutory and regulatory requirements.

For example, on January 1, 2019, the Economic Substance (Companies and Limited Partnerships) Act, 2018

of the British Virgin Islands (the “Economic Substance Act”) came into force and was amended on October 1, 2019 and June 29, 2021 and remains subject to further amendments, additional regulations and guidance on interpretation from the regulator.

For example, on January 1, 2019, the Economic Substance (Companies and Limited Partnerships) Act, 2018 of the British Virgin Islands (the “Economic Substance Act”) came into force and was amended on October 1, 2019 and June 29, 2021 and remains subject to further amendments, additional regulations and guidance on interpretation from the regulator.

We strive to conduct our business in a manner that is in compliance with the Economic Substance Act.

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A company seeking to market an innovative pharmaceutical in the U.S.

must submit a complete set of safety and efficacy data to the FDA.

must submit a complete set of safety and efficacy

data to the FDA.

If the innovative pharmaceutical is a chemical product, the company files an NDA.

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The FDA cannot approve an ANDA until after the innovator’s listed patents expire unless there is a successful patent challenge.

However, after the innovator has marketed its product for four years, a generic manufacturer may file an ANDA and allege that one or more of the patents listed in the Orange Book under an

innovator’s NDA is either invalid or not infringed (a Paragraph IV certification).

However, after the innovator has marketed its product for four years, a generic manufacturer may file an ANDA and allege that one or more of the patents listed in the Orange Book under an innovator’s NDA is either invalid or not infringed (a Paragraph IV certification).

The innovator then must decide whether to file a patent infringement suit against the generic manufacturer.

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In certain EU countries, this process can take place simultaneously while the product is marketed but in other EU countries, this process must be completed before the company can market the new product.

The pricing and reimbursement

procedure can take months and sometimes years to complete.

The pricing and reimbursement procedure can take months and sometimes years to complete.

Throughout the EU, all products for which marketing authorizations have been filed are subject to an “8+2+1” regime.

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If we are unable to obtain licenses from third parties on commercially reasonable terms or lose our rights to such licensed intellectual property, or if our rights are determined to be narrower than we understand them to be, we may not be able to continue developing or commercializing our product candidates.

We are a party to a number of license agreements under which we are granted rights to intellectual property that are important to our business, including, for example, an agreement with ALS Biopharma and Fox Chase Chemical Diversity Center, Inc., pursuant to which we were assigned intellectual property rights relating to troriluzole, a license agreement with Yale University, pursuant to which we were granted certain patent rights to develop and commercialize riluzole-based products, another license agreement with Yale University pursuant to which we acquired exclusive, worldwide rights to Yale's intellectual property directed to its MoDE platform, a license agreement with Highlightll, pursuant to which we were granted exclusive rights to develop and commercialize Highlightll’s brain penetrant dual TYK2/JAK1 inhibitor program, a license agreement with Bristol-Myers Squibb, pursuant to which we were granted exclusive rights to develop and commercialize taldefgrobep alfa, and a license agreement with KU Leuven, pursuant to which we were granted an exclusive license to develop and commercialize the TRPM3 antagonist platform.

with GeneQuantum pursuant to which we acquired exclusive worldwide rights, excluding China, to develop and commercialize BHV-1510, a license agreement with GeneQuantum and Aimed pursuant to which we acquired exclusive worldwide rights to develop and commercialize BHV-1530 .

We may enter into additional license agreements in the future.

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If we fail to comply with any of our obligations under a current or future license agreement, the licensor may allege that we have breached our license agreement, and may seek to terminate our license.

Termination of any of our current or future licenses could result in our loss of the right to use the licensed intellectual property, which could materially adversely affect our ability to develop, manufacture or commercialize a product candidate or product, if approved, as well

as harm our competitive business position and our business prospects.

Under some license agreements, termination may also result in the transfer of or granting of rights under certain of our intellectual property and information related to the product candidate being developed under the license, such as regulatory information.

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Even if patents covering our product candidates are obtained, once the patent life has expired for a product candidate, we may be open to competition from competitive products, including generic products.

Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such product candidates may not provide us with exclusivity for an adequate amount of time for us to realize commercial benefits.

Given the amount of time required for the development, testing and regulatory review of new product

candidates, patents protecting such product candidates may not provide us with exclusivity for an adequate amount of time for us to realize commercial benefits.

Depending upon the timing, duration and conditions of FDA marketing approval of our product candidates, one or more of our U.S.

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Moreover, the length of the extension could be less than we request.

If we are unable to obtain a patent term restoration, a supplementary protection certificate or extension, or the term is less than we request, the period during which we can enforce our patent rights for that product will be shortened and our competitors

may obtain approval to market competing products sooner.

As a result, our revenue from applicable products could be reduced.

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We expect that as early as four (4) years after the approval of our products, one or more generic manufactures may allege that one or more of the patents listed in the Orange Book under our NDA is either invalid or not infringed (a Paragraph IV certification).

Similarly, with respect to biologics, we may face patent challenges from applicants seeking approval for biosimilar products under the Biologic Price Competition and Innovation Act ("BPCIA") as early as four (4) years after our BLA is approved, although the FDA cannot approve the biosimilar application until twelve (12) years after our BLA approval.

We then must decide whether to file a patent infringement suit against such generic manufacturer(s).

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In addition to claims of infringement made by third parties against us, we have in the past and may again in the future file claims of infringement and/or trade secret misappropriation against third parties who infringe, or misappropriate, our patents and/or trade secrets or those of our licensors.

This can occur as a counter claim in an infringement suit against us or as a direct claim against the third party.

This can occur as a counter claim in an

infringement suit against us or as a direct claim against the third party.

Our adversaries in these proceedings may have the ability to dedicate substantially greater resources to prosecuting these legal actions than we can.

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The initiation of a claim against a third party may also cause the third party to bring counter claims against us such as claims asserting that our patents are invalid or unenforceable or claims challenging the scope of the intellectual property rights we own or control.

The outcome following legal assertions of invalidity and unenforceability is unpredictable.

The outcome following legal assertions of invalidity and enforceability is unpredictable.

During the course of any intellectual property litigation, there could be public announcements of the results of hearings, rulings on motions or other interim proceedings in the litigation.

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An unauthorized disclosure or use of our trade secrets can have an adverse impact on our business.

In March 2023, we and Yale University filed suit against Avilar Therapeutics, Inc.

and RA Capital Management GP, LLC in Delaware US District Court alleging misappropriation of trade secrets and breach of contract.

The litigation is ongoing.

• Other innovator companies may independently develop alternative technologies to our technologies without infringing our intellectual property rights, such as, for example, by developing compounds that function according to the same mechanism of action as our compounds, but are chemically distinct from ours and are not covered by the claims of the patents that we own or control.

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Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.

In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on our valuation.

In addition, there could be public announcements of the results

of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on our valuation.

Risks Related to Our Business Operations, Employee Matters and Managing Growth

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We are exposed to the risk that our employees, independent contractors, consultants, commercial collaborators, principal investigators, CROs and vendors may engage in fraudulent conduct or other illegal activity.

true, complete and accurate information to such authorities, (2) manufacturing standards, (3) federal and state data privacy, security, fraud and abuse and other healthcare laws and regulations in the United States and abroad and (4) laws that require the true, complete and accurate reporting of financial information or data.

Misconduct by these parties could include intentional, reckless or negligent conduct or unauthorized activities that violates (1) the laws and regulations of the FDA, the EMA and other similar regulatory authorities, including those laws requiring the reporting of true, complete and accurate information to such authorities, (2) manufacturing standards, (3) federal and state data privacy, security, fraud and abuse and other healthcare laws and regulations in the United States and abroad and (4) laws that require the true, complete and accurate reporting of financial information or data.

In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices.

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Any of the foregoing could seriously harm our business.

In July 2025, a class action law suit was filed in the US District court of Connecticut against the Company and certain executive officers asserting claims under US securities laws.

We believe that the allegations are without merit and plan to defend ourself vigorously.

The litigation is ongoing.

Risks Related to Ownership of Our Common Shares

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We do not have any control over the analysts or the content and opinions included in their reports.

The price of our shares could decline if one or more equity research analysts downgrade our shares or issue other unfavorable commentary or research.

The price of our shares could decline if one or more equity

research analysts downgrade our shares or issue other unfavorable commentary or research.

If one or more equity research analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our shares could decrease, which in turn could cause our share price or trading volume to decline.

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The circumstances in which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights of shareholders of a BVI business company being more limited than those of shareholders of a company organized in the United States.

Accordingly, shareholders

may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred.

Accordingly, shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred.

The BVI courts are also unlikely to:

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securities laws have been infringed.

In addition, there is uncertainty as to whether the courts of the BVI would recognize or enforce judgments of U.S.

In addition, there is uncertainty as to whether the

courts of the BVI would recognize or enforce judgments of U.S.

courts against us or such persons predicated upon the civil liability provisions of the securities laws of the U.S.

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However, a U.S.

holder may make a QEF election with respect to our common shares only if we agree to furnish such U.S.

holder may make a QEF election with respect to our common

shares only if we agree to furnish such U.S.

holder annually with a PFIC annual information statement as specified in the applicable U.S.

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Our Amended Memorandum and Articles of Association provide that unless we consent in writing to the selection of an alternative forum, the courts of the British Virgin Islands shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s members, (iii) any action asserting a claim arising pursuant to any provision of British Virgin Islands law or the Amended Memorandum and Articles of Association, or (iv) any action asserting a claim against the Company governed by the internal affairs doctrine, and that each shareholder consents to the exclusive jurisdiction of the courts of the British Virgin Islands over all such claims or disputes.

Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over

actions brought under the Securities Act or the rules and regulations promulgated thereunder.

Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over actions brought under the Securities Act or the rules and regulations promulgated thereunder.

Furthermore, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.

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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 1A. Risk Factors