10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

OR

☐         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-38080

Biohaven Pharmaceutical Holding Company Ltd.

(Exact Name of Registrant as Specified in its Charter)

British Virgin Islands					Not applicable
(State or other jurisdiction of incorporation or organization)					(I.R.S. Employer Identification No.)
c/o Biohaven Pharmaceuticals, Inc.
215 Church Street	,	New Haven	,	Connecticut	06510
(Address of principal executive offices)					(Zip Code)

(203) 404-0410

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Shares, no par value	BHVN	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Small reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐ 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 30, 2019, the registrant had 52,240,009 common shares, without par value per share, outstanding.

	Table of Contents
		Page
Part I	Financial Information
Item 1.	Condensed Consolidated Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37
Part II	Other Information
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 6.	Exhibits	40
Signatures		42

Part 1.  Financial Information

Item 1. Condensed Consolidated Financial Statements

Index to Condensed Consolidated Financial Statements
	Page
Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018	2
Condensed Consolidated Statements of Operations and Comprehensive Loss for three and nine months ended September 30, 2019 and 2018	3
Condensed Consolidated Statements of Cash Flows for nine months ended September 30, 2019 and 2018	4
Notes to Condensed Consolidated Financial Statements	5

1

Index to Condensed Consolidated Financial Statements

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

	September 30, 2019		December 31, 2018
	(Unaudited)
Assets
Current assets:
Cash	$	416,574	$	264,249
Prepaid expenses and other current assets (Note 4)	6,596		8,090
Total current assets	423,170		272,339
Property and equipment, net	7,460		6,248
Equity method investment (Note 5)	7,106		11,414
Other assets	1,351		11
Total assets	$	439,087	$	290,012
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	11,562	$	10,752
Accrued expenses (Note 6)	35,644		8,782
Total current liabilities	47,206		19,534
Liability related to sale of future royalties, net (Note 7)	136,799		117,515
Mandatorily redeemable preferred shares, net (Note 8)	99,268		—
Derivative liability (Note 8)	36,795		—
Other long-term liabilities	43		2,043
Total liabilities	320,111		139,092
Commitments and contingencies (Note 13)
Shareholders’ equity:
Common shares, no par value; 200,000,000 shares authorized as of September 30, 2019 and December 31, 2018; 52,217,684 and 44,197,549 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively	874,589		554,384
Additional paid-in capital	67,496		40,104
Accumulated deficit	(823,109)		(443,568)
Total shareholders’ equity	118,976		150,920
Total liabilities and shareholders’ equity	$	439,087	$	290,012

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

2

Index to Condensed Consolidated Financial Statements

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Operating expenses:
Research and development	$	61,674	$	47,362	$	278,654	$	151,993
General and administrative	28,782		7,574		65,479		24,495
Total operating expenses	90,456		54,936		344,133		176,488
Loss from operations	(90,456)		(54,936)		(344,133)		(176,488)
Other income (expense):
Non-cash interest expense on mandatorily redeemable preferred shares	(4,378)		—		(8,333)		—
Non-cash interest expense on liability related to sale of future royalties	(7,308)		(5,633)		(19,272)		(6,134)
Change in fair value of warrant liability	—		—		—		(1,182)
Change in fair value of derivative liability	(1,717)		—		(2,980)		—
Loss from equity method investment	(1,993)		(697)		(4,308)		(2,066)
Other	8		(14)		(25)		(29)
Total other expense, net	(15,388)		(6,344)		(34,918)		(9,411)
Loss before provision for income taxes	$	(105,844)	$	(61,280)	$	(379,051)	$	(185,899)
Provision for income taxes	323		161		490		273
Net loss and comprehensive loss	$	(106,167)	$	(61,441)	(379,541)		(186,172)
Net loss per share — basic and diluted	$	(2.04)	$	(1.53)	$	(8.04)	$	(4.82)
Weighted average common shares outstanding—basic and diluted	52,077,240		40,147,735		47,210,615		38,636,072

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

3

Index to Condensed Consolidated Financial Statements

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

(Unaudited)

	Nine Months Ended September 30,
	2019		2018
Cash flows from operating activities:
Net loss	$	(379,541)	$	(186,172)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash share-based compensation expense	34,855		12,438
Non-cash interest expense on mandatorily redeemable preferred shares	8,333		—
Non-cash interest expense on liability related to sale of future royalties	19,272		6,134
Non-cash expense related to license agreement	5,646		4,080
Change in fair value of derivative liability	2,980		—
Change in fair value of warrant liability	—		1,182
Loss from equity method investment	4,308		2,066
Other non-cash items	437		91
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	1,494		(9,598)
Other assets	(340)		(32)
Accounts payable	810		(63)
Accrued expenses	26,862		5,521
Other long-term liabilities	(2,000)		628
Net cash used in operating activities	$	(276,884)	$	(163,725)
Cash flows from investing activities:
Purchases of property and equipment	(1,637)		(2,634)
Purchase of equity method investment	—		(1,375)
Net cash used in investing activities	$	(1,637)	$	(4,009)
Cash flows from financing activities:
Proceeds from issuance of common shares	303,221		55,000
Proceeds from sale of future royalties	—		106,047
Proceeds from issuance of common stock related to sale of future royalties	—		43,953
Proceeds from issuance of mandatorily redeemable preferred shares	125,000		—
Proceeds from exercise of warrants	1,998		—
Payments of issuance costs	(1,150)		(2,987)
Proceeds from exercise of stock options	2,777		2,438
Net cash provided by financing activities	$	431,846	$	204,451
Net increase in cash and restricted cash	153,325		36,717
Cash and restricted cash at beginning of period	264,249		131,468
Cash and restricted cash at end of period	$	417,574	$	168,185
Supplemental disclosure of cash flow information:
Cash paid for interest	$	—	$	—
Cash paid for income taxes	$	835	$	273
Supplemental disclosure of non-cash investing and financing activities:
Offering costs included in accounts payable and accrued expenses	$	—	$	377

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

4

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

1.   Nature of the Business and Basis of Presentation

Biohaven Pharmaceutical Holding Company Ltd. (“we,” “us” or the “Company”) was incorporated in Tortola, British Virgin Islands in September 2013. We are a clinical-stage biopharmaceutical company with a portfolio of innovative, late-stage product candidates targeting neurological diseases, including rare disorders. Our product candidates are based on multiple mechanisms —calcitonin gene-related peptide (“CGRP”) receptor antagonists, glutamate modulators and myeloperoxidase inhibition—which we believe have the potential to significantly alter existing treatment approaches across a diverse set of neurological indications with high unmet need in both large and orphan indications. The most advanced product candidate from the Company’s CGRP receptor antagonist platform is rimegepant, which the Company is developing for the acute and preventive treatment of migraine. During the second quarter of 2019, the Company submitted new drug applications ("NDA") to the United States Food and Drug Administration ("FDA") for the Zydis^® Orally Dissolving Tablet ("ODT") and tablet formulations of rimegepant. The NDA submission of rimegepant Zydis ODT was submitted using a FDA priority review voucher, purchased in April 2019, providing for an expedited 6-month review.

The Company is subject to risks and uncertainties common to clinical-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts may require additional capital, additional personnel and infrastructure, and further regulatory and other capabilities. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize revenue from product sales.

Subsequent to its May 2017 initial public offering, the Company has primarily raised funds through sales of equity in private placements and public offerings, as well as through the sale of a revenue participation right related to potential future royalties. The Company has incurred recurring losses since its inception, had an accumulated deficit as of September 30, 2019 , and expects to continue to generate operating losses for the foreseeable future. To execute its business plans, the Company will continue to require additional funding to support its continuing operations and pursue its growth strategy.

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its subsidiaries after elimination of all significant intercompany accounts and transactions. Investments in companies in which the Company owns less than a 50% equity interest and where it exercises significant influence over the operating and financial policies of the investee are accounted for using the equity method of accounting.

2.   Summary of Significant Accounting Policies

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual for research and development expenses and the valuation of common shares, stock options, warrants, derivative instruments, contingent equity instruments, and non-cash interest expense on liability related to sale of future royalties. In addition, management’s assessment of the Company’s ability to continue as a going concern involves the estimation of the amount and timing of future cash inflows and outflows. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

Fair Value Measurements

Certain assets of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure

5

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

2.   Summary of Significant Accounting Policies (Continued)

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

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

•Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

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

 The Company’s derivative liability is carried at fair value, determined according to the fair value hierarchy described above (see Note 3).

Leases

The Company determines if an arrangement contains a lease at the inception of a contract. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and operating lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments. As the interest rate implicit in the Company’s leases is not readily determinable, the Company utilizes an estimate of its incremental borrowing rate based on market sources including interest rates for companies with similar credit quality for agreements of similar duration, determined by class of underlying asset, to discount the lease payments. The operating lease right-of-use assets also include lease payments made before commencement and exclude lease incentives. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and lease expense is recognized on a straight-line basis over the term of the short-term lease. For real estate leases, the Company separately accounts for lease components and non-lease components. The Company has restricted cash of $1,000 as of September 30, 2019, included in other assets in the unaudited condensed consolidated financial statements, which represents collateral held by a bank for a letter of credit ("LOC") issued in connection with a real estate lease executed in August 2019. The restricted cash is invested in a non-interest bearing account. See Note 13 ‘‘Commitments and Contingencies’’ for additional information on the real estate lease.

Unaudited Interim Condensed Consolidated Financial Information

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. The accompanying unaudited condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. The accompanying year-end condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30, 2019 and the results of its operations for the three and nine months ended September 30, 2019 and 2018 and its cash flows for the nine months ended September 30, 2019 and 2018. The results for the three and nine months ended September 30, 2019 are not necessarily indicative of results to be expected for the year ending December 31, 2019, any other interim periods or any future year or period.  The financial information included herein should be read in conjunction with the financial statements and notes in the Company's Annual Report on Form 10-K for the year ended December 31, 2018.

Recently Adopted Accounting Pronouncements

Effective January 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees

6

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

2.   Summary of Significant Accounting Policies (Continued)

and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. In July of 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases (“ASU 2018-10”), and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), both of which clarified and enhanced the certain amendments made in ASU 2016-02 and were adopted by the Company in conjunction with ASU 2016-02. The adoption requires a modified retrospective transition approach, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company has elected to adopt the standard using the effective date, January 1, 2019, as its date of initial application. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. Given that the Company had no material outstanding leases as of the date of the adoption, the adoption of ASU 2016-02 did not have a material impact on the Company's financial position or results of operations.

3.   Fair Value of Financial Assets and Liabilities

The Company held no financial assets measured at fair value on a recurring basis as of September 30, 2019, and no financial assets or liabilities measured at fair value on a recurring basis as of December 31, 2018.

The following tables present information about the Company's financial liability measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair value:

	Fair Value Measurement as of September 30, 2019 Using:
	Level 1		Level 2		Level 3		Total
Liabilities:
Derivative liability	$	—	$	—	$	36,795	$	36,795
	$	—	$	—	$	36,795	$	36,795

The following table provides a roll forward from transaction date of the Series A preferred shares (see Note 8) to September 30, 2019 of the aggregate fair value of the Company’s derivative liability for which fair value is determined by Level 3 inputs:

	Derivative Liability
Transaction date balance	$	33,815
Change in fair value	2,980
Balance at September 30, 2019	$	36,795

Valuation of Derivative Liability

The fair value of the derivative liability recognized in connection with the Series A preferred shares agreement with RPI Finance Trust ("RPI"), as described in Note 8, was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The fair value of the derivative liability relates to certain scenarios outlined in the agreement that would result in accelerated payments as compared to the agreement's host instrument. The with-and-without valuation method was used to determine the fair value of the embedded derivatives within the agreement. As inputs into the valuation, the Company considered the type and probability of occurrence of certain events, the amount of the payments, the expected timing of certain events, and a risk-adjusted discount rate. In accordance with ASC 815, Derivatives and Hedging, the fair value of the derivative was recorded on the balance sheet as a derivative liability with changes in fair

7

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

3.   Fair Value of Financial Assets and Liabilities (Continued)

value recorded in other income (expense) in the condensed consolidated statements of operations and comprehensive loss. If factors change and different assumptions are used, the fair value of the derivative liability and related gains or losses could be materially different in the future.

Valuation of Liability Related to Sale of Future Royalties

In June 2018, and as described in Note 7, the Company entered into a funding agreement with RPI, accounted for as a liability financing. As of September 30, 2019, the fair value of the liability related to sale of future royalties, used in determining the effective interest rate of the liability, is based on the Company's current estimates of future royalties expected to be paid to RPI over the life of the arrangement, which is considered Level 3.

4.   Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

	As of September 30, 2019		As of December 31, 2018
Prepaid clinical trial costs	$	4,871	$	7,210
Prepaid insurance	839		393
Other	886		487
	$	6,596	$	8,090

5.   Equity Method Investment

On August 29, 2016, the Company executed a stock purchase agreement with Kleo Pharmaceuticals, Inc. (“Kleo”), a privately held Delaware corporation, to purchase 3,000,000 shares of Kleo’s common stock at an initial closing, with a commitment to purchase an aggregate of 5,500,000 additional shares of common stock, in each case at a share price of $1.00 per share. Kleo is a development-stage biopharmaceutical company focused on advancing the field of immunotherapy by developing small molecules that emulate biologics. The Company purchased 3,000,000 shares upon the initial closing on August 31, 2016, and the remaining 5,500,000 shares were purchased in four equal tranches of 1,375,000 shares beginning six months from the initial closing and then every three months thereafter. In connection with the initial investment, the Company received the right to designate two of the members of Kleo’s board of directors. The Company completed all four of the remaining tranche purchases in March, June and October 2017 and January 2018, with each tranche purchase consisting of 1,375,000 shares for cash consideration of $1,375.

In March 2017, the Company purchased 500,000 shares of Kleo common stock directly from a co-founder of Kleo for consideration of $250 in cash and 32,500 common shares of the Company.

In addition to these purchases, in October 2017, the Company purchased an additional aggregate of 2,049,543 shares for cash consideration of $2,253 which allowed the Company to maintain its relative ownership interest in Kleo.

In November 2018, the Company participated in Kleo's Series B financing. The Company purchased 1,420,818 shares for cash consideration of $5,000. As of the close of the Series B financing, the Company's ownership interest in the outstanding stock of Kleo was 41.9%.

The Company has a variable interest in Kleo through its equity investment. Kleo is a variable interest entity due to the equity investment at risk being insufficient to finance its activities. An assessment of whether or not the Company has the power to direct activities that most significantly impact Kleo’s economic performance and to identify the party that obtains the majority of the benefits of the investment was performed as of September 30, 2019 and December 31, 2018, and will be performed as of each subsequent reporting date. After each of these assessments, the Company concluded that the activities that most significantly impact Kleo’s economic performance are the ability to direct the research activities, the ability to select vendors to perform the research, the ability to maintain research staff and the ability to raise additional funds, each of which are directed by Kleo. Based on the outcome of these assessments, the Company concluded that the investment should be accounted for under the equity method.

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BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

5.   Equity Method Investment (Continued)

The Company has recorded its investments in Kleo to date based on the costs of those investments, as adjusted for the Company’s proportional share of Kleo’s net income or loss in each period. The Company records future adjustments to the carrying value of its investment at each reporting date equal to its proportionate share of Kleo’s net loss for the corresponding period. The Company recorded other expense and a corresponding reduction in the carrying value of its investment in Kleo as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Proportionate share of Kleo's net loss	$	1,993	$	697	$	4,308	$	2,066

The carrying value of the Company’s investment in Kleo was $7,106 and $11,414 as of September 30, 2019 and December 31, 2018, respectively, and is reported as equity method investment on the condensed consolidated balance sheet. The carrying value of the investment represents the Company’s maximum loss exposure as of the balance sheet date. The following table provides a roll-forward of the carrying value of the Company’s equity method investment:

	Carrying Value
Balance at December 31, 2018	$	11,414
Loss recognized in connection with equity method investment	(4,308)
Balance at September 30, 2019	$	7,106
Balance at December 31, 2017	$	7,847
Purchases of Kleo common stock	1,375
Loss recognized in connection with equity method investment	(2,066)
Balance at September 30, 2018	$	7,156

6.   Accrued Expenses

Accrued expenses consisted of the following:

	As of September 30, 2019		As of December 31, 2018
Accrued development milestones payable (Note 13)	$	13,500	$	—
Accrued employee compensation and benefits	4,219		108
Accrued clinical trial costs	10,126		6,753
Accrued professional fees	6,625		1,636
Other	1,174		285
	$	35,644	$	8,782

7.   Liability Related to Sale of Future Royalties, net

In June 2018, the Company entered into a funding agreement (the "Funding Agreement") to sell tiered, sales-based royalty rights on global net sales of pharmaceutical products containing the compounds rimegepant or vazegepant (previously known as BHV-3500) and certain derivative compounds thereof ("Products") to RPI, a Delaware statutory trust. The Company issued to RPI the right to receive certain revenue participation payments, subject to certain reductions, based on the future global net sales of the Products for each calendar quarter during the royalty term contemplated by the Funding Agreement ("Revenue Participation Right"), in exchange for $100,000 in cash.

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BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

Concurrent with the Funding Agreement, the Company entered into a common stock purchase agreement (the "Purchase Agreement") with RPI. Pursuant to the Purchase Agreement, the Company sold 1,111,111 common shares of the Company to RPI at a price of $45.00 per share, for gross proceeds of $50,000.

The Company concluded that there were two units of accounting for the consideration received comprised of the liability related to sale of future royalties and the common shares. The Company allocated the $100,000 from the Funding Agreement and $50,000 from the Purchase Agreement among the two units of accounting on a relative fair value basis at the time of the transaction. The Company allocated $106,047 in transaction consideration to the liability, and $43,953 to the common shares. The Company determined the fair value of the common shares based on the closing stock price on the transaction date, adjusted for the trading restrictions. The transaction costs of $377 were allocated in proportion to the allocation of total consideration to the two units of accounting. The effective interest rate under the Funding Agreement, including transaction costs, is approximately 22% as of September 30, 2019.

Biohaven recognized $7,308 and $5,633 in non-cash interest expense in the three months ended September 30, 2019 and 2018, respectively, and $19,272 and $6,134 in non-cash interest expense in the nine months ended September 30, 2019 and 2018, respectively, related to the Funding Agreement.

8.  Mandatorily Redeemable Preferred Shares, net

In April 2019, the Company sold 2,495 Series A preferred shares (the "Series A Preferred Shares") to RPI at a price of $50,100 per preferred share pursuant to a Series A preferred share purchase agreement (the "Preferred Share Agreement"). The gross proceeds from the transaction with RPI were $125,000, with $105,000 of the proceeds used to purchase a priority review voucher ("PRV") issued by the United States Secretary of Health and Human Services to potentially expedite the regulatory review of the new drug application ("NDA") for the ODT formulation of rimegepant and the remainder of the proceeds to be used for other general corporate purposes. Pursuant to the Preferred Share Agreement, the Company may issue additional Series A Preferred Shares to RPI in up to three additional closings for an aggregate amount of $75,000 subject to the acceptance by the FDA of both NDAs with respect to the tablet formulation of rimegepant and the NDA with respect to the ODT formulation of rimegepant. As a condition for the issuance of additional Series A Preferred Shares, one NDA must be accepted under the priority review designation pathway. The issuance of additional Series A Preferred Shares is also subject to customary closing conditions. Subject to the satisfaction of the applicable conditions under the Preferred Share Agreement, the issuance of additional Series A Preferred Shares is entirely at the Company’s option, and the Company is not obligated to issue any additional Series A Preferred Shares, subject to a fee up to $3,000 if not issued in total. The fee is reduced proportionally by the amount of additional Series A Preferred Shares issued up to the aggregate $75,000, in which the fee is reduced to zero.

The holders of the Company's outstanding Series A Preferred Shares, will have the right to require redemption of the shares in certain circumstances. If a Change of Control, as defined in the Company's memorandum and article of association, occurs after October 5, 2019 and the Series A Preferred Shares have not previously been redeemed, the Company must redeem the Series A Preferred Shares for two times (2x) the original purchase price of the Series A Preferred Shares payable in a lump sum at the closing of the Change of Control or in equal quarterly installments following the closing of the Change of Control through December 31, 2024.

If an NDA for rimegepant is not approved by December 31, 2021, the holders of the Series A Preferred Shares have the option at any time thereafter to require the Company to redeem the Series A Preferred Shares for one point two times (1.2x) the original purchase price of the Series A Preferred Shares.

If no Change of Control has occurred, the Series A Preferred Shares have not previously been redeemed and (i) rimegepant is approved on or before December 31, 2024, following approval and starting one-year after approval, the Company must redeem the Series A Preferred Shares for two times (2x) the original purchase price, payable in a lump sum or in equal quarterly installments through December 31, 2024 (provided that if rimegepant is approved in 2024, the entire redemption amount must be paid by December 31, 2024) or (ii)  rimegepant is not approved by December 31, 2024, the Company must redeem the Series A Preferred Shares for two times (2x) the original purchase price on December 31, 2024.

The Company may redeem the Series A Preferred Shares at our option at any time for two times (2x) the original purchase price, which redemption price may be paid in a lump sum or in equal quarterly installments through December 31, 2024.

10

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

8.   Mandatorily Redeemable Preferred Shares, net (Continued)

In the event that the Company defaults on any obligation to redeem Series A Preferred Shares when required, the redemption amount shall accrue interest at the rate of eighteen percent (18%) per annum. If any such default continues for at least one year, the holders of such shares shall be entitled to convert, subject to certain limitations, such Series A Preferred Shares into common shares, with no waiver of their redemption rights.

Under all circumstances, the Series A Preferred Shares are required to be redeemed by December 31, 2024. Accordingly, the Company has concluded the Series A Preferred Shares are mandatorily redeemable instruments and classified as a liability. The Company initially measured the liability at fair value, and will subsequently accrete the carrying value to the redemption value through interest expense using the effective interest rate method. The effective interest rate under the Preferred Share Agreement, including transaction costs, was determined to be approximately 18%, and the Company recognized $4,378 and $8,333 in interest expense for the three and nine months ended September 30, 2019, respectively. The Company had 2,495 and no Series A preferred shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively.

The following table shows the activity within the preferred share liability for the nine months ended September 30, 2019:

	Carrying Value
Transaction date balance	$	91,185
Non-cash interest expense recognized, net of transaction cost amortization	8,312
Gross balance at September 30, 2019	99,497
Less: Unamortized transaction costs	(229)
Net balance at September 30, 2019	$	99,268

Certain scenarios as described in the Preferred Share Agreement were determined by the Company to result in a derivative liability. The with-and-without valuation method was used to determine the fair value of the embedded derivatives within the agreement. As inputs into the valuation, the Company considered the type and probability of occurrence of certain events, the amount of the payments, the expected timing of certain events, and a risk-adjusted discount rate. In accordance with ASC 815, Derivatives and Hedging, the fair value of the derivative was recorded on the balance sheet as a derivative liability with changes in fair value recorded in other income (expense) in the condensed consolidated statements of operations and comprehensive loss (see Note 3 for details on the fair value measurement). If factors change and different assumptions are used, the fair value of the derivative liability and related gains or losses could be materially different in the future.

The Company recorded the payment for the PRV as research and development expense in the condensed consolidated statements of operations and comprehensive loss, and as an operating cash outflow in the condensed consolidated statements of cash flows for the nine months ended September 30, 2019.

9.   Warrants

Guarantor and Co-Guarantor Warrants

On August 30, 2016, the Company entered into a one-year credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association. In connection with entering into the Credit Agreement, the Company issued warrants to purchase common shares to two of the Company’s directors in connection with a guarantee of its obligations under the agreement. The Company previously classified the warrants as a liability on its condensed consolidated balance sheet because each warrant represented a freestanding financial instrument that was not indexed to the Company’s own shares. The warrant liability was initially recorded at fair value upon entering into the Credit Agreement and was subsequently remeasured to fair value at each reporting date.

On January 26, 2018, the anti-dilution price protection provisions contained within the warrants issued to each of the guarantor and co-guarantor of the Credit Agreement expired.

Changes in the fair value of the warrant liability, until expiration of the anti-dilution price protection provisions, were recognized as a component of other income (expense), net, in the Company’s condensed consolidated statement of operations

11

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

9.   Warrants (Continued)

and comprehensive loss.  Upon expiration of the provision, the Company discontinued classification of these warrants as a liability and has accordingly reclassified the fair value of $5,203 to additional paid-in capital within shareholders’ equity.

The fair value of the warrant liability was $4,021 at December 31, 2017. The Company recorded expense of $1,182 related to the warrant liability within other income (expense) in the condensed consolidated statements of operations and comprehensive loss for the nine months ended September 30, 2018. Both warrants were exercised in March 2019.

Fox Chase Chemical Diversity Center Inc.

In May 2019, the Company entered into an agreement with Fox Chase Chemical Diversity Center Inc. ("FCCDC") for FCCDC's TDP-43 assets (the "FCCDC Agreement"). The FCCDC Agreement provides the Company with a plan and goal to identify one or more new chemical entity candidates for preclinical development for eventual clinical evaluation for the treatment of one or more TDP-43 proteinopathies. As consideration, Biohaven issued 100,000 of its common shares to FCCDC valued at $5,646. As of the end of the second quarter of 2019, the payment was recorded in accounts payable and research and development expense as the shares had not settled during the quarter. Upon settlement of the shares in July 2019, the Company transferred the value of the common shares issued to FCCDC from accounts payable to common stock.

In addition to the common shares issued to FCCDC, Biohaven is obligated to pay FCCDC milestone payments totaling up to $4,500 with $1,000 for each additional NDA filing (See Note 12). The Company also issued a warrant to FCCDC, granting FCCDC the option to purchase up to 100,000 Biohaven common shares, at a strike price of $56.46 per share, subject to vesting upon achievement of certain milestones in development of TD-43. The warrant has standard terms and conditions for exercise and has accelerated vesting in the event of a change of control of Biohaven.

12

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

10.   Shareholders' Equity

Changes in shareholders’ equity for the three and nine months ended September 30, 2019 was as follows:

	Common Shares
	Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Total Shareholders' Equity (Deficit)
Balances as of December 31, 2018	44,197,549	$	554,384	$	40,104	$	(443,568)	$	150,920
Exercise of stock options	85,445	1,961		(896)		—		1,065
Non-cash share-based compensation expense	—	—		7,330		—		7,330
Net loss	—	—		—		(62,304)		(62,304)
Balances as of March 31, 2019	44,282,994	556,345		46,538		(505,872)		97,011
Issuance of common shares upon completion of equity offering, net of offering costs	6,976,745	281,100		—		—		281,100
Exercise of related party warrants	215,000	7,201		(5,203)		—		1,998
Exercise of stock options	26,875	320		(172)		—		148
Share-based compensation expense	—	—		17,554		—		17,554
Net loss	—	—		—		(211,070)		(211,070)
Balances as of June 30, 2019	51,501,614	$	844,966	$	58,717	$	(716,942)	$	186,741
Issuance of common shares upon completion of underwriters' exercise of option from follow-on equity offering, net of offering costs	525,000	21,221		—		—		21,221
Issuance of common shares as payment for TDP-43 asset	100,000	5,646		—		—		5,646
Exercise of stock options	91,070	2,756		(1,192)		—		1,564
Share-based compensation expense	—	—		9,971		—		9,971
Net loss	—	—		—		(106,167)		(106,167)
Balances as of September 30, 2019	52,217,684	$	874,589	$	67,496	$	(823,109)	$	118,976

13

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

10.   Shareholders' Equity (Continued)

Changes in shareholders’ equity for the three and nine months ended September 30, 2018 was as follows:

	Common Shares
	Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Total Shareholders' Equity (Deficit)
Balances as of December 31, 2017	36,057,748	$	311,061	$	23,556	$	(202,646)	$	131,971
Issuance of common shares upon completion of equity offering, net of offering costs	2,000,000	52,013		—		—		52,013
Exercise of ALS Biopharma warrants, net settlement of shares	228,219	—		—		—		—
Reclassification of warrant liability to equity	—	—		5,203		—		5,203
Exercise of stock options	321,050	4,656		(3,653)		—		1,003
Non-cash share-based compensation expense	—	—		3,088		—		3,088
Net loss	—	—		—		(85,462)		(85,462)
Balances as of March 31, 2018	38,607,017	$	367,730	$	28,194	$	(288,108)	$	107,816
Issuance of common shares upon completion of equity offering, net of offering costs	1,111,111	43,842		—		—		43,842
Exercise of ALS Biopharma warrants, net settlement of shares	261,140	—		—		—		—
Exercise of stock options	115,023	1,653		(820)		—		833
Share-based compensation expense	—	—		5,608		—		5,608
Net loss	—	—		—		(39,269)		(39,269)
Balances as of June 30, 2018	40,094,291	$	413,225	$	32,982	$	(327,377)	$	118,830
Issuance of common shares as payment for TDP-43 asset	109,523	4,080		—		—		4,080
Exercise of stock options	57,936	968		(366)		—		602
Share-based compensation expense	—	—		3,742		—		3,742
Net loss	—	—		—		(61,441)		(61,441)
Balances as of September 30, 2018	40,261,750	$	418,273	$	36,358	$	(388,818)	$	65,813

Issuance of Common Shares for the June 2019 Offering

In June 2019, the Company issued and sold 6,976,745 common shares at a public offering price of $43.00 per share for net proceeds of approximately $281,100 after deducting underwriting discounts and commissions of approximately $18,000 and other offering expenses of approximately $900. In addition, in July 2019, the underwriters of the follow-on offering partially exercised their option to purchase additional shares, and the Company issued and sold 525,000 common shares for net proceeds of approximately $21,221 after deducting underwriting discounts and commissions of approximately $1,354. Thus, the aggregate net proceeds to the Company from the follow-on offering, after deducting underwriting discounts and commissions and other offering costs, were approximately $302,321.

14

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

10.   Shareholders' Equity (Continued)

Exercise of Related Party Warrants

In connection with a guarantee of its obligations under the Credit Agreement, the Company issued warrants, each to purchase 107,500 common shares at an exercise price of $9.2911 per share, to two of its directors. Both warrants were exercised in March 2019, and common shares settled in the second quarter of 2019 (See Note 9).

Private Placement

In March 2018, the Company sold an aggregate of 2,000,000 common shares in a private placement at a price of $27.50 per share, for net proceeds of $52,013 after deducting underwriting discounts and commissions of $2,800 and other offering expenses of $187. Subsequent to the closing of the private placement, the Company paid Bristol-Myers Squibb Company ("BMS") the $50,000 upfront payment under an amendment (the "BMS Amendment") to the Company's July 2016 license agreement with BMS (the "BMS Agreement"). See Note 12 for additional details.

ALS Biopharma, LLC Warrant Exercise

In January 2018, ALS Biopharma, LLC exercised a warrant for the purchase of 275,000 common shares through a net share settlement, resulting in an issuance of 228,219 common shares.

In April 2018, ALS Biopharma exercised a warrant for the purchase of 325,000 common shares through a net share settlement, resulting in an issuance of 261,140 common shares.

11.   Net Loss Per Share

Basic and diluted net loss per share attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd. was calculated as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Numerator:
Net loss	$	(106,167)	$	(61,441)	$	(379,541)	$	(186,172)
Denominator:
Weighted average common shares outstanding—basic and diluted	52,077,240		40,147,735		47,210,615		38,636,072
Net loss per share attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd.—basic and diluted	$	(2.04)	$	(1.53)	$	(8.04)	$	(4.82)

The Company’s potential dilutive securities, which include stock options and warrants to purchase common shares, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common shareholders of the Company is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common shareholders for the periods indicated because including them would have had an anti-dilutive effect:

	As of September 30, 2019
	2019	2018
Options to purchase common shares	8,560,514	5,982,134
Warrants to purchase common shares	106,751	221,751
	8,667,265	6,203,885

15

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

12.  License and Other Agreements

Catalent Agreements for Rimegepant

In January 2018, the Company entered into an exclusive world-wide license and development agreement with Catalent U.K. Swindon Zydis Limited, a subsidiary of Catalent, Inc. ("Catalent") pursuant to which the Company obtained certain license rights to the Zydis ODT technology for use with rimegepant. If the Company obtains regulatory approval or launches a rimegepant product that utilizes the Zydis ODT technology, the Company is obligated to pay Catalent up to $1,500 upon the achievement of specified regulatory and commercial milestones. If the Company commercializes a rimegepant product that utilizes the Zydis ODT technology, the agreement permits the Company to purchase the commercial product from Catalent at a fixed price, inclusive of a royalty. Under the agreement, Catalent will not develop or manufacture a formulation of any oral CGRP compound using Zydis ODT technology for itself or a third party until 2031, subject to certain minimum commercial revenues.

Under this agreement, the Company is responsible for conducting clinical trials and preparing and filing regulatory submissions. The Company has the right to sublicense its rights under the agreement subject to Catalent’s prior written consent. Catalent has the right to enforce the patents covering the Zydis technology and to defend any allegation that a formulation using Zydis technology, such as rimegepant, infringes a third party’s patent.

This agreement terminates on a country-by-country basis upon the later of (i) 10 years after the launch of the most recently launched product in such country and (ii) the expiration of the last valid claim covering each product in such country, unless earlier voluntarily terminated by the Company or by Catalent. This agreement automatically extends for one-year terms unless either party gives advance notice of intent to terminate. In addition, Catalent may terminate the agreement either in its entirety or terminate the exclusive nature of the agreement on a country-by-country basis if, among other things, the Company fails to meet specified development timelines, which the Company may extend in certain circumstances.

Amendment to License Agreement with BMS

In March 2018, the Company entered into the BMS Amendment. Under the BMS Amendment, the Company paid BMS an upfront payment of $50,000 in return for a low single-digit reduction in the royalties payable on net sales of rimegepant and a mid single-digit reduction in the royalties payable on net sales of vazegepant (previously known as BHV-3500), recorded in research and development expense in the condensed consolidated statements of operations and comprehensive loss. Under the original license agreement, the Company had been obligated to make tiered royalty payments based on annual worldwide net sales of licensed products upon their approval and commercialization, with percentages in the low- to mid-teens.

The BMS Amendment also removed BMS’s right of first negotiation to regain its intellectual property rights or enter into a license agreement with the Company following the Company’s receipt of topline data from its Phase 3 clinical trials of rimegepant, and clarified that antibodies targeting CGRP are not prohibited as competitive compounds under the non-competition clause of the BMS Agreement.

The BMS Agreement continues to provide the Company with exclusive global development and commercialization rights to rimegepant, vazegepant and related CGRP molecules, as well as related know-how and intellectual property. The Company’s obligations to make development and commercial milestone payments to BMS under the original license agreement remain unchanged.

Biotech Value Advisors Agreement

In March 2019, the Company entered into a master services agreement with Biotech Value Advisors, LLC related to the commercial preparation for several of the Company's late-stage product candidates. In addition to fixed quarterly consulting expenses under the agreement, the Company agreed to pay up to $2,000 upon achievement of specified commercial milestones.

Fox Chase Chemical Diversity Center Inc. Agreement

In May 2019, Biohaven entered into the FCCDC Agreement in which the Company purchased certain intellectual property relating to the TDP-43 protein from FCCDC. The FCCDC Agreement provides the Company with a plan and goal to identify one or more new chemical entity candidates for preclinical development for eventual clinical evaluation for the treatment of one

16

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

12.  License and Other Agreements (Continued)

or more TDP-43 proteinopathies. As consideration, Biohaven issued 100,000 of its common shares to FCCDC valued at $5,646. As of the end of the second quarter of 2019, the payment was recorded in accounts payable and research and development expense as the shares had not settled during the quarter. Upon settlement of the shares in July 2019, the Company transferred the value of the common shares issued to FCCDC from accounts payable to common stock.

In addition, Biohaven is obligated to pay FCCDC milestone payments totaling up to $4,500 with $1,000 for each additional NDA filing. The Company also issued a warrant to FCCDC, granting FCCDC the option to purchase up to 100,000 Biohaven common shares, at a strike price of $56.46 per share, subject to vesting upon achievement of certain milestones in development of TD-43 (see Note 9).

In connection with the FCCDC Agreement, Biohaven and FCCDC have established a TDP-43 Research Plan that provides for certain milestones to be achieved by FCCDC, and milestone payments to be made by the Company up to $1,500 over a period of up to 30 months as success fees for research activities by FCCDC. In addition to the milestone payments, the Company will pay FCCDC an earned royalty equal to zero to ten percent of net sales of any TD-43 patent products with a valid claim as defined in the FCCDC Agreement. The Company may also license the rights developed under the FCCDC Agreement and, if it does so, will be obligated to pay a portion of any payments received from such licensee to FCCDC in addition to any milestones payments it would otherwise be obligated to pay. The Company is also responsible for the prosecution and maintenance of the patents related to the TDP-43 assets.

The FCCDC Agreement can be terminated on a country-by-country basis and product-by-product basis upon expiration of the royalty term for such product in such country. Each royalty term begins on the date of the first commercial sale of the licensed product in the applicable country and ends on the expiration of the last to expire of the applicable patents in that country. The FCCDC Agreement may be terminated earlier in specified situations, including termination for uncured material breach of the FCCDC Agreement by either party, termination by FCCDC in specified circumstances, termination by the Company on a country-by-country basis with advance notice and termination upon a party's insolvency or bankruptcy.

Amendment to License Agreement with Yale

In September 2013, the Company entered into an exclusive license agreement with Yale (the "Yale Agreement") to obtain a license to certain patent rights for the commercial development, manufacture, distribution, use and sale of products and processes resulting from the development of those patent rights, related to the use of riluzole in treating various neurological conditions, such as general anxiety disorder, post-traumatic stress disorder and depression. As part of the consideration for this license, the Company issued Yale 250,000 common shares and granted Yale the right to purchase up to 10% of the securities issued in specified future equity offerings by the Company, in addition to the obligation to issue shares to prevent anti-dilution. The obligation to contingently issue equity to Yale was no longer outstanding as of December 31, 2018.

The Yale Agreement was amended and restated in May 2019. As amended, the Company agreed to pay Yale up to $2,000 upon the achievement of specified regulatory milestones and annual royalty payments of a low single-digit percentage based on net sales of riluzole-based products from the licensed patents or from products based on troriluzole. Under the amended and restated agreement, the royalty rates are reduced as compared to the original agreement. In addition, under the amended and restated agreement, the Company may develop products based on riluzole or troriluzole. The amended and restated agreement retains a minimum annual royalty of up to $1,000 per year, beginning after the first sale of product under the agreement. If the Company grants any sublicense rights under the Yale Agreement, it must pay Yale a low single-digit percentage of sublicense income that it receives. To date, no milestone or royalty payments have been made under this agreement.

The Yale Agreement, as amended and restated, requires the Company to meet certain due diligence requirements based upon specified milestones relating to riluzole or troriluzole based products. The Company can elect to extend the deadline for its compliance with the due diligence requirements by a maximum of one year upon the payment to Yale of up to $150. The Company is also required to reimburse Yale for any fees that Yale incurs related to the filing, prosecution, defending and maintenance of patent rights licensed under the Yale Agreement. In the event that the Company fails to make any payments, commits a material breach, fails to maintain adequate insurance or challenges the patent rights of Yale, Yale can terminate the Yale Agreement. The Company can terminate the Yale Agreement (i) upon 90 days' notice to Yale, (ii) if Yale commits a material breach of the Yale Agreement or (iii) as to a specific country if there are no valid patent rights in such country. The Yale Agreement expires on a country-by-country basis upon the later of the date on which the last patent rights expire in such

17

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

12.  License and Other Agreements (Continued)

country or ten years from the date of the first sale of a product incorporating the licensed patents or the Company’s patents relating to troriluzole.

Termination of MGH Agreement

In September 2014, the Company entered into a license agreement (the "MGH Agreement") with The General Hospital Corporation d/b/a Massachusetts General Hospital ("MGH"), pursuant to which MGH granted the Company a license to certain patent rights for the commercial development, manufacture, distribution and use of any products or processes resulting from development of those patent rights, related to treating depression with a combination of ketamine and scopolamine. The Company was obligated to pay MGH annual license maintenance fees and future milestone payments of up to $750 upon the achievement of specified clinical and regulatory milestones and up to $2,500 upon the achievement of specified commercial milestones. The Company had also agreed to pay MGH royalties between zero and ten percent based on net sales of products licensed under the agreement. In July 2019, the Company elected to terminate the agreement. Upon termination, the Company is no longer subject to future milestone or royalty payments under the MGH Agreement.

13.  Commitments and Contingencies

Summarized below are the matters previously described in Note 16 of the Notes to the Consolidated Financial Statements in the Company's Form 10-K for the year ended December 31, 2018, updated as applicable.

Lease Agreements

In August 2017, the Company entered into a lease agreement for office space and the related property for its United States ("US") headquarters in New Haven, Connecticut, which it began occupying during the fourth quarter of 2018. The lease commenced on January 1, 2018 and had a term of 85 months, with the ability to extend to 120 months. The Company had the option to purchase the property for $2,700 and executed that option in December 2018 and therefore has no remaining lease obligation related to its US headquarters building.

The Company recorded the following for the lease agreement for its US headquarters during the construction period:

	Three Months Ended September 30, 2018		Nine Months Ended September 30, 2018
Rent expense	$	4	$	40
Capitalized costs	$	1,114	$	2,493

18

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

13.  Commitments and Contingencies (Continued)

In August 2019, the Company entered into a lease agreement for office space in Yardley, Pennsylvania to support expansion of the Company's commercial operations in anticipation of the rimegepant commercial launch. The lease will commence on March 1, 2020 and have a term of 88 months, with the ability to extend to 148 months. The Company has restricted cash of $1,000, as of September 30, 2019, included in other assets in the unaudited condensed consolidated financial statements, which represents collateral held by a bank for a letter of credit issued in connection with the lease. The restricted cash is invested in a non-interest bearing account.

The lessor has provided the Company a temporary space to occupy while leasehold improvements are completed prior to the lease commencement next year. With the exception of the first month's rent payment made on execution of the lease, the Company is not required to pay rent until August 2020. The Company determined there were two units of account for the lease, one for use of the temporary space, with a duration from the lease execution date to the lease commencement date and another for the use of the premises, with a duration from the lease commencement date to the lease termination date. The two units of account are being treated as two separate operating leases.

Since the Company expects to occupy the temporary space for less than 12 months, the Company did not record a right-of-use asset and lease liability on its balance sheet for the temporary space. The rent expense for the temporary space recognized for the three and nine months ended September 30, 2019 was $24 because there will be no cash payment for use of the temporary space, the rent expense recognized for the use of the temporary space is being treated as deferred rent payments.

The Company can begin occupying the premises after the landlord has substantially completed all agreed upon improvements to the office space. After substantial completion of the office space in the first half of 2020, the Company expects to record a right-of-use asset and operating lease liability on its balance sheet and straight-line the lease expense over the duration of the lease.

License Agreements

The Company has entered into license agreements with various parties under which it is obligated to make contingent and non-contingent payments.  License agreements generally require the Company to pay annual maintenance fees and future payments upon the attainment of agreed upon development and/or commercial milestones.  These agreements may also require minimum royalty payments based on sales of products developed from the applicable technologies, if any.

Administration of intranasal vazegepant in a Phase 1 clinical trial was initiated in October 2018 and has achieved targeted therapeutic exposures. The compound advanced into a Phase 2/3 trial to evaluate efficacy for the acute treatment of migraine in the first quarter of 2019. Pursuant to the BMS Agreement, the Company is required to pay $2,000 to BMS on commencement of a Phase 1 clinical trial, and $4,000 on commencement of a Phase 2 clinical trial, and accordingly, the Company has recognized these liabilities as of December 31, 2018 and September 30, 2019, respectively, in accrued expenses within the condensed consolidated balance sheets. The payment obligations under the agreement are deferred until the earlier of the first approval, or the discontinuation, of the development of rimegepant.

Pursuant to the BMS Agreement, the Company is required to pay $7,500 to BMS in relation to the NDA filing for rimegepant, and accordingly, the Company has recognized this liability as of September 30, 2019 in accrued expenses within the condensed consolidated balance sheet. The Company made the milestone payment in October 2019.

Research Commitments

The Company has entered into agreements with several contract research organizations to provide services in connection with its preclinical studies and clinical trials. The Company commits to minimum payments under these arrangements.

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with certain executive officers and members of its board of directors that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. The Company’s amended and restated memorandum and

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BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

13.  Commitments and Contingencies (Continued)

articles of association also provide for indemnification of directors and officers in specified circumstances. To date, the Company has not incurred any material costs as a result of such indemnification provisions. The Company does not believe that the outcome of any claims under indemnification arrangements will have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its condensed consolidated financial statements as of September 30, 2019 or December 31, 2018.

Legal Proceedings

From time to time, in the ordinary course of business, the Company is subject to litigation and regulatory examinations as well as information gathering requests, inquiries and investigations. As of September 30, 2019, there were no matters which would have a material impact on the Company’s financial results.

14.   Related Party Transactions

Guarantor and Co-Guarantor Warrants

The guarantor and co-guarantor of the Credit Agreement with Wells Fargo are each shareholders and members of the board of directors of the Company. The Company issued warrants to the guarantor and co-guarantor in exchange for their respective guarantees (see Note 9 and 10). On January 26, 2017, each of these two directors received a warrant to purchase 107,500 common shares at an exercise price of $9.2911 per share. Both warrants were exercised in March 2019 and common shares settled in the second quarter of 2019.

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Form 10-Q Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission (“SEC”). Some of the statements contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, constitute forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We have based these forward-looking statements on our current expectations and projections about future events. The following information and any forward-looking statements should be considered in light of factors discussed elsewhere in this Quarterly Report on Form 10-Q, particularly including those risks identified in Part II-Item 1A “Risk Factors” and our other filings with the SEC.

Our actual results and timing of certain events may differ materially from the results discussed, projected, anticipated, or indicated in any forward-looking statements. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this Quarterly Report on Form 10-Q. Statements made herein are as of the date of the filing of this Form 10-Q with the SEC and should not be relied upon as of any subsequent date. Even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, they may not be predictive of results or developments in future periods. We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

We caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date they are made.

Overview

We are a clinical-stage biopharmaceutical company with a portfolio of innovative, late-stage product candidates targeting neurological diseases, including rare disorders. Our product candidates are based on multiple mechanisms — calcitonin gene-related peptide, or CGRP, receptor antagonists, glutamate modulators and myeloperoxidase, or MPO, inhibition — which we believe have the potential to significantly alter existing treatment approaches across a diverse set of neurological indications with high unmet need in both large and orphan indications. Our programs include the following:

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Product	Platform	Indication	Development Stage
Rimegepant	CGRP	Acute treatment and prevention of migraine	Acute: New drug applications ("NDA") submitted with the United States Food and Drug Administration ("FDA") in the second quarter of 2019 for the Zydis orally dissolving tablet ("ODT") and tablet formulations of rimegepant. Long-term safety study is expected to complete in the fourth quarter of 2019. Prevention: Phase 3 trial for prevention initiated in the fourth quarter of 2018 and results are expected at the end of the fourth quarter of 2019 or early first quarter of 2020.
Rimegepant	CGRP	Trigeminal Neuralgia	Phase 2 proof of concept trial ongoing.
Vazegepant	CGRP	Acute treatment and prevention of migraine	Phase 2/3 trial in acute treatment of migraine ongoing; results are expected in the fourth quarter of 2019.
Troriluzole	Glutamate	Ataxias	Phase 2/3 randomization phase in spinocerebellar ataxia ("SCA") complete; extension trial ongoing. Phase 3 trial ongoing.
Troriluzole	Glutamate	Obsessive Compulsive Disorder (“OCD”)	Phase 2/3 trial ongoing; results are expected in the first quarter of 2020.
Troriluzole	Glutamate	Alzheimer’s disease	Phase 2/3 trial ongoing; interim analysis expected in the fourth quarter of 2019.
Troriluzole	Glutamate	Generalized Anxiety Disorder (“GAD”)	Phase 2/3 trial ongoing; completed enrollment in the fourth quarter of 2019.
Nurtec	Glutamate	Amyotrophic Lateral Sclerosis (“ALS”)	Complete Response Letter ("CRL") received from the FDA in July 2019. Currently working with FDA to develop a timely path forward.
BHV-5000	Glutamate	Neuropsychiatric disorders	Phase 1 trial completed 2018; additional nonclinical studies anticipated in 2019.
Verdiperstat	MPO	Multiple System Atrophy ("MSA")	Phase 3 trial initiated in third quarter of 2019.
Verdiperstat	MPO	ALS	Selected for study in HEALEY ALS Platform Trial with an expected start date in the second quarter of 2020.

Due to a number of concurrent workstreams including ending enrollment in multiple pivotal trials, closing the databases from these large clinical trials and two Biohaven NDAs under review with typical information requests, topline data from any of our upcoming study readouts anticipated in the fourth quarter of 2019 could extend into the first quarter of 2020.

CGRP Platform

In July 2016, we acquired exclusive, worldwide rights to our CGRP receptor antagonist platform, including rimegepant and vazegepant (previously known as BHV-3500), through a license agreement with Bristol-Myers Squibb Company (“BMS”), which was amended in March 2018.

Rimegepant

The most advanced product candidate from our CGRP receptor antagonist platform is rimegepant, an orally available, potent and selective small molecule human CGRP receptor antagonist that we are developing for the acute and preventive treatment of migraine. During the second quarter of 2019, we submitted NDAs for the acute treatment of migraine to the FDA for the Zydis ODT and tablet formulations of rimegepant. The NDA submission of rimegepant Zydis ODT was submitted using a U.S. Food and Drug Administration ("FDA") priority review voucher ("PRV"), purchased in March 2019, providing for an expedited 6-month review.

During the third quarter of 2019, we received communication from the FDA that our rimegepant Zydis ODT and tablet formulation NDA submissions were accepted and given a Prescription Drug User Fee Act ("PDUFA") date in the first quarter of 2020 for our Zydis ODT submission. In October 2019, we also received a mid-cycle communication update from the FDA in which no major safety concerns were identified by the FDA. In addition, no specific issues requiring input from the Company were needed at the time of communication, and there were no plans for an Advisory Committee meeting at such time. All comments from the FDA are preliminary and do not reflect a final decision on the review.

Study 301/Study 302

In March 2018, we announced positive topline data from our first two pivotal Phase 3 trials (“Study 301 and Study 302”) for the acute treatment of migraine. In each trial, treatment with a single 75 mg dose of rimegepant met the co-primary efficacy endpoints of the trial, which were superior to placebo, at two hours post-dose, on measures of pain freedom and freedom from the patient’s most bothersome symptom. In addition to achieving both co-primary endpoints in each of the trials, rimegepant also was observed to be generally safe and well-tolerated in the trials, with a safety profile similar to placebo. The co-primary endpoints achieved in the Phase 3 trials are consistent with regulatory guidance from the FDA and provide the basis for the submission of a NDA to the FDA.

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Study 303

A third Phase 3 clinical trial for the acute treatment of migraine with a bioequivalent orally dissolving tablet (“ODT”) formulation of rimegepant was commenced in February 2018. On December 3, 2018, we announced positive topline data from this randomized, controlled Phase 3 clinical trial (“BHV3000-303” or “Study 303”) evaluating the efficacy and safety of our Zydis ODT formulation of rimegepant for the acute treatment of migraine. Rimegepant differentiated from placebo on the two co-primary endpoints using a single dose, pain freedom and freedom from most bothersome symptom at 2 hours. In total, rimegepant differentiated the first 21 consecutive primary and secondary outcome measures that were pre-specified. Patients treated with the rimegepant Zydis ODT formulation began to numerically separate from placebo on pain relief as early as 15 minutes, and this difference was statistically significant at 60 minutes. Additionally, a significantly greater percentage of patients treated with rimegepant Zydis ODT returned to normal functioning by 60 minutes and lasting clinical benefit compared to placebo was observed through 48 hours after a single dose of rimegepant on freedom from pain, pain relief, freedom from the most bothersome symptom, and freedom from functional disability. The safety and tolerability observations of rimegepant in Study 303 were consistent with our previous observations. The overall rates of adverse events were similar to placebo (13.2% with respect to rimegepant compared to 10.5% with placebo). The efficacy and safety profile of rimegepant has now been observed across three randomized controlled trials to date. The co-primary endpoints achieved in the Phase 3 trials are consistent with regulatory guidance from the FDA. We continue to advance the rimegepant Zydis ODT and tablet formulation development programs towards potential commercialization for the acute treatment of migraine.

Study 305

In November 2018, we initiated a double-blind, placebo-controlled Phase 3 clinical trial examining regularly scheduled dosing of rimegepant 75 mg to evaluate its efficacy and safety as a preventive therapy for migraine (“BHV3000-305” or “Study 305”). We anticipate receiving topline results at the end of the fourth quarter of 2019 or early first quarter of 2020.

Long-term Safety Study

In August 2017, we commenced a long-term safety study of rimegepant in patients with migraine. On December 10, 2018, we announced the results of an interim analysis from our ongoing long-term safety study (“BHV3000-201” or “Study 201”).

On May 8, 2019, we announced updated interim results from the long-term safety study. As of February 20, 2019 (the database cutoff date of the interim assessment), 105,192 doses of rimegepant 75 mg had been administered across 1,784 patients with migraine. As of February 20, 2019, approximately 527 patients have received near daily dosing (14 or more doses in 4 weeks) of rimegepant 75 mg to date for a duration ranging between 4 and 52 weeks. Interim hepatic data as of February 21, 2019 were reviewed by an external independent panel of liver experts who concluded that there was no liver safety signal detected through the data analysis cut-off date and, compared to placebo arms of other migraine treatments, there was a very low incidence of overall elevations of liver laboratory abnormalities (1% incidence of serum ALT or AST > 3x the upper limit of normal (ULN) through the data analysis cut-off date). Based on this interim analysis, there are indications that rimegepant may be safe and well tolerated with long-term dosing in patients with migraine.

On May 8, 2019, we also reported the safety and preliminary exploratory efficacy data from the scheduled dosing cohort in the study. In this cohort of patients with a history of 4 to 14 moderate to severe migraine attacks per month, patients were treated with rimegepant 75 mg every other day for up to 12 consecutive weeks. Patients in this cohort could also supplement their scheduled rimegepant dosing with additional as-needed dosing on nonscheduled dosing days. In this cohort, 286 patients received a total of 11,296 doses of rimegepant 75 mg tablets at least every other day, with a median number of 14.2 tablets per 4 week period. During the on-treatment period, no rimegepant-treated patients (n=281) experienced ALT or AST levels >3x the ULN. There were also no rimegepant-treated patients who experienced alkaline phosphatase or bilirubin >2x the ULN. With regard to efficacy, 48.4% of subjects in the scheduled dosing cohort experienced a ≥50% reduction in the frequency of monthly migraine days with moderate-to-severe pain intensity during the third month of treatment. This preliminary exploratory open-label efficacy data from Study 201 suggest that rimegepant may be associated with a reduction in migraine days per month (30 days) compared to the observational lead-in period, suggesting a potential preventive effect that warrants further study.

Study 201 concluded during the third quarter of 2019 with additional data analyses submitted to the FDA in connection with the NDA submissions, including the required 120-day safety update. The final report is expected in the fourth quarter of 2019. Additionally, this program for the acute treatment of migraine will be supported by results of 20 Phase 1/2 trials.

Pediatric Study Plan

In November 2017, the FDA agreed to our initial acute treatment pediatric study plan. In June 2019, the FDA provided agreement for the amended Pediatric Study Plan.

Trigeminal Neuralgia

We initiated a Phase 2 proof of concept trial in the second quarter of 2019 to evaluate the safety and efficacy of rimegepant in patients with treatment refractory trigeminal neuralgia. Trigeminal neuralgia is a chronic facial pain syndrome characterized

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by paroxysmal, severe, and lancinating episodes of pain in the distribution of one or more branches of the trigeminal nerve. The trigeminal nerve, or fifth cranial nerve, is the largest of the 12 cranial nerves and provides sensory innervation to the head and neck, as well as motor innervation to the muscles of mastication. These episodic bouts of severe facial pain can last seconds to minutes, occur several times per day, and often result in significant disability. Over the long-term course of the disease, symptoms often become refractory to medical therapy and current treatment options remain suboptimal.

International Health Authority Interactions

In February 2018, a request for scientific advice for rimegepant was submitted to the Committee for Medicinal Products for Human Use (“CHMP”), a committee of the European Medicines Agency (“EMA”), and feedback was received in June 2018. Based on this feedback, we believe we have several potential pathways to approval.

In January 2019, we and our wholly owned subsidiary, BioShin Consulting Services Company Ltd. ("BioShin"), a Shanghai based limited liability company, jointly announced that the National Medical Products Administration (“NMPA,” formerly, the China FDA) has accepted the investigational new drug (“IND”) application for rimegepant for the treatment of migraine. As previously announced, BioShin was established to develop and potentially commercialize our late-stage migraine and neurology portfolio in China and other Asia-Pacific markets. Following the results of Study 303, we also plan to submit a second IND application to the NMPA for the Zydis ODT formulation of rimegepant for the acute treatment of migraine. We expect to submit this IND in the fourth quarter of 2019.

Vazegepant

Administration of intranasal vazegepant in a Phase 1 clinical trial was initiated in October 2018 and has achieved targeted therapeutic exposures. We advanced vazegepant into a Phase 2/3 trial to evaluate its efficacy for the acute treatment of migraine in the first quarter of 2019. We believe that intranasal vazegepant may provide an ultra-rapid onset of action that could be used in a complimentary fashion with other migraine treatment when the speed of onset is critical to a patient. We anticipate reporting topline results from this trial in the fourth quarter of 2019.

Glutamate Platform

We are developing three product candidates that modulate the body’s glutamate system. Two of these product candidates, troriluzole (previously referred to as trigriluzole and BHV-4157) and Nurtec (previously BHV-0223), act as glutamate transporter modulators, while our product candidate BHV-5000 is an antagonist of the glutamate N-methyl-D-aspartate (“NMDA”) receptor.

Troriluzole

Ataxias

We are developing troriluzole for the treatment of ataxias; our initial focus has been spinocerebellar ataxia (“SCA”). We received both orphan drug designation and fast track designation from the FDA for troriluzole for the treatment of SCA. A Phase 3 trial began enrollment in March 2019 to evaluate the efficacy of troriluzole in SCA. We believe that the non-statistically significant clinical observations from our first Phase 2/3 trial and open-label extension phase in SCA support our decision to advance troriluzole into a Phase 3 trial that could provide the data needed to serve as the basis for an NDA. We expect to complete enrollment in the Phase 3 trial of troriluzole in SCA in the first quarter of 2020.

Other Indications

A Phase 2/3 double-blind, randomized, controlled trial to assess the efficacy of troriluzole in Obsessive Compulsive Disorder (“OCD”) commenced in December 2017. We expect to complete the enrollment of this trial by the end of 2019. In addition, a Phase 2/3 double-blind, randomized, controlled trial of troriluzole in the treatment of mild-to-moderate Alzheimer’s disease has advanced with the Alzheimer’s Disease Cooperative Study, a consortium of sites funded by the National Institutes of Health. We expect to complete enrollment and announce interim futility results for this trial in the fourth quarter of 2019. We began enrollment in a Phase 2/3 clinical trial of troriluzole in Generalized Anxiety Disorder (“GAD”) in February 2019, and completed enrollment of this trial in the fourth quarter of 2019. Top line data is expected at the end of the fourth quarter of 2019 or early first quarter of 2020.

Nurtec

We are developing Nurtec for the treatment of Amyotrophic Lateral Sclerosis (“ALS”). In January 2018, we announced positive results of a bioequivalence study with Nurtec and marketed riluzole, thus providing pivotal data that we believed was sufficient for the filing of an NDA with the FDA, allowing us to pursue the regulatory approval of Nurtec for ALS under Section 505(b)(2) of the U.S. Federal Food, Drug, and Cosmetic Act. We submitted an NDA in September 2018, and the PDUFA date was in July 2019.

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In July 2019, we announced that we received a Complete Response Letter ("CRL") from the FDA for the 505(b)2 application seeking approval for NURTEC™ (riluzole) for the treatment of ALS. The sole issue identified in the CRL relates to an FDA concern regarding the use of an active pharmaceutical ingredient ("API") manufactured by Apotex Pharmachem India Private Limited ("Apotex") and used in the drug product supplies for the bioequivalence study in 2017. In the CRL, the FDA stated that it provided recommendations to Apotex regarding the information needed to qualify previous API batches manufactured at Apotex during the time period in question. We have been subsequently informed by the manufacturer that the manufacturer had an exemption from the FDA to supply riluzole to the U.S. market during that time period. We have been in contact with the FDA's Chemistry Manufacturing, and Controls ("CMC") group and Apotex to resolve the matter and we have already submitted additional information to the FDA regarding this issue. We note that the API for commercial supply of Nurtec is currently sourced from another supplier, with whom no CMC issues have been identified.  The FDA did not cite any other concerns in their CRL regarding Nurtec.

BHV-5000

We are also developing BHV-5000, an orally available, low-trapping NMDA receptor antagonist, for the treatment of neuropsychiatric diseases. One potential target indication includes Complex Regional Pain Syndrome (“CRPS”). CRPS is a rare, chronic pain condition typically affecting limbs and triggered by traumatic injury. Accompanying symptoms also include chronic inflammation and reduced mobility in the affected areas. Other disorders of interest include treatment-resistant major depressive disorder and Rett syndrome. Rett syndrome is a rare and severe genetic neurodevelopmental disorder for which no approved treatments are currently available. We acquired worldwide rights to BHV-5000 under an exclusive license agreement with AstraZeneca AB in October 2016. We selected a lead formulation at the end of 2017 and completed single dosing in a Phase 1 clinical trial of BHV-5000 in January 2018 to evaluate its pharmacokinetic properties. Nonclinical studies are ongoing to support future trials.

MPO Platform

Verdiperstat

We are developing verdiperstat (previously BHV-3241), an oral myeloperoxidase inhibitor for the treatment of neurodegenerative diseases. One target indication is MSA, a rare, rapidly progressive and fatal neurodegenerative disease with no cure or effective treatments. Verdiperstat has recieved orphan drug designation for the treatment of MSA from both the FDA and the European Medicines Agency. A Phase 3 trial began enrollment in July 2019 to evaluate the efficacy of verdiperstat in MSA. We expect to obtain China IND approval to join the phase 3 clinical trial of verdiperstat for the treatment of MSA by the end of 2019. Another potential target indication is ALS. In September 2019, we announced that verdiperstat was selected to be studied in the HEALEY ALS Platform Trial, which is being conducted by the Sean M. Healey & AMG Center for ALS at Massachusetts General Hospital in collaboration with the Northeast ALS Consortium (NEALS) clinical trial network. Promising investigational drugs were chosen for the HEALEY ALS Platform Trial through a competitive process, with the Healey Center providing partial financial support to successful applicants. Verdiperstat was progressed through Phase 2 clinical trials by AstraZeneca. We have entered into an exclusive license agreement with AstraZeneca for the product candidate.

Preclinical

In May 2019, the Company entered into an agreement with Fox Chase Chemical Diversity Center Inc. ("FCCDC") for FCCDC's TDP-43 assets (the "FCCDC Agreement"). The FCCDC Agreement provides the Company with a plan and goal to identify one or more new chemical entity candidates for preclinical development for eventual clinical evaluation for the treatment of one or more TDP-43 proteinopathies. In connection with the FCCDC Agreement, Biohaven and FCCDC have established a TDP-43 Research Plan that provides for certain milestones to be achieved by FCCDC, and milestone payments to be made by us (See Note 12).

Recent Developments

Priority Review Voucher Purchase and Series A Preferred Share Financing

In April 2019, we sold 2,495 Series A preferred shares (the "Series A Preferred Shares") to RPI Finance Trust ("RPI") at a price of $50,100 per preferred share pursuant to a Series A preferred share purchase agreement (the "Preferred Share Agreement"). The financing closed in April 2019. The gross proceeds from the transaction with RPI were $125 million, with $105 million of the proceeds used to purchase a PRV issued by the United States Secretary of Health and Human Services to potentially expedite the regulatory review of the NDA for the ODT formulation of rimegepant and the remainder of the proceeds to be used for other general corporate purposes. Pursuant to the Preferred Share Agreement, we may issue additional Series A Preferred Shares to RPI in up to three additional closings for an aggregate amount of $75 million subject to the acceptance by the FDA of both NDAs with respect to the tablet formulation of rimegepant and the ODT formulation of rimegepant. As a condition of future issuance of Series A Preferred Shares, one NDA must be accepted under the priority review designation pathway. The issuance of additional Series A Preferred Shares is also subject to customary closing

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conditions. Subject to the satisfaction of the applicable conditions under the Preferred Share Agreement, the issuance of additional Series A Preferred Shares is entirely at our option, and we are not obligated to issue any additional Series A Preferred Shares.

Follow-on Offering of Common Shares

In June 2019, we issued and sold 6,976,745 common shares at a public offering price of $43.00 per share for net proceeds of $281.1 million after deducting underwriting discounts and commissions of $18.0 million and other offering expenses of approximately $0.9 million. Subsequently, in July 2019, the underwriters of the follow-on offering partially exercised their option to purchase additional shares, and we issued and sold 525,000 common shares for net proceeds of $21.2 million after deducting underwriting discounts and commissions of $1.4 million. Thus, the aggregate net proceeds to us from the follow-on offering, after deducting underwriting discounts and commissions and other offering costs, were $302.3 million.

Executive Officer Update

During August 2019, Robert Berman M.D. transitioned to a new role in charge of Special Projects and Medical Oversight. Elyse Stock M.D., previously our Chief of Portfolio Strategy and Development, has assumed the role of Chief Medical Officer.

Capital Requirements

Since our inception, we have incurred significant operating losses. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our current product candidates and programs. Our net loss was $106.2 million and $61.4 million for the three months ended September 30, 2019 and 2018, respectively. As of September 30, 2019, we had an accumulated deficit of $823.1 million. We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for our product candidates. We expect to continue to incur significant expenses for at least the next several years as we advance our product candidates from discovery through preclinical development and clinical trials and seek regulatory approval and pursue commercialization of any approved product candidate. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. In addition, we may incur expenses in connection with the in-license or acquisition of additional product candidates.

As a result, we will need additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the public or private sale of equity, debt financings or other capital sources, including collaborations with other companies or other strategic transactions. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our product candidates or delay our pursuit of potential in-licenses or acquisitions.

Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

As of September 30, 2019, we had cash of $416.6 million. We believe that our cash as of September 30, 2019 will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. We have based these estimates on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “—Liquidity and Capital Resources.” Our future viability beyond that point is dependent on our ability to raise additional capital to finance our operations.

Components of Our Results of Operations

Revenue

To date, we have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products in the near future. If our development efforts for our product candidates are successful and result in regulatory approval or additional license agreements with third parties, we may generate revenue in the future from product sales.

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Operating Expenses

Research and Development Expenses

Research and development expenses consist primarily of costs incurred in connection with the development of our product candidates. We expense research and development costs as incurred. These expenses include:

•expenses incurred under agreements with contract research organizations (“CROs”) or contract manufacturing organizations (“CMOs”), as well as investigative sites and consultants that conduct our clinical trials, preclinical studies and other scientific development services;

•manufacturing scale-up expenses and the cost of acquiring and manufacturing preclinical and clinical trial materials and commercial materials, including manufacturing validation batches;

•employee-related expenses, including salaries, benefits, travel and non-cash share-based compensation expense for employees engaged in research and development functions;

•costs related to compliance with regulatory requirements;

•payments made in cash, equity securities or other forms of consideration under third-party licensing agreements.

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

Our external direct research and development expenses are tracked on a program-by-program basis for our product candidates and consist primarily of external costs, such as fees paid to outside consultants, CROs, contract manufacturing organizations, and central laboratories in connection with our preclinical development, process development, manufacturing and clinical development activities. Our direct research and development expenses by program also include fees incurred under license agreements. We do not allocate employee costs or other indirect costs, to specific programs because these costs are deployed across multiple programs and, as such, are not separately classified. We use internal resources primarily to oversee the research and development as well as for managing our preclinical development, process development, manufacturing and clinical development activities. Many employees work across multiple programs, and we do not track personnel costs by program.

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. As a result, we expect that our research and development expenses will increase over the next several years as we increase personnel costs conduct clinical trials and prepare regulatory filings for our product candidates. We also expect to incur additional expenses related to milestone and royalty payments payable to third parties with whom we have entered into license agreements to acquire the rights to our product candidates.

The successful development and commercialization of our product candidates is highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical and clinical development of any of our product candidates or when, if ever, material net cash inflows may commence from any of our product candidates. This uncertainty is due to the numerous risks and uncertainties associated with product development and commercialization, including the uncertainty of:

•the scope, progress, outcome and costs of our preclinical development activities, clinical trials and other research and development activities;

•establishment of an appropriate safety profile with IND-enabling studies;

•successful patient enrollment in, and the initiation and completion of, clinical trials;

•the timing, receipt and terms of any marketing approvals from applicable regulatory authorities;

•establishment of commercial manufacturing capabilities or making arrangements with third-party manufacturers;

•development and timely delivery of commercial-grade drug formulations that can be used in our clinical trials and for commercial launch;

•acquisition, maintenance, defense and enforcement of patent claims and other intellectual property rights;

•significant and changing government regulation;

•initiation of commercial sales of our product candidates, if and when approved, whether alone or in collaboration with others; and

•maintenance of a continued acceptable safety profile of the product candidates following approval.

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General and Administrative Expenses

General and administrative expenses include salaries, benefits, travel expense and non-cash share-based compensation expense for personnel in executive, finance and administrative functions. General and administrative expenses also include professional fees for legal, patent, consulting, accounting and audit services.

We anticipate that our general and administrative expenses will increase in the future as we increase our general and administrative headcount to support our continued research and development, and commercialization activities of our product candidates. We also continue to incur accounting, audit, legal, regulatory, compliance, public relations, director and insurance costs associated with being a public company. Additionally, as we believe regulatory approval of several of our product candidates appears likely, we expect further increases in payroll and related expenses as a result of our preparation for commercial operations, especially as it relates to the sales and marketing of our product candidates.

Other Income (Expense)

Change in Fair Value of Derivative Liability

The fair value of the derivative liability recognized in connection with contingent payments under the Preferred Share Agreement is determined using the with-and-without valuation method. As inputs into the valuation, we considered the type and probability of occurrence of certain events, the amount of the payments, the expected timing of certain events, and a risk-adjusted discount rate. In accordance with ASC 815, Derivatives and Hedging, the fair value of the derivative is recorded on the balance sheet as a derivative liability with changes in fair value recorded in other income (expense) in the condensed consolidated statements of operations and comprehensive loss.

Non-Cash Interest Expense on Liability Related to Sale of Future Royalties

We have accounted for our funding agreement with RPI (the "Funding Agreement") as a liability financing. The debt is amortized under the effective interest rate method and, accordingly, we are recording non-cash interest expense over the estimated term of the Funding Agreement. The liability related to sale of future royalties, and the debt amortization, are based on our current estimate of future royalties expected to be paid over the term of the Funding Agreement. We will periodically assess the expected royalty payments and, if materially different than our previous estimate, will prospectively adjust and recognize the related non-cash interest expense. The transaction costs associated with the liability will be amortized to non-cash interest expense over the estimated term of the Funding Agreement.

Loss from Equity Method Investment

From August 2016 through November 2018, we purchased shares of common stock in Kleo Pharmaceuticals, Inc., a privately held Delaware corporation (“Kleo”). As of September 30, 2019 and December 31, 2018, we owned approximately 42% of the outstanding shares of Kleo’s common stock. We account for our investment in Kleo under the equity method of accounting. As a result, our proportionate share of Kleo’s net income or loss each reporting period is included in other income (expense), net, in our condensed consolidated statement of operations and comprehensive loss and results in a corresponding adjustment to the carrying value of the equity method investment on our condensed consolidated balance sheet.

Change in Fair Value of Warrant Liability

In connection with entering into a credit agreement, we issued warrants to purchase common shares to two of our directors in connection with a guarantee of our obligations under the agreement. We previously classified the warrants as a liability on our consolidated balance sheet because each warrant represented a freestanding financial instrument that was not indexed to our shares. The warrant liability was initially recorded at fair value upon entering into the credit agreement and was subsequently remeasured to fair value at each reporting date. Changes in the fair value of the warrant liability was recognized as a component of other income (expense), net in the condensed consolidated statement of operations and comprehensive loss. On January 26, 2018, the anti-dilution price protection provisions contained within the warrants expired. Due to the expiration of these provisions, we discontinued classification of these warrants as a liability, and have accordingly reclassified them to additional paid-in capital within shareholders' equity.

Provision for Income Taxes

As a company incorporated in the British Virgin Islands (“BVI”), we are principally subject to taxation in the BVI. Under the current laws of the BVI, tax on a company’s income is assessed at a zero percent tax rate. As a result, we have not recorded any income tax benefits from losses incurred in the BVI during each reporting period, and no net operating loss carryforwards will be available to us for those losses. We have historically outsourced all of the research and clinical development for our programs under a master services agreement with our wholly owned subsidiary, Biohaven Pharmaceuticals, Inc., a Delaware corporation (“BPI”). As a result of providing services under this agreement, BPI was profitable during the nine months ended September 30, 2019 and 2018, and BPI is subject to taxation in the United States. Our provision for income taxes has

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historically been comprised of the state income taxes of BPI’s profitable operations in the United States and federal income taxes due to general business credit limitations.

As of September 30, 2019, we evaluated our deferred tax assets and determined that a full valuation allowance on these assets was appropriate due to excess research and development (“R&D”) credits.

Results of Operations

Comparison of the Three Months Ended September 30, 2019 and 2018

The following tables summarize our results of operations for the three months ended September 30, 2019 and 2018:

	Three Months Ended September 30,
	2019		2018		Change
In thousands
Operating expenses:
Research and development	$	61,674	$	47,362	$	14,312
General and administrative	28,782		7,574		21,208
Total operating expenses	90,456		54,936		35,520
Loss from operations	(90,456)		(54,936)		(35,520)
Other income (expense):
Non-cash interest expense on mandatorily redeemable preferred shares	(4,378)		—		(4,378)
Non-cash interest expense on liability related to sale of future royalties	(7,308)		(5,633)		(1,675)
Change in fair value of derivative liability	(1,717)		—		(1,717)
Loss from equity method investment	(1,993)		(697)		(1,296)
Other	8		(14)		22
Total other income (expense), net	(15,388)		(6,344)		(9,044)
Loss before provision for income taxes	(105,844)		(61,280)		(44,564)
Provision for income taxes	323		161		162
Net loss and comprehensive loss	$	(106,167)	$	(61,441)	$	(44,726)

Research and Development Expenses

	Three Months Ended September 30,
	2019		2018		Change
In thousands
Direct research and development expenses by program:
Nurtec	$	243	$	2,930	$	(2,687)
Troriluzole	9,533		4,837		4,696
Rimegepant	26,081		22,722		3,359
Vazegepant	12,562		3,072		9,490
BHV-5000	279		887		(608)
Verdiperstat	3,103		—		3,103
Unallocated research and development costs:
Personnel related (including non-cash share-based compensation)	8,969		4,612		4,357
Preclinical research programs	39		—		39
Other	865		8,302		(7,437)
Total research and development expenses	$	61,674	$	47,362	$	14,312

R&D expenses, including non-cash share-based compensation costs, were $61.7 million for the three months ended September 30, 2019, compared to $47.4 million for the three months ended September 30, 2018. The increase of $14.3 million was primarily due to increased expenses due to later stage trials in our CGRP platform and troriluzole program of $12.8 million and $4.7 million, respectively, and an increase in personnel related costs of $4.4 million. The increase in R&D expenses was

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partially offset by a $7.1 million one-time license payment to AstraZeneca in the third quarter of 2018. Included in R&D expense for the three months ended September 30, 2019 is $7.5 million in costs related to process validation batches of rimegepant to support our expected commercial launch in the first quarter of 2020.

The increase in personnel related costs, including non-cash share-based compensation, was a result of additional options issued and hiring additional research and development personnel related to the anticipated commercial launch of rimegepant. Our headcount, in research and development, increased to 59 as of September 30, 2019, compared to 34 as of September 30, 2018. Non-cash share-based compensation expense was $3.6 million for the three months ended September 30, 2019, an increase of $1.9 million as compared to the same period in 2018.

General and Administrative Expenses

G&A expenses, including non-cash share-based compensation costs, were $28.8 million for the three months ended September 30, 2019, compared to $7.6 million for the three months ended September 30, 2018. The increase of $21.2 million was primarily due to increases in spending to prepare for commercial launch expected in early 2020, and personnel-related costs, including non-cash share-based compensation, due to the hiring of additional personnel in our general and administrative functions primarily to prepare for commercialization of our product candidates, and increases in professional fees supporting ongoing business operations. Our headcount, in general and administrative activities, increased to 119 as of September 30, 2019, compared to 23 as of September 30, 2018. Non-cash share-based compensation expense, included in personnel-related costs, was $6.3 million for the three months ended September 30, 2019, an increase of $4.4 million as compared to the same period in 2018.

Other Income (Expense), Net

Other income (expense), net was a net expense of $15.4 million for the three months ended September 30, 2019, compared to net expense of $6.3 million for the three months ended September 30, 2018. The increase of $9.0 million in net expense was primarily due to the change in fair value of derivative liability and the non-cash interest expense on our liability related to the mandatorily redeemable preferred shares resulting from the sale of Series A Preferred Shares to RPI in April 2019, and an increase in the non-cash interest expense recognized on our liability related to the sale of future royalties.

Provision for Income Taxes

We recorded a provision for income taxes of $0.3 million for the three months ended September 30, 2019, compared to a provision for income taxes of $0.2 million for the three months ended September 30, 2018. We recorded a tax provision for the three months ended September 30, 2019 primarily for the federal and state income taxes of BPI’s profitable operations in the United States during that period.

Comparison of the Nine Months Ended September 30, 2019 and 2018

The following tables summarize our results of operations for the nine months ended September 30, 2019 and 2018:

	Nine Months Ended September 30,
	2019		2018		Change
In thousands
Operating expenses:
Research and development	$	278,654	$	151,993	$	126,661
General and administrative	65,479		24,495		40,984
Total operating expenses	344,133		176,488		167,645
Loss from operations	(344,133)		(176,488)		(167,645)
Other income (expense):
Non-cash interest expense on mandatorily redeemable preferred shares	(8,333)		—		(8,333)
Non-cash interest expense on liability related to sale of future royalties	(19,272)		(6,134)		(13,138)
Change in fair value of warrant liability	—		(1,182)		1,182
Change in fair value of derivative liability	(2,980)		—		(2,980)
Loss from equity method investment	(4,308)		(2,066)		(2,242)
Other	(25)		(29)		4
Total other income (expense), net	(34,918)		(9,411)		(25,507)
Loss before provision for income taxes	(379,051)		(185,899)		(193,152)
Provision for income taxes	490		273		217
Net loss and comprehensive loss	$	(379,541)	$	(186,172)	$	(193,369)

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Research and Development Expenses

	Nine Months Ended September 30,
	2019		2018		Change
In thousands
Direct research and development expenses by program:
Nurtec	$	678	$	5,324	$	(4,646)
Troriluzole	24,232		8,833		15,399
Rimegepant:
Priority review voucher purchase	105,000		—		105,000
Program expenses	74,918		57,213		17,705
Vazegepant	28,006		5,790		22,216
BHV-5000	714		1,519		(805)
Verdiperstat	6,217		—		6,217
Unallocated research and development costs:
Personnel related (including non-cash share-based compensation)	30,756		13,644		17,112
BMS Amendment upfront license payment	—		50,000		(50,000)
Preclinical research programs	5,685		—		5,685
Other	2,448		9,670		(7,222)
Total research and development expenses	$	278,654	$	151,993	$	126,661

Research and development expenses were $278.7 million for the nine months ended September 30, 2019, compared to $152.0 million for the nine months ended September 30, 2018. The increase of $126.7 million was primarily due to:

•the purchase of a PRV for $105.0 million to potentially expedite the regulatory review of the ODT version of rimegepant;

•filing fees of $7.6 million related to our NDA submissions;

•increases in direct costs of $15.4 million for our troriluzole program, $22.2 million for our vazegepant program, including a development milestone accrual of $4.0 million, and $5.7 million for our preclinical research programs; and

•increases in personnel costs of $17.1 million, including an increase of $11.6 million in non-cash share-based compensation.

The increase in direct costs for our troriluzole and vazegepant programs was primarily due to increases in costs associated with advancing the programs into later-stage clinical trials for the nine months ended September 30, 2019, as compared to the same period in 2018, and the development milestone accrual for the vazegepant program noted above. The increase of $5.7 million in direct costs for our preclinical research programs was due to the one-time issuance of common shares to FCCDC for assets within the FCCDC Agreement.

The increase in personnel-related costs, including non-cash share-based compensation, was a result of additional options issued and hiring additional research and development personnel. Our headcount in research and development increased to 59 as of September 30, 2019, compared to 34 as of September 30, 2018.  Non-cash share-based compensation expense, included in personnel related costs, was $17.7 million for the nine months ended September 30, 2019, a increase of $11.6 million as compared to the same period in 2018.

The increases in direct costs during the period were partially offset by the one-time upfront payment to BMS in the nine months ended September 30, 2018.

General and Administrative Expenses

General and administrative expenses were $65.5 million for the nine months ended September 30, 2019, compared to $24.5 million for the nine months ended September 30, 2018. The increase of $41.0 million was primarily due to increases in personnel-related costs, including non-cash share-based compensation, due to the hiring of additional personnel in our general and administrative functions, preparation for commercialization activities, and professional fees supporting ongoing business operations.  Our headcount, outside of research and development, increased to 119 as of September 30, 2019, compared to 23 as

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of September 30, 2018.  Non-cash share-based compensation expense, included in personnel related costs, was $17.2 million for the nine months ended September 30, 2019, an increase of 10.8 million as compared to the same period in 2018.

Other Income (Expense), Net

Other income (expense), net was a net expense of $34.9 million for the nine months ended September 30, 2019, compared to net expense of $9.4 million for the nine months ended September 30, 2018. The increase of $25.5 million in net expense was primarily due to the change in fair value of derivative liability and the non-cash interest expense on our liability related to the mandatorily redeemable preferred shares resulting from the sale of Series A Preferred Shares to RPI in April 2019, and an increase in the non-cash interest expense recognized on our liability related to the sale of future royalties.

Provision for Income Taxes

We recorded a provision for income taxes of $0.5 million for the nine months ended September 30, 2019, compared to a provision for income taxes of $0.3 million for the nine months ended September 30, 2018. We recorded a tax provision for the nine months ended September 30, 2019 for the state income taxes of BPI’s profitable operations in the United States during that period.

Liquidity and Capital Resources

Since our inception, we have not generated any revenue and have incurred significant operating losses and negative cash flows from our operations. We have funded our operations primarily with proceeds from sales of equity, and other financing transactions. Subsequent to our initial public offering ("IPO"), we have raised funds through sales of our equity in public and private offerings, as well as through the sale of a revenue participation right related to future royalties.

In May 2017, our registration statement on Form S-1 relating to our IPO was declared effective by the SEC. The IPO closed on May 9, 2017 and we issued and sold 9,900,000 common shares at a public offering price of $17.00 per share, resulting in net proceeds of $152.7 million after deducting underwriting discounts and commissions and other offering expenses. In addition, on May 9, 2017, the underwriters of our IPO fully exercised their option to purchase additional shares, and on May 11, 2017, we issued and sold an additional 1,485,000 common shares, resulting in additional net proceeds to us of $23.5 million, after deducting underwriting discounts and commissions and other offering expenses. The aggregate net proceeds we received from the IPO, after deducting underwriting discounts and commissions and offering expenses, were $176.1 million.

In March 2018, we sold an aggregate of 2,000,000 common shares in a private placement at a price of $27.50 per share, for net proceeds of $52.0 million after deducting underwriting discounts and commissions of $2.8 million and other offering expenses of $0.2 million. Subsequent to the closing of the private placement, we paid BMS the $50 million upfront payment under the amendment to our license agreement with BMS (the "BMS Amendment").

In June 2018, we entered into a funding agreement to sell tiered, sales-based royalty rights on global net sales of pharmaceutical products containing the compounds rimegepant or vazegepant to RPI. We issued to RPI the right to receive certain revenue participation payments, subject to certain reductions, based on the future global net sales of the products, for each calendar quarter during the royalty term contemplated by the Funding Agreement, in exchange for $100.0 million in cash. Specifically, the participation rate commences at 2.10 percent on annual global net sales of up to and equal to $1.5 billion, declining to 1.50 percent on annual global net sales exceeding $1.5 billion.

Concurrently, we entered into a common stock purchase agreement with RPI, pursuant to which we issued and sold 1,111,111 common shares to RPI. RPI paid $45.00 per share, resulting in net proceeds of $49.9 million after deducting offering expenses of $0.1 million.

In December 2018, we closed on an underwritten public offering of 3,859,060 common shares, including the full exercise of the underwriters' option to purchase additional shares, at a price to the public of $37.25 per share. The aggregate net proceeds to us from the offering, after deducting the underwriting discounts and commissions and offering expenses payable, were approximately $134.5 million.

In April 2019, we closed the sale of 2,495 Series A Preferred Shares to RPI at a price of $50,100 per preferred share, resulting in gross proceeds of $125.0 million, before offering expenses. As described above, we used $105.0 million of these proceeds to fund the purchase of the PRV.

In June 2019, we issued and sold 6,976,745 common shares at a public offering price of $43.00 per share for net proceeds of $281.1 million after deducting underwriting discounts and commissions of $18.0 million and other offering expenses of approximately $0.9 million. In addition, in July 2019, the underwriters of the follow-on offering partially exercised their option to purchase additional shares, and we issued and sold 525,000 common shares for net proceeds of $21.2 million after deducting underwriting discounts and commissions of $1.4 million. Thus, the aggregate net proceeds to us from the follow-on offering, after deducting underwriting discounts and commissions and other offering costs, were $302.3 million.

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As of September 30, 2019, we had cash of $416.6 million.  Cash in excess of immediate requirements is invested in non-interest-bearing accounts with a view to liquidity and capital preservation.

Cash Flows

The following table summarizes our cash flows for each of the periods presented:

	Nine Months Ended September 30,
	2019		2018
In thousands
Net cash used in operating activities	$	(276,884)	$	(163,725)
Net cash used in investing activities	(1,637)		(4,009)
Net cash provided by financing activities	431,846		204,451
Net increase in cash and restricted cash	$	153,325	$	36,717

Operating Activities

During the nine months ended September 30, 2019, operating activities used $276.9 million of cash, an increase of $113.2 million as compared to the nine months ended September 30, 2018.  The increase in cash usage was primarily due to the $105 million PRV payment, and increases in cash paid for clinical trials, commercial supply and other commercialization activities, personnel, professional fees and other infrastructure costs, partially offset by the one-time $50 million upfront payment under the BMS Amendment made in 2018.

Investing Activities

During the nine months ended September 30, 2019, we used $1.6 million of cash in investing activities, a decrease of $2.4 million as compared to the nine months ended September 30, 2018.  The decrease was primarily due to a reduction in the amount invested in Kleo during the nine months ended September 30, 2019, as compared to the same period in 2018.

Financing Activities

During the nine months ended September 30, 2019, net cash provided by financing activities was $431.8 million, an increase of $227.4 million compared to the nine months ended September 30, 2018.  The increase was primarily due to $302.3 million in net proceeds received from the June 2019 follow-on issuance of common shares.

Funding Requirements

We expect our expenses to increase in connection with our ongoing activities, particularly as we advance the preclinical activities, clinical trials and potential commercialization of our product candidates. Our costs will also increase as we:

•Continue to advance the rimegepant programs towards commercialization for the acute treatment of migraine;

•complete our ongoing Phase 3 clinical trial to evaluate rimegepant as a preventive therapy for migraine and our ongoing Phase 2 proof of concept trial to evaluate the safety and efficacy of rimegepant in patients with treatment refractory trigeminal neuralgia;

•complete the ongoing extension phase of the Phase 2/3 clinical trial of troriluzole in SCA and our ongoing Phase 2/3 trials of troriluzole in OCD, Alzheimer’s disease and GAD and, complete our ongoing Phase 3 randomized controlled trial to assess the efficacy of troriluzole in SCA;

•conduct support activities for future clinical trials of BHV-5000;

•complete the ongoing Phase 2/3 clinical trial of vazegepant and related support activities;

•conduct our planned Phase 3 clinical trial of verdiperstat in MSA;

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

•make required milestone and royalty payments under the license agreements by which we acquired some of the rights to our product candidates;

•make required royalty payments to RPI under the Funding Agreement;

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•initiate preclinical studies and clinical trials for any additional indications for our current product candidates and any future product candidates that we may pursue;

•continue to build our portfolio of product candidates through the acquisition or in-license of additional product candidates or technologies;

•continue to develop, maintain, expand and protect our intellectual property portfolio;

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

•ultimately establish a sales, marketing and distribution infrastructure to commercialize any product candidate for which we may obtain marketing approval;

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

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

Additionally, pursuant to the terms of our Series A Preferred Shares, we will be required to redeem our Series A preferred shares upon various circumstances, as described in greater detail below (see "-Contractual Obligations and Commitments") and in any event no later than December 31, 2024.

Without additional external funding, we expect that our existing cash will be sufficient to fund our planned operating expenses, financial commitments and other cash requirements for at least the next 12 months, without giving effect to any additional sources of capital such as the issuance of any additional Series A Preferred Shares under the Preferred Share Agreement. The assumption for cash usage through this date assumes that planned programs and expenditures continue and that we do not reduce, stop or curtail programs or other spending. Beyond that point, we will need to raise additional capital to finance our operations, which could include the issuance of additional Series A Preferred Shares if the conditions for such issuance are satisfied, or through other means, which cannot be assured.

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 rimegepant, troriluzole, or our other product candidates, we expect to incur additional 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. Our future funding requirements will depend on and could increase significantly as a result of many factors, including:

•the scope, progress, results and costs of researching and developing our product candidates, and conducting preclinical studies and clinical trials;

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

•the costs of future activities, including product sales, medical affairs, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval;

•the revenue, if any, received from commercial sale of our products, should any of our product candidates receive marketing approval;

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

•the costs of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

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

•the costs of manufacturing commercial-grade product and necessary inventory to support commercial launch;

•the costs associated with payment of milestones and royalties under existing contractual arrangements and/or in-licensing additional products candidates to augment our current pipeline; and

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

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

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

Contractual Obligations and Commitments

In addition to the following discussion of our commitment to RPI under the Funding Agreement, the disclosure of our contractual obligations and commitments is set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations and Commitments” in our Annual Report on Form 10-K for the year ended December 31, 2018. See Note 13 to our condensed consolidated financial statements included in Item 1, “Unaudited Condensed Consolidated Financial Statements,” of this Quarterly Report on Form 10-Q for further discussion of commitments and contingencies.

Pursuant to our Funding Agreement with RPI entered in June 2018, we have a commitment for repayments under the Revenue Participation Right due for sales of Products. A liability of $106.0 million represents the carrying value established on the date of the transaction. Actual payments to RPI may be significantly different than the carrying value based on future royalties that may become payable from the sale of Products.

In April 2019, we issued the Series A Preferred Shares for the aggregate original purchase price of $125 million. The Series A Preferred Shares are redeemable from time to time, as described below.

If a Change of Control (as defined in our amended and restated memorandum and articles of association) occurs on or before October 5, 2019, we shall have the option to redeem the Series A Preferred Shares for one point five times (1.5x) the original purchase price of the Series A Preferred Shares upon the closing of the Change of Control. If we do not elect to redeem the Series A Preferred Shares for 1.5x the original purchase price at the closing of such Change of Control, then we would be required to redeem the Series A Preferred Shares for two times (2x) the original purchase price, payable in equal quarterly installments following closing of the Change of Control through December 31, 2024.

If a Change of Control occurs after October 5, 2019 and the Series A Preferred Shares have not previously been redeemed, we must redeem the Series A Preferred Shares for two times (2x) the original purchase price of the Series A Preferred Shares payable in a lump sum at the closing of the Change of Control or in equal quarterly installments following the closing of the Change of Control through December 31, 2024.

If an NDA for rimegepant is not approved by December 31, 2021, RPI has the option at any time thereafter to require us to redeem the Series A Preferred Shares for one point two times (1.2x) the original purchase price of the Series A Preferred Shares.

If no Change of Control has occurred, the Series A Preferred Shares have not previously been redeemed and (i) rimegepant is approved on or before December 31, 2024, following approval and starting one-year after approval, we must redeem the Series A Preferred Shares for two times (2x) the original purchase price, payable in a lump sum or in equal quarterly installments through December 31, 2024 (provided that if rimegepant is approved in 2024, the entire redemption amount must be paid by December 31, 2024) or (ii) rimegepant is not approved by December 31, 2024, we must redeem the Series A Preferred Shares for two times (2x) the original purchase price on December 31, 2024.

We may redeem the Series A Preferred Shares at our option at any time for two times (2x) the original purchase price, which redemption price may be paid in a lump sum or in equal quarterly installments through December 31, 2024.

In August 2019, the Company entered into a lease agreement for office space in Yardley, Pennsylvania. The lease will commence on March 1, 2020 and have a term of 88 months, with the ability to extend to 148 months. The lessor has provided the Company a temporary space to occupy while leasehold improvements are completed prior to commencement next year. With the exception of the first month's rent payment made on execution of the lease, the Company is not required to pay rent until August 2020. The total lease payments due under the lease agreement is $5.1 million over the 88 months.

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Critical Accounting Policies and Significant Judgments and Estimates

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis.

Changes to Critical Accounting Policies

Valuation of Derivative Liability

In the second quarter of 2019, we added "Valuation of Derivative Liability" to our critical accounting policies. The fair value of the derivative liability recognized in connection with contingent payments under the Preferred Share Agreement is determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The fair value of the derivative liability is determined using the with-and-without valuation method. As inputs into the valuation, we considered the type and probability of occurrence of certain events, the amount of the payments, the expected timing of certain events, and a risk-adjusted discount rate. In accordance with ASC 815, Derivatives and Hedging, the fair value of the derivative is recorded on the balance sheet as a derivative liability with changes in fair value recorded in other income (expense) in the condensed consolidated statements of operations and comprehensive loss. If factors change and different assumptions are used, the fair value of the derivative liability and related gains or losses could be materially different in the future.

Current Critical Accounting Policies

The critical accounting policies noted below are described above, and under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations— Critical Accounting Policies and Significant Judgments and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2018.  All of the critical accounting policies noted are described in the notes to the condensed consolidated financial statements included in Item 1, “Unaudited Condensed Consolidated Financial Statements,” of this Quarterly Report on Form 10-Q. We believe that the following accounting policies involve the most judgment and complexity:

•accrued research and development expenses;

•non-cash share-based compensation;

•equity method investment, including related impairment;

•non-cash interest expense on liability related to sale of future royalties;

•valuation of derivative liability; and

•valuation of warrant liability.

Accordingly, we believe the policies set forth above are critical to fully understanding and evaluating our financial condition and results of operations. If actual results or events differ materially from the estimates, judgments and assumptions used by us in applying these policies, our reported financial condition and results of operations could be materially affected.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations, if applicable, is disclosed in Note 2 to our condensed consolidated financial statements appearing at the beginning of this Quarterly Report on Form 10-Q.

36

Item 3. Quantitative and Qualitative Disclosures about Market Risks

Interest Rate Risk

The market risk inherent in our financial instruments and in our financial position has historically been the potential loss arising from adverse changes in interest rates. As of September 30, 2019 and December 31, 2018, we had cash of $416.6 million and $264.2 million, respectively. As of September 30, 2019, we held our cash in non-interest-bearing bank accounts and accordingly, the value of these accounts is not subject to fluctuation in interest rates.

We have adopted an investment policy, pursuant to which we hold such net proceeds in non-interest bearing accounts, with the goal of capital preservation and liquidity so that such funds are readily available to fund our operations. We have no exposure to interest rate risk related to indebtedness as of September 30, 2019.

We do not engage in any hedging activities against changes in interest rates. We do not have material foreign currency or other derivative financial instruments.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to a company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

In designing and evaluating our disclosure controls and procedures, management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and not be detected.

Based on the evaluation of our disclosure controls and procedures as of September 30, 2019, our Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2019, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Controls over Financial Reporting

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended September 30, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings 

From time to time, we may be subject to litigation and claims arising in the ordinary course of business. We are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened legal proceeding against us that we believe could have a material adverse effect on our business, operating results, cash flows or financial condition.

Item 1A.  Risk Factors

Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities. Except for the updated risk factors set forth immediately below, our risk factors have not changed materially from those described in "Part I, Item 1A. Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the Securities and Exchange Commission on February 28, 2019.

We may be required to redeem our outstanding Series A Preferred Shares.

The holders of our outstanding Series A Preferred Shares (consisting of 2,495 shares as of the filing of this report), will have the right to require us to redeem their shares in certain circumstances. If a Change of Control occurs after October 5, 2019 and the Series A Preferred Shares have not previously been redeemed, we must redeem the Series A Preferred Shares for two times (2x) the original purchase price of the Series A Preferred Shares payable in a lump sum at the closing of the Change of Control or in equal quarterly installments following the closing of the Change of Control through December 31, 2024.

If an NDA for rimegepant is not approved by December 31, 2021, the holder of the Series A Preferred Shares has the option at any time thereafter to require us to redeem the Series A Preferred Shares for one point two times (1.2x) the original purchase price of the Series A Preferred Shares.

If no Change of Control has occurred, the Series A Preferred Shares have not previously been redeemed and (i) rimegepant is approved on or before December 31, 2024, following approval and starting one-year after approval, we must redeem the Series A Preferred Shares for two times (2x) the original purchase price, payable in a lump sum or in equal quarterly installments through December 31, 2024 (provided that if rimegepant is approved in 2024, the entire redemption amount must be paid by December 31, 2024) or (ii)  rimegepant is not approved by December 31, 2024, we must redeem the Series A Preferred Shares for two times (2x) the original purchase price on December 31, 2024.

We may redeem the Series A Preferred Shares at our option at any time for two times (2x) the original purchase price, which redemption price may be paid in a lump sum or in equal quarterly installments through December 31, 2024.

In the event that we default on any obligation to redeem Series A Preferred Shares when required, the redemption amount shall accrue interest at the rate of eighteen percent (18%) per annum. If any such default continues for at least one year, the holders of such shares shall be entitled to convert, subject to certain limitations, such Series A Preferred Shares into common shares, with no waiver of their redemption rights.

Our obligation to redeem the Series A Preferred Shares would require a substantial amount of cash, the expenditure of which would likely have a material adverse effect on our liquidity, capital resources and business prospects. The purchase agreement by which the Series A Preferred Shares were issued provides for the potential sale of up to 1,497 additional Series A Preferred Shares under specified circumstances. The terms of our Series A Preferred Shares or any new preferred shares we may issue could also have the effect of delaying, deterring or preventing a change in control.

Our Series A Preferred Shares have rights, preferences and privileges that are not held by, and are preferential to, the rights of our common shareholders, which could result in the interests of the holders of our Series A Preferred Shares differing from those of our common shareholders.

In addition to the redemption rights discussed above, the holders of our Series A Preferred Shares have the right to receive a liquidation preference, equal to two times (2x) the original purchase price of such shares, entitling them to be paid out of our assets available for distribution to shareholders before any payment may be made to holders of any common shares. The existence of a liquidation preference may reduce the value of our common shares, make it harder for us to sell common shares in offerings in the future, or prevent or delay a change of control. Additionally, each Series A Preferred Share is entitled to vote with the common shares on the basis of 1,000 votes per share. Our memorandum and articles of association grant the Series A Preferred Shares customary protective provisions which provide that, without the approval of holders of a majority of the Series A Preferred Shares, we may not adversely affect the rights of the Series A Preferred Shares or create, authorize or issue any class or series of equity securities senior to, or pari passu with, the Series A Preferred Shares.

The preferential rights of the Series A Preferred Shares could result in divergent interests between the holders of the Series A Preferred Shares and holders of our common shares.

38

The regulatory approval process of the FDA and comparable foreign jurisdictions is lengthy, time-consuming and unpredictable.

Our future success is dependent upon our ability to successfully develop, obtain regulatory approval for and then successfully commercialize one or more of our product candidates. The time required to obtain approval by the FDA is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities. In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval is generally uncertain, may change during the course of a product candidate’s clinical development and may vary among jurisdictions. Moreover, the redemption of a rare pediatric disease priority review voucher, or PRV, for one of our future regulatory submissions to the FDA, such as the PRV that we recently purchased, may not result in faster review or approval compared to products considered for approval under conventional FDA procedures and, in any event, does not assure ultimate approval by FDA. We have not obtained regulatory approval for any product candidate and it is possible that none of our existing product candidates or any product candidates we may seek to develop in the future will ever obtain regulatory approval. Neither we nor any future collaborator is permitted to market any of our product candidates in the United States or abroad until we receive regulatory approval of an NDA from the FDA or approval from the EMA, National Medical Products Administration or other applicable foreign regulatory agency.

Prior to obtaining approval to commercialize a product candidate in any jurisdiction, we must demonstrate to the satisfaction of the FDA, EMA, National Medical Products Administration or any comparable foreign regulatory agency, that such product candidates are safe and effective for their intended uses. Results from preclinical studies and clinical trials can be interpreted in different ways. The FDA, EMA, National Medical Products Administration or any comparable foreign regulatory agency can delay, limit or deny approval of our product candidates or require us to conduct additional preclinical or clinical testing or abandon a program for many reasons, including:

•the FDA, EMA, National Medical Products Administration or the applicable foreign regulatory agency’s disagreement with the number, design, conduct or implementation of our preclinical studies and clinical trials;

•negative or ambiguous results from our clinical trials or results that may not meet the level of statistical significance required by the FDA, EMA, National Medical Products Administration or any comparable foreign regulatory agency for approval;

•serious and unexpected drug-related side effects experienced by participants in our clinical trials or by individuals using drugs similar to our product candidates;

•our inability to demonstrate to the satisfaction of the FDA, EMA, National Medical Products Administration or the applicable foreign regulatory agency that our product candidates are safe and effective for their proposed indications;

•the FDA’s, EMA’s, National Medical Products Administration's or the applicable foreign regulatory agency’s disagreement with the interpretation of data from preclinical studies or clinical trials;

•actions by the CROs that we retain to conduct our preclinical studies and clinical trials, which are outside of our control and that materially adversely impact our preclinical studies and clinical trials;

•the FDA’s, EMA’s, National Medical Products Administration's or other applicable foreign regulatory agencies’ disagreement with the interpretation of data from preclinical studies or clinical trials;

•our inability to demonstrate the clinical and other benefits of our product candidates outweigh any safety or other perceived risks;

•the FDA’s, EMA’s, National Medical Products Administration's or the applicable foreign regulatory agency’s requirement for additional preclinical studies or clinical trials;

•the FDA’s, EMA’s, National Medical Products Administration's or the applicable foreign regulatory agency’s disagreement regarding the formulation, labeling or the specifications of our product candidates;

•the FDA’s, EMA’s, National Medical Products Administration's or the applicable foreign regulatory agency’s failure to approve the manufacturing processes or facilities of third-party manufacturers with which we contract; or

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

For example, in July 2019 we received a Complete Response Letter (CRL) with respect to our 505(b)2 application to the FDA for the treatment of ALS with Nurtec (riluzole). The CRL cited issues with the active pharmaceutical ingredient (API)

39

used in the Biohaven 2017 bioequivalence study that was manufactured between 2014 and 2016 in an Apotex Pharmachem India Private Limited (Apotex) facility. In the CRL, the FDA stated that it provided recommendations to Apotex regarding the information that would be needed to qualify previous API batches manufactured at Apotex during the time period in question. We are working with the FDA and Apotex to resolve the matter but there is no assurance that the FDA will approve the Nurtec 505(b)2 application.

Any of our current or future product candidates could take a significantly longer time to gain regulatory approval than expected or may never gain regulatory approval. This could delay or eliminate any potential product revenue by delaying or terminating the potential commercialization of our product candidates.

Of the large number of drugs in development, only a small percentage successfully complete the FDA or foreign regulatory approval processes and are commercialized. The lengthy approval process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval to market our product candidates, which would significantly harm our business, financial condition, results of operations and prospects.

FDA guidance regarding the approval of drugs for the acute treatment of migraine has recently changed. We intend to seek advice and guidance from the FDA which may include requesting a pre-NDA meeting with the FDA prior to the submission of an NDA for any of our product candidates. If the feedback we receive is different from what we currently anticipate, this could delay the development and regulatory approval process for these product candidates. We generally plan to seek regulatory approval to commercialize our product candidates in the United States, the European Union and other key global markets. To obtain regulatory approval in other countries, we must comply 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. Even if we are successful in obtaining approval in one jurisdiction, we cannot ensure that we will obtain approval in any other jurisdiction. Failure to obtain approval in one jurisdiction may negatively impact our ability to obtain approval elsewhere. Failure to obtain marketing authorization for our product candidates will result in our being unable to market and sell such products. If we fail to obtain approval in any jurisdiction, the geographic market for our product candidates could be limited. Similarly, regulatory agencies may not approve the labeling claims that are necessary or desirable for the successful commercialization of our product candidates or may grant approvals for more limited patient populations than requested.

Even if we eventually complete clinical testing and receive approval of an NDA or foreign marketing application for our product candidates, the FDA or the applicable foreign regulatory agency may grant approval contingent on the performance of costly additional clinical trials, including Phase 4 clinical trials or the implementation of a Risk Evaluation and Mitigation Strategy ("REMS") which may be required to ensure safe use of the drug after approval. Any delay in obtaining, or inability to obtain, applicable regulatory approval would delay or prevent commercialization of that product candidate and would adversely impact our business and prospects.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

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Item 6. Exhibits

Exhibit No.*	Description
31.1	Certification of Principal Executive Officer under Section 302 of the Sarbanes-Oxley Act.
31.2	Certification of Principal Financial Officer under Section 302 of the Sarbanes-Oxley Act.
32.1‡	Certifications of Principal Executive Officer and Principal Financial Officer under Section 906 of the Sarbanes-Oxley Act.
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

___________________________________________________

* The XBRL instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

‡ These certifications are being furnished solely to accompany this quarterly report pursuant to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

41

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
Dated: November 1, 2019
	By:	/s/ Vlad Coric, M.D.
		Vlad Coric, M.D.
		Chief Executive Officer
		(On behalf of the Registrant and as the Principal Executive Officer)
	By:	/s/ Jim Engelhart
		Jim Engelhart
		Chief Financial Officer
		(Principal Financial Officer)

42

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Vlad Coric, M.D., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2019 of Biohaven Pharmaceutical Holding Company Ltd. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  November 1, 2019

/s/ Vlad Coric, M.D.

Vlad Coric, M.D.

President and Chief Executive Officer

(principal executive officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jim Engelhart, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2019 of Biohaven Pharmaceutical Holding Company Ltd. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 1, 2019

/s/ Jim Engelhart

Jim Engelhart

Chief Financial Officer

(principal financial officer)

EX-32.1

Exhibit 32.1

CERTIFICATIONS OF

PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Vlad Coric, M.D., President and Chief Executive Officer of Biohaven Pharmaceutical Holding Company Ltd. (the “Company”), and Jim Engelhart, Chief Financial Officer of the Company, each hereby certifies that, to the best of his knowledge:

1. The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2019, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and

2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned have set their hands hereto as of the 1 day of November 2019.

/s/ Vlad Coric, M.D.	/s/ Jim Engelhart
Vlad Coric, M.D.	Jim Engelhart
President and Chief Executive Officer (principal executive officer)	Chief Financial Officer (principal financial officer)

* This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

XML

Equity Method Investment (Tables)

9 Months Ended

Sep. 30, 2019

Equity Method Investments and Joint Ventures [Abstract]

Schedule of proportionate share of equity investment net loss

The Company recorded other expense and a corresponding reduction in the carrying value of its investment in Kleo as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Proportionate share of Kleo's net loss	$	1,993	$	697	$	4,308	$	2,066

Schedule of carrying value of equity method investment

The following table provides a roll-forward of the carrying value of the Company’s equity method investment:

	Carrying Value
Balance at December 31, 2018	$	11,414
Loss recognized in connection with equity method investment	(4,308)
Balance at September 30, 2019	$	7,106
Balance at December 31, 2017	$	7,847
Purchases of Kleo common stock	1,375
Loss recognized in connection with equity method investment	(2,066)
Balance at September 30, 2018	$	7,156

XML

Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Schedule of basic and diluted net loss per share

Basic and diluted net loss per share attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd. was calculated as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Numerator:
Net loss	$	(106,167)	$	(61,441)	$	(379,541)	$	(186,172)
Denominator:
Weighted average common shares outstanding—basic and diluted	52,077,240		40,147,735		47,210,615		38,636,072
Net loss per share attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd.—basic and diluted	$	(2.04)	$	(1.53)	$	(8.04)	$	(4.82)

Schedule of potentially anti-dilutive securities excluded from calculation of diluted net loss per share

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

	As of September 30, 2019
	2019	2018
Options to purchase common shares	8,560,514	5,982,134
Warrants to purchase common shares	106,751	221,751
	8,667,265	6,203,885

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Operating expenses:
Research and development	$ 61,674	$ 47,362	$ 278,654	$ 151,993
General and administrative	28,782	7,574	65,479	24,495
Total operating expenses	90,456	54,936	344,133	176,488
Loss from operations	(90,456)	(54,936)	(344,133)	(176,488)
Other income (expense):
Non-cash interest expense on mandatorily redeemable preferred shares	(4,378)	0	(8,333)	0
Non-cash interest expense on liability related to sale of future royalties	(7,308)	(5,633)	(19,272)	(6,134)
Change in fair value of warrant liability	0	0	0	(1,182)
Change in fair value of derivative liability	(1,717)	0	(2,980)	0
Loss from equity method investment	(1,993)	(697)	(4,308)	(2,066)
Other	8	(14)	(25)	(29)
Total other expense, net	(15,388)	(6,344)	(34,918)	(9,411)
Loss before provision for income taxes	(105,844)	(61,280)	(379,051)	(185,899)
Provision for income taxes	323	161	490	273
Net loss and comprehensive loss	$ (106,167)	$ (61,441)	$ (379,541)	$ (186,172)
Net loss per share - basic and diluted (in dollars per share)	$ (2.04)	$ (1.53)	$ (8.04)	$ (4.82)
Weighted average common shares outstanding - basic and diluted (shares)	52,077,240	40,147,735	47,210,615	38,636,072

XML

Fair Value of Financial Assets and Liabilities

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Assets and Liabilities

Fair Value of Financial Assets and Liabilities

The Company held no financial assets measured at fair value on a recurring basis as of September 30, 2019, and no financial assets or liabilities measured at fair value on a recurring basis as of December 31, 2018.

The following tables present information about the Company's financial liability measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair value:

	Fair Value Measurement as of September 30, 2019 Using:
	Level 1		Level 2		Level 3		Total
Liabilities:
Derivative liability	$	—	$	—	$	36,795	$	36,795
	$	—	$	—	$	36,795	$	36,795

The following table provides a roll forward from transaction date of the Series A preferred shares (see Note 8) to September 30, 2019 of the aggregate fair value of the Company’s derivative liability for which fair value is determined by Level 3 inputs:

	Derivative Liability
Transaction date balance	$	33,815
Change in fair value	2,980
Balance at September 30, 2019	$	36,795

Valuation of Derivative Liability

The fair value of the derivative liability recognized in connection with the Series A preferred shares agreement with RPI Finance Trust ("RPI"), as described in Note 8, was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The fair value of the derivative liability relates to certain scenarios outlined in the agreement that would result in accelerated payments as compared to the agreement's host instrument. The with-and-without valuation method was used to determine the fair value of the embedded derivatives within the agreement. As inputs into the valuation, the Company considered the type and probability of occurrence of certain events, the amount of the payments, the expected timing of certain events, and a risk-adjusted discount rate. In accordance with ASC 815, Derivatives and Hedging, the fair value of the derivative was recorded on the balance sheet as a derivative liability with changes in fair

value recorded in other income (expense) in the condensed consolidated statements of operations and comprehensive loss. If factors change and different assumptions are used, the fair value of the derivative liability and related gains or losses could be materially different in the future.

Valuation of Liability Related to Sale of Future Royalties

In June 2018, and as described in Note 7, the Company entered into a funding agreement with RPI, accounted for as a liability financing. As of September 30, 2019, the fair value of the liability related to sale of future royalties, used in determining the effective interest rate of the liability, is based on the Company's current estimates of future royalties expected to be paid to RPI over the life of the arrangement, which is considered Level 3.

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License and Other Agreements (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended						3 Months Ended
	May 31, 2019	Mar. 31, 2019	Mar. 31, 2018	Jan. 31, 2018	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2019	Jun. 30, 2019	Jun. 30, 2018	Mar. 31, 2018
License and other agreements
Value of common stock issued							$ 21,221	$ 281,100	$ 43,842	$ 52,013
FCCDC Warrants
License and other agreements
Number of securities called by warrants (shares)	100,000
Exercise price of warrants (in dollars per share)	$ 56.46
Catalent Agreement | Collaborative arrangement
License and other agreements
Last patent right expiration period (in years)				10 years
Automatic extension period (in years)				1 year
Catalent Agreement | Collaborative arrangement | Maximum
License and other agreements
Milestone payment to be paid upon regulatory achievement				$ 1,500
BMS Agreement
License and other agreements
Upfront payment under the BMS Amendment			$ 50,000
Biotech Value Advisors Agreement | Collaborative arrangement | Maximum
License and other agreements
Commercial milestone payment to be paid		$ 2,000
FCCDC Agreement | Collaborative arrangement
License and other agreements
Common stock issued (shares)	100,000
Value of common stock issued	$ 5,646
Development milestone payment to be paid	4,500
Development milestone payments to be paid per each additional NDA filing	1,000
Performance milestone payment to be paid	$ 1,500
Time period for payment of performance milestone	30 months
FCCDC Agreement | Collaborative arrangement | Minimum
License and other agreements
Earned royalty payment per agreement (percent)	0.00%
FCCDC Agreement | Collaborative arrangement | Maximum
License and other agreements
Earned royalty payment per agreement (percent)	10.00%
Yale Agreement | Collaborative arrangement
License and other agreements
Milestone payment to be paid upon regulatory achievement	$ 2,000
Common stock issued (shares)						250,000
Right to purchase securities in specified future equity offering (as a percent)						10.00%
Minimum annual royalty payment to be paid upon sale of product	$ 1,000
Notice period to terminate agreement	90 days
Yale Agreement | Collaborative arrangement | Maximum
License and other agreements
Extension of due diligence requirements (in years)	1 year
Amount of payment subject to due diligence extension	$ 150
MGH Agreement | Collaborative arrangement | Minimum
License and other agreements
Royalties to be paid per agreement (percent)					0.00%
MGH Agreement | Collaborative arrangement | Maximum
License and other agreements
Upfront payment under the BMS Amendment					$ 750
Commercial milestone payment to be paid					$ 2,500
Royalties to be paid per agreement (percent)					10.00%

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Shareholders' Equity - Changes in Shareholders' Equity (Details) - USD ($) $ in Thousands		3 Months Ended						9 Months Ended
	Jan. 26, 2018	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2018
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance		$ 186,741	$ 97,011	$ 150,920	$ 118,830	$ 107,816	$ 131,971	$ 150,920	$ 131,971
Issuance of common shares upon completion of equity offering and follow-on equity offering, net of offering costs		21,221	281,100			43,842	52,013
Exercise of warrants, net settlement of shares			1,998
Reclassification of warrant liability to equity	$ 5,203						5,203
Issuance of shares as payment for TDP-43 asset		5,646			4,080
Exercise of stock options		1,564	148	1,065	602	833	1,003
Non-cash share-based compensation expense		9,971	17,554	7,330	3,742	5,608	3,088
Net loss		(106,167)	(211,070)	(62,304)	(61,441)	(39,269)	(85,462)	(379,541)	(186,172)
Ending balance		118,976	186,741	97,011	65,813	118,830	107,816	118,976	65,813
Common Shares
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance		$ 844,966	$ 556,345	$ 554,384	$ 413,225	$ 367,730	$ 311,061	$ 554,384	$ 311,061
Beginning balance (in shares)		51,501,614	44,282,994	44,197,549	40,094,291	38,607,017	36,057,748	44,197,549	36,057,748
Issuance of common shares upon completion of equity offering and follow-on equity offering, net of offering costs		$ 21,221	$ 281,100			$ 43,842	$ 52,013
Issuance of common shares upon completion of equity offering, net of offering costs (in shares)		525,000	6,976,745			1,111,111	2,000,000
Exercise of warrants, net settlement of shares			$ 7,201
Exercise of warrants, net settlement of shares (in shares)			215,000			261,140	228,219
Issuance of shares as payment for TDP-43 asset		$ 5,646			$ 4,080
Issuance of shares as payment for TDP-43 asset (in shares)		100,000			109,523
Exercise of stock options		$ 2,756	$ 320	$ 1,961	$ 968	$ 1,653	$ 4,656
Exercise of stock options (in shares)		91,070	26,875	85,445	57,936	115,023	321,050
Ending balance		$ 874,589	$ 844,966	$ 556,345	$ 418,273	$ 413,225	$ 367,730	$ 874,589	$ 418,273
Ending balance (in shares)		52,217,684	51,501,614	44,282,994	40,261,750	40,094,291	38,607,017	52,217,684	40,261,750
Additional Paid-in Capital
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance		$ 58,717	$ 46,538	$ 40,104	$ 32,982	$ 28,194	$ 23,556	$ 40,104	$ 23,556
Exercise of warrants, net settlement of shares			(5,203)
Reclassification of warrant liability to equity							5,203
Exercise of stock options		(1,192)	(172)	(896)	(366)	(820)	(3,653)
Non-cash share-based compensation expense		9,971	17,554	7,330	3,742	5,608	3,088
Ending balance		67,496	58,717	46,538	36,358	32,982	28,194	67,496	36,358
Accumulated Deficit
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance		(716,942)	(505,872)	(443,568)	(327,377)	(288,108)	(202,646)	(443,568)	(202,646)
Net loss		(106,167)	(211,070)	(62,304)	(61,441)	(39,269)	(85,462)
Ending balance		$ (823,109)	$ (716,942)	$ (505,872)	$ (388,818)	$ (327,377)	$ (288,108)	$ (823,109)	$ (388,818)

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Equity Method Investment - Roll-forward of Carrying Value (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Carrying value of equity method investment
Beginning balance			$ 11,414	$ 7,847
Purchases of Kleo common stock			0	1,375
Loss recognized in connection with equity method investment	$ (1,993)	$ (697)	(4,308)	(2,066)
Ending balance	$ 7,106	$ 7,156	$ 7,106	$ 7,156

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Fair Value of Financial Assets and Liabilities - Roll Forward of Aggregate Fair Value Determined by Level 3 Inputs (Details) - USD ($) $ in Thousands	5 Months Ended
	Sep. 30, 2019	Apr. 30, 2019
Fair Value Disclosures [Abstract]
Transaction date balance		$ 33,815
Change in fair value	$ 2,980
Balance at end of period	$ 36,795

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Related Party Transactions

9 Months Ended

Sep. 30, 2019

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Guarantor and Co-Guarantor Warrants

The guarantor and co-guarantor of the Credit Agreement with Wells Fargo are each shareholders and members of the board of directors of the Company. The Company issued warrants to the guarantor and co-guarantor in exchange for their respective guarantees (see Note 9 and 10). On January 26, 2017, each of these two directors received a warrant to purchase 107,500 common shares at an exercise price of $9.2911 per share. Both warrants were exercised in March 2019 and common shares settled in the second quarter of 2019.

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Accrued Expenses

9 Months Ended

Sep. 30, 2019

Payables and Accruals [Abstract]

Accrued Expenses

Accrued Expenses

Accrued expenses consisted of the following:

	As of September 30, 2019		As of December 31, 2018
Accrued development milestones payable (Note 13)	$	13,500	$	—
Accrued employee compensation and benefits	4,219		108
Accrued clinical trial costs	10,126		6,753
Accrued professional fees	6,625		1,636
Other	1,174		285
	$	35,644	$	8,782

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Shareholders' Equity

9 Months Ended

Sep. 30, 2019

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders' Equity

Changes in shareholders’ equity for the three and nine months ended September 30, 2019 was as follows:

	Common Shares
	Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Total Shareholders' Equity (Deficit)
Balances as of December 31, 2018	44,197,549	$	554,384	$	40,104	$	(443,568)	$	150,920
Exercise of stock options	85,445	1,961		(896)		—		1,065
Non-cash share-based compensation expense	—	—		7,330		—		7,330
Net loss	—	—		—		(62,304)		(62,304)
Balances as of March 31, 2019	44,282,994	556,345		46,538		(505,872)		97,011
Issuance of common shares upon completion of equity offering, net of offering costs	6,976,745	281,100		—		—		281,100
Exercise of related party warrants	215,000	7,201		(5,203)		—		1,998
Exercise of stock options	26,875	320		(172)		—		148
Share-based compensation expense	—	—		17,554		—		17,554
Net loss	—	—		—		(211,070)		(211,070)
Balances as of June 30, 2019	51,501,614	$	844,966	$	58,717	$	(716,942)	$	186,741
Issuance of common shares upon completion of underwriters' exercise of option from follow-on equity offering, net of offering costs	525,000	21,221		—		—		21,221
Issuance of common shares as payment for TDP-43 asset	100,000	5,646		—		—		5,646
Exercise of stock options	91,070	2,756		(1,192)		—		1,564
Share-based compensation expense	—	—		9,971		—		9,971
Net loss	—	—		—		(106,167)		(106,167)
Balances as of September 30, 2019	52,217,684	$	874,589	$	67,496	$	(823,109)	$	118,976

Changes in shareholders’ equity for the three and nine months ended September 30, 2018 was as follows:

	Common Shares
	Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Total Shareholders' Equity (Deficit)
Balances as of December 31, 2017	36,057,748	$	311,061	$	23,556	$	(202,646)	$	131,971
Issuance of common shares upon completion of equity offering, net of offering costs	2,000,000	52,013		—		—		52,013
Exercise of ALS Biopharma warrants, net settlement of shares	228,219	—		—		—		—
Reclassification of warrant liability to equity	—	—		5,203		—		5,203
Exercise of stock options	321,050	4,656		(3,653)		—		1,003
Non-cash share-based compensation expense	—	—		3,088		—		3,088
Net loss	—	—		—		(85,462)		(85,462)
Balances as of March 31, 2018	38,607,017	$	367,730	$	28,194	$	(288,108)	$	107,816
Issuance of common shares upon completion of equity offering, net of offering costs	1,111,111	43,842		—		—		43,842
Exercise of ALS Biopharma warrants, net settlement of shares	261,140	—		—		—		—
Exercise of stock options	115,023	1,653		(820)		—		833
Share-based compensation expense	—	—		5,608		—		5,608
Net loss	—	—		—		(39,269)		(39,269)
Balances as of June 30, 2018	40,094,291	$	413,225	$	32,982	$	(327,377)	$	118,830
Issuance of common shares as payment for TDP-43 asset	109,523	4,080		—		—		4,080
Exercise of stock options	57,936	968		(366)		—		602
Share-based compensation expense	—	—		3,742		—		3,742
Net loss	—	—		—		(61,441)		(61,441)
Balances as of September 30, 2018	40,261,750	$	418,273	$	36,358	$	(388,818)	$	65,813

Issuance of Common Shares for the June 2019 Offering

In June 2019, the Company issued and sold 6,976,745 common shares at a public offering price of $43.00 per share for net proceeds of approximately $281,100 after deducting underwriting discounts and commissions of approximately $18,000 and other offering expenses of approximately $900. In addition, in July 2019, the underwriters of the follow-on offering partially exercised their option to purchase additional shares, and the Company issued and sold 525,000 common shares for net proceeds of approximately $21,221 after deducting underwriting discounts and commissions of approximately $1,354. Thus, the aggregate net proceeds to the Company from the follow-on offering, after deducting underwriting discounts and commissions and other offering costs, were approximately $302,321.

Exercise of Related Party Warrants

In connection with a guarantee of its obligations under the Credit Agreement, the Company issued warrants, each to purchase 107,500 common shares at an exercise price of $9.2911 per share, to two of its directors. Both warrants were exercised in March 2019, and common shares settled in the second quarter of 2019 (See Note 9).

Private Placement

In March 2018, the Company sold an aggregate of 2,000,000 common shares in a private placement at a price of $27.50 per share, for net proceeds of $52,013 after deducting underwriting discounts and commissions of $2,800 and other offering expenses of $187. Subsequent to the closing of the private placement, the Company paid Bristol-Myers Squibb Company ("BMS") the $50,000 upfront payment under an amendment (the "BMS Amendment") to the Company's July 2016 license agreement with BMS (the "BMS Agreement"). See Note 12 for additional details.

ALS Biopharma, LLC Warrant Exercise

In January 2018, ALS Biopharma, LLC exercised a warrant for the purchase of 275,000 common shares through a net share settlement, resulting in an issuance of 228,219 common shares.

In April 2018, ALS Biopharma exercised a warrant for the purchase of 325,000 common shares through a net share settlement, resulting in an issuance of 261,140 common shares.

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Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Accrued expenses
Accrued development milestones payable	$ 13,500	$ 0
Accrued employee compensation and benefits	4,219	108
Accrued clinical trial costs	10,126	6,753
Accrued professional fees	6,625	1,636
Other	1,174	285
Total accrued expenses	$ 35,644	$ 8,782

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Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Prepaid Expense and Other Assets, Current [Abstract]
Prepaid clinical trial costs	$ 4,871	$ 7,210
Prepaid insurance	839	393
Other	886	487
Total prepaid expenses and other current assets	$ 6,596	$ 8,090

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Equity Method Investment

9 Months Ended

Sep. 30, 2019

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investment

Equity Method Investment

On August 29, 2016, the Company executed a stock purchase agreement with Kleo Pharmaceuticals, Inc. (“Kleo”), a privately held Delaware corporation, to purchase 3,000,000 shares of Kleo’s common stock at an initial closing, with a commitment to purchase an aggregate of 5,500,000 additional shares of common stock, in each case at a share price of $1.00 per share. Kleo is a development-stage biopharmaceutical company focused on advancing the field of immunotherapy by developing small molecules that emulate biologics. The Company purchased 3,000,000 shares upon the initial closing on August 31, 2016, and the remaining 5,500,000 shares were purchased in four equal tranches of 1,375,000 shares beginning six months from the initial closing and then every three months thereafter. In connection with the initial investment, the Company received the right to designate two of the members of Kleo’s board of directors. The Company completed all four of the remaining tranche purchases in March, June and October 2017 and January 2018, with each tranche purchase consisting of 1,375,000 shares for cash consideration of $1,375.

In March 2017, the Company purchased 500,000 shares of Kleo common stock directly from a co-founder of Kleo for consideration of $250 in cash and 32,500 common shares of the Company.

In addition to these purchases, in October 2017, the Company purchased an additional aggregate of 2,049,543 shares for cash consideration of $2,253 which allowed the Company to maintain its relative ownership interest in Kleo.

In November 2018, the Company participated in Kleo's Series B financing. The Company purchased 1,420,818 shares for cash consideration of $5,000. As of the close of the Series B financing, the Company's ownership interest in the outstanding stock of Kleo was 41.9%.

The Company has a variable interest in Kleo through its equity investment. Kleo is a variable interest entity due to the equity investment at risk being insufficient to finance its activities. An assessment of whether or not the Company has the power to direct activities that most significantly impact Kleo’s economic performance and to identify the party that obtains the majority of the benefits of the investment was performed as of September 30, 2019 and December 31, 2018, and will be performed as of each subsequent reporting date. After each of these assessments, the Company concluded that the activities that most significantly impact Kleo’s economic performance are the ability to direct the research activities, the ability to select vendors to perform the research, the ability to maintain research staff and the ability to raise additional funds, each of which are directed by Kleo. Based on the outcome of these assessments, the Company concluded that the investment should be accounted for under the equity method.

The Company has recorded its investments in Kleo to date based on the costs of those investments, as adjusted for the Company’s proportional share of Kleo’s net income or loss in each period. The Company records future adjustments to the carrying value of its investment at each reporting date equal to its proportionate share of Kleo’s net loss for the corresponding period. The Company recorded other expense and a corresponding reduction in the carrying value of its investment in Kleo as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Proportionate share of Kleo's net loss	$	1,993	$	697	$	4,308	$	2,066

The carrying value of the Company’s investment in Kleo was $7,106 and $11,414 as of September 30, 2019 and December 31, 2018, respectively, and is reported as equity method investment on the condensed consolidated balance sheet. The carrying value of the investment represents the Company’s maximum loss exposure as of the balance sheet date. The following table provides a roll-forward of the carrying value of the Company’s equity method investment:

	Carrying Value
Balance at December 31, 2018	$	11,414
Loss recognized in connection with equity method investment	(4,308)
Balance at September 30, 2019	$	7,106
Balance at December 31, 2017	$	7,847
Purchases of Kleo common stock	1,375
Loss recognized in connection with equity method investment	(2,066)
Balance at September 30, 2018	$	7,156

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Warrants

9 Months Ended

Sep. 30, 2019

Other Liabilities Disclosure [Abstract]

Warrants

Warrants

Guarantor and Co-Guarantor Warrants

On August 30, 2016, the Company entered into a one-year credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association. In connection with entering into the Credit Agreement, the Company issued warrants to purchase common shares to two of the Company’s directors in connection with a guarantee of its obligations under the agreement. The Company previously classified the warrants as a liability on its condensed consolidated balance sheet because each warrant represented a freestanding financial instrument that was not indexed to the Company’s own shares. The warrant liability was initially recorded at fair value upon entering into the Credit Agreement and was subsequently remeasured to fair value at each reporting date.

On January 26, 2018, the anti-dilution price protection provisions contained within the warrants issued to each of the guarantor and co-guarantor of the Credit Agreement expired.

Changes in the fair value of the warrant liability, until expiration of the anti-dilution price protection provisions, were recognized as a component of other income (expense), net, in the Company’s condensed consolidated statement of operations

and comprehensive loss.  Upon expiration of the provision, the Company discontinued classification of these warrants as a liability and has accordingly reclassified the fair value of $5,203 to additional paid-in capital within shareholders’ equity.

The fair value of the warrant liability was $4,021 at December 31, 2017. The Company recorded expense of $1,182 related to the warrant liability within other income (expense) in the condensed consolidated statements of operations and comprehensive loss for the nine months ended September 30, 2018. Both warrants were exercised in March 2019.

Fox Chase Chemical Diversity Center Inc.

In May 2019, the Company entered into an agreement with Fox Chase Chemical Diversity Center Inc. ("FCCDC") for FCCDC's TDP-43 assets (the "FCCDC Agreement"). The FCCDC Agreement provides the Company with a plan and goal to identify one or more new chemical entity candidates for preclinical development for eventual clinical evaluation for the treatment of one or more TDP-43 proteinopathies. As consideration, Biohaven issued 100,000 of its common shares to FCCDC valued at $5,646. As of the end of the second quarter of 2019, the payment was recorded in accounts payable and research and development expense as the shares had not settled during the quarter. Upon settlement of the shares in July 2019, the Company transferred the value of the common shares issued to FCCDC from accounts payable to common stock.

In addition to the common shares issued to FCCDC, Biohaven is obligated to pay FCCDC milestone payments totaling up to $4,500 with $1,000 for each additional NDA filing (See Note 12). The Company also issued a warrant to FCCDC, granting FCCDC the option to purchase up to 100,000 Biohaven common shares, at a strike price of $56.46 per share, subject to vesting upon achievement of certain milestones in development of TD-43. The warrant has standard terms and conditions for exercise and has accelerated vesting in the event of a change of control of Biohaven.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Summarized below are the matters previously described in Note 16 of the Notes to the Consolidated Financial Statements in the Company's Form 10-K for the year ended December 31, 2018, updated as applicable.

Lease Agreements

In August 2017, the Company entered into a lease agreement for office space and the related property for its United States ("US") headquarters in New Haven, Connecticut, which it began occupying during the fourth quarter of 2018. The lease commenced on January 1, 2018 and had a term of 85 months, with the ability to extend to 120 months. The Company had the option to purchase the property for $2,700 and executed that option in December 2018 and therefore has no remaining lease obligation related to its US headquarters building.

The Company recorded the following for the lease agreement for its US headquarters during the construction period:

	Three Months Ended September 30, 2018		Nine Months Ended September 30, 2018
Rent expense	$	4	$	40
Capitalized costs	$	1,114	$	2,493

In August 2019, the Company entered into a lease agreement for office space in Yardley, Pennsylvania to support expansion of the Company's commercial operations in anticipation of the rimegepant commercial launch. The lease will commence on March 1, 2020 and have a term of 88 months, with the ability to extend to 148 months. The Company has restricted cash of $1,000, as of September 30, 2019, included in other assets in the unaudited condensed consolidated financial statements, which represents collateral held by a bank for a letter of credit issued in connection with the lease. The restricted cash is invested in a non-interest bearing account.

The lessor has provided the Company a temporary space to occupy while leasehold improvements are completed prior to the lease commencement next year. With the exception of the first month's rent payment made on execution of the lease, the Company is not required to pay rent until August 2020. The Company determined there were two units of account for the lease, one for use of the temporary space, with a duration from the lease execution date to the lease commencement date and another for the use of the premises, with a duration from the lease commencement date to the lease termination date. The two units of account are being treated as two separate operating leases.

Since the Company expects to occupy the temporary space for less than 12 months, the Company did not record a right-of-use asset and lease liability on its balance sheet for the temporary space. The rent expense for the temporary space recognized for the three and nine months ended September 30, 2019 was $24 because there will be no cash payment for use of the temporary space, the rent expense recognized for the use of the temporary space is being treated as deferred rent payments.

The Company can begin occupying the premises after the landlord has substantially completed all agreed upon improvements to the office space. After substantial completion of the office space in the first half of 2020, the Company expects to record a right-of-use asset and operating lease liability on its balance sheet and straight-line the lease expense over the duration of the lease.

License Agreements

The Company has entered into license agreements with various parties under which it is obligated to make contingent and non-contingent payments.  License agreements generally require the Company to pay annual maintenance fees and future payments upon the attainment of agreed upon development and/or commercial milestones.  These agreements may also require minimum royalty payments based on sales of products developed from the applicable technologies, if any.

Administration of intranasal vazegepant in a Phase 1 clinical trial was initiated in October 2018 and has achieved targeted therapeutic exposures. The compound advanced into a Phase 2/3 trial to evaluate efficacy for the acute treatment of migraine in the first quarter of 2019. Pursuant to the BMS Agreement, the Company is required to pay $2,000 to BMS on commencement of a Phase 1 clinical trial, and $4,000 on commencement of a Phase 2 clinical trial, and accordingly, the Company has recognized these liabilities as of December 31, 2018 and September 30, 2019, respectively, in accrued expenses within the condensed consolidated balance sheets. The payment obligations under the agreement are deferred until the earlier of the first approval, or the discontinuation, of the development of rimegepant.

Pursuant to the BMS Agreement, the Company is required to pay $7,500 to BMS in relation to the NDA filing for rimegepant, and accordingly, the Company has recognized this liability as of September 30, 2019 in accrued expenses within the condensed consolidated balance sheet. The Company made the milestone payment in October 2019.

Research Commitments

The Company has entered into agreements with several contract research organizations to provide services in connection with its preclinical studies and clinical trials. The Company commits to minimum payments under these arrangements.

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with certain executive officers and members of its board of directors that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. The Company’s amended and restated memorandum and

articles of association also provide for indemnification of directors and officers in specified circumstances. To date, the Company has not incurred any material costs as a result of such indemnification provisions. The Company does not believe that the outcome of any claims under indemnification arrangements will have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its condensed consolidated financial statements as of September 30, 2019 or December 31, 2018.

Legal Proceedings

From time to time, in the ordinary course of business, the Company is subject to litigation and regulatory examinations as well as information gathering requests, inquiries and investigations. As of September 30, 2019, there were no matters which would have a material impact on the Company’s financial results.

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Prepaid Expenses and Other Current Assets (Tables)

9 Months Ended

Sep. 30, 2019

Prepaid Expense and Other Assets, Current [Abstract]

Schedule of prepaid expenses and other current assets

Prepaid expenses and other current assets consisted of the following:

	As of September 30, 2019		As of December 31, 2018
Prepaid clinical trial costs	$	4,871	$	7,210
Prepaid insurance	839		393
Other	886		487
	$	6,596	$	8,090

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Shareholders' Equity (Tables)

9 Months Ended

Sep. 30, 2019

Stockholders' Equity Note [Abstract]

Schedule of changes in shareholders' equity

Changes in shareholders’ equity for the three and nine months ended September 30, 2019 was as follows:

	Common Shares
	Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Total Shareholders' Equity (Deficit)
Balances as of December 31, 2018	44,197,549	$	554,384	$	40,104	$	(443,568)	$	150,920
Exercise of stock options	85,445	1,961		(896)		—		1,065
Non-cash share-based compensation expense	—	—		7,330		—		7,330
Net loss	—	—		—		(62,304)		(62,304)
Balances as of March 31, 2019	44,282,994	556,345		46,538		(505,872)		97,011
Issuance of common shares upon completion of equity offering, net of offering costs	6,976,745	281,100		—		—		281,100
Exercise of related party warrants	215,000	7,201		(5,203)		—		1,998
Exercise of stock options	26,875	320		(172)		—		148
Share-based compensation expense	—	—		17,554		—		17,554
Net loss	—	—		—		(211,070)		(211,070)
Balances as of June 30, 2019	51,501,614	$	844,966	$	58,717	$	(716,942)	$	186,741
Issuance of common shares upon completion of underwriters' exercise of option from follow-on equity offering, net of offering costs	525,000	21,221		—		—		21,221
Issuance of common shares as payment for TDP-43 asset	100,000	5,646		—		—		5,646
Exercise of stock options	91,070	2,756		(1,192)		—		1,564
Share-based compensation expense	—	—		9,971		—		9,971
Net loss	—	—		—		(106,167)		(106,167)
Balances as of September 30, 2019	52,217,684	$	874,589	$	67,496	$	(823,109)	$	118,976

Changes in shareholders’ equity for the three and nine months ended September 30, 2018 was as follows:

	Common Shares
	Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Total Shareholders' Equity (Deficit)
Balances as of December 31, 2017	36,057,748	$	311,061	$	23,556	$	(202,646)	$	131,971
Issuance of common shares upon completion of equity offering, net of offering costs	2,000,000	52,013		—		—		52,013
Exercise of ALS Biopharma warrants, net settlement of shares	228,219	—		—		—		—
Reclassification of warrant liability to equity	—	—		5,203		—		5,203
Exercise of stock options	321,050	4,656		(3,653)		—		1,003
Non-cash share-based compensation expense	—	—		3,088		—		3,088
Net loss	—	—		—		(85,462)		(85,462)
Balances as of March 31, 2018	38,607,017	$	367,730	$	28,194	$	(288,108)	$	107,816
Issuance of common shares upon completion of equity offering, net of offering costs	1,111,111	43,842		—		—		43,842
Exercise of ALS Biopharma warrants, net settlement of shares	261,140	—		—		—		—
Exercise of stock options	115,023	1,653		(820)		—		833
Share-based compensation expense	—	—		5,608		—		5,608
Net loss	—	—		—		(39,269)		(39,269)
Balances as of June 30, 2018	40,094,291	$	413,225	$	32,982	$	(327,377)	$	118,830
Issuance of common shares as payment for TDP-43 asset	109,523	4,080		—		—		4,080
Exercise of stock options	57,936	968		(366)		—		602
Share-based compensation expense	—	—		3,742		—		3,742
Net loss	—	—		—		(61,441)		(61,441)
Balances as of September 30, 2018	40,261,750	$	418,273	$	36,358	$	(388,818)	$	65,813

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Prepaid Expenses and Other Current Assets

9 Months Ended

Sep. 30, 2019

Prepaid Expense and Other Assets, Current [Abstract]

Prepaid Expenses and Other Current Assets

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

	As of September 30, 2019		As of December 31, 2018
Prepaid clinical trial costs	$	4,871	$	7,210
Prepaid insurance	839		393
Other	886		487
	$	6,596	$	8,090

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities:
Net loss	$ (379,541)	$ (186,172)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash share-based compensation expense	34,855	12,438
Non-cash interest expense on mandatorily redeemable preferred shares	8,333	0
Non-cash interest expense on liability related to sale of future royalties	19,272	6,134
Non-cash expense related to license agreement	5,646	4,080
Change in fair value of derivative liability	2,980	0
Change in fair value of warrant liability	0	1,182
Loss from equity method investment	4,308	2,066
Other non-cash items	437	91
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	1,494	(9,598)
Other assets	(340)	(32)
Accounts payable	810	(63)
Accrued expenses	26,862	5,521
Other long-term liabilities	(2,000)	628
Net cash used in operating activities	(276,884)	(163,725)
Cash flows from investing activities:
Purchases of property and equipment	(1,637)	(2,634)
Purchase of equity method investment	0	(1,375)
Net cash used in investing activities	(1,637)	(4,009)
Cash flows from financing activities:
Proceeds from issuance of common shares	303,221	55,000
Proceeds from sale of future royalties	0	106,047
Proceeds from issuance of common stock related to sale of future royalties	0	43,953
Proceeds from issuance of mandatorily redeemable preferred shares	125,000	0
Proceeds from exercise of warrants	1,998	0
Payments of issuance costs	(1,150)	(2,987)
Proceeds from exercise of stock options	2,777	2,438
Net cash provided by financing activities	431,846	204,451
Net increase in cash and restricted cash	153,325	36,717
Cash and restricted cash at beginning of period	264,249	131,468
Cash and restricted cash at end of period	417,574	168,185
Supplemental disclosure of cash flow information:
Cash paid for interest	0	0
Cash paid for income taxes	835	273
Supplemental disclosure of non-cash investing and financing activities:
Offering costs included in accounts payable and accrued expenses	$ 0	$ 377

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COVER PAGE - shares	9 Months Ended
	Sep. 30, 2019	Oct. 30, 2019
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
Document Transition Report	false
Entity File Number	001-38080
Entity Registrant Name	Biohaven Pharmaceutical Holding Company Ltd.
Entity Central Index Key	0001689813
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Incorporation, State or Country Code	D8
Entity Address, Address Line One	c/o Biohaven Pharmaceuticals, Inc.
Entity Address, Address Line Two	215 Church Street
Entity Address, City or Town	New Haven
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06510
City Area Code	203
Local Phone Number	404-0410
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of 12(b) Security	Common Shares, no par value
Trading Symbol	BHVN
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		52,240,009

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Commitments and Contingencies - Narrative (Details) $ in Thousands		1 Months Ended	3 Months Ended	9 Months Ended
	Jan. 01, 2018 USD ($)	Aug. 31, 2019 lease	Sep. 30, 2019 USD ($)	Sep. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)
Other Commitments [Line Items]
Restricted cash			$ 1,000	$ 1,000
Accrued clinical trial costs			10,126	10,126	$ 6,753
New Headquarters, New Haven, CT
Other Commitments [Line Items]
Lease agreement, term (in months)	85 months
Lease agreement, term including renewal options (in months)	120 months
Value of property with option to purchase	$ 2,700
Yardley Pennsylvania Office Space
Other Commitments [Line Items]
Lease agreement, term (in months)		88 months
Lease agreement, term including renewal options (in months)		148 months
Number of operating leases | lease		2
Operating Lease, Expense			24	24
BMS Agreement | Required payment on commencement of Phase 1 clinical trial
Other Commitments [Line Items]
Accrued clinical trial costs			2,000	2,000	2,000
BMS Agreement | Required payment on commencement of Phase 2 clinical trial
Other Commitments [Line Items]
Accrued clinical trial costs			4,000	4,000	$ 4,000
BMS Agreement | Required payment related to Rimegepant NDA filing
Other Commitments [Line Items]
Accrued clinical trial costs			$ 7,500	$ 7,500

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Shareholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended					2 Months Ended	9 Months Ended
	Jul. 31, 2019	Jun. 30, 2019	Apr. 30, 2018	Mar. 31, 2018	Jan. 31, 2018	Jul. 31, 2019	Sep. 30, 2019	Sep. 30, 2018	Mar. 31, 2019
Common Shares [Line Items]
Proceeds from sale of common stock							$ 303,221	$ 55,000
Other offering expenses							$ 1,150	$ 2,987
June 2019 Offering
Common Shares [Line Items]
Proceeds from sale of common stock						$ 302,321
Public Offering
Common Shares [Line Items]
Common stock issued (shares)		6,976,745
Proceeds from sale of common stock		$ 281,100
Issuance price per share (in dollars per share)		$ 43.00
Underwriting discounts and commissions		$ 18,000
Other offering expenses		$ 900
Over-Allotment Option
Common Shares [Line Items]
Common stock issued (shares)	525,000
Proceeds from sale of common stock	$ 21,221
Underwriting discounts and commissions	$ 1,354
Private Placement
Common Shares [Line Items]
Common stock issued (shares)				2,000,000
Issuance price per share (in dollars per share)				$ 27.50
Net proceeds from private placement stock issuance				$ 52,013
Underwriting discounts and commissions				2,800
Other offering expenses				187
BMS Agreement
Common Shares [Line Items]
Upfront payment under the BMS Amendment				$ 50,000
ALS Biopharma
Common Shares [Line Items]
Exercise of warrants, net settlement of shares (shares)			325,000		275,000
Number of shares issued for exercise of warrants (in shares)			261,140		228,219
Credit Agreement Warrants
Common Shares [Line Items]
Number of securities called by warrants (shares)									107,500
Exercise price of warrants (in dollars per share)									$ 9.2911

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Liability Related to Sale of Future Royalties, net

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Liability Related to Sale of Future Royalties, net

Liability Related to Sale of Future Royalties, net In June 2018, the Company entered into a funding agreement (the "Funding Agreement") to sell tiered, sales-based royalty rights on global net sales of pharmaceutical products containing the compounds rimegepant or vazegepant (previously known as BHV-3500) and certain derivative compounds thereof ("Products") to RPI, a Delaware statutory trust. The Company issued to RPI the right to receive certain revenue participation payments, subject to certain reductions, based on the future global net sales of the Products for each calendar quarter during the royalty term contemplated by the Funding Agreement ("Revenue Participation Right"), in exchange for $100,000 in cash.

Concurrent with the Funding Agreement, the Company entered into a common stock purchase agreement (the "Purchase Agreement") with RPI. Pursuant to the Purchase Agreement, the Company sold 1,111,111 common shares of the Company to RPI at a price of $45.00 per share, for gross proceeds of $50,000.

The Company concluded that there were two units of accounting for the consideration received comprised of the liability related to sale of future royalties and the common shares. The Company allocated the $100,000 from the Funding Agreement and $50,000 from the Purchase Agreement among the two units of accounting on a relative fair value basis at the time of the transaction. The Company allocated $106,047 in transaction consideration to the liability, and $43,953 to the common shares. The Company determined the fair value of the common shares based on the closing stock price on the transaction date, adjusted for the trading restrictions. The transaction costs of $377 were allocated in proportion to the allocation of total consideration to the two units of accounting. The effective interest rate under the Funding Agreement, including transaction costs, is approximately 22% as of September 30, 2019.

Biohaven recognized $7,308 and $5,633 in non-cash interest expense in the three months ended September 30, 2019 and 2018, respectively, and $19,272 and $6,134 in non-cash interest expense in the nine months ended September 30, 2019 and 2018, respectively, related to the Funding Agreement.

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Net Loss Per Share

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Net Loss Per Share

Net Loss Per Share

Basic and diluted net loss per share attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd. was calculated as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Numerator:
Net loss	$	(106,167)	$	(61,441)	$	(379,541)	$	(186,172)
Denominator:
Weighted average common shares outstanding—basic and diluted	52,077,240		40,147,735		47,210,615		38,636,072
Net loss per share attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd.—basic and diluted	$	(2.04)	$	(1.53)	$	(8.04)	$	(4.82)

The Company’s potential dilutive securities, which include stock options and warrants to purchase common shares, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common shareholders of the Company is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common shareholders for the periods indicated because including them would have had an anti-dilutive effect:

	As of September 30, 2019
	2019	2018
Options to purchase common shares	8,560,514	5,982,134
Warrants to purchase common shares	106,751	221,751
	8,667,265	6,203,885

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Equity Method Investment - Expense and Carrying Amount of Investment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Equity Method Investments and Joint Ventures [Abstract]
Proportionate share of Kleo's net loss	$ 1,993	$ 697	$ 4,308	$ 2,066

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Fair Value of Financial Assets and Liabilities - Financial Liability Measured at Fair Value on Recurring Basis (Details) - Recurring - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Liabilities:
Derivative liability	$ 36,795,000
Financial liabilities at fair value	36,795,000	$ 0
Level 1
Liabilities:
Derivative liability	0
Financial liabilities at fair value	0
Level 2
Liabilities:
Derivative liability	0
Financial liabilities at fair value	0
Level 3
Liabilities:
Derivative liability	36,795,000
Financial liabilities at fair value	$ 36,795,000

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Mandatorily Redeemable Preferred Shares, net - Narrative (Details)	1 Months Ended	3 Months Ended		9 Months Ended
	Apr. 30, 2019 USD ($) closing $ / shares shares	Sep. 30, 2019 USD ($) shares	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) shares	Sep. 30, 2018 USD ($)	Dec. 31, 2018 shares
Mandatorily Redeemable Preferred Shares
Interest expense		$ 4,378,000	$ 0	$ 8,333,000	$ 0
Series A Preferred Shares
Mandatorily Redeemable Preferred Shares
Number of shares sold in transaction (in shares) | shares	2,495
Issuance price per share (in dollars per share) | $ / shares	$ 50,100
Gross proceeds from transaction	$ 125,000,000
Payment for priority review voucher	$ 105,000,000
Number of additional closings per share agreement, maximum | closing	3
Aggregate value of additional closings available per share agreement	$ 75,000,000
Maximum fee per share agreement for nonissuance of shares	3,000,000
Fee required per share agreement if all shares issued	$ 0
Redemption relative to original purchase price upon optional redemption	2
Annual interest rate upon default of redemption (percent)	18.00%
Effective interest rate (percent)		18.00%		18.00%
Interest expense		$ 4,378,000
Mandatorily redeemable shares issued (in shares) | shares		2,495		2,495		0
Mandatorily redeemable shares outstanding (in shares) | shares		2,495		2,495		0
Series A Preferred Shares | Change of control after October 5, 2019
Mandatorily Redeemable Preferred Shares
Redemption relative to original purchase price upon required redemption	2
Series A Preferred Shares | NDA for rimegepant approved by December 31, 2021
Mandatorily Redeemable Preferred Shares
Redemption relative to original purchase price upon optional redemption	1.2
Series A Preferred Shares | No change of control and NDA for rimegepant approved on or before December 31, 2024
Mandatorily Redeemable Preferred Shares
Redemption relative to original purchase price upon required redemption	2
Series A Preferred Shares | NDA for rimegepant not approved by December 31, 2024
Mandatorily Redeemable Preferred Shares
Redemption relative to original purchase price upon required redemption	2

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual for research and development expenses and the valuation of common shares, stock options, warrants, derivative instruments, contingent equity instruments, and non-cash interest expense on liability related to sale of future royalties. In addition, management’s assessment of the Company’s ability to continue as a going concern involves the estimation of the amount and timing of future cash inflows and outflows. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

Fair Value Measurements

Certain assets of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure

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

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

•Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

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

 The Company’s derivative liability is carried at fair value, determined according to the fair value hierarchy described above (see Note 3).

Leases

The Company determines if an arrangement contains a lease at the inception of a contract. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and operating lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments. As the interest rate implicit in the Company’s leases is not readily determinable, the Company utilizes an estimate of its incremental borrowing rate based on market sources including interest rates for companies with similar credit quality for agreements of similar duration, determined by class of underlying asset, to discount the lease payments. The operating lease right-of-use assets also include lease payments made before commencement and exclude lease incentives. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and lease expense is recognized on a straight-line basis over the term of the short-term lease. For real estate leases, the Company separately accounts for lease components and non-lease components. The Company has restricted cash of $1,000 as of September 30, 2019, included in other assets in the unaudited condensed consolidated financial statements, which represents collateral held by a bank for a letter of credit ("LOC") issued in connection with a real estate lease executed in August 2019. The restricted cash is invested in a non-interest bearing account. See Note 13 ‘‘Commitments and Contingencies’’ for additional information on the real estate lease.

Unaudited Interim Condensed Consolidated Financial Information

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. The accompanying unaudited condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. The accompanying year-end condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30, 2019 and the results of its operations for the three and nine months ended September 30, 2019 and 2018 and its cash flows for the nine months ended September 30, 2019 and 2018. The results for the three and nine months ended September 30, 2019 are not necessarily indicative of results to be expected for the year ending December 31, 2019, any other interim periods or any future year or period.  The financial information included herein should be read in conjunction with the financial statements and notes in the Company's Annual Report on Form 10-K for the year ended December 31, 2018.

Recently Adopted Accounting Pronouncements

Effective January 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees

and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. In July of 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases (“ASU 2018-10”), and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), both of which clarified and enhanced the certain amendments made in ASU 2016-02 and were adopted by the Company in conjunction with ASU 2016-02. The adoption requires a modified retrospective transition approach, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company has elected to adopt the standard using the effective date, January 1, 2019, as its date of initial application. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. Given that the Company had no material outstanding leases as of the date of the adoption, the adoption of ASU 2016-02 did not have a material impact on the Company's financial position or results of operations.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Common shares, par value (in dollars per share)	$ 0	$ 0
Common shares, authorized (shares)	200,000,000	200,000,000
Common shares, issued (shares)	52,217,684	44,197,549
Common shares, outstanding (shares)	52,217,684	44,197,549

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Schedule of lease agreement during construction period

The Company recorded the following for the lease agreement for its US headquarters during the construction period:

	Three Months Ended September 30, 2018		Nine Months Ended September 30, 2018
Rent expense	$	4	$	40
Capitalized costs	$	1,114	$	2,493

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual for research and development expenses and the valuation of common shares, stock options, warrants, derivative instruments, contingent equity instruments, and non-cash interest expense on liability related to sale of future royalties. In addition, management’s assessment of the Company’s ability to continue as a going concern involves the estimation of the amount and timing of future cash inflows and outflows. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

Fair Value Measurements

Fair Value Measurements

Certain assets of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure

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

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

•Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

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

Leases

Leases

The Company determines if an arrangement contains a lease at the inception of a contract. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and operating lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments. As the interest rate implicit in the Company’s leases is not readily determinable, the Company utilizes an estimate of its incremental borrowing rate based on market sources including interest rates for companies with similar credit quality for agreements of similar duration, determined by class of underlying asset, to discount the lease payments. The operating lease right-of-use assets also include lease payments made before commencement and exclude lease incentives. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and lease expense is recognized on a straight-line basis over the term of the short-term lease. For real estate leases, the Company separately accounts for lease components and non-lease components. The Company has restricted cash of $1,000 as of September 30, 2019, included in other assets in the unaudited condensed consolidated financial statements, which represents collateral held by a bank for a letter of credit ("LOC") issued in connection with a real estate lease executed in August 2019. The restricted cash is invested in a non-interest bearing account. See Note 13 ‘‘Commitments and Contingencies’’ for additional information on the real estate lease.

Unaudited Interim Condensed Consolidated Financial Information

Unaudited Interim Condensed Consolidated Financial Information

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. The accompanying unaudited condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. The accompanying year-end condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30, 2019 and the results of its operations for the three and nine months ended September 30, 2019 and 2018 and its cash flows for the nine months ended September 30, 2019 and 2018. The results for the three and nine months ended September 30, 2019 are not necessarily indicative of results to be expected for the year ending December 31, 2019, any other interim periods or any future year or period.  The financial information included herein should be read in conjunction with the financial statements and notes in the Company's Annual Report on Form 10-K for the year ended December 31, 2018.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Effective January 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees

and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. In July of 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases (“ASU 2018-10”), and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), both of which clarified and enhanced the certain amendments made in ASU 2016-02 and were adopted by the Company in conjunction with ASU 2016-02. The adoption requires a modified retrospective transition approach, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company has elected to adopt the standard using the effective date, January 1, 2019, as its date of initial application. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. Given that the Company had no material outstanding leases as of the date of the adoption, the adoption of ASU 2016-02 did not have a material impact on the Company's financial position or results of operations.

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Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2019

Payables and Accruals [Abstract]

Schedule of accrued expenses

Accrued expenses consisted of the following:

	As of September 30, 2019		As of December 31, 2018
Accrued development milestones payable (Note 13)	$	13,500	$	—
Accrued employee compensation and benefits	4,219		108
Accrued clinical trial costs	10,126		6,753
Accrued professional fees	6,625		1,636
Other	1,174		285
	$	35,644	$	8,782

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Net Loss Per Share - Antidilutive Securities Excluded from Computation of Net Loss per Share (Details) - shares	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Securities excluded from computation of diluted net loss per share
Anti-dilutive securities excluded from calculation of diluted net loss per share	8,667,265	6,203,885
Options to purchase common shares
Securities excluded from computation of diluted net loss per share
Anti-dilutive securities excluded from calculation of diluted net loss per share	8,560,514	5,982,134
Warrants to purchase common shares
Securities excluded from computation of diluted net loss per share
Anti-dilutive securities excluded from calculation of diluted net loss per share	106,751	221,751

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Warrants - Narrative (Details) $ / shares in Units, $ in Thousands			1 Months Ended	3 Months Ended					9 Months Ended
	Jan. 26, 2018 USD ($)	Aug. 30, 2016 director	May 31, 2019 USD ($) $ / shares shares	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)
Warrants
Reclassification of fair value of warrant liability to shareholders' equity	$ 5,203							$ 5,203
Fair value of warrant liability											$ 4,021
Expense related to warrant liability				$ 0		$ 0			$ 0	$ 1,182
Value of common stock issued				$ 21,221	$ 281,100		$ 43,842	$ 52,013
Credit Agreement | Wells Fargo Term Loan
Warrants
Credit agreement term		1 year
Directors
Warrants
Number of directors to whom the Company agreed to issue warrants | director		2
FCCDC Warrants
Warrants
Number of securities called by warrants (shares) | shares			100,000
Exercise price of warrants (in dollars per share) | $ / shares			$ 56.46
FCCDC Agreement | Collaborative arrangement
Warrants
Common stock issued (shares) | shares			100,000
Value of common stock issued			$ 5,646
Development milestone payment to be paid			4,500
Development milestone payments to be paid per each additional NDA filing			$ 1,000

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Related Party Transactions - Narrative (Details) - Directors	Jan. 26, 2017 director $ / shares shares
Related Party Transactions
Number of directors to whom the Company agreed to issue warrants | director	2
Guarantor and Co-Guarantor Warrants
Related Party Transactions
Number of securities called by warrants (shares) | shares	107,500
Exercise price of warrants (in dollars per share) | $ / shares	$ 9.2911

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Nature of the Business and Basis of Presentation

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of the Business and Basis of Presentation

Nature of the Business and Basis of Presentation

Biohaven Pharmaceutical Holding Company Ltd. (“we,” “us” or the “Company”) was incorporated in Tortola, British Virgin Islands in September 2013. We are a clinical-stage biopharmaceutical company with a portfolio of innovative, late-stage product candidates targeting neurological diseases, including rare disorders. Our product candidates are based on multiple mechanisms —calcitonin gene-related peptide (“CGRP”) receptor antagonists, glutamate modulators and myeloperoxidase inhibition—which we believe have the potential to significantly alter existing treatment approaches across a diverse set of neurological indications with high unmet need in both large and orphan indications. The most advanced product candidate from the Company’s CGRP receptor antagonist platform is rimegepant, which the Company is developing for the acute and preventive treatment of migraine. During the second quarter of 2019, the Company submitted new drug applications ("NDA") to the United States Food and Drug Administration ("FDA") for the Zydis^® Orally Dissolving Tablet ("ODT") and tablet formulations of rimegepant. The NDA submission of rimegepant Zydis ODT was submitted using a FDA priority review voucher, purchased in April 2019, providing for an expedited 6-month review.

The Company is subject to risks and uncertainties common to clinical-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts may require additional capital, additional personnel and infrastructure, and further regulatory and other capabilities. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize revenue from product sales.

Subsequent to its May 2017 initial public offering, the Company has primarily raised funds through sales of equity in private placements and public offerings, as well as through the sale of a revenue participation right related to potential future royalties. The Company has incurred recurring losses since its inception, had an accumulated deficit as of September 30, 2019 , and expects to continue to generate operating losses for the foreseeable future. To execute its business plans, the Company will continue to require additional funding to support its continuing operations and pursue its growth strategy.

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its subsidiaries after elimination of all significant intercompany accounts and transactions. Investments in companies in which the Company owns less than a 50% equity interest and where it exercises significant influence over the operating and financial policies of the investee are accounted for using the equity method of accounting.

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash	$ 416,574	$ 264,249
Prepaid expenses and other current assets	6,596	8,090
Total current assets	423,170	272,339
Property and equipment, net	7,460	6,248
Equity method investment	7,106	11,414
Other assets	1,351	11
Total assets	439,087	290,012
Current liabilities:
Accounts payable	11,562	10,752
Accrued expenses	35,644	8,782
Total current liabilities	47,206	19,534
Liability related to sale of future royalties	136,799	117,515
Mandatorily redeemable preferred shares, net	99,268	0
Derivative liability	36,795	0
Other long-term liabilities	43	2,043
Total liabilities	320,111	139,092
Commitments and contingencies
Shareholders’ equity:
Common shares, no par value; 200,000,000 shares authorized as of September 30, 2019 and December 31, 2018; 52,217,684 and 44,197,549 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively	874,589	554,384
Additional paid-in capital	67,496	40,104
Accumulated deficit	(823,109)	(443,568)
Total shareholders’ equity	118,976	150,920
Total liabilities and shareholders’ equity	$ 439,087	$ 290,012

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Fair Value of Financial Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Schedule of financial liability measured at fair value on a recurring basis

The following tables present information about the Company's financial liability measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair value:

	Fair Value Measurement as of September 30, 2019 Using:
	Level 1		Level 2		Level 3		Total
Liabilities:
Derivative liability	$	—	$	—	$	36,795	$	36,795
	$	—	$	—	$	36,795	$	36,795

Schedule of aggregate fair value of derivative liability determined by Level 3 inputs

The following table provides a roll forward from transaction date of the Series A preferred shares (see Note 8) to September 30, 2019 of the aggregate fair value of the Company’s derivative liability for which fair value is determined by Level 3 inputs:

	Derivative Liability
Transaction date balance	$	33,815
Change in fair value	2,980
Balance at September 30, 2019	$	36,795

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Mandatorily Redeemable Preferred Shares, net (Tables)

9 Months Ended

Sep. 30, 2019

Other Liabilities Disclosure [Abstract]

Schedule of activity within the preferred share liability

The following table shows the activity within the preferred share liability for the nine months ended September 30, 2019:

	Carrying Value
Transaction date balance	$	91,185
Non-cash interest expense recognized, net of transaction cost amortization	8,312
Gross balance at September 30, 2019	99,497
Less: Unamortized transaction costs	(229)
Net balance at September 30, 2019	$	99,268

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Summary of Significant Accounting Policies (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Accounting Policies [Abstract]
Restricted cash	$ 1,000

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Commitments and Contingencies - Rent Expense and Capitalized Costs (Details) - New Headquarters, New Haven, CT - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018
Other Commitments [Line Items]
Rent expense	$ 4	$ 40
Capitalized costs	$ 1,114	$ 2,493

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Net Loss Per Share - Calculation of Basic and Diluted Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2018
Numerator:
Net loss	$ (106,167)	$ (211,070)	$ (62,304)	$ (61,441)	$ (39,269)	$ (85,462)	$ (379,541)	$ (186,172)
Denominator:
Weighted average common shares outstanding - basic and diluted (shares)	52,077,240			40,147,735			47,210,615	38,636,072
Net loss per share attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd - basic and diluted (in dollars per share)	$ (2.04)			$ (1.53)			$ (8.04)	$ (4.82)

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Mandatorily Redeemable Preferred Shares, net - Activity Within the Preferred Share Liability (Details) - USD ($) $ in Thousands	5 Months Ended
	Sep. 30, 2019	Apr. 30, 2019	Dec. 31, 2018
Mandatorily Redeemable Preferred Shares
Net balance at period end	$ 99,268		$ 0
Series A Preferred Shares
Mandatorily Redeemable Preferred Shares
Transaction date balance		$ 91,185
Non-cash interest expense recognized, net of transaction cost amortization	8,312
Gross balance at period end	99,497
Less: Unamortized transaction costs	(229)
Net balance at period end	$ 99,268

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Mandatorily Redeemable Preferred Shares, net

9 Months Ended

Sep. 30, 2019

Other Liabilities Disclosure [Abstract]

Mandatorily Redeemable Preferred Shares, net

Mandatorily Redeemable Preferred Shares, net

In April 2019, the Company sold 2,495 Series A preferred shares (the "Series A Preferred Shares") to RPI at a price of $50,100 per preferred share pursuant to a Series A preferred share purchase agreement (the "Preferred Share Agreement"). The gross proceeds from the transaction with RPI were $125,000, with $105,000 of the proceeds used to purchase a priority review voucher ("PRV") issued by the United States Secretary of Health and Human Services to potentially expedite the regulatory review of the new drug application ("NDA") for the ODT formulation of rimegepant and the remainder of the proceeds to be used for other general corporate purposes. Pursuant to the Preferred Share Agreement, the Company may issue additional Series A Preferred Shares to RPI in up to three additional closings for an aggregate amount of $75,000 subject to the acceptance by the FDA of both NDAs with respect to the tablet formulation of rimegepant and the NDA with respect to the ODT formulation of rimegepant. As a condition for the issuance of additional Series A Preferred Shares, one NDA must be accepted under the priority review designation pathway. The issuance of additional Series A Preferred Shares is also subject to customary closing conditions. Subject to the satisfaction of the applicable conditions under the Preferred Share Agreement, the issuance of additional Series A Preferred Shares is entirely at the Company’s option, and the Company is not obligated to issue any additional Series A Preferred Shares, subject to a fee up to $3,000 if not issued in total. The fee is reduced proportionally by the amount of additional Series A Preferred Shares issued up to the aggregate $75,000, in which the fee is reduced to zero.

The holders of the Company's outstanding Series A Preferred Shares, will have the right to require redemption of the shares in certain circumstances. If a Change of Control, as defined in the Company's memorandum and article of association, occurs after October 5, 2019 and the Series A Preferred Shares have not previously been redeemed, the Company must redeem the Series A Preferred Shares for two times (2x) the original purchase price of the Series A Preferred Shares payable in a lump sum at the closing of the Change of Control or in equal quarterly installments following the closing of the Change of Control through December 31, 2024.

If an NDA for rimegepant is not approved by December 31, 2021, the holders of the Series A Preferred Shares have the option at any time thereafter to require the Company to redeem the Series A Preferred Shares for one point two times (1.2x) the original purchase price of the Series A Preferred Shares.

If no Change of Control has occurred, the Series A Preferred Shares have not previously been redeemed and (i) rimegepant is approved on or before December 31, 2024, following approval and starting one-year after approval, the Company must redeem the Series A Preferred Shares for two times (2x) the original purchase price, payable in a lump sum or in equal quarterly installments through December 31, 2024 (provided that if rimegepant is approved in 2024, the entire redemption amount must be paid by December 31, 2024) or (ii)  rimegepant is not approved by December 31, 2024, the Company must redeem the Series A Preferred Shares for two times (2x) the original purchase price on December 31, 2024.

The Company may redeem the Series A Preferred Shares at our option at any time for two times (2x) the original purchase price, which redemption price may be paid in a lump sum or in equal quarterly installments through December 31, 2024.

In the event that the Company defaults on any obligation to redeem Series A Preferred Shares when required, the redemption amount shall accrue interest at the rate of eighteen percent (18%) per annum. If any such default continues for at least one year, the holders of such shares shall be entitled to convert, subject to certain limitations, such Series A Preferred Shares into common shares, with no waiver of their redemption rights.

Under all circumstances, the Series A Preferred Shares are required to be redeemed by December 31, 2024. Accordingly, the Company has concluded the Series A Preferred Shares are mandatorily redeemable instruments and classified as a liability. The Company initially measured the liability at fair value, and will subsequently accrete the carrying value to the redemption value through interest expense using the effective interest rate method. The effective interest rate under the Preferred Share Agreement, including transaction costs, was determined to be approximately 18%, and the Company recognized $4,378 and $8,333 in interest expense for the three and nine months ended September 30, 2019, respectively. The Company had 2,495 and no Series A preferred shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively.

The following table shows the activity within the preferred share liability for the nine months ended September 30, 2019:

	Carrying Value
Transaction date balance	$	91,185
Non-cash interest expense recognized, net of transaction cost amortization	8,312
Gross balance at September 30, 2019	99,497
Less: Unamortized transaction costs	(229)
Net balance at September 30, 2019	$	99,268

Certain scenarios as described in the Preferred Share Agreement were determined by the Company to result in a derivative liability. The with-and-without valuation method was used to determine the fair value of the embedded derivatives within the agreement. As inputs into the valuation, the Company considered the type and probability of occurrence of certain events, the amount of the payments, the expected timing of certain events, and a risk-adjusted discount rate. In accordance with ASC 815, Derivatives and Hedging, the fair value of the derivative was recorded on the balance sheet as a derivative liability with changes in fair value recorded in other income (expense) in the condensed consolidated statements of operations and comprehensive loss (see Note 3 for details on the fair value measurement). If factors change and different assumptions are used, the fair value of the derivative liability and related gains or losses could be materially different in the future.

The Company recorded the payment for the PRV as research and development expense in the condensed consolidated statements of operations and comprehensive loss, and as an operating cash outflow in the condensed consolidated statements of cash flows for the nine months ended September 30, 2019.

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License and Other Agreements

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

License and Other Agreements

License and Other Agreements

Catalent Agreements for Rimegepant

In January 2018, the Company entered into an exclusive world-wide license and development agreement with Catalent U.K. Swindon Zydis Limited, a subsidiary of Catalent, Inc. ("Catalent") pursuant to which the Company obtained certain license rights to the Zydis ODT technology for use with rimegepant. If the Company obtains regulatory approval or launches a rimegepant product that utilizes the Zydis ODT technology, the Company is obligated to pay Catalent up to $1,500 upon the achievement of specified regulatory and commercial milestones. If the Company commercializes a rimegepant product that utilizes the Zydis ODT technology, the agreement permits the Company to purchase the commercial product from Catalent at a fixed price, inclusive of a royalty. Under the agreement, Catalent will not develop or manufacture a formulation of any oral CGRP compound using Zydis ODT technology for itself or a third party until 2031, subject to certain minimum commercial revenues.

Under this agreement, the Company is responsible for conducting clinical trials and preparing and filing regulatory submissions. The Company has the right to sublicense its rights under the agreement subject to Catalent’s prior written consent. Catalent has the right to enforce the patents covering the Zydis technology and to defend any allegation that a formulation using Zydis technology, such as rimegepant, infringes a third party’s patent.

This agreement terminates on a country-by-country basis upon the later of (i) 10 years after the launch of the most recently launched product in such country and (ii) the expiration of the last valid claim covering each product in such country, unless earlier voluntarily terminated by the Company or by Catalent. This agreement automatically extends for one-year terms unless either party gives advance notice of intent to terminate. In addition, Catalent may terminate the agreement either in its entirety or terminate the exclusive nature of the agreement on a country-by-country basis if, among other things, the Company fails to meet specified development timelines, which the Company may extend in certain circumstances.

Amendment to License Agreement with BMS

In March 2018, the Company entered into the BMS Amendment. Under the BMS Amendment, the Company paid BMS an upfront payment of $50,000 in return for a low single-digit reduction in the royalties payable on net sales of rimegepant and a mid single-digit reduction in the royalties payable on net sales of vazegepant (previously known as BHV-3500), recorded in research and development expense in the condensed consolidated statements of operations and comprehensive loss. Under the original license agreement, the Company had been obligated to make tiered royalty payments based on annual worldwide net sales of licensed products upon their approval and commercialization, with percentages in the low- to mid-teens.

The BMS Amendment also removed BMS’s right of first negotiation to regain its intellectual property rights or enter into a license agreement with the Company following the Company’s receipt of topline data from its Phase 3 clinical trials of rimegepant, and clarified that antibodies targeting CGRP are not prohibited as competitive compounds under the non-competition clause of the BMS Agreement.

The BMS Agreement continues to provide the Company with exclusive global development and commercialization rights to rimegepant, vazegepant and related CGRP molecules, as well as related know-how and intellectual property. The Company’s obligations to make development and commercial milestone payments to BMS under the original license agreement remain unchanged.

Biotech Value Advisors Agreement

In March 2019, the Company entered into a master services agreement with Biotech Value Advisors, LLC related to the commercial preparation for several of the Company's late-stage product candidates. In addition to fixed quarterly consulting expenses under the agreement, the Company agreed to pay up to $2,000 upon achievement of specified commercial milestones.

Fox Chase Chemical Diversity Center Inc. Agreement

In May 2019, Biohaven entered into the FCCDC Agreement in which the Company purchased certain intellectual property relating to the TDP-43 protein from FCCDC. The FCCDC Agreement provides the Company with a plan and goal to identify one or more new chemical entity candidates for preclinical development for eventual clinical evaluation for the treatment of one

or more TDP-43 proteinopathies. As consideration, Biohaven issued 100,000 of its common shares to FCCDC valued at $5,646. As of the end of the second quarter of 2019, the payment was recorded in accounts payable and research and development expense as the shares had not settled during the quarter. Upon settlement of the shares in July 2019, the Company transferred the value of the common shares issued to FCCDC from accounts payable to common stock.

In addition, Biohaven is obligated to pay FCCDC milestone payments totaling up to $4,500 with $1,000 for each additional NDA filing. The Company also issued a warrant to FCCDC, granting FCCDC the option to purchase up to 100,000 Biohaven common shares, at a strike price of $56.46 per share, subject to vesting upon achievement of certain milestones in development of TD-43 (see Note 9).

In connection with the FCCDC Agreement, Biohaven and FCCDC have established a TDP-43 Research Plan that provides for certain milestones to be achieved by FCCDC, and milestone payments to be made by the Company up to $1,500 over a period of up to 30 months as success fees for research activities by FCCDC. In addition to the milestone payments, the Company will pay FCCDC an earned royalty equal to zero to ten percent of net sales of any TD-43 patent products with a valid claim as defined in the FCCDC Agreement. The Company may also license the rights developed under the FCCDC Agreement and, if it does so, will be obligated to pay a portion of any payments received from such licensee to FCCDC in addition to any milestones payments it would otherwise be obligated to pay. The Company is also responsible for the prosecution and maintenance of the patents related to the TDP-43 assets.

The FCCDC Agreement can be terminated on a country-by-country basis and product-by-product basis upon expiration of the royalty term for such product in such country. Each royalty term begins on the date of the first commercial sale of the licensed product in the applicable country and ends on the expiration of the last to expire of the applicable patents in that country. The FCCDC Agreement may be terminated earlier in specified situations, including termination for uncured material breach of the FCCDC Agreement by either party, termination by FCCDC in specified circumstances, termination by the Company on a country-by-country basis with advance notice and termination upon a party's insolvency or bankruptcy.

Amendment to License Agreement with Yale

In September 2013, the Company entered into an exclusive license agreement with Yale (the "Yale Agreement") to obtain a license to certain patent rights for the commercial development, manufacture, distribution, use and sale of products and processes resulting from the development of those patent rights, related to the use of riluzole in treating various neurological conditions, such as general anxiety disorder, post-traumatic stress disorder and depression. As part of the consideration for this license, the Company issued Yale 250,000 common shares and granted Yale the right to purchase up to 10% of the securities issued in specified future equity offerings by the Company, in addition to the obligation to issue shares to prevent anti-dilution. The obligation to contingently issue equity to Yale was no longer outstanding as of December 31, 2018.

The Yale Agreement was amended and restated in May 2019. As amended, the Company agreed to pay Yale up to $2,000 upon the achievement of specified regulatory milestones and annual royalty payments of a low single-digit percentage based on net sales of riluzole-based products from the licensed patents or from products based on troriluzole. Under the amended and restated agreement, the royalty rates are reduced as compared to the original agreement. In addition, under the amended and restated agreement, the Company may develop products based on riluzole or troriluzole. The amended and restated agreement retains a minimum annual royalty of up to $1,000 per year, beginning after the first sale of product under the agreement. If the Company grants any sublicense rights under the Yale Agreement, it must pay Yale a low single-digit percentage of sublicense income that it receives. To date, no milestone or royalty payments have been made under this agreement.

The Yale Agreement, as amended and restated, requires the Company to meet certain due diligence requirements based upon specified milestones relating to riluzole or troriluzole based products. The Company can elect to extend the deadline for its compliance with the due diligence requirements by a maximum of one year upon the payment to Yale of up to $150. The Company is also required to reimburse Yale for any fees that Yale incurs related to the filing, prosecution, defending and maintenance of patent rights licensed under the Yale Agreement. In the event that the Company fails to make any payments, commits a material breach, fails to maintain adequate insurance or challenges the patent rights of Yale, Yale can terminate the Yale Agreement. The Company can terminate the Yale Agreement (i) upon 90 days' notice to Yale, (ii) if Yale commits a material breach of the Yale Agreement or (iii) as to a specific country if there are no valid patent rights in such country. The Yale Agreement expires on a country-by-country basis upon the later of the date on which the last patent rights expire in such

country or ten years from the date of the first sale of a product incorporating the licensed patents or the Company’s patents relating to troriluzole.

Termination of MGH Agreement

In September 2014, the Company entered into a license agreement (the "MGH Agreement") with The General Hospital Corporation d/b/a Massachusetts General Hospital ("MGH"), pursuant to which MGH granted the Company a license to certain patent rights for the commercial development, manufacture, distribution and use of any products or processes resulting from development of those patent rights, related to treating depression with a combination of ketamine and scopolamine. The Company was obligated to pay MGH annual license maintenance fees and future milestone payments of up to $750 upon the achievement of specified clinical and regulatory milestones and up to $2,500 upon the achievement of specified commercial milestones. The Company had also agreed to pay MGH royalties between zero and ten percent based on net sales of products licensed under the agreement. In July 2019, the Company elected to terminate the agreement. Upon termination, the Company is no longer subject to future milestone or royalty payments under the MGH Agreement.

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Liability Related to Sale of Future Royalties, net - Narrative (Details) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Jun. 30, 2018 USD ($) unit_of_accounting $ / shares shares	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)
Liability For Sale of Future Royalties [Line Items]
Proceeds from sale of common stock				$ 303,221	$ 55,000
Non-cash interest expense on liability related to sale of future royalties		$ 7,308	$ 5,633	$ 19,272	$ 6,134
RPI Agreement
Liability For Sale of Future Royalties [Line Items]
Units of accounting related to consideration received | unit_of_accounting	2
Transaction consideration allocated to liability	$ 106,047
Transaction consideration allocated to equity	43,953
Transaction costs	377
RPI Funding Agreement
Liability For Sale of Future Royalties [Line Items]
Proceeds from royalty agreement	$ 100,000
Effective interest rate (percent)		22.00%		22.00%
RPI Purchase Agreement
Liability For Sale of Future Royalties [Line Items]
Common stock issued (shares) | shares	1,111,111
Common stock sold, price per share (in dollars per share) | $ / shares	$ 45.00
Proceeds from sale of common stock	$ 50,000

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Equity Method Investment - Stock Purchase Agreement with Kleo (Details) $ / shares in Units, $ in Thousands			1 Months Ended					9 Months Ended		11 Months Ended
	Aug. 31, 2016 shares	Aug. 29, 2016 director tranche $ / shares shares	Nov. 30, 2018 USD ($) shares	Jan. 31, 2018 USD ($) shares	Oct. 31, 2017 USD ($) shares	Jun. 30, 2017 USD ($) shares	Mar. 31, 2017 USD ($) shares	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Jan. 31, 2018 shares
Equity Method Investment
Cash payment for purchase of equity method investment | $								$ 0	$ 1,375
Kleo
Equity Method Investment
Shares of Kleo common stock purchased (shares)			1,420,818		2,049,543
Cash payment for purchase of equity method investment | $			$ 5,000		$ 2,253
Shares of Kleo common stock purchased from co-founder (shares)							500,000
Cash payment for purchase of Kleo officer and stockholder shares | $							$ 250
Issuance of common shares for purchase of Kleo office and stockholder shares (shares)							32,500
Ownership percentage (percent)			41.90%
Kleo | Kleo Stock Purchase Agreement
Equity Method Investment
Shares to be purchased per stock purchase agreement (shares)		3,000,000
Additional shares to be purchased per stock purchase agreement (shares)		5,500,000
Price per share (in dollars per share) | $ / shares		$ 1.00
Shares of Kleo common stock purchased (shares)	3,000,000			1,375,000	1,375,000	1,375,000	1,375,000			5,500,000
Cash payment for purchase of equity method investment | $				$ 1,375	$ 1,375	$ 1,375	$ 1,375
Number of equal tranches of shares to be purchased | tranche		4
Shares to be purchased in equal tranches (shares)		1,375,000
Period of time shares begin to be purchased in equal tranches after initial closing		6 months
Period of time shares are purchased after initial purchase		3 months
Number to designate to Kleo's board of directors | director		2

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Fair Value of Financial Assets and Liabilities - Narrative (Details) - Recurring - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities
Financial assets at fair value	$ 0	$ 0
Financial liabilities at fair value	$ 36,795,000	$ 0