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 March 31, 2022

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 ☐

1

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 13(a) of the Exchange 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 May 6, 2022, the registrant had 71,043,181 common shares, without par value per share, outstanding.

2

 

	TABLE OF CONTENTS
		Page
Part I	Financial Information
Item 1:	Condensed Consolidated Financial Statements (Unaudited)	1
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	49
Item 4:	Controls and Procedures	50
Part II	Other Information
Item 1:	Legal Proceedings	51
Item 1A:	Risk Factors	51
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 6:	Exhibits	54
	Signatures	55

Part I.     Financial Information

Item 1.    Condensed Consolidated Financial Statements (Unaudited)

Index to Condensed Consolidated Financial Statements (Unaudited)
	Page
Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021	2
Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2022 and 2021	3
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021	4
Notes to Condensed Consolidated Financial Statements	5

1

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share amounts)

	March 31, 2022		December 31, 2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	169,065	$	171,945
Marketable securities	433,410		192,648
Trade receivable, net	328,342		308,269
Inventory	91,281		80,608
Prepaid expenses	104,891		88,838
Other current assets	44,096		33,946
Total current assets	1,171,085		876,254
Property and equipment, net	14,534		14,690
Intangible assets, net	55,910		56,438
Other assets	130,188		129,830
Total assets	$	1,371,717	$	1,077,212
Liabilities and Shareholders’ Deficit
Current liabilities:
Accounts payable	$	56,202	$	51,683
Accrued expenses and other current liabilities	457,412		420,019
Current portion of mandatorily redeemable preferred shares	62,500		62,500
Total current liabilities	576,114		534,202
Long-term debt	634,106		626,720
Liability related to sale of future royalties, net	377,998		367,645
Mandatorily redeemable preferred shares, net	162,994		155,737
Derivative liability	9,120		13,110
Obligation to perform R&D services	36,016		50,571
Other long-term liabilities	41,782		12,236
Total liabilities	1,838,130		1,760,221
Commitments and contingencies (Note 14)
Contingently redeemable non-controlling interests	—		60,000
Shareholders’ deficit:
Common shares, no par value; 200,000,000 shares authorized as of March 31, 2022 and December 31, 2021; 70,540,802 and 66,933,531 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively	2,112,686		1,676,792
Additional paid-in capital	129,580		169,656
Accumulated other comprehensive loss	(2,398)		(73)
Accumulated deficit	(2,702,154)		(2,585,755)
Total shareholders’ deficit attributable to Biohaven Pharmaceutical Holding Company Ltd.	(462,286)		(739,380)
Non-controlling interests in consolidated subsidiaries	(4,127)		(3,629)
Total shareholders' deficit	(466,413)		(743,009)
Total liabilities and shareholders’ deficit	$	1,371,717	$	1,077,212

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

2

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 March 31,
	2022		2021
Revenues:
Product revenue, net	$	123,590	$	43,823
Collaboration and other revenue	195,262		—
Total revenues	318,852		43,823
Operating expenses:
Cost of sales	26,342		12,862
Research and development	119,099		107,111
Selling, general and administrative	227,243		159,523
Total operating expenses	372,684		279,496
Loss from operations	(53,832)		(235,673)
Other income (expense):
Interest expense	(17,216)		(7,731)
Interest expense on mandatorily redeemable preferred shares	(7,917)		(7,943)
Interest expense on liability related to sale of future royalties	(17,314)		(13,508)
Change in fair value of derivatives	3,604		(210)
Gain from equity method investment	—		5,261
Other income (expense), net	81		(1,700)
Total other expense, net	(38,762)		(25,831)
Loss before provision for income taxes	(92,594)		(261,504)
Provision for income taxes	24,303		3,824
Net loss	(116,897)		(265,328)
Net loss attributable to non-controlling interests	498		360
Deemed dividend upon repurchase of preferred shares in consolidated subsidiary	(92,673)		—
Net loss attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd.	$	(209,072)	$	(264,968)
Net loss per share attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd. — basic and diluted	$	(2.97)	$	(4.27)
Weighted average common shares outstanding—basic and diluted	70,332,274		62,040,715
Comprehensive loss:
Net loss	$	(116,897)	$	(265,328)
Other comprehensive (loss) income, net of tax	(2,325)		95
Comprehensive loss	(119,222)		(265,233)
Less: comprehensive loss attributable to non-controlling interests	498		360
Comprehensive loss attributable to Biohaven Pharmaceutical Holding Company Ltd.	$	(118,724)	$	(264,873)

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

3

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Three Months Ended March 31,
	2022		2021
Cash flows from operating activities:
Net loss	$	(116,897)	$	(265,328)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash share-based compensation expense	81,828		48,726
Interest expense on mandatorily redeemable preferred shares	7,917		7,943
Interest expense on liability related to sale of future royalties	17,314		13,508
Deferred interest paid-in-kind on long-term debt	6,450		2,795
Issuance of common shares as payment for license agreement	1,779		4,243
Change in fair value of derivatives	(3,604)		210
Gain from equity method investment	—		(5,261)
Depreciation and amortization	4,402		5,054
Change in obligation to perform R&D services	(6,942)		—
Other non-cash items	(646)		461
Changes in operating assets and liabilities:
Trade receivable, net	(20,073)		(36,658)
Inventory	(23,397)		(17,566)
Prepaid expenses, other current assets, and other assets	(24,954)		(25,619)
Accounts payable	4,518		13,903
Accrued expenses, other current liabilities, and other liabilities	48,661		47,915
Net cash used in operating activities	$	(23,644)	$	(205,674)
Cash flows from investing activities:
Purchases of marketable securities	(246,816)		—
Sales of marketable securities	—		113,441
Maturities of marketable securities	3,058		7,515
Purchases of property and equipment	(512)		(1,187)
Net cash (used in) provided by investing activities	$	(244,270)	$	119,769
Cash flows from financing activities:
Proceeds from issuance of common shares	252,000		308,743
Proceeds from obligation to perform R&D services	—		100,000
Proceeds from the issuance of series B preferred shares	14,579		17,585
Proceeds from exercise of share options	2,803		1,382
Payments for term loan, finance leases, and other	(1,391)		(6,695)
Net cash provided by financing activities	$	267,991	$	421,015
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(46)		14
Net increase in cash, cash equivalents and restricted cash	31		335,124
Cash, cash equivalents and restricted cash at beginning of period	174,343		134,231
Cash, cash equivalents and restricted cash at end of period	$	174,374	$	469,355

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," "our," "Biohaven" or the “Company”) was incorporated in Tortola, British Virgin Islands in September 2013. We are a biopharmaceutical company with a portfolio of innovative product candidates targeting neurological diseases, including rare disorders. The Company's lead product, NURTEC® ODT (rimegepant), was approved by the U.S. Food and Drug Administration ("FDA") in February 2020, for the acute treatment of migraine and was approved for the preventive treatment of migraine in May 2021. NURTEC ODT is the first and only calcitonin gene-related peptide ("CGRP") receptor antagonist available in a quick-dissolve orally dissolving tablet ("ODT") formulation that is approved by the FDA for both the acute and preventive treatment of migraine in adults. Our Neuroinnovation portfolio includes product candidates based on multiple mechanisms — CGRP receptor antagonists, glutamate modulators, myeloperoxidase inhibition, Kv7 ion channel activators ("Kv7"), and Myostatin 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.

On November 9, 2021, the Company entered into a strategic commercialization arrangement with Pfizer Inc. ("Pfizer"), including a collaboration and license agreement and a related sublicense agreement (the "Pfizer Collaboration"), pursuant to which Pfizer would commercialize product candidates containing the Company's proprietary compounds rimegepant (BHV-3000) and gains rights to zavegepant (BHV-3500) (the "Licensed Products") in all countries worldwide outside of the United States (the "Territory"). The Pfizer Collaboration became effective on January 4, 2022. Refer to Note 13, "Collaboration, License and Other Agreements" for further details.

The Company is subject to risks and uncertainties common to companies in the biopharmaceutical industry, including, but not limited to, the risks associated with developing product candidates at each stage of non-clinical and clinical development; the challenges associated with gaining regulatory approval of such product candidates; the risks associated with commercializing pharmaceutical products for marketing and sale; the potential for development by third parties of new technological innovations that may compete with the Company’s products; the dependence on key

personnel; the challenges of protecting proprietary technology; the need to comply with government regulations; the high costs of drug development; and the uncertainty of being able to secure additional capital when needed to fund operations.

The Company has incurred recurring losses since its inception, had an accumulated deficit as of March 31, 2022, and expects to continue to generate operating losses during the continued global commercial launch of rimegepant. Prior to the commercial launch of rimegepant the Company has primarily raised funds through sales of equity in private placements and public offerings, sale of revenue participation rights related to potential future royalties, and debt financings.

As of May 10, 2022, the issuance date of our condensed consolidated financial statements, the Company expects that its cash, cash equivalents and marketable securities as of March 31, 2022, our future operating cash flows from sales of NURTEC ODT, the funds available from the Sixth Street Financing Agreement, Series B Preferred Shares receipts, product sales and other proceeds from our Pfizer Collaboration will be sufficient to fund its current forecast for operating expenses, including commercialization of NURTEC ODT, financial commitments and other cash requirements for more than one year. The Company may need to raise additional capital to execute its business plans and growth strategy until it is profitable. If no additional capital is raised through either public or private equity financings, debt financings, strategic relationships, alliances and licensing agreements, or a combination thereof, the Company may delay, limit or reduce discretionary spending in areas related to research and development activities and other general and administrative expenses in order to fund its operating costs and working capital needs.

2.   Summary of Significant Accounting Policies

Our significant accounting policies are described in Note 2 of the notes to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 (the "2021 Form 10-K"). Updates to our accounting policies, including impacts from the adoption of new accounting standards, are discussed below in this Note 2.

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance

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)

with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its controlled 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.

The financial statements of our subsidiaries with functional currencies other than the U.S. dollar are translated into U.S. dollars using period-end exchange rates for assets and liabilities, historical exchange rates for shareholders' equity (deficit) and weighted average exchange rates for operating results. Translation gains and losses are included in accumulated other comprehensive income, net of tax, in shareholders' deficit. Foreign currency transaction gains and losses are included in other income (expense) in the condensed consolidated statements of operations and comprehensive loss.

Reclassifications

Certain items in the prior period’s condensed consolidated financial statements have been reclassified to conform to the current presentation.

Use of Estimates

The preparation of condensed 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 condensed consolidated financial statements and the reported amounts of income and expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, revenue recognition, interest expense on liability related to sale of future royalties, valuation of Series B preferred shares forward contracts and income taxes. 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.

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 March 31, 2022 and the results of its operations for the three months ended March 31, 2022 and 2021 and its cash flows for the three months ended March 31, 2022 and 2021. The results for the three months ended March 31, 2022 are not necessarily indicative of results to be expected for the year ending December 31, 2022, 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, 2021.

Revenue Recognition - Collaboration and Other Revenue

The Company analyzes its collaboration arrangements to assess whether they are within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities. This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and those that are more reflective of a vendor-customer relationship and, therefore, within the scope of ASC 606, Revenue from Contracts with Customers

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)

("ASC 606"). For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently, generally by analogy to ASC 606. The accounting treatment pursuant to ASC 606 is outlined below.

The terms of licensing and collaboration agreements entered into typically include payment of one or more of the following: non-refundable, up-front license fees; development, regulatory and commercial milestone payments; payments for manufacturing supply and research and development services and royalties on net sales of licensed products. Each of these payments results in collaboration and other revenue, except for revenues related to manufacturing supply services, which are classified as product revenue. The core principle of ASC 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received in exchange for those goods or services.

In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

Amounts received prior to recognizing revenue are recorded as contract liabilities in the Company’s condensed consolidated balance sheets.

At contract inception, the Company assesses the goods or services promised in a contract with a customer and identifies those distinct goods and services that represent a performance obligation. A promised good or service may not be identified as a performance obligation if it is immaterial in the context of the contract with the customer, if it is not separately identifiable from other promises in the contract (either because it is not capable of being separated or because it is not separable in the context of the contract), or if the promised good or service does not provide the customer with a material right.

The Company considers the terms of the contract to determine the transaction price. The transaction price

is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration will only be included in the transaction price when it is not considered constrained, which is when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur.

If it is determined that multiple performance obligations exist, the transaction price is allocated at the inception of the agreement to all identified performance obligations based on the relative standalone selling prices ("SSP"). The relative SSP for each deliverable is estimated using external sourced evidence if it is available. If external sourced evidence is not available, the Company uses its best estimate of the SSP for the deliverable.

Revenue is recognized when, or as, the Company satisfies a performance obligation by transferring a promised good or service to a customer. An asset is transferred when, or as, the customer obtains control of that asset, which for a service is considered to be as the services are received and used. The Company recognizes revenue over time by measuring the progress toward complete satisfaction of the relevant performance obligation using an appropriate input or output method based on the nature of the service promised to the customer.

After contract inception, the transaction price is reassessed at every period end and updated for changes such as resolution of uncertain events. Any change in the transaction price is allocated to the performance obligations on the same basis as at contract inception, or to a single performance obligation as applicable.

Management may be required to exercise considerable judgment in estimating revenue to be recognized. Judgment is required in identifying performance obligations, estimating the transaction price, estimating the SSP of identified performance obligations, which may include forecasted revenue, development timelines, estimated future costs, discount rates and probabilities of technical and regulatory success, and estimating the progress towards satisfaction of performance obligations.

Recently Adopted Accounting Pronouncements

Effective January 1, 2022 the Company adopted ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—

7

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)

Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The update addresses issues identified as a result of the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. The adoption of ASU 2020-06 did not have a material effect on the Company's consolidated financial statements.

Effective January 1, 2022 the Company adopted ASU No. 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force), which provides guidance on modifications or exchanges of a freestanding equity-classified written call option that is not within the scope of another topic. An entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument, and provides further guidance on measuring the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity

classified after modification or exchange. ASU 2021-04 also provides guidance on the recognition of the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange on the basis of the substance of the transaction, in the same manner as if cash had been paid as consideration. The guidance has been applied prospectively and did not have a material effect on the consolidated financial statements of the Company.

Future Adoption of New Accounting Pronouncements

In January 2021 the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, providing temporary guidance to ease the burden in accounting for reference rate reform primarily resulting from the discontinuation of LIBOR, which is currently expected to occur in mid-2023 for legacy contracts. The amendments in ASU 2021-01 are elective immediately and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued. The Company does not expect that the adoption of ASU 2021-01 will have a material effect on its consolidated financial statements.

8

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

3. Marketable Securities

The amortized cost, gross unrealized holding gains, gross unrealized holding losses and fair value of debt securities available-for-sale by type of security at March 31, 2022 and December 31, 2021 was as follows:

	Amortized Cost		Allowance for Credit Losses		Net Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
March 31, 2022
Corporate bonds
U.S.	$	290,201	$	—	$	290,201	$	2	$	(1,969)	$	288,234
Foreign	47,106		—		47,106		—		(426)		46,680
Government related obligations
U.S.	98,707		—		98,707		1		(212)		98,496
Total	$	436,014	$	—	$	436,014	$	3	$	(2,607)	$	433,410
December 31, 2021
Corporate bonds
U.S.	$	130,388	$	—	$	130,388	$	1	$	(234)	$	130,155
Foreign	20,643		—		20,643		—		(82)		20,561
Government related obligations
U.S.	41,939		—		41,939		—		(8)		41,931
Total	$	192,971	$	—	$	192,971	$	1	$	(324)	$	192,648

The Company had 99 and 53 available-for-sale debt securities in an unrealized loss position, with an aggregate fair value of $412,366 and $185,296, as of March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022, the Company did not intend to sell these securities, and did not believe it was more likely than not that it would be required to sell these securities prior to the anticipated recovery of their amortized cost basis. We did not have any investments in a continuous unrealized loss position for more than twelve months as of March 31, 2022 and December 31, 2021.

The net amortized cost and fair value of debt securities available-for-sale at March 31, 2022 and December 31, 2021 are shown below by contractual maturity. Actual maturities may differ from contractual maturities because securities may be restructured, called or prepaid, or the Company intends to sell a security prior to maturity. The fair values of available for sale debt securities are classified as marketable securities in the condensed consolidated balance sheets at March 31, 2022 and December 31, 2021.

	March 31, 2022				December 31, 2021
	Net Amortized Cost		Fair Value		Net Amortized Cost		Fair Value
Due to mature:
Less than one year	$	342,502	$	341,069	$	155,359	$	155,226
One year through five years	93,512		92,341		37,612		37,422
Total	$	436,014	$	433,410	$	192,971	$	192,648

9

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

3.  Marketable Securities (Continued)

Net Investment Income

Sources of net investment income included in other income (expense) in the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022 and 2021 were as follows:

	Three Months Ended March 31,
	2022		2021
Gross investment income from debt securities available-for-sale	$	140	$	72
Investment expenses	(18)		(52)
Net investment income (excluding net realized capital gains or losses)	122		20
Net realized capital (losses) gains	(3)		19
Net investment income	$	119	$	39

We utilize the specific identification method in computing realized gains and losses. The proceeds from the sale of available-for-sale debt securities and the related gross realized capital gains and losses for the three months ended March 31, 2022 and 2021 were the following:

	Three Months Ended March 31,
	2022		2021
Proceeds from sales	$	—	$	113,441
Gross realized capital gains	—		19
Gross realized capital losses	$	—	—

4.   Fair Value of Financial Assets and Liabilities

The preparation of the Company’s condensed consolidated financial statements in accordance with GAAP requires certain assets and liabilities to be reflected at their fair value and others to be reflected on another basis, such as an adjusted historical cost basis. In this note, the Company provides details on the fair value of financial assets and liabilities and how it determines those fair values.

Financial Instruments Measured at Fair Value on the Condensed Consolidated Balance Sheets

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.

For a description of the methods and assumptions that are used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument, see (Note 4) “Fair Value of Financial Assets and Liabilities” in the 2021 Form 10-K. Financial assets and liabilities measured at fair value on a recurring basis on the condensed consolidated balance sheets at March 31, 2022 and December 31, 2021 were as follows:

10

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

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

		Fair Value Measurement Using:
Balance Sheet Classification	Type of Instrument	Level 1		Level 2		Level 3		Total
March 31, 2022
Assets:
Cash equivalents	Money market funds	$	45,999	$	—	$	—	$	45,999
Cash equivalents	U.S. treasury bills	—		8,497		—		8,497
Marketable securities	U.S. treasury bills	5,992		92,504		—		98,496
Marketable securities	U.S. corporate bonds	—		288,234		—		288,234
Marketable securities	Foreign corporate bonds	—		46,680		—		46,680
Total assets		$	51,991	$	435,915	$	—	$	487,906
Liabilities:
Series B preferred shares forward contracts		$	—	$	—	$	9,120	$	9,120
Total liabilities		$	—	$	—	$	9,120	$	9,120
December 31, 2021
Assets:
Cash equivalents	Money market funds	$	32,420	$	—	$	—	$	32,420
Marketable securities	U.S. treasury bills	5,994		35,937		—		41,931
Marketable securities	U.S. corporate bonds	—		130,155		—		130,155
Marketable securities	Foreign corporate bonds	—		20,561		—		20,561
Total assets		$	38,414	$	186,653	$	—	$	225,067
Liabilities:
Series B preferred shares forward contracts		$	—	$	—	$	13,110	$	13,110
Total liabilities		$	—	$	—	$	13,110	$	13,110

There were no securities transferred between Level 1, 2 and 3 during the three months ended March 31, 2022 or 2021.

11

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

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

Series B Preferred Shares Forward Contracts

The following tables provide roll forwards of the aggregate fair value of the Company's Series B Preferred Shares Forward Contracts for which fair value is determined by Level 3 inputs for the three months ended March 31, 2022 and 2021:

	Carrying Value
Balance at December 31, 2021	$	13,110
Change in fair value of derivative liability	(3,604)
Partial settlement of derivative liability	(386)
Balance at March 31, 2022	$	9,120
Balance at December 31, 2020	$	14,190
Change in fair value of derivative liability	835
Partial settlement of derivative liability	(625)
Balance at March 31, 2021	$	14,400

Contingent Value Right Liability

On January 4, 2021, the Company acquired Kleo Pharmaceuticals, Inc. (“Kleo”) (see Note 6). Included in the purchase consideration transferred was a contingent value right to receive one dollar in cash for each Kleo share if certain specified Kleo biopharmaceutical products or product candidates receive the approval of the FDA prior to the expiration of 30 months following the effective time of the transaction. The maximum amount payable pursuant to the contingent value right is approximately $17,300, and the fair value of the contingent value right was $1,457 as of the acquisition date. The Company recorded the contingent value right in other long-term liabilities on the condensed consolidated balance sheets.

The fair value of the contingent value right was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The Company used a discounted cash flow approach to value the contingent value right liability. As inputs into the valuation, the Company considered the probability of FDA approval within the 30 month period, which we estimated at approximately 10%, the amount of the payment, and a discount rate of approximately 7% determined using an implied credit spread adjusted based on companies with similar credit risk.

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

5. Balance Sheet Components

Restricted Cash

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

Restricted cash included in other assets in the condensed consolidated balance sheets represents collateral held by a bank for a letter of credit ("LOC") issued in connection with the leased office space in Yardley, Pennsylvania. The following represents a reconciliation of cash and cash equivalents in the condensed consolidated balance sheets to total cash, cash equivalents and restricted cash as of March 31, 2022 and December 31, 2021, respectively, in the condensed consolidated statements of cash flows:

	March 31, 2022		December 31, 2021
Cash and cash equivalents	$	169,065	$	171,945
Restricted cash (included in other current assets)	4,559		1,648
Restricted cash (included in other assets)	750		750
Cash, cash equivalents and restricted cash in the statements of cash flows	$	174,374	$	174,343

Trade Receivable, Net

The Company’s trade accounts receivable consists of amounts due primarily from pharmacy wholesalers in the U.S. (collectively, its "Customers") related to sales of NURTEC ODT and have standard payment terms. For certain Customers, the trade accounts receivable for the Customer is net of distribution service fees, prompt pay discounts and other adjustments. The Company monitors the financial performance and creditworthiness of its Customers so that it can properly assess and respond to changes in their credit profile. The Company reserves against trade accounts receivable for estimated losses that may arise from a Customer’s inability to pay and any amounts determined to be uncollectible are written off against the reserve when it is probable that the receivable will not be collected. The allowance for doubtful accounts,

12

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

5. Balance Sheet Components (Continued)

including reserve amounts for estimated credit losses, was immaterial as of March 31, 2022 and December 31, 2021.

Inventory

Inventory consisted of the following:

	As of March 31, 2022		As of December 31, 2021
Work-in-process	169,390		159,075
Finished goods	13,731		9,269
Total inventories	$	183,121	$	168,344
Less noncurrent inventories(1)	91,840		87,736
Total inventories classified as current	$	91,281	$	80,608

(1) Included in other assets on the condensed consolidated balance sheets. There are no recoverability issues for these amounts.

Prepaid Expenses

Prepaid expenses consisted of the following:

	As of March 31, 2022		As of December 31, 2021
Prepaid clinical trial costs	$	58,562	$	42,578
Prepaid manufacturing	8,856		17,448
Prepaid commercial costs	33,248		15,732
Other prepaid expenses	4,225		13,080
Prepaid expenses	$	104,891	$	88,838

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

	As of March 31, 2022		As of December 31, 2021
Accrued development milestones	$	5,000	$	5,000
Accrued employee compensation and benefits	35,362		40,109
Accrued clinical trial costs	36,051		37,477
Accrued commercialization and other professional fees	22,744		19,994
Accrued sales discounts and allowances	233,096		203,760
Current obligation to perform R&D services	29,642		22,030
Other accrued expenses and other current liabilities	95,517		91,649
Accrued expenses and other current liabilities	$	457,412	$	420,019

6.   Business Acquisition

On January 4, 2021, the Company acquired Kleo Pharmaceuticals, Inc. (“Kleo”). Kleo is a development-stage biopharmaceutical company focused on advancing the field of immunotherapy by developing small molecules that emulate biologics. The transaction was accounted for as the acquisition of a business using the acquisition method of accounting.

The total fair value of the consideration transferred was $20,043 which primarily consisted of the issuance of a total of 115,836 common shares of the Company to Kleo stockholders and contingent consideration in the form of a contingent value right to receive one dollar in cash for each Kleo share if certain specified Kleo biopharmaceutical products or product candidates receive the approval of the FDA prior to the expiration of 30 months following the effective time of the transaction. The maximum amount payable pursuant to the contingent value right was approximately $17,300. At December 31, 2021, the Company determined the value of the contingent value right to be immaterial and recognized a gain of $1,457 related to the contingent value right in other income (expense) during the fourth quarter of 2021. The value of the contingent value right continues to be immaterial with no value included on the condensed consolidated balance sheet as of March 31, 2022.

13

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

6.   Business Acquisition (Continued)

Prior to the consummation of the transaction, the Company owned approximately 41.9% of the outstanding shares of Kleo and accounted for it as an equity method investment. As part of the transaction, the Company acquired the remainder of the shares of Kleo, and post-transaction the Company owns 100% of the outstanding shares of Kleo. The carrying value of the Company’s investment in Kleo was $1,176 immediately prior to the acquisition date. The Company determined the fair value of the existing interest was $6,437, and recognized a gain from our equity method investment during the first quarter of 2021 of $5,261 on the condensed consolidated statements of operations and comprehensive loss as a result of remeasuring to fair value the existing equity interest in Kleo.

In connection with the transaction, we recorded: net working capital of $573; property, plant and equipment of $1,257; intangible assets consisting of in progress research and development assets of $18,400 which include an oncology therapeutic candidate entering Phase I clinical trials and a COVID-19 therapeutic candidate in the planning stage for clinical development; debt assumed of $1,577; and goodwill of $1,390.

Kleo’s employees, other than its President and Chief Financial Officer, were retained as part of the transaction. In connection with the transaction agreement, the Company filed a registration statement permitting Kleo stockholders to offer and sell the common shares of the Company issued in the transaction.

7.   Liability Related to Sale of Future Royalties, net

2018 RPI Funding Agreement

In June 2018, the Company entered into a funding agreement (the "2018 RPI Funding Agreement") to sell tiered, sales-based royalty rights on global net sales of pharmaceutical products containing the compounds rimegepant or zavegepant (previously known as BHV-3500 and vazegepant) 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 2018 RPI Funding Agreement, in exchange for $100,000 in cash. Specifically, the participation rate commences at 2.1% on annual global net sales of up to and equal to $1,500,000, declining to 1.5% on annual global net sales exceeding $1,500,000. Pursuant to the Pfizer Collaboration, Pfizer will compensate Biohaven for the

related royalties on net sales outside of the U.S. owed to RPI under the 2018 RPI Funding Agreement

Concurrent with the 2018 RPI 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 account 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 2018 RPI Funding Agreement and $50,000 from the Purchase Agreement among the two units of account 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 share 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 account. The effective interest rate under the 2018 RPI Funding Agreement, including transaction costs, is approximately 27% as of March 31, 2022.

2020 RPI Funding Agreement

In August 2020, the Company entered into a funding agreement with RPI 2019 Intermediate Finance Trust (“RPI 2019 IFT”) providing for up to $250,000 of funding in exchange for rights to participation payments based on global net sales of products containing zavegepant and rimegepant and certain payments based on success-based milestones relating to zavegepant (the "2020 RPI Funding Agreement"). Under the 2020 RPI Funding Agreement, RPI 2019 IFT will be entitled to receive tiered, sales based participation rights up to 3.0% of future global net sales of products containing zavegepant, 0.4% of future global net sales of products containing rimegepant, and payments tied to success-based milestones as described below. Pursuant to the Pfizer Collaboration, Pfizer will compensate Biohaven for the related royalties on net sales outside of the U.S. owed to RPI under the 2020 RPI Funding Agreement. The Company received $150,000 in cash at closing in 2020 and $100,000 in cash upon achievement of the commencement of the oral zavegepant Phase 3 program in March 2021.

The success-based milestone payments range from 0.6x to 2.95x of the funded amount depending on the number of regulatory approvals achieved for

14

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

7.   Liability Related to Sale of Future Royalties, net (Continued)

zavegepant (including 1.9x for the first zavegepant migraine regulatory approval) and would be paid over a 10-year period. If the Company consummates a Change of Control, RPI 2019 IFT has the option to accelerate each unpaid milestone payment which has or thereafter occurs.

The Company concluded that there were two units of account for the $150,000 in initial consideration received, which comprised of a liability related to sale of future royalties for products containing rimegepant and a research and development arrangement with RPI 2019 IFT for zavegepant. The Company allocated the $150,000 from the 2020 RPI Funding Agreement among the two units of account based on the present value of probability adjusted net sales at the time of the transaction. The Company allocated $147,876 in transaction consideration to the liability related to sale of future royalties and $2,124 to the obligation to perform R&D services liability in the condensed consolidated balance sheets. The transaction costs of $400 were allocated to the liability related to sale of future royalties. The effective interest rate under the 2020 RPI Funding Agreement, including transaction costs, is approximately 8% as of March 31, 2022.

In March 2021, the Company received $100,000 from RPI 2019 IFT, pursuant to the 2020 RPI Funding Agreement, for the commencement of the oral zavegepant Phase 3 clinical program. The Company allocated the proceeds to obligation to perform R&D services liability in the condensed consolidated balance sheets.

Since there is a substantive and genuine transfer of risk to RPI 2019 IFT for the development of zavegepant, the $102,124 of consideration allocated to the development of zavegepant is being recognized by the Company as an obligation to perform contractual services and therefore is a reduction of research and development expenses as incurred.

The following table shows the activity within the obligation to perform R&D services account for the three months ended March 31, 2022 and 2021, related to the 2020 RPI Funding Agreement.

	Three Months Ended March 31,
	2022		2021
Reduction to research and development expenses	$	6,943	190

The following table shows the activity within the liability related to sales of future royalties account for

the three months ended March 31, 2022 and 2021, related to the 2018 and 2020 RPI Funding Agreements.

	Three Months Ended March 31,
	2022		2021
Liability related to sale of future royalties - beginning balance	$	384,283	$	335,282
Royalty revenues paid and payable to RPI	(3,090)		(1,096)
Interest expense on liability related to sale of future royalties	17,314		13,508
Liability related to sale of future royalties - ending balance	$	398,507	$	347,694

8.   Mandatorily Redeemable Preferred Shares, net

RPI Series A Preferred Shares

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.

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 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.

The Company may redeem the Series A Preferred Shares at its 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

15

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)

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.

The Company is required to redeem the Series A Preferred Shares for two times (2x) the original purchase price, payable beginning March 31, 2021 in equal quarterly installments through 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 20% as of March 31, 2022. The Company recognized $6,463 and $7,943 in interest expense for the three months ended March 31, 2022 and 2021, respectively. The Company had 1,715 and 1,871 Series A preferred shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively.

The following table shows the activity within the Series A preferred share liability for the three months ended March 31, 2022 and 2021, respectively:

	Carrying Value
Gross balance at December 31, 2021	$	141,740
Interest expense recognized, excluding transaction cost amortization	6,452
Redemption of Series A preferred shares	(15,625)
Gross balance at March 31, 2022	$	132,567
Less: unamortized transaction costs	(120)
Net balance at March 31, 2022	$	132,447
Gross balance at December 31, 2020	$	174,264
Interest expense recognized, including transaction cost amortization	7,932
Redemption of Series A preferred shares	(15,625)
Gross balance at March 31, 2021	$	166,571
Less: unamortized transaction costs	(162)
Net balance at March 31, 2021	$	166,409

RPI Series B Preferred Shares

On August 7, 2020, the Company entered into the RPI Series B Preferred Share Agreement, pursuant to which RPI agreed to invest in the Company through the purchase of up to 3,992 Series B Preferred Shares at a price of $50,100 per share. The shares will be issued in quarterly increments from March 31, 2021 to December 31, 2024. Upon issuance of the Series B Preferred Shares, they qualify as mandatorily redeemable instruments and are classified as a mandatorily redeemable preferred shares liability on the condensed consolidated balance sheet. The Company measures the liability at fair value, and subsequently accretes the carrying value to the redemption value through interest expense using the effective interest rate method. The effective interest rate under the Series B Preferred Share Agreement was determined to be approximately 8.7% as of March 31, 2022. The Company recognized $1,454 in interest expense for the three months ended March 31, 2022 and no interest expense for the three months ended March 31, 2021. The Company had 1,697 and 1,406 Series B preferred shares issued and outstanding, as of March 31, 2022 and December 31, 2021, respectively.

The following table shows the activity within the Series B preferred share liability for the three months ended March 31, 2022 and 2021, respectively:

	Carrying Value
Balance at December 31, 2021	$	76,627
Interest expense recognized	1,454
Issuance of Series B preferred shares at fair value	14,966
Balance at March 31, 2022	$	93,047
Balance at December 31, 2020	$	—
Issuance of Series B preferred shares at fair value	18,210
Balance at March 31, 2021	$	18,210

16

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

9.   Shareholders' Deficit

Changes in shareholders’ deficit for the three months ended March 31, 2022 were as follows:

	Common Shares
	Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Biohaven Shareholders' Equity (Deficit)		Non-controlling Interests		Total Shareholders' Equity (Deficit)
Balances as of December 31, 2021	66,933,531	$	1,676,792	$	169,656	$	(2,585,755)	$	(73)	$	(739,380)	$	(3,629)	$	(743,009)
Repurchase of preferred shares in consolidated subsidiary	1,232,629	152,673		(92,673)						60,000				60,000
Issuance of common shares as payment for agreements	2,037,921	253,779								253,779				253,779
Issuance of common shares under equity incentive plan	336,721	29,442		(30,193)						(751)				(751)
Non-cash share-based compensation expense				82,790						82,790				82,790
Net loss						(116,399)				(116,399)		(498)		(116,897)
Other comprehensive loss								(2,325)		(2,325)				(2,325)
Balances as of March 31, 2022	70,540,802	$	2,112,686	$	129,580	$	(2,702,154)	$	(2,398)	$	(462,286)	$	(4,127)	$	(466,413)

Changes in shareholders’ equity (deficit) for the three months ended March 31, 2021 were as follows:

	Common Shares
	Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Biohaven Shareholders' Equity (Deficit)		Non-controlling Interests		Total Shareholders' Equity (Deficit)
Balance as of December 31, 2020	60,436,876	$	1,249,547	$	98,938	$	(1,739,169)	$	314	$	(390,370)	$	(1,819)	$	(392,189)
Issuance of common shares, net of offering costs	4,037,204	308,243		—		—		—		308,243		—		308,243
Issuance of common shares as part of acquisition	115,836	10,673		—		—		—		10,673		—		10,673
Issuance of common shares as payment for license agreements	110,998	10,243		—		—		—		10,243		—		10,243
Issuance of common shares under equity incentive plan	365,554	25,315		(23,933)		—		—		1,382		—		1,382
Non-cash share-based compensation expense	—	—		48,726		—		—		48,726		—		48,726
Net loss	—	—		—		(264,968)		—		(264,968)		(360)		(265,328)
Other comprehensive income	—	—		—		—		95		95		—		95
Balance as of March 31, 2021	65,066,468	$	1,604,021	$	123,731	$	(2,004,137)	$	409	$	(275,976)	$	(2,179)	$	(278,155)

Issuance of Common Shares for Pfizer Collaboration Agreement

In November 2021, the Company and Pfizer Inc. entered into a Subscription Agreement (the “Subscription Agreement”). In January 2022, upon expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the Company closed the sale of 2,022,581

of its common shares to Pfizer Inc. for $350,000 (the “Share Purchase”), pursuant to the terms of the Subscription Agreement. The estimated fair market value of the shares issued to Pfizer was approximately $252,000, adjusted by a discount for lack of marketability due to certain holding period restrictions, which was valued using an option pricing model (see Note 13).

17

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

9.   Shareholders' Deficit (Continued)

Issuance of Common Shares for KU Leuven Agreement

In January 2022, Biohaven and Katholieke Universiteit Leuven ("KU Leuven") entered into an Exclusive License and Research Collaboration Agreement (the "KU Leuven Agreement") to develop and commercialize first-in-class TRPM3 antagonists to address the growing proportion of people worldwide living with chronic pain disorders. As consideration, KU Leuven received an upfront cash payment of $3,000 and 15,340 shares valued at $1,779 which were both recorded as research and development expense on the Company’s condensed consolidated statements of operations.

Issuance of Common Shares for the March 2021 Offering

In March 2021, the Company issued and sold 2,686,409 common shares at a public offering price of $76.00 per share for net proceeds of approximately $199,500 after deducting underwriting discounts and commissions of approximately $4,167 and other offering expenses of approximately $500. In addition, in March 2021, the underwriter of the March follow-on offering exercised its option to purchase additional shares, and the Company issued and sold 402,961 common shares for net proceeds of approximately $30,000 after deducting underwriting discounts and commissions of approximately $625. 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 $229,500.

Issuance of Common Shares for Acquisition of Kleo Pharmaceuticals, Inc.

On January 4, 2021, the Company acquired Kleo Pharmaceuticals, Inc. In the merger, each share of Kleo common stock issued and outstanding immediately prior to the effective time of the merger was converted into the right to receive approximately 0.007 of a common share of the Company, rounded up to the nearest whole share. Prior to the consummation of the merger, the Company owned approximately 41.9% of the outstanding shares of Kleo through its subsidiary Therapeutics, resulting in 115,836 common shares of the Company being issued to Kleo stockholders in the merger.

Issuance of Common Shares for Yale MoDE Agreement

On January 1, 2021, the Company entered into a worldwide, exclusive license agreement for the

development and commercialization of a novel Molecular Degrader of Extracellular Protein (MoDEs) platform based on ground-breaking research conducted in the laboratory of Professor David Spiegel at Yale University. Under the agreement, the Company paid Yale University an upfront cash payment of $1,000 and 11,668 shares valued at $1,000, both of which were included in research and development expense in the condensed consolidated statements of operations and comprehensive loss.

Issuance of Common Shares for Consulting Agreement with Moda Pharmaceuticals LLC

On January 1, 2021, the Company entered into a consulting services agreement with Moda Pharmaceuticals LLC to further the scientific and commercial advancement of technology, drug discovery platforms, product candidates and related intellectual property owned or controlled by the Company (Note 13). Under the agreement, the Company paid Moda Pharmaceuticals LLC an upfront cash payment of $2,700 and 37,836 shares valued at $3,243, both of which were included in research and development expense in the condensed consolidated statements of operations and comprehensive loss.

Issuance of Common Shares for Equity Distribution Agreement

In December 2020, the Company entered into the Equity Distribution Agreement. In accordance with the terms of the Equity Distribution Agreement, we may offer and sell common shares having an aggregate offering price of up to $400,000 from time to time through or to the sales agents, acting as our agents or principals. Sales of our common shares, if any, will be made in sales deemed to be “at the market offerings” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, or the Securities Act, in ordinary brokers’ transactions, to or through a market maker, on or through the New York Stock Exchange or any other market venue where the securities may be traded, in the over-the-counter market, in privately negotiated transactions, or through a combination of any such methods of sale. The sales agents may also sell our common shares by any other method permitted by law. The sales agents are not required to sell any specific amount of securities but will act as our sales agents using commercially reasonable efforts consistent with their normal trading and sales practices, on mutually agreed terms between the sales agents and us. The Company issued and sold no shares in the three months ended March 31, 2022, and 939,328 common

18

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

9.   Shareholders' Deficit (Continued)

shares for net proceeds of approximately $78,743 during the three months ended March 31, 2021.

Issuance of Series A Preferred Shares and Employee Share Options by Consolidated Subsidiary

In September 2020, the Company's Asia-Pacific Subsidiary, BioShin Limited, authorized, issued and sold 15,384,613 BioShin Series A Preferred Shares at a price of $3.90 per share for a total of $60,000 to a group of investors led by OrbiMed, with participation from Cormorant Asset Management LLC, HBM Healthcare Investments Ltd, Surveyor Capital (a Citadel Company), and Suvretta Capital Management, LLC (the "BioShin Investors"). The BioShin Series A Preferred Shares contained both a call option by the Company and a put option held by the BioShin Investors. Due to the contingently redeemable features, the Company had classified the BioShin Series A Preferred Shares in mezzanine equity since the redemption was out of the Company's control.

In connection with the BioShin Series A Preferred Shares issuance, BioShin Limited executed the 2020 Equity Incentive Plan ("BioShin 2020 Equity Incentive Plan") and granted options under the BioShin 2020 Equity Incentive Plan to certain employees. The compensation expense is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period of the award (generally three years) using the straight-line method. The Company is accounting for the expense being recognized over the requisite service period as non-controlling interest in shareholder's equity. The Company recognized $498 and $360 in non-controlling interest relating to the options for the three months ended March 31, 2022 and 2021, respectively.

In November 2021, the Company, Biohaven Therapeutics Ltd. Atlas Merger Sub ("Merger Sub") and BioShin entered into an Agreement and Plan of Merger (the "Bioshin Merger Agreement"). The Bioshin Merger Agreement provided for the merger of the Merger Sub with and into BioShin, with BioShin surviving the merger as a wholly owned indirect subsidiary of the Company, in accordance with Section 233 of the Cayman Islands Companies Act. As a result of the satisfaction of the closing conditions described in the Biohsin Merger Agreement, on January 6, 2022, each Series A convertible preferred share of BioShin, no par value, other than Excluded Shares (as defined in the Bioshin Merger Agreement) was converted into the right to receive 0.080121 of a common share of the Company and was removed from mezzanine equity. The

convertible Series A preferred shares of BioShin converted into 1,232,629 shares of the Company.

10. Accumulated Other Comprehensive Income (Loss)

Shareholders’ deficit included the following activity in accumulated other comprehensive income for the three months ended March 31, 2022:

	Three Months Ended March 31, 2022
Net unrealized investment gains (losses):
Beginning of period balance	$	(323)
Other comprehensive loss(1)	(2,279)
End of period balance	(2,602)
Foreign currency translation adjustments:
Beginning of period balance	250
Other comprehensive loss(1)	(46)
End of period balance	204
Total beginning of period accumulated other comprehensive loss	(73)
Total other comprehensive loss	(2,325)
Total end of period accumulated other comprehensive loss	$	(2,398)

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

19

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

10. Accumulated Other Comprehensive Income (Loss) (Continued)

Shareholders’ deficit included the following activity in accumulated other comprehensive income for the three months ended March 31, 2021:

	Three Months Ended March 31, 2021
Net unrealized investment gains (losses):
Beginning of period balance	$	(125)
Other comprehensive income(1)	63
Amounts reclassified from accumulated other comprehensive income(1)	19
Other comprehensive income	82
End of period balance	(43)
Foreign currency translation adjustments:
Beginning of period balance	439
Other comprehensive income(1)	13
End of period balance	452
Total beginning of period accumulated other comprehensive income	314
Total other comprehensive income	95
Total end of period accumulated other comprehensive income	$	409

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

11. Share-Based Compensation

Non-Cash Share-Based Compensation Expense

Non-cash share-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period of the award (generally three to four years) using the straight-line method. Non-cash share-based compensation expense, consisting of expense for stock options, Restricted Share Units ("RSUs"), Performance Share Units ("PSU"), and Employee Share Purchase Plan ("ESPP"), was classified in the condensed

consolidated statements of operations and comprehensive loss as follows:

	Three months ended March 31,
	2022		2021
Research and development expenses	$	33,953	$	20,058
Selling, general and administrative expenses	47,875		28,668
Total non-cash share-based compensation expense	$	81,828	$	48,726
Less: Share-based compensation expense attributable to non-controlling interests	498		360
Share-based compensation expense attributable to Biohaven Pharmaceutical Holding Company Ltd.	$	81,330	$	48,366

Share-based compensation expense capitalized to inventory during the three months ended March 31, 2022 and 2021 was $962 and $0, respectively.

Stock Options

All stock option grants are awarded at fair value on the date of grant. The fair value of stock options is estimated using the Black-Scholes option pricing model and stock-based compensation is recognized on a straight-line basis over the requisite service period. Stock options granted generally become exercisable over a three-year or four-year period from the grant date. Stock options generally expire 10 years after the grant date.

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company's common shares for those stock options that had exercise prices lower than the fair value of the Company's common shares at March 31, 2022.

As of March 31, 2022, the Company's unrecognized compensation expense related to unvested stock options totaled $105,422, which the Company expects to be recognized over a weighted-average period of 2.23 years. The Company expects approximately 2,592,919 of the unvested stock options to vest over the requisite service period.

20

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

11. Share-Based Compensation (Continued)

The following table is a summary of the Company's stock option activity for the three months ended March 31, 2022:

	Number of Shares	Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2021	7,089,727	$40.15
Granted	1,243,000	$128.09
Exercised	(46,665)	$60.06
Forfeited	(3,750)	$63.01
Outstanding as of March 31, 2022	8,282,312	$53.22	7.01	$	553,426
Options exercisable as of March 31, 2022	5,689,393	$38.82	6.31	$	456,699
Vested and expected to vest as of March 31, 2022	8,282,312	$53.22	7.01	$	553,426

Restricted Share Units and Performance Share Units

The Company’s RSUs are considered nonvested share awards and require no payment from the employee. For each RSU, employees receive one common share at the end of the vesting period. The employee can elect to receive the one common share net of taxes or pay for taxes separately and receive the entire share. Compensation cost is recorded based on the market price of the Company’s common shares on the grant date and is recognized on a straight-line basis over the requisite service period.

The Company’s PSUs contain performance vesting conditions in addition to a service vesting condition. Vesting of the Company’s PSUs is dependent upon the degree to which the Company achieves its performance goals, which are generally set for a three-year performance period and are approved at the time of grant by the Compensation Committee. The fair value of PSUs granted with service and performance vesting conditions is based on the market price of the Company's common stock on the grant date. Compensation expense is recognized on a straight-line basis over the vesting period, beginning when the accomplishment of the performance vesting conditions become probable. Certain of the PSUs also contain a market vesting condition based on the performance of the Company's common shares relative to a comparator group. The fair value of these PSUs is determined using a Monte Carlo simulation as of the grant date and is recognized over the vesting period.

As of March 31, 2022, there was $159,189 of total unrecognized compensation cost related to Company RSUs and PSUs that are expected to vest. These costs are expected to be recognized over a weighted-average period of 2.43 years. The total fair value of RSUs vested

during the three months ended March 31, 2022 was $52,844.

The following table is a summary of the RSU and PSU activity for the three months ended March 31, 2022:

	Number of Shares	Weighted Average Grant Date Fair Value
Unvested as of December 31, 2021	1,218,070	$78.98
Granted	1,064,917	$127.95
Forfeited	(14,085)	$97.19
Vested	(561,296)	$94.12
Unvested as of March 31, 2022	1,707,606	$104.39

21

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

12.   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 March 31,
	2022		2021
Numerator:
Net loss	$	(116,897)	$	(265,328)
Net loss attributable to non-controlling interests	498		360
Deemed dividend upon repurchase of preferred shares in consolidated subsidiary (1)	(92,673)		—
Net loss attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd.	$	(209,072)	$	(264,968)
Denominator:
Weighted average common shares outstanding—basic and diluted	70,332,274		62,040,715
Net loss per share attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd.—basic and diluted	$	(2.97)	$	(4.27)

(1) As part of the BioShin Merger Agreement, the Company repurchased the 15,384,613 BioShin Series A Preferred Shares previously classified as mezzanine equity on the condensed consolidated balance sheet in exchange for 1,232,629 shares of the Company with a fair value of $152,673 (see Note 9 for further detail).

The Company’s potential dilutive securities, which include stock options, restricted share units, performance share units, 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 March 31,
	2022	2021
Options to purchase common shares	8,282,312	8,549,583
Warrants to purchase common shares	100,000	106,751
Restricted share units and performance share units	1,707,606	1,045,519
Total	10,089,918	9,701,853

13.  Collaboration, License and Other Agreements

Commercial and Late-stage Agreements

Pfizer Collaboration

In November 2021, the Company and Pfizer entered into a collaboration and license agreement and a related sublicense agreement (the "Pfizer Collaboration"), pursuant to which Pfizer was granted the exclusive right to commercialize product candidates containing Biohaven's proprietary compound rimegepant (BHV-3000) and may elect to commercialize zavegepant (BHV-3500) (the "Zavegepant Option"), in each case, in all countries worldwide outside of the United States. In January 2022, following the expiration or termination of applicable waiting periods under all applicable antitrust laws and the completion of the Share Purchase (as defined below), the Pfizer Collaboration became effective. In consideration therefor, Pfizer made an upfront cash payment to the Company of $150,000 and a $350,000 equity investment in the Company (as further discussed below).

In November 2021, in connection with the Pfizer Collaboration, the Company and Pfizer Inc. entered into the Subscription Agreement. In January 2022, upon expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the Company closed the sale of 2,022,581 of its common shares to Pfizer Inc. for $350,000 (the “Share Purchase”), pursuant to the terms of the Subscription Agreement. The estimated fair market value of the shares issued to Pfizer was approximately $252,000, adjusted by a discount for lack of marketability due to certain holding period restrictions, which was valued using an option pricing model. The issuance resulted in a $98,000 premium paid to the Company above the estimated fair value of the Company's common stock (the "Share Purchase Premium"), which forms part of the transaction price for the Collaboration Agreement as discussed below.

22

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

13.  Collaboration, License and Other Agreements (Continued)

Under the terms of the arrangement, the Company will be eligible to receive an aggregate additional $740,000 in contingent payments based on specified commercial and sales-based milestones for the Licensed Products.

The Company is also entitled to tiered, escalating royalties from the upper teens to twenty percent of net sales of Licensed Products in the Territory. In general, Pfizer’s obligation to pay royalties continues on a product-by-product and country-by-country basis until the latest of ten years after the first commercial sale of such product in such country, the expiration of the patent rights covering such product in such country or the expiration of the period of exclusivity applicable to such product in such country. In addition to the upfront payments, contingent payments and royalties described above, Pfizer will also compensate Biohaven for a pro-rata share of certain of its sales-based milestone obligations owed to BMS under the BMS License, and related net sales royalties owed to BMS and RPI that result from Pfizer’s commercialization and sale, respectively, of the Licensed Products in the Territory.

Upon closing, the Company identified the following as material distinct performance obligations associated with the Pfizer Collaboration under ASC 606: (i) delivery of the license and sublicense to commercialize Rimegepant outside the U.S.; (ii) a material right for the delivery of the license and sublicense for Zavegepant in conjunction with the Zavegepant Option; (iii) certain future development activities to be performed by the Company, which include clinical development activities, regulatory affairs and the transfer of information required for manufacturing (the "initial development plan"); and (iv) a material right for the Company's obligation to provide product to Pfizer under the Supply Agreement.

The Company believes that the Pfizer Collaboration is a collaboration arrangement as defined in ASC 808, Collaborative Agreements. The Company also believes that Pfizer meets the definition of a customer as defined in ASC 606, Revenue From Contracts With Customers for all of the performance obligations identified at inception except for the initial development plan. As ASC 808 does not address recognition and measurement, the Company has accounted for the initial development plan performance obligation by analogy to ASC 606.

The transaction price at inception included fixed consideration consisting of the upfront cash payment of $150,000 and the $98,000 Share Purchase Premium. Potential development, regulatory, and sales-based

milestones, and royalties, will be accounted for as variable transaction price related to the Licensed Products under ASC 606. Given the uncertain nature of these payments, we determined they were fully constrained as of March 31, 2022 and not included in the transaction price for the collaboration arrangement. We will re-evaluate the transaction price at each reporting period as uncertain events are resolved or other changes in circumstances occur. From inception of the collaboration arrangement through March 31, 2022, there was no change to the transaction price.

The respective standalone value for each of the performance obligations was determined by applying the SSP method and the transaction price was allocated based on the relative SSP method with revenue recognition timing to be determined either by the provision of services or execution or expiration of an option.

The Company used an income approach to estimate the SSP for the Rimegepant license and sublicense, Zavegepant Option, and the Supply Agreement, and a cost approach for estimating the SSP of the initial development plan. The Rimegepant license and sublicense was delivered on the closing date of the collaboration arrangement and revenue allocated to this performance obligation of $194,389 was recorded as collaboration and other revenue on the condensed consolidated statements of operations and comprehensive loss during the three months ended March 31, 2022. Revenue allocated to the Zavegepant Option is deferred as a contract liability until execution or expiration of the option occurs. The initial development plan activities are expected to be delivered over time as the services are performed, with the allocated revenue being recognized over time based on costs incurred to perform the services, since the level of costs incurred over time is thought to best reflect the transfer of services to Pfizer. Revenue allocated to the Supply Agreement is deferred, and will be recognized as product revenue on the condensed consolidated statement of operations over the estimated period of the services.

In January 2022, upon the effectiveness of the agreements, a total contract liability of $53,611 was recorded relating to the remaining performance obligations under the Pfizer Collaboration. Approximately $873 of the initial contract liability was recognized as collaboration and other revenue on the condensed consolidated statements of operations and comprehensive loss during the three months ended March 31, 2022. As of March 31, 2022, the total contract liability relating to the Pfizer Collaboration, which is

23

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

13.  Collaboration, License and Other Agreements (Continued)

primarily related to our obligations under the initial development plan was $52,738, of which $21,763 was classified as current and recorded to accrued expenses and other current liabilities on the condensed consolidated balance sheet. The remaining $30,975 was recorded to other long-term liabilities on the condensed consolidated balance sheet as of March 31, 2022, and expected to be recognized over several years.

In assessing the Pfizer Collaboration, management exercised considerable judgment in estimating revenue to be recognized, specifically related to estimating the discount for lack of marketability associated with the stock issuance, determining the separate performance obligations under the Collaboration Agreement, and estimating the standalone selling price of those performance obligations.

As of March 31, 2022 the Company had not achieved any milestones under the Pfizer Collaboration.

Yale University Agreement

In September 2013, the Company entered into an exclusive license agreement (the "Yale Agreement") with Yale University 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, 2019.

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.

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

BMS Agreement

In July 2016, the Company entered into an exclusive, worldwide license agreement with BMS (the "BMS Agreement") for the development and commercialization rights to rimegepant and zavegepant, as well as other CGRP-related intellectual property. In exchange for these rights, the Company agreed to pay BMS initial payments, milestone payments and royalties on net sales of licensed products under the agreement.

The Company is obligated to make milestone payments to BMS upon the achievement of specified development and commercialization milestones. The development milestone payments due under the BMS Agreement depend on the licensed product being developed. With respect to rimegepant, the Company is obligated to pay up to $127,500 in the aggregate upon the achievement of the development milestones. For any product other than rimegepant, the Company is obligated to pay up to $74,500 in the aggregate upon the achievement of the development milestones. In addition, the Company is obligated to pay up to $150,000 for each licensed product upon the achievement of commercial milestones. If the Company receives revenue from sublicensing any of its rights under the BMS Agreement, it is also obligated to pay a portion of that revenue to BMS. The Company is also obligated to make tiered royalty payments to BMS based on annual worldwide net sales, with percentages in the low to mid-teens.

Under the BMS Agreement, the Company is obligated to use commercially reasonable efforts to develop licensed products and to commercialize at least one licensed product using the patent rights licensed from BMS and is solely responsible for all development, regulatory and commercial activities and costs. The Company is also required to reimburse BMS for any fees that BMS incurs related to the filing, prosecution, defending, and maintenance of patent rights licensed under the BMS Agreement. Under the BMS Agreement, BMS transferred to the Company manufactured licensed products, including certain materials that will be used by the Company to conduct clinical trials. The Company's right to sublicense its rights under the BMS agreement, other than to an affiliate or to certain third-party manufacturers, is subject to BMS's prior written

24

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

13.  Collaboration, License and Other Agreements (Continued)

consent, which cannot be unreasonably withheld or delayed.

The BMS Agreement will terminate on a licensed product-by-licensed product and country-by-country basis upon the expiration of the royalty term with respect to each licensed product in each country and can also be terminated if certain events occur, e.g., material breach or insolvency.

In March 2018, the Company entered into an amendment to the BMS Agreement (the “2018 BMS Amendment”). Under the 2018 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 zavegepant, which was recorded in research and development expense in the condensed consolidated statements of operations and comprehensive loss.

The 2018 BMS Amendment also removes 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 with rimegepant, and clarifies that antibodies targeting CGRP are not prohibited as competitive compounds under the non-competition clause of the Original License Agreement.

In August 2020, the Company entered into a further amendment of the BMS Agreement (the “August 2020 BMS Amendment”). Under the August 2020 BMS Amendment, the Company paid BMS an upfront payment of $5,000 in return for a reduction in the royalties payable on net sales of rimegepant and zavegepant in China, with percentages in the low to mid-single digits. In addition, the Company is obligated to pay up to $22,500 for each licensed product upon the achievement of commercial milestones in China. The August 2020 BMS Amendment also amended the BMS Agreement to remove sales in China from the commercial milestone payment obligations.

In November 2020, the Company entered into a further amendment of the BMS Agreement (the “November 2020 BMS Amendment”). Under the November 2020 BMS Amendment, certain exclusivity provisions under the BMS Agreement are waived which permits the Company to develop certain CGRP compounds licensed by the Company from Heptares Therapeutics Limited (“Heptares”). Under the November 2020 Amendment, if the Company initiates clinical development of a Heptares compound prior to July 8, 2023, the Company is obligated to pay BMS certain fees based on net sales of the Heptares

compounds from low single percentage to 10% and pay up to $17,500 for each Heptares compound upon the achievement of certain development milestones and up to $150,000 for each Heptares compound upon the achievement of certain commercial milestones. As of March 31, 2022 the Company has not achieved any of the development or commercial milestones for the Heptares compounds. No fees or milestones are due by the Company to BMS for Heptares compounds that begin clinical trials after July 8, 2023.

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

In connection with the BMS Agreement, upon FDA approval of NURTEC ODT on February 27, 2020, the Company became obligated to pay BMS $40,000 in milestone payments. The Company recorded the $40,000 in milestone payments as an intangible asset on its condensed consolidated balance sheet in the first quarter of 2020, and is amortizing the expense to cost of sales on its condensed consolidated statements of operations and comprehensive loss over the patent life. The Company paid the $40,000 in milestone payments to BMS during the year ended December 31, 2020.

In connection with the BMS Agreement, the Company was required to pay $2,000 to BMS on commencement of a Phase 1 clinical trial, $4,000 on commencement of a Phase 2 clinical trial, and $6,000 on commencement of a Phase 3 clinical trial, for certain milestones relating to the development of zavegepant. Accordingly, the Company recognized these liabilities in accrued expenses within the condensed consolidated balance sheets in the fourth quarter of 2018, first quarter of 2019, and fourth quarter of 2019, respectively. Per the BMS Agreement, the $2,000 and $4,000 payment obligations under the agreement were deferred until the earlier of FDA approval of rimegepant or the discontinuation of the rimegepant development program. Upon FDA approval of NURTEC ODT on February 27, 2020, the Company became obligated to pay BMS the $2,000 and $4,000 milestone payments for the commencement of the Phase 1 and Phase 2 clinical trials of zavegepant, respectively, and made the milestone payments in the second quarter of 2020. The Company paid the $6,000 milestone payment following the commencement of the Phase 3 clinical trial of zavegepant in the fourth quarter of 2020. In the first quarter of 2021, the Company accrued a $5,000

25

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

13.  Collaboration, License and Other Agreements (Continued)

development milestone expense following the regulatory filing for rimegepant in Europe, which was paid in the second quarter of 2021. In the fourth quarter of 2021, the Company accrued a $5,000 development milestone expense for the planned submission of a New Drug Application to the FDA for intranasal zavegepant in the first half of 2022.

The Company did not record research and development expense related to the BMS Agreement during the three months ended March 31, 2022 and 2021. In addition, for the three months ended March 31, 2022 and 2021, the Company recorded $12,355 and $4,384, respectively, in royalty expense in cost of sales on the condensed consolidated statements of operations and comprehensive loss under the BMS agreement.

RPI Agreements

In June 2018, pursuant to the 2018 RPI Funding Agreement entered into by the Company and RPI (Note 7), the Company granted 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 2018 RPI Funding Agreement, in exchange for $100,000 in cash. Specifically, the participation rate commences at 2.1 percent on annual global net sales of up to and equal to $1,500,000, declining to 1.5 percent on annual global net sales exceeding $1,500,000.

In connection with the 2018 RPI Funding Agreement, the Company recorded, $14,096 in interest expense on its liability related to sale of future royalties for the three months ended March 31, 2022 and $11,419 in interest expense on its liability related to sale of future royalties for the three months ended March 31, 2021, respectively, The Company paid $4,025 and $736 under the 2018 RPI Funding Agreement during the three months ended March 31, 2022 and March 31, 2021, respectively.

In August 2020, pursuant to the 2020 RPI Funding Agreement, the Company sold sales-based participation rights on global net sales of products containing zavegepant and rimegepant to RPI 2019 IFT for aggregate funding of $250,000, payable in two tranches. For further details on the transaction see Note 7 “Liability Related to Sale of Future Royalties, net.”

In connection with the 2020 RPI Funding Agreement, the Company recorded $3,218 and $2,089 in interest expense for the three months ended March 31, 2022 and March 31, 2021, respectively. The Company recorded payments of $767 during the three months

ended March 31, 2022, and payments of $140 under the 2020 RPI Funding Agreement during the three months ended March 31, 2021.

AstraZeneca License Agreement

In September 2018, the Company entered into an exclusive license agreement (the "2018 AstraZeneca Agreement") with AstraZeneca, pursuant to which AstraZeneca granted the Company a license to certain patent rights for the commercial development, manufacture, distribution and use of any products or processes resulting from development of those patent rights, including BHV-3241. Under the 2018 AstraZeneca Agreement, the Company paid AstraZeneca an upfront cash payment of $3,000 and 109,523 shares valued at $4,080 on the date of settlement, both of which were included in research and development expense, and is obligated to pay milestone payments to AstraZeneca totaling up to $55,000 upon the achievement of specified regulatory and commercial milestones and up to $50,000 upon the achievement of specified sales-based milestones. In addition, we will pay AstraZeneca tiered royalties ranging from high single-digit to low double-digits based on net sales of specified approved products, subject to specified reductions.

The Company plans to conduct a Phase 3 clinical trial of this product candidate, which is now referred to as verdiperstat, for the treatment of multiple system atrophy (“MSA”), a rare, rapidly progressive and fatal neurodegenerative disease with no cure or effective treatments. The Company is solely responsible, and has agreed to use commercially reasonable efforts, for all development, regulatory and commercial activities related to verdiperstat. The Company may sublicense its rights under the agreement and, if it does so, will be obligated to pay a portion of any milestone payments received from the sublicense to AstraZeneca in addition to any milestone payments it would otherwise be obligated to pay.

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

For the three months ended March 31, 2022 and 2021, the Company did not record any material expense or make any milestone or royalty payments under the 2018 AstraZeneca Agreement.

26

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

13.  Collaboration, License and Other Agreements (Continued)

Taldefgrobep Alfa License Agreement

In February 2022, following the transfer of intellectual property, the Company announced that we entered into a worldwide license agreement with BMS for the development and commercialization rights to taldefgrobep alfa (also known as BMS-986089), a novel, Phase 3-ready anti-myostatin adnectin (the "Taldefgrobep Alfa License Agreement"). Under the terms of the Taldefgrobep Alfa License Agreement, the Company will receive worldwide rights to taldefgrobep alfa and BMS will be eligible for regulatory approval milestone payments of up to $200,000, as well as tiered, sales-based royalty percentages from the high teens to the low twenties. There were no upfront or contingent payments to BMS related to the Taldefgrobep Alfa License Agreement.

Other Agreements

In addition to the agreements discussed above, the Company has entered into various other collaborations, including licensing and development programs, for assets which the Company considers to be early-stage (have not yet entered phase 3 clinical trials). The agreements generally include upfront fees, milestone payments which become payable upon achievement of certain clinical, development, regulatory and sales milestones, as well as royalties calculated as a percentage of product revenue, with rates that vary by agreement.

The Company records milestones and other payments, including funding for research arrangements, which become due under its early-stage agreements to research and development expense in the condensed consolidated statements of operations and comprehensive loss. Amounts recorded for the period were as follows:

	Three months ended March 31,
	2022		2021
Milestone payments	$	—	$	962
Other payments	4,445		1,579

For the three months ended March 31, 2022 the Company made upfront payments consisting of $3,000 cash and 15,340 shares valued at $1,779 in connection with new agreements. For the three months ended March 31, 2021 the Company made upfront payments consisting of $3,700 cash and 49,504 shares valued at $4,243 in connection with new agreements.

As of March 31, 2022, under these agreements the Company has potential future developmental,

regulatory, and commercial milestone payments of up to approximately $216,966, $279,325 and $573,121, respectively. Payments under these agreements generally become due and payable upon achievement of a specified milestone. Because the achievement of these milestones have not been considered probable as of March 31, 2022, such contingencies have not been recorded in our financial statements. Amounts related to contingent milestone payments are not considered contractual obligations as they are contingent on the successful achievement of certain development, regulatory or commercial milestones.

14.   Commitments and Contingencies

Summarized below are the matters previously described in Note 17 of the Notes to the Consolidated Financial Statements in the Company's Form 10-K for the year ended December 31, 2021, updated as applicable.

Commercial Commitments

The Company's commercial commitments primarily relate to manufacturing preparation services that are enforceable and legally binding on us and that specify all significant terms, including applicable milestone payments and target completion dates, and its commercial car fleet.

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

27

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

14.  Commitments and Contingencies (Continued)

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 March 31, 2022 or December 31, 2021.

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

15. Income Taxes

The following table provides a comparative summary of the Company's income tax provision and effective income tax rate for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
	2022			2021
Income tax provision	$	24,303		$	3,824
Effective income tax rate	26.2		%	1.5		%

The Company recorded an income tax provision of $24,303 for the three months ended March 31, 2022 compared to a provision for income taxes of $3,824 for the three months ended March 31, 2021. The increase in income tax expense of $20,479 was primarily attributable the mandatory capitalization of R&D expenses effective January 1, 2022 under the Tax Cuts and Jobs Act, offset by an increased benefit to the Company's foreign derived intangible income deduction.

16. Subsequent Events

Kv7 Platform Acquisition

On April 1, 2022, the Company closed the previously announced acquisition from Knopp Biosciences LLC (“Knopp”) of Channel Biosciences, LLC (“Channel”), a wholly owned subsidiary of Knopp owning the assets of Knopp’s Kv7 channel targeting platform (the “Transaction”), pursuant to a Membership Interest Purchase Agreement (the “Purchase Agreement”), dated February 24, 2022.

In consideration for the Transaction, on April 4, 2022, Biohaven made an upfront payment comprised of $35,000 in cash and 493,254 common shares of the Company, valued at approximately $65,000, (“Biohaven Shares”) issued through a private placement. Biohaven has also agreed to pay additional success-based payments comprised of (i) up to $325,000 based on developmental and regulatory milestones through approvals in the United States, EMEA and Japan for the lead asset, BHV-7000 (formerly known as KB-3061), (ii) up to an additional $250,000 based on developmental and regulatory milestones for the Kv7 pipeline development in other indications and additional country approvals, and (iii) up to $562,500 for commercial sales-based milestones of BHV-7000. These contingent milestone payments may be paid in cash or Biohaven Shares at the election of Biohaven, but if Biohaven elects to pay in Biohaven Shares, such amounts are subject to increases of a mid-single-digit percentage increase (or in one case, a ten-percent increase). Additionally, Biohaven has agreed to make scaled royalty payments in cash for BHV-7000 and the pipeline programs, starting at high single digits and peaking at low teens for BHV-7000 and starting at mid-single digits and peaking at low double digits for the pipeline programs.

The Company has also given Knopp the option to request a one-time cash true-up payment from the Company in December 2022 in the event that Knopp continues to hold Biohaven Shares issued as a component of the upfront payment and the value of such shares has declined, subject to certain conditions.

Pfizer Acquisition

On May 9, 2022, the Company, Pfizer and Bulldog (BVI) Ltd., a wholly owned subsidiary of Pfizer (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Pfizer Merger Agreement”), pursuant to which, on the terms and subject to the conditions set forth in the Pfizer Merger Agreement, Pfizer will acquire all outstanding shares of Biohaven for $148.50 per share in cash and Merger Sub will merge with and into the Company (the “Pfizer Merger”), with the Company surviving the Pfizer Merger as a wholly owned subsidiary of Pfizer.

In connection with and as a condition to the Pfizer Merger, the Company and Biohaven Research Ltd. (“New Biohaven”) entered into a Separation and Distribution Agreement, dated as of May 9, 2022 (the “Separation Agreement”), pursuant to which, on the terms and subject to the conditions set forth in the Separation Agreement, immediately prior to the effective time of the Pfizer Merger: (i) the Company will

28

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

16. Subsequent Events (Continued)

effect a pre-closing reorganization, which will result in (x) New Biohaven owning, assuming or retaining certain assets and liabilities of the Company and its subsidiaries related to the Company’s pipeline assets and businesses, and (y) the Company owning, assuming or retaining all other assets and liabilities, including those associated with the Company’s platform for the research, development, manufacture and commercialization of calcitonin gene-related peptide receptor antagonists, including rimegepant, zavegepant and the Heptares Therapeutics Limited pre-clinical CGRP portfolio; and (ii) thereafter, the Company will distribute to its shareholders as of the record date all of the issued and outstanding common shares of New Biohaven, no par value, on a pro rata basis (the “Spin-Off”), at a ratio of one New Biohaven Common Share for every two common shares of the Company. Following the Spin-Off, New Biohaven will be a separate public company and the Company will have no continuing common share ownership interest in New Biohaven.

The boards of directors of both Biohaven and Pfizer have unanimously approved the Spin-Off and the Pfizer Merger. Pfizer will pay transaction consideration totaling approximately $11.6 billion in cash. Pfizer will also make payments at the closing of the Pfizer Merger to settle Biohaven’s third party debt and for the redemption of all outstanding shares of Biohaven’s redeemable preferred stock. Following the closing of the Pfizer Merger, New Biohaven will continue to operate under the Biohaven name. New Biohaven will be led by Vlad Coric, MD, as Chairman and CEO, and include other members of the current management team of Biohaven. New Biohaven will be capitalized with $275 million of cash. New Biohaven will also have the right to receive tiered royalties from Pfizer on any annual net sales of rimegepant and zavegepant in the United States in excess of $5.25 billion. Pfizer expects to finance the transaction with existing cash on hand. Pfizer’s acquisition of Biohaven is subject to the completion of the New Biohaven spin-off transaction and other customary closing conditions, including receipt of regulatory approvals and approval by Biohaven’s shareholders. The companies expect the transaction to close by early 2023.

Additional information about the Pfizer Merger Agreement and the Pfizer Merger will be set forth in the Company’s Definitive Proxy Statement on Schedule 14A that will be filed with the SEC.

29

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, 2021 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 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, the development of the industry in which we operate, the potential achievement of milestones and receipt of payments under our collaboration with Pfizer (“Pfizer”) entered into in November 2021 (the “Pfizer Collaboration”) and the proposed Pfizer Merger and Spin-Off, among other things, 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, the development of the industry in which we operate, the potential achievement of milestones and receipt of payments under the Pfizer Collaboration 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 commercial-stage biopharmaceutical company with a portfolio of innovative, best-in-class therapies to improve the lives of patients with debilitating neurological and neuropsychiatric diseases, including rare disorders. Our Neuroinnovation portfolio includes FDA-approved NURTEC ODT (rimegepant) for the acute and preventive treatment of migraine and a broad pipeline of product candidates across five distinct mechanistic platforms: calcitonin gene related peptide ("CGRP") receptor antagonism, glutamate modulation, myeloperoxidase ("MPO") inhibition, Kv7 ion channel activators ("Kv7"), and Myostatin inhibition.

30

Our clinical-stage milestones include the following:

Drug Name	Indication	1H2021	2H2021	1H2022		2H2022
	Migraine prevention	Approval
	Migraine acute/prevention	Europe Filing 1Q		EU Approval
	Migraine acute (China/Korea)			Topline		China Filing
Zavegepant Small molecule/NCE	Migraine (intranasal)		Topline	US Filing
	Migraine (oral)	Start Phase 3
Troriluzole NCE prodrug of riluzole	Spinocerebellar ataxia			Expected Topline
	Obsessive-Compulsive Disorder (“OCD”)					Complete Enrollment
Verdiperstat NCE oral MPO inhibitor	Amyotrophic Lateral Sclerosis ("ALS")		Complete Enrollment			Topline
Taldefgrobep Alfa Anti-myostatin adnectin	Spinal Muscular Atrophy ("SMA")				Start Phase 3
BHV-7000 Kv7 channel modulator	Focal epilepsy					Start Phase 1
BHV-1100 ARM combo	Multiple Myeloma		Start Phase 1
Milestone Achieved

CGRP Platform

In July 2016, we acquired exclusive, worldwide rights to our CGRP receptor antagonist platform, including rimegepant and zavegepant (previously known as BHV-3500 and vazegepant), through a license agreement, as amended, with Bristol-Myers Squibb Company (“BMS”). In December 2020, Heptares Therapeutics Ltd. ("Sosei Heptares") and Biohaven entered a global collaboration and license agreement (the "Heptares Agreement") under which Biohaven received exclusive global rights to develop, manufacture and commercialize a portfolio of novel, small-molecule CGRP receptor antagonists discovered by Sosei Heptares for the treatment of CGRP-mediated disorders.

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 have developed 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 for the Zydis ODT formulation of rimegepant was submitted using an FDA priority review voucher, purchased in March 2019, providing for an expedited 6-month review. The Zydis

ODT formulation of rimegepant (NURTEC ODT) was approved by the FDA for the acute treatment of migraine on February 27, 2020 and was available by prescription in U.S. pharmacies on March 12, 2020. During the fourth quarter of 2020, we submitted an sNDA for the preventive treatment of migraine to the FDA for NURTEC ODT. The FDA approved NURTEC ODT for the preventive treatment of episodic migraine on May 27, 2021.

We remain focused on investing in long-term success by driving new-to-brand prescriptions, and ultimately market share, in this rapidly growing oral CGRP market and are continuing to observe a positive return on investment with increasing physician advocacy and attracting a greater pool of patients. We believe that the rapid adoption of NURTEC ODT is evidence of significant unmet need among people with migraine and an associated large acute and preventive therapy market opportunity. We continue to expand commercial payer coverage, with NURTEC ODT now covered by insurance providers reflecting 96% of commercial lives.

A summary of key rimegepant studies is described below.

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

31

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 ("MBS"). 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 were consistent with regulatory guidance from the FDA and provided the basis for the submission of an NDA to the FDA.

Study 303

A third Phase 3 clinical trial for the acute treatment of migraine with a bioequivalent 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 the MBS at two hours. In total, rimegepant was significantly differentiated from the placebo in 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 MBS, 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 co-primary endpoints achieved in the Phase 3 trials were consistent with regulatory guidance from the FDA and formed the basis of efficacy data required by the FDA for approval.

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”). In March 2020, we announced positive topline results from this study. Rimegepant 75 mg, dosed every other day, demonstrated statistically significant superiority, compared to placebo, on the primary endpoint of reduction in the mean number of migraine days per month in both episodic and chronic migraine patients. The safety profile seen in the 370 patients who received rimegepant 75 mg every other day was consistent with

prior clinical trial experience. With this trial, rimegepant has become the only CGRP targeted therapy to demonstrate efficacy in both the acute and preventive treatment of migraine. An sNDA for rimegepant for prevention of migraine was filed with the FDA and accepted for review in the fourth quarter of 2020. The FDA approved NURTEC ODT for the preventive treatment of migraine on May 27, 2021.

Pediatric Study Plan

In June 2019, the FDA agreed to our Pediatric Study Plan for the acute treatment of migraine. The pediatric program for the acute treatment of migraine was initiated in the fourth quarter of 2020.

Trigeminal Neuralgia

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

Plaque Psoriasis

In the fourth quarter of 2020, we announced a collaboration with Weill Cornell Medicine's Dr. Richard Granstein, Chairman of Dermatology, to initiate an investigator-led clinical trial, which will explore whether treatment with one of our CGRP receptor antagonists will reduce the severity of disease and percentage of area affected as measured by patients' Psoriasis Activity Severity Index (PASI) score after 16 weeks of treatment as compared to placebo. In addition, the study will assess the potential impact on itch and patient quality-of-life measures. Psoriasis is a chronic and painful autoimmune disease characterized by red patches of dry, cracked skin that may bleed, itch, and burn that affects approximately 7- 8 million people in the U.S.

Rhinosinusitis

In February 2022, we announced that we have begun enrollment in a Phase 2/3 clinical trial assessing the safety and efficacy of NURTEC ODT 75mg in patients with chronic rhinosinusitis ("CRS") with or without nasal polyps. CRS is a symptomatic inflammation of the paranasal sinuses and nasal cavity lasting more than 12 weeks. CRS typically manifests as facial pain/pressure/fullness, nasal obstruction (congestion), nasal discharge, and/or a decreased sense of smell. Both

32

preclinical and human studies have indicated that increased CGRP levels are associated with CRS, and suggest that blocking CGRP receptors with NURTEC ODT may have beneficial effects for those suffering from CRS. We expect to enroll approximately 200 patients in a randomized, double-blind, placebo-controlled trial across approximately 25 sites in the U.S. Researchers will evaluate acute symptomatic treatment with rimegepant in patients with chronic rhinosinusitis with and without nasal polyps. The primary outcome measure is the change in a patient’s facial pain/pressure/fullness score on a Numerical Rating Scale (0-10). The trial will also assess the safety and tolerability of rimegepant.

Temporomandibular Disorder

In the first quarter of 2022, we received “Study May Proceed” communications from the FDA regarding our proposed clinical trial for the use of NURTEC ODT in temporomandibular disorder ("TMD"). TMD is a disorder of the jaw muscles, temporomandibular joints, and the nerves associated with chronic facial pain. We expect to commence a clinical trial during the second quarter of 2022.

International Health Authority Interactions

Scientific advice for rimegepant for acute and preventive migraine treatment was received from the CHMP, a committee of the European Medicines Agency, in June and December 2018, respectively. In the first quarter of 2021, we submitted the MAA for rimegepant dual indication, inclusive of acute treatment and prevention of migraine. In April 2022, the European Commission ("EC") approved rimegepant 75 mg (available as an orally dissolving tablet), intended for the prophylaxis and acute treatment of migraine. VYDURA™ (rimegepant) will be the commercial name for rimegepant in the EU. The full indication for VYDURA is the acute treatment of migraine with or without aura in adults and preventive treatment of episodic migraine in adults who have at least four migraine attacks per month. The Marketing Authorization follows the recommendation for approval by CHMP in February 2022. The EC approval will be valid for all 27 EU member states as well as Iceland, Liechtenstein and Norway and local reimbursement approval will follow. Assessment of the MAA by the Medicines & Healthcare products Regulatory Agency ("MHRA") is underway and approval is expected to shortly follow in the United Kingdom.

Filings in Israel and the Middle East began in 2020. In March 2021, we received approval for rimegepant in Israel and the UAE for the acute treatment of migraine. In the fourth quarter of 2021, we received approval for rimegepant in Israel for the preventive treatment of episodic migraine in adults and in Kuwait for the acute treatment of migraine in adults. We expect further approvals in 2022.

With respect to Japan, we have engaged the Pharmaceuticals and Medical Devices Agency ("PMDA")

on a path forward, and initiation of Phase 2/3 bridging studies are anticipated to begin mid-2022.

In January 2019, we and our subsidiary, BioShin (Shanghai) Consulting Services Company Ltd. (“BioShin Shanghai”), a Shanghai based limited liability company, jointly announced that the National Medical Products Administration (“NMPA,” formerly, the China FDA) had accepted the IND application for rimegepant for the treatment of migraine. As previously announced, BioShin Shanghai 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 submitted a second IND application to the NMPA for the Zydis ODT formulation of rimegepant for the acute treatment of migraine. The IND application for the Zydis ODT formulation of rimegepant was accepted by the NMPA in the fourth quarter of 2019. In September 2020, BioShin Limited ("BioShin"), our subsidiary and the parent organization of BioShin Shanghai, raised $60.0 million in series A funding (the "BioShin Funding") which was used to build out BioShin in China and advance our clinical portfolio in the Asia-Pacific region.

In November 2020, BioShin initiated a double-blind, randomized Phase 3 clinical trial evaluating the safety and efficacy of NURTEC ODT (rimegepant) for the acute treatment of migraine in China and South Korea. In February 2022, we announced positive topline results from the study. The study met its co-primary endpoints of freedom from pain (p<0.0001) and freedom from MBS including either nausea, phonophobia or photophobia (p<0.0001) at 2-hours following a single oral dose of rimegepant. The early onset and durable 48 hour efficacy observed in China and South Korea is consistent with previous clinical trial results. In addition to the positive results on the co-primary endpoints, NURTEC ODT demonstrated rapid onset efficacy that was superior to placebo on multiple clinically important outcomes, including: pain relief at 2 hours (p < 0.0001); normal functioning at 2 hours post-dose (p<0.0001); no need for rescue medication within 24 hrs of dosing (p < 0.0001), and showed lasting efficacy with sustained pain freedom from 2 through 24 hours (p < 0.0001) and sustained pain freedom from 2 through 48 hours (p < 0.0001). Initial analysis of topline data indicates NURTEC ODT was numerically advantaged compared to placebo on multiple early-onset measures, including: pain relief within 45 minutes and freedom from MBS within 45 minutes; return to normal function within 60 min; and pain freedom within 90 min. Rimegepant also showed a favorable safety and tolerability profile among study participants that was consistent with prior clinical trial results in the United States. Detailed data from the study will be presented at future medical meetings to help inform ongoing and future research. We expect to submit an NDA during the second half of 2022.

Pursuant to the terms of our Pfizer Collaboration, we will continue to perform development activities required for the regulatory approval of rimegepant and zavegepant in all countries outside of the U.S. ("the

33

Territory"). The development activities are to be performed under a mutually agreed-upon development plan. In addition, Pfizer has the right to conduct certain development activities in the Territory and will be the marketing authorization holder in all countries in the Territory where permitted under applicable law.

Zavegepant

BHV-3500, formerly "vazegepant", is now referred to as "zavegepant" (za ve’ je pant). The World Health Organization (WHO) International Nonproprietary Names (INN) Expert Committee revised the name to "zavegepant" which was accepted by the United States Adopted Names Council for use in the U.S. and is pending formal adoption by the INN for international use.

Acute Treatment of Migraine

Administration of intranasal zavegepant in a Phase 1 clinical trial was initiated in October 2018 and achieved targeted therapeutic exposures. We advanced zavegepant into a Phase 2/3 trial to evaluate its efficacy for the acute treatment of migraine in the first quarter of 2019. We believed that intranasal zavegepant could provide an ultra-rapid onset of action that could be used in a complementary fashion with other migraine treatments when the speed of onset is critical to a patient and/or for patients experiencing severe nausea and/or vomiting symptoms. In December 2019, we announced positive topline results from the Phase 2/3 trial. Zavegepant 10 and 20 mg was statistically superior to placebo on the co-primary endpoints of pain freedom and freedom from the MBS at two hours using a single dose.

In January 2021, we announced the initiation of the Phase 3 clinical trial for the use of intranasal zavegepant for the acute treatment of migraine and in December 2021, we announced top-line results. The results of the study showed that zavegepant was statistically superior to placebo on the co-primary endpoints of pain freedom (24% vs 15%, p <.0001) and freedom from most bothersome symptom (40% vs 31%, p = 0.0012) at 2 hours. Zavegepant was superior to placebo demonstrating pain relief as early as 15 minutes, with patients achieving return to normal function as early as 30 minutes after dosing (p < 0.006). The efficacy benefits of zavegepant were durable, including superiority versus placebo (p < 0.05) on: sustained pain freedom 2 to 24 hours; sustained pain freedom 2 to 48 hours; sustained pain relief 2 to 24 hours; and sustained pain relief 2 to 48 hours. Based upon these results, combined with our prior positive Phase 2/3 trial, we plan to proceed with regulatory submissions in the United States and other countries and submitted an NDA for intranasal zavegepant with the FDA in the first quarter of 2022.

Preventative Treatment of Migraine

In September 2020, we announced that the FDA authorized the initiation of clinical trials for oral zavegepant and that we had achieved first in human

dosing in a Phase 1 trial designed to assess the safety and pharmacokinetics of oral formulations of zavegepant. In March 2021, we announced that our Phase 2/3 clinical program to assess the efficacy of oral zavegepant in the preventive treatment of migraine began enrollment. The Phase 2/3 trial is ongoing with enrollment expected to complete in the first half of 2023.

COVID-19

In April 2020, we announced our plan to study intranasal zavegepant in pulmonary complications of COVID-19 disease. The IND was approved by the Division of Pulmonary, Allergy, and Critical Care at FDA in April 2020, and a Phase 2 trial began in April 2020 in collaboration with Thomas Jefferson University and other academic medical institutions. The clinical trial will assess the potential benefits of CGRP receptor-blockade in mitigating an excessive immune response which in some cases can be fatal in COVID-19 patients.

Asthma

In October 2021, we began enrollment in a Phase 1b, double-blind, placebo-controlled, parallel-group study to evaluate the safety and efficacy of oral zavegepant for the treatment of subjects with mild allergic asthma. Enrollment in the trial is ongoing.

Next Generation CGRP Receptor Antagonists

Several clinical candidates are being developed through a global collaboration and license agreement between Biohaven and Sosei Heptares. Under the agreement, Biohaven received exclusive global rights to develop, manufacture and commercialize a portfolio of novel, small-molecule CGRP receptor antagonists discovered by Sosei Heptares for the treatment of CGRP-mediated disorders.

BHV-3100, previously known as HTL0022562, was developed successfully through preclinical trials by Sosei Heptares and demonstrated promising and differentiated properties in target CGRP-mediated disorders. During the fourth quarter of 2021, we decided to stop development of BHV-3100 based upon its emerging preclinical profile and will instead advance one of the portfolio's backup compounds in its place.

Glutamate Platform

The most advanced product candidate from our glutamate receptor antagonist platform is troriluzole (previously referred to as trigriluzole and BHV-4157), which is in multiple Phase 3 trials. Other product candidates include BHV-5500, which 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

34

("SCA"). We have received both orphan drug designation and fast track designation from the FDA for troriluzole for the treatment of SCA. Orphan designation was also received from EMA. 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 completed enrollment in the Phase 3 trial of troriluzole in SCA in the first quarter of 2021. Results are expected in the second quarter of 2022.

Other Indications

A Phase 2/3 double-blind, randomized, controlled trial to assess the efficacy of troriluzole in OCD commenced in December 2017. The Phase 2/3 study results were announced in June 2020. Troriluzole 200 mg administered once daily as adjunctive therapy in OCD patients with inadequate response to standard of care treatment showed consistent numerical improvement over placebo on the Yale-Brown Obsessive Compulsive Scale (Y-BOCS) at all study timepoints (weeks 4 to 12) but did not meet the primary outcome measure at week 12 (p = 0.22 at week 12), including significant improvement at week 8 (p < 0.05). Troriluzole was well tolerated with a safety profile consistent with past clinical trial experience. Given the strong signal in the Phase 2/3 proof of concept study and after receiving feedback from the FDA in an End of Phase 2 meeting, in December 2020 we initiated enrollment in the Phase 3 program. Two Phase 3 studies are currently ongoing with enrollment expected to complete in the second half of 2022.

In addition, a Phase 2/3 double-blind, randomized, controlled trial of troriluzole in the treatment of mild-to-moderate Alzheimer’s disease ("AD") was advanced with the Alzheimer’s Disease Cooperative Study, a consortium of sites funded by the National Institutes of Health. In January 2021, topline data from the trial revealed that troriluzole did not statistically differentiate from placebo at 48 weeks on the study's prespecified co-primary endpoints on the Alzheimer's Disease Assessment Scale-Cognitive Subscale ("ADAS-cog") and the Clinical Dementia Rating Scale Sum of Boxes in study participants with mild-to-moderate AD. Troriluzole also did not differentiate from placebo on the key secondary measure of hippocampal volume assessed by magnetic resonance imaging (MRI) in the overall population. A subgroup analysis consisting only of mild AD patients did, however, reveal that troriluzole exhibited a nonsignificant numerical difference of a potential benefit at week 48 on both the ADAS-cog and hippocampal volumetric MRI. Although the numerical effects on the ADAS-cog and hippocampal MRI measured in mild AD patients suggests a potential biologic effect of troriluzole in patients with early stage disease, additional analyses and biomarker data will be informative and help determine whether any further study in early AD is warranted. With regard to safety and

tolerability, treatment with troriluzole at a dose of 280 mg once daily was relatively well tolerated and demonstrated a safety profile consistent with previous studies of troriluzole. In December 2021, we completed an ongoing long-term extension study of troriluzole in AD for mild AD patients.

In December 2021, the Global Coalition for Adaptive Research ("GCAR") selected troriluzole for evaluation in Glioblastoma Adaptive Global Innovative Learning Environment - NCT03970447 ("GBM AGILE"). GBM AGILE is a revolutionary patient-centered, adaptive platform trial for registration that tests multiple therapies for patients with newly-diagnosed and recurrent glioblastoma ("GBM"), the most fatal form of brain cancer. Troriluzole will be evaluated in all patient subgroups of the trial which include newly-diagnosed methylated MGMT, newly-diagnosed unmethylated MGMT, and recurrent GBM. Troriluzole was selected for inclusion in GBM AGILE based on compelling evidence showing deregulation of glutamate in GBM. The therapeutic potential of troriluzole in GBM and other oncology indications is supported by several recent clinical and translational research studies conducted with troriluzole and its active moiety.

International Development

In the third quarter of 2020, BioShin raised $60.0 million in series A funding which will be used to build out BioShin Limited in China and advance our clinical portfolio in the Asia-Pacific region, including initiating sites in China to participate in the global registrational trial of troriluzole in SCA. In December 2021, in connection with entering into the Collaboration Agreement with Pfizer,we merged BioShin into a Biohaven subsidiary. BioShin completed enrollment for the SCA trial in China in the first quarter of 2021 with results expected in the first half of 2022.

BHV-5000 and BHV-5500

We are developing BHV-5500, a low-trapping NMDA receptor antagonist. 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 post-herpetic neuralgia and diabetic peripheral neuralgia. We acquired worldwide rights to BHV-5000 and BHV-5500 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. Results from nonclinical studies limiting clinical dose of BHV-5000 have led us to focus on BHV-5500 (lanicemine). Current work is focused on formulation development.

35

MPO Platform

Verdiperstat

We are developing verdiperstat (previously BHV-3241), an oral myeloperoxidase inhibitor for the treatment of neurodegenerative diseases. One potential target indication is ALS. In September 2019, we announced that verdiperstat was selected to be studied in the Phase 3 HEALEY ALS Platform Trial, which is being conducted by the Sean M. Healey & AMG Center for ALS at Massachusetts General Hospital in collaboration with the Northeast ALS Consortium (“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. The Phase 3 HEALEY ALS Platform Trial of verdiperstat began enrollment in July 2020. Enrollment in the trial was completed in November 2021, with results expected in the second half of 2022.

Verdiperstat was progressed through Phase 2 clinical trials by AstraZeneca. Seven clinical studies have been completed by AstraZeneca, including four Phase 1 studies in healthy subjects, two Phase 2a studies in subjects with Parkinson’s disease, and one Phase 2b study in subjects with MSA. We have entered into an exclusive license agreement with AstraZeneca for the product candidate.

Myostatin Platform

Taldefgrobep Alfa

In February 2022, we announced that we entered into a worldwide license agreement with BMS for the development and commercialization rights to taldefgrobep alfa (also known as BMS-986089), a novel, Phase 3-ready anti-myostatin adnectin. Myostatin is a natural protein that limits skeletal muscle growth, an important process in healthy muscular development. However, in patients with neuromuscular diseases, active myostatin can critically limit the growth needed to achieve developmental and functional milestones. Myostatin inhibition is a promising therapeutic strategy for enhancing muscle mass and strength in a range of pediatric and adult neuromuscular conditions. Taldefgrobep is a muscle-targeted treatment for neuromuscular disease and offers the opportunity for combination therapy. We plan to initiate a Phase 3 clinical trial of taldefgrobep in SMA in mid-2022. SMA is a rare, progressively debilitating motor neuron disease in which development and growth of muscle mass are compromised, resulting in progressive weakness and muscle atrophy, reduced motor function, impaired quality of life and often death.

Kv7 Platform

BHV-7000

In February 2022, we announced that we entered into a definitive agreement with Channel Biosciences,

LLC, a subsidiary of Knopp Biosciences, LLC, to acquire a Kv7 channel targeting platform, adding the latest advances in ion-channel modulation to our growing neuroscience portfolio. BHV-7000 (formerly known as KB-3061) is the lead asset from the Kv7 platform and is a potentially best-in-class potassium channel activator with a preclinical profile suggestive of a wide therapeutic index, high selectivity, and significantly reduced GABA-ergic activity. We expect to bring BHV-7000 to the clinic in the second half 2022 in preparation for a development program in focal epilepsy.

Biohaven Labs

Kleo Pharmaceuticals, Inc. and Biohaven Labs

In January 2021, we acquired the remaining approximately 58% of Kleo that we did not previously own. We have assumed Kleo's laboratory facilities located in Science Park in New Haven, Connecticut and formed Biohaven Labs to serve as the integrated chemistry and discovery research arm of Biohaven. Biohaven Labs will continue several existing Kleo discovery partnerships, including one with the Bill and Melinda Gates Foundation for the development of a of a SARS-CoV-2 neutralizing therapy for COVID-19 and one with PeptiDream for the development of immuno-oncology therapeutics (See Note 6).

Biohaven's proprietary Multimodal Antibody Therapy Enhancer ("MATE") conjugation technology uses a new class of synthetic peptide binders to target the spike protein of SARS-CoV-2 that are then selectively conjugated to commercially available intravenous immunoglobulin. The Biohaven synthetic binders for SARS-CoV2 were designed to establish a much wider area and number of contacts with the spike protein that other agents like monoclonal antibodies. In February 2021, we announced that BHV-1200, developed with Biohaven's proprietary MATE platform, has demonstrated functional binding and neutralization of the SARS-CoV-2 virus, including the strains known as the "English" and "South African" variants (also known as B.1.1.7 and B.1.351, respectively). The preliminary experiments conducted by Biohaven Labs and an academic collaborator demonstrated that BHV-1200 substantially reduced viral entry into cells. We intend to advance BHV-1200 into a full clinical development program. Accelerated development of the COVID-19 MATE program has been supported by the Bill and Melinda Gates Foundation. In addition, the in vitro data indicated that BHV-1200 may activate important immune system components including antibody-dependent cellular phagocytosis and antibody dependent cellular cytotoxicity. We believe our proprietary MATE-conjugation technology could also be used against other infectious diseases by changing the targeting moiety of its antibody binders.

36

Option and License Agreement with the University of Connecticut

In October 2018, we entered into an exclusive, worldwide option and license agreement (the "UConn Agreement") with the University of Connecticut ("UConn") for the development and commercialization rights to UC1MT, a therapeutic antibody targeting extracellular metallothionein. Under this agreement, we have the option to acquire an exclusive, worldwide license to UC1MT and its underlying patents to develop and commercialize throughout the world in all human indications. If we choose to exercise the option, we would be obligated to pay UConn milestone payments upon the achievement of specified regulatory and commercial milestones, and royalties of a low single-digit percentage of net sales of licensed products.

Fox Chase Chemical Diversity Center, Inc.

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

Sosei Heptares

In November 2020, we entered into a global collaboration and license agreement with Sosei Heptares, an international biopharmaceutical group focused on the discovery and early development of new medicines originating from their proprietary GPCR-targeted StaR technology and structure-based drug design platform capabilities. Under the agreement, Sosei Heptares will be eligible to receive development, regulatory and commercialization milestone payments, as well as tiered royalties on net sales of products resulting from the collaboration. In return, we will receive exclusive global rights to develop, manufacture and commercialize a portfolio of novel, small-molecule CGRP receptor antagonists discovered by Sosei Heptares for the treatment of CGRP-mediated disorders.

Artizan Biosciences, Inc.

In December 2020, we entered into an Option and License Agreement with Artizan Biosciences Inc. ("Artizan"), a biotechnology company focused on addressing inflammatory diseases involving the human intestinal microbiota. Pursuant to the agreement, we acquired an option to obtain a royalty-based license from Artizan to manufacture, use and commercialize certain products. Artizan will use the proceeds to continue advancing the preclinical research and

development of its lead program for inflammatory bowel disease, which is anticipated to enter the clinic in 2022, as well as to explore additional disease targets. In November 2021, we announced a collaborative therapeutic discovery and development program in Parkinson’s disease ("PD"), to exploit recent scientific advances in the understanding of pathogenic roles played by the gut microbiome in PD.

BHV-1100

In the fourth quarter of 2021, Biohaven initiated a Phase 1a/1b trial in multiple myeloma patients using its antibody recruiting molecule (ARM) BHV-1100 in combination with autologous cytokine induced memory-like (CIML) natural killer (NK) cells and immune globulin (IG) to target and kill multiple myeloma cells expressing the cell surface protein CD38. BHV-1100 is the lead clinical asset from Biohaven’s Antibody Recruiting Molecule (ARM™) Platform developed from a strategic alliance with PeptiDream Inc. (TYO: 4587). This clinical trial will assess the safety and tolerability as well as exploratory efficacy endpoints in newly diagnosed multiple myeloma patients who have tested positive for minimal residual disease (MRD+) in first remission prior to autologous stem cell transplant (ASCT).

Reliant Glycosciences, LLC

In July 2021, Biohaven entered into a development and license agreement with Reliant Glycosciences, LLC ("Reliant") for collaboration on a program with Biohaven Labs’ multifunctional molecules to develop and commercialize conjugated antibodies for therapeutic uses relating to IgA nephropathy and treatment of other diseases and conditions. Under the Agreement, Reliant was entitled to an upfront share payment and will be eligible to receive development milestone payments and royalties of net sales of licensed products.

KU Leuven

In January 2022, we entered into the KU Leuven Agreement to develop and commercialize first-in-class TRPM3 antagonists to address the growing proportion of people worldwide living with chronic pain disorders. The TRPM3 antagonist platform was discovered at the Centre for Drug Design and Discovery and the Laboratory of Ion Channel Research at KU Leuven. Under the KU Leuven Agreement, we receive exclusive global rights to develop, manufacture and commercialize KU Leuven's portfolio of small-molecule TRPM3 antagonists. The portfolio includes the lead candidate, henceforth known as BHV-2100, which has demonstrated promising efficacy in preclinical pain models and will be the first to advance towards Phase 1 studies. We will support further basic and translational research at KU Leuven on the role of TRPM3 in pain and other disorders.

Recent Developments

The following is a summary of key developments affecting our business in 2022.

37

Pfizer Acquisition

On May 9, 2022, the Company, Pfizer and Bulldog (BVI) Ltd., a wholly owned subsidiary of Pfizer (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Pfizer Merger Agreement”), pursuant to which, on the terms and subject to the conditions set forth in the Pfizer Merger Agreement, Pfizer will acquire all outstanding shares of Biohaven for $148.50 per share in cash and Merger Sub will merge with and into the Company (the “Pfizer Merger”), with the Company surviving the Pfizer Merger as a wholly owned subsidiary of Parent.

In connection with and as a condition to the Pfizer Merger, the Company and Biohaven Research Ltd. (“New Biohaven”) entered into a Separation and Distribution Agreement, dated as of May 9, 2022 (the “Separation Agreement”), pursuant to which, on the terms and subject to the conditions set forth in the Separation Agreement, immediately prior to the effective time of the Pfizer Merger: (i) the Company will effect a pre-closing reorganization, which will result in (x) New Biohaven owning, assuming or retaining certain assets and liabilities of the Company and its subsidiaries related to the Company’s pipeline assets and businesses, and (y) the Company owning, assuming or retaining all other assets and liabilities, including those associated with the Company’s platform for the research, development, manufacture and commercialization of calcitonin gene-related peptide receptor antagonists, including rimegepant, zavegepant and the Heptares Therapeutics Limited pre-clinical CGRP portfolio; and (ii) thereafter, the Company will distribute to its shareholders as of the record date all of the issued and outstanding common shares of New Biohaven, no par value, on a pro rata basis (the “Spin-Off”), at a ratio of one New Biohaven Common Share for every two common shares of the Company. Following the Spin-Off, New Biohaven will be a separate public company and the Company will have no continuing common share ownership interest in New Biohaven.

Following the closing of the Pfizer Merger, New Biohaven will continue to operate under the Biohaven name. New Biohaven will be led by Vlad Coric, MD, as Chairman and CEO, and include other members of the current management team of Biohaven. At distribution, New Biohaven will be capitalized with $275 million in cash. New Biohaven will also have the right to receive tiered royalties from Pfizer on any annual net sales of rimegepant and zavegepant in the United States in excess of $5.25 billion. Pfizer expects to finance the transaction with existing cash on hand. Pfizer’s acquisition of Biohaven is subject to the completion of the New Biohaven spin-off transaction and other customary closing conditions, including receipt of regulatory approvals and approval by Biohaven’s shareholders. The companies expect the transaction to close by early 2023.

Pfizer Collaboration Agreement

In November 2021, we entered into the Pfizer Collaboration, pursuant to which Pfizer would commercialize the product candidates containing the Company's proprietary compounds rimegepant (BHV-3000) and gains rights to zavegepant (BHV-3500) (the "Licensed Products") in all countries worldwide outside of the United States. In consideration thereof, in January 2022 Pfizer made an upfront payment of $150.0 million to Biohaven upon receipt of the requisite regulatory approvals needed for the effectiveness of the Collaboration Agreement. In addition, in January 2022 Pfizer purchased $350.0 million worth of Biohaven common shares at approximately $173.05 per share, equal to 125% of the volume weighted average price per share for the 20 consecutive trading days prior to the signing. We will be eligible to receive an aggregate additional $740.0 million in contingent payments based on specified commercial and sales-based milestones for the Licensed Products.

We are also entitled to tiered, escalating royalties from the upper teens to twenty percent of net sales of Licensed Products in the Territory. In general, Pfizer’s obligation to pay royalties continues on a product-by-product and country-by-country basis until the latest of ten years after the first commercial sale of such product in such country, the expiration of the patent rights covering such product in such country or the expiration of the period of exclusivity applicable to such product in such country. In addition to the upfront payments, contingent payments and royalties described above, Pfizer will also compensate us for a pro-rata share of certain of its sales-based milestone obligations owed to BMS under the BMS License, and related net sales royalties owed to BMS and RPI that result from Pfizer’s commercialization and sale, respectively, of the Licensed Products in the Territory.

Merger Agreement with BioShin

On November 9, 2021, we entered into an agreement and plan of merger (the “Bioshin Merger Agreement”) with BioShin. The Bioshin Merger Agreement provides for the merger of a wholly owned indirect subsidiary of the Company with and into BioShin, with BioShin surviving the merger as a wholly owned indirect subsidiary of the Company (the “BioShin Merger”). As a result of the satisfaction of the closing conditions described in the BioShin Merger Agreement, on January 6, 2022, each Series A convertible preferred share of BioShin, no par value, other than Excluded Shares (as defined in the BioShin Merger Agreement), was converted into the right to receive 0.080121 of a Biohaven common share.

KU Leuven Agreement

In January 2022, we entered into the KU Leuven Agreement to develop and commercialize first-in-class TRPM3 antagonists to address the growing proportion of people worldwide living with chronic pain disorders. The

38

TRPM3 antagonist platform was discovered at the Centre for Drug Design and Discovery ("CD3") and the Laboratory of Ion Channel Research ("LICR") at KU Leuven. Under the KU Leuven Agreement, we receive exclusive global rights to develop, manufacture and commercialize KU Leuven's portfolio of small-molecule TRPM3 antagonists. The portfolio includes the lead candidate, henceforth known as BHV-2100, which has demonstrated promising efficacy in preclinical pain models and will be the first to advance towards Phase 1 studies. We will support further basic and translational research at KU Leuven on the role of TRPM3 in pain and other disorders. As consideration, KU Leuven received an an upfront cash payment of $3.0 million and 15,340 shares valued at $1.8 million, and is eligible to receive additional development, regulatory, and commercialization milestones payments of up to $327.8 million. In addition, KU Leuven will be eligible to receive mid-single digit royalties on net sales of products resulting from the collaboration.

Kv7 Platform Acquisition

On April 1, 2022, we closed the previously announced acquisition from Knopp Biosciences LLC (“Knopp”) of Channel Biosciences, LLC (“Channel”), a wholly owned subsidiary of Knopp owning the assets of Knopp’s Kv7 channel targeting platform (the “Transaction”), pursuant to a Membership Interest Purchase Agreement (the “Purchase Agreement”), dated February 24, 2022.

In consideration for the Transaction, on April 4, 2022, we made an upfront payment comprised of $35 million in cash and 493,254 Biohaven common shares, valued at approximately $65 million, (“Biohaven Shares”) issued through a private placement. We also agreed to pay additional success-based payments comprised of (i) up to $325 million based on developmental and regulatory milestones through approvals in the United States, EMEA and Japan for the lead asset, BHV-7000 (formerly known as KB-3061), (ii) up to an additional $250 million based on developmental and regulatory milestones for the Kv7 pipeline development in other indications and additional country approvals, and (iii) up to $562.5 million for commercial sales-based milestones of BHV-7000. These contingent milestone payments may be paid in cash or Biohaven Shares at our election, but if we elect to pay in Biohaven Shares, such amounts are subject to increases of a mid-single-digit percentage increase (or in one case, a ten-percent increase). Additionally, we agreed to make scaled royalty payments in cash for BHV-7000 and the pipeline programs, starting at high single digits and peaking at low teens for BHV-7000 and starting at mid-single digits and peaking at low double digits for the pipeline programs.

We have also given Knopp the option to request a one-time cash true-up payment from us in December 2022 in the event that Knopp continues to hold Biohaven Shares issued as a component of the upfront payment

and the value of such shares has declined, subject to certain conditions.

Taldefgrobep Alfa Platform License

In February 2022, following the transfer of intellectual property we announced that we entered into a worldwide license agreement with BMS for the development and commercialization rights to taldefgrobep alfa, a novel, Phase 3-ready anti-myostatin adnectin. The in-licensing of taldefgrobep expands our portfolio of innovative, late-stage product candidates for the treatment of neurologic, neuroinflammatory, and psychiatric indications. Under the terms of the agreement, we will receive worldwide rights to taldefgrobep alfa and BMS will be eligible for regulatory approval milestone payments, as well as tiered, sales-based royalty percentages from the high teens to the low twenties (see Note 13). We plan to initiate a Phase 3 clinical trial of taldefgrobep alfa in SMA in 2022.

Components of Our Results of Operations

Product Revenue, Net

We began to recognize revenue from product sales, net of rebates, chargebacks, discounts and other adjustments, in March 2020 in conjunction with the launch of our first product, NURTEC ODT. We will continue to evaluate trends related to revenue momentum for NURTEC ODT, including any discernible impacts of the COVID-19 pandemic. If our development efforts for our other product candidates are successful and result in regulatory approval, or additional license agreements with third parties, we may generate additional revenue in the future from product sales.

Collaboration and other revenue

We enter into licensing and collaboration agreements in which we are entitled to receive up-front payments, certain milestone payments and royalties. In November 2021, we entered into a collaboration and license agreement and related sublicense agreement with Pfizer, pursuant to which Pfizer would commercialize the Licensed Products in all countries worldwide outside of the United States (see Note 13).

Pursuant to ASC 606, during the three months ended March 31, 2022 we recorded a portion of the transaction price received in connection with the Collaboration Agreement to collaboration and other revenue on the condensed consolidated statements of operations and comprehensive loss for the amount representing performance obligations which had been satisfied during the period, including the transfer of intellectual property to Pfizer.

Operating Expenses

Cost of Sales

Cost of sales includes direct and indirect costs related to the manufacturing and distribution of NURTEC, including third-party manufacturing costs,

39

packaging services, freight-in, third-party royalties payable on our net product revenues and amortization of intangible assets associated with NURTEC ODT.

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;

•development milestone payments incurred prior to regulatory approval of the product candidate;

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

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, CMOs, 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 and certain development milestones 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 remain significant over the next several years as we increase personnel costs,conduct late-stage clinical trials, and prepare regulatory filings for our product candidates. We also expect to incur additional expenses related to milestone and royalty payments payable to third parties with whom we have entered into license agreements to acquire the rights to our product candidates.

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;

40

•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.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of personnel costs, including salaries, benefits and travel expenses for our executive, commercial, finance, business, corporate development and other administrative functions; and non-cash share-based compensation expense. Selling, general and administrative expenses also include facilities and other related expenses, including rent, depreciation, maintenance of facilities, insurance and supplies; professional fees for expenses incurred under agreements with third parties relating to the commercialization of NURTEC ODT; and for public relations, audit, tax and legal services, including legal expenses to pursue patent protection of our intellectual property.

We anticipate that our selling, general and administrative expenses, including payroll and related expenses, will remain significant in the future as we continue to expand our operations and organizational capabilities, continue to support our commercial activities associated with NURTEC ODT, and prepare for potential commercialization of our product candidates, if successfully developed and approved. We also anticipate increased expenses associated with general operations, including costs related to accounting and legal services, director and officer insurance premiums, facilities and other corporate infrastructure and office-related costs, such as information technology costs.

Other Income (Expense)

Interest Expense

Interest expense primarily consists of interest on our outstanding term loan with Sixth Street Specialty Lending, Inc., which includes interest expense on the outstanding loan balance, accretion of the debt discount and amortization of issuance costs. Our interest expense also includes implied interest on our finance leases associated with our commercial car fleet. We utilize the effective interest method to determine our interest expense on the term loan and finance leases and the straight-line method for the amortization of the debt issuance costs.

Interest Expense on Mandatorily Redeemable Preferred Shares

Interest expense on mandatorily redeemable preferred shares is being recognized in connection with the issuance of series A preferred shares and series B preferred shares pursuant to the Series A preferred

share purchase agreement and Series B preferred shares forward contracts we entered into with RPI. Since we are required to redeem the series A preferred shares for 2x the original purchase price in equal quarterly installments by December 31, 2024 and the series B preferred shares for 1.77x the original purchase price in equal installments beginning on March 31, 2025 and ending December 31, 2030, we concluded that the Series A preferred shares and Series B preferred shares are mandatorily redeemable instruments and initially classified the preferred shares at their fair value as a liability. Interest expense on the mandatorily redeemable preferred shares represents the accretion of the carrying value of the preferred shares liability to its redemption value using the effective interest rate method.

Change in Fair Value of Derivatives

The fair value of the derivative liability recognized in connection with the Series B Preferred Shares Forward Contracts is determined using discounted cash flow and Monte Carlo valuation methods. As inputs into the valuation, we considered the probability of occurrence of certain change of control 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 condensed consolidated balance sheets as a Series B preferred shares forward contact with changes in fair value recorded in other income (expense) in the condensed consolidated statements of operations and comprehensive loss.

Interest Expense on Liability Related to Sale of Future Royalties

We have accounted for the 2018 RPI Funding Agreement and a unit of accounting of the 2020 RPI Funding Agreement with RPI Trust both as liability financings, primarily because they have significant continuing involvement in generating the future revenue on which the royalties are based. The liabilities related to sale of future royalties and the related interest expense are measured based on our current estimate of the timing and amount of future royalties expected to be paid over the estimated terms of the 2018 RPI Funding Agreement and 2020 RPI Funding Agreement. The liabilities are amortized using the effective interest rate method, resulting in recognition of interest expense over the estimated term of the agreement. Each reporting period, we assess the estimated timing and amount of future expected royalty payments over the estimated terms. If there is a change to one of the estimates, we recognize the impact to the liability’s amortization schedule and the related interest expense prospectively. Our estimate of the amount of expected future royalties to be paid considers the probability of success of compounds not yet approved for sale, and market penetration rates, compliance rate, and net pricing of both NURTEC ODT and compound not yet approved for sale. Additionally, the transaction costs associated with

41

the liabilities will be amortized to interest expense over the estimated term of the 2018 RPI Funding Agreement and 2020 RPI Funding Agreement, respectively.

Gain from Equity Method Investment

Prior to our acquisition of Kleo in January 2021, we owned approximately 41.9% of the outstanding shares as of December 31, 2020, and accounted for our investment in Kleo under the equity method of accounting. As a result, our proportionate share of Kleo’s net income or loss each reporting period was included in other income (expense), net, in our condensed consolidated statements 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.

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

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 agreements with our wholly owned subsidiary, Biohaven Pharmaceuticals, Inc., a Delaware corporation (“BPI”). As a result of providing services under this agreement and profit from US commercial sales of NURTEC ODT, BPI was profitable during the three months ended March 31, 2022 and 2021, and BPI is subject to taxation in the United States.

In August 2020, we completed an intra-entity asset transfer of certain of our intellectual property to our Irish subsidiary. As a result of the transfer, we recorded a deferred tax asset of $875.0 million for the step up in tax basis received pursuant to Irish tax law. Based on our analysis of all available objective evidence, we concluded that it was more likely than not that the deferred tax asset from the intra-entity transfer will not

be realized due to the lack of net operating income history of our subsidiary. Therefore, we established a full valuation allowance against our net deferred tax asset in Ireland.

We continue to maintain a valuation allowance against our US deferred tax assets. We periodically review our position and have determined that a full valuation allowance on these assets was appropriate due to excess research and development ("R&D") credit carryforwards as of March 31, 2022. We will continue to evaluate the need for a valuation allowance on our deferred tax assets until there is sufficient positive evidence to support the reversal of all or some portion of these allowances. We anticipate the commercialization of NURTEC ODT will result in future earnings and believe sufficient positive evidence may become available to allow us to reach a conclusion that a significant portion, or all, of the valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release is subject to change on the basis of the level of profitability that we are able to actually achieve.

In January 2021, we completed the acquisition of Kleo. The acquisition and inclusion of Kleo did not result in a material impact on the provision for income taxes or the effective tax rate for the three months ended March 31, 2022 or 2021. We recorded a full valuation allowance against our Kleo US deferred tax assets and will periodically review our position and have determined that a full valuation allowance on these assets was appropriate due to Kleo’s cumulative loss history. We will continue to evaluate the need for a valuation allowance on our deferred tax assets until there is sufficient positive evidence to support the reversal of all or some portion of these allowances.

We recorded income tax provisions during the three months ended March 31, 2022 and 2021 of $24.3 million and $3.8 million. The income tax provisions recorded primarily represent certain state taxes for the period and US federal taxes due to general business credit limitations and the mandatory capitalization of R&D expenses effective January 1, 2022 under the Tax Cuts and Jobs Act.

42

Results of Operations

Comparison of the Three Months Ended March 31, 2022 and 2021

The following tables summarize our results of operations for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
	2022		2021		Change
In thousands
Revenues:
Product revenue, net	$	123,590	$	43,823	$	79,767
Collaboration and other revenue	195,262		—		195,262
Total revenues	318,852		43,823		275,029
Operating expenses:
Cost of sales	26,342		12,862		13,480
Research and development	119,099		107,111		11,988
Selling, general and administrative	227,243		159,523		67,720
Total operating expenses	372,684		279,496		93,188
Loss from operations	(53,832)		(235,673)		181,841
Other income (expense):
Interest expense	(17,216)		(7,731)		(9,485)
Interest expense on mandatorily redeemable preferred shares	(7,917)		(7,943)		26
Interest expense on liability related to sale of future royalties	(17,314)		(13,508)		(3,806)
Change in fair value of derivatives	3,604		(210)		3,814
Gain from equity method investment	—		5,261		(5,261)
Other income (expense), net	81		(1,700)		1,781
Total other expense, net	(38,762)		(25,831)		(12,931)
Loss before provision for income taxes	(92,594)		(261,504)		168,910
Provision for income taxes	24,303		3,824		20,479
Net loss	(116,897)		(265,328)		148,431
Net loss attributable to non-controlling interests	498		360		138
Deemed dividend upon repurchase of preferred shares in consolidated subsidiary	(92,673)		—		(92,673)
Net loss attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd.	$	(209,072)	$	(264,968)	$	55,896

Product revenue, net

Net product revenue was $123.6 million for the three months ended March 31, 2022, compared to $43.8 million for the three months ended March 31, 2021. The increase of $79.8 million in net product revenues is due to both increased NURTEC ODT sales volume and improvements in net price realization due to decreases in sales allowances during the three months ended March 31, 2022, compared to the three months ended March 31, 2021. Sales allowances and accruals mostly consisted of patient affordability programs, distribution fees and rebates.

Collaboration and other revenue

Collaboration and other revenue was $195.3 million for the three months ended March 31, 2022. No collaboration and other revenue was recognized for the three months ended March 31, 2021. The

collaboration and other revenue recognized during the three months ended March 31, 2022 was primarily due to $194.4 million recognized upon the satisfaction of our performance obligation for the delivery of the license and sublicense to commercialize Rimegepant outside the U.S. as part of our Collaboration Agreement with Pfizer (see Note 13).

Cost of Sales

Cost of sales was $26.3 million for the three months ended March 31, 2022, compared to $12.9 million for the three months ended March 31, 2021. Our cost of sales is related to royalties on net sales payable to BMS under a license agreement, manufacturing costs for NURTEC ODT, certain distribution costs and amortization of intangible assets related to milestone payments to BMS and Catalent, Inc. ("Catalent"). See Note 13 "Collaboration, License and Other Agreements"

43

to our condensed consolidated financial statements for more information on the BMS agreements. The increase of $13.5 million in costs of goods sold was primarily due

to increased NURTEC ODT sales during the three months ended March 31, 2022, compared to the three months ended March 31, 2021.

Research and Development Expenses

	Three Months Ended March 31,
	2022		2021		Change
In thousands
Direct research and development expenses by program:
Rimegepant	$	19,116	$	16,992	$	2,124
Troriluzole	13,517		16,614		(3,097)
Zavegepant	7,474		22,748		(15,274)
Verdiperstat	5,079		6,788		(1,709)
TRPM3	5,877		—		5,877
Other programs	5,668		4		5,664
Unallocated research and development costs:
Personnel related (including non-cash share-based compensation)	51,161		30,677		20,484
Preclinical research programs	6,071		10,482		(4,411)
Other	5,136		2,806		2,330
Total research and development expenses	$	119,099	$	107,111	$	11,988

R&D expenses, including non-cash share-based compensation costs, were $119.1 million for the three months ended March 31, 2022, compared to $107.1 million for the three months ended March 31, 2021. The increase of $12.0 million was primarily due to an increase of $20.5 million in personnel costs related to increases in headcount and $5.9 million related to TRPM3 program expenses resulting from our December 2021 agreement with KU Leuven to develop and commercialize TRPM3 antagonists. These increases were partially offset by a decrease in program expense for zavegepant of $15.3 million, primarily due to the conclusion of a Phase 3 clinical trial for the acute treatment of migraines in December 2021 with positive topline results. Non-cash share-based compensation expense was $34.0 million for the three months ended March 31, 2022, an increase of $13.9 million as compared to the same period in 2021. The increase in non-cash share-based compensation expense was primarily due to increases in headcount and our annual equity incentive awards granted in the first quarter of 2022 which had an increased fair value per award than the annual equity incentive awards granted in the first quarter of 2021.

Selling, General and Administrative Expenses

SG&A expenses, including non-cash share-based compensation costs, were $227.2 million for the three months ended March 31, 2022, compared to $159.5 million for the three months ended March 31, 2021. The increase of $67.7 million was primarily due to increases in spending to support the increased commercial sales of NURTEC ODT, including the launch of NURTEC ODT for the preventative treatment of migraine which was approved by the FDA in May of 2021. The increased spending included increases in marketing and

advertising expenses, professional fees and non-cash share based compensation. Less than half of the SG&A expense was for commercial organization personnel costs, excluding non-cash share-based compensation expense. Non-cash share-based compensation expense was $47.9 million for the three months ended March 31, 2022, an increase of $19.2 million as compared to the same period in 2021. The increase in non-cash share-based compensation expense was primarily due to increases in headcount and our annual equity incentive awards granted in the first quarter of 2022 which had an increased fair value per award than the annual equity incentive awards granted in the first quarter of 2021.

Other Expense, Net

Other expense, net was $38.8 million for the three months ended March 31, 2022, compared to net expense of $25.8 million for the three months ended March 31, 2021. The increase of $12.9 million in net expense was primarily due to increased interest expense as a result of additional borrowings under our debt facility and a gain from equity method investment recognized in the first quarter of 2021 related to the acquisition of Kleo Pharmaceuticals, Inc.

Provision for Income Taxes

We recorded an income tax provision of $24.3 million for the three months ended March 31, 2022, compared to a provision for income taxes of $3.8 million for the three months ended March 31, 2021. The increase in income tax expense of $20.5 million was primarily attributable the mandatory capitalization of R&D expenses effective January 1, 2022 under the Tax

44

Cuts and Jobs Act, offset by an increased benefit to the Company's foreign derived intangible income deduction.

Liquidity and Capital Resources

Since our inception, we have incurred significant operating losses and negative cash flows from our operations. We have funded our operations primarily with proceeds from sales of our common and preferred equity, sales of revenue participation rights related to future royalties, proceeds from a senior secured credit facility and the Collaboration Agreement with Pfizer. In addition, we began to generate net product revenue in

the first quarter of 2020 in conjunction with the launch of our first product, NURTEC ODT.

As of March 31, 2022, we had cash and cash equivalents of $169.1 million, excluding restricted cash of $5.3 million. Cash in excess of immediate requirements is invested in marketable securities with a view to liquidity and capital preservation. As of March 31, 2022, we had marketable securities of $433.4 million. We continuously assess our working capital needs, capital expenditure requirements, and future investments or acquisitions.

Cash Flows

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

	Three Months Ended March 31,
	2022		2021		Change
In thousands
Net cash used in operating activities	$	(23,644)	$	(205,674)	$	182,030
Net cash (used in) provided by investing activities	(244,270)		119,769		(364,039)
Net cash provided by financing activities	267,991		421,015		(153,024)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(46)		14		(60)
Net increase in cash, cash equivalents and restricted cash	$	31	$	335,124	$	(335,093)

Operating Activities

During the three months ended March 31, 2022, we used $23.6 million of cash in operating activities, a decrease of $182.0 million as compared to the three months ended March 31, 2021. The decrease in cash used in operations was primarily due to $248.0 million in upfront consideration received from Pfizer at the closing of the Collaboration Agreement, partially offset by increased costs related to commercial sales of NURTEC ODT.

Investing Activities

During the three months ended March 31, 2022, we used $244.3 million of cash in investing activities, an increase of $364.0 million as compared to the three months ended March 31, 2021. The increase in cash used in investing activities was primarily due to an increase of $246.8 million of purchases of marketable securities and a decrease of $113.4 million in sales of marketable securities during the three months ended March 31, 2022.

Financing Activities

During the three months ended March 31, 2022, net cash provided by financing activities was $268.0 million, a decrease of $153.0 million compared to the three months ended March 31, 2021.  The decrease in cash provided by financing activities was primarily due to a decrease in proceeds from the issuance of common shares of $56.7 million and a decrease in proceeds from the obligation to perform R&D services of $100.0 million during the three months ended March 31, 2022.

Pfizer Collaboration Agreement

In November 2021, we entered into the Collaboration Agreement with Pfizer, pursuant to which Pfizer would commercialize the Licensed Products in all countries worldwide outside of the United States. In consideration thereof, in January 2022 Pfizer made an upfront payment of $150.0 million to Biohaven upon receipt of the requisite regulatory approvals needed for the effectiveness of the Collaboration Agreement. In addition, in January 2022 Pfizer purchased $350.0 million worth of Biohaven common shares at approximately $173.05 per share. We will be eligible to receive an aggregate additional $740.0 million in contingent payments based on specified commercial and sales-based milestones for the Licensed Products.

We are also entitled to tiered, escalating royalties from the upper teens to twenty percent of net sales of Licensed Products in the Territory. In general, Pfizer’s obligation to pay royalties continues on a product-by-product and country-by-country basis until the latest of ten years after the first commercial sale of such product in such country, the expiration of the patent rights covering such product in such country or the expiration of the period of exclusivity applicable to such product in such country. In addition to the upfront payments, contingent payments and royalties described above, Pfizer will also compensate us for a pro-rata share of certain of our sales-based milestone obligations owed to BMS under the BMS License, and related net sales royalties owed to BMS and RPI that result from Pfizer’s commercialization and sale, respectively, of the Licensed Products in the Territory. See Note 13,

45

"Collaboration, License and Other Agreements" to the Condensed Consolidated Financial Statements included in this report for additional information regarding our Collaboration Agreement with Pfizer.

Credit Facility

In August 2020, we entered into a financing agreement, as amended, with the Lenders pursuant to which the Lenders agreed to extend a senior secured credit facility to the Company providing for term loans in an aggregate principal amount up to $500.0 million, plus any capitalized interest paid in kind. We drew an Initial Term Loan of $275.0 million at closing in August 2020 (the "Initial Term Loan" and had $100.0 million of immediately available delayed draw term loan commitments and $125.0 million of delayed draw term loans available upon achievement of the Delay Draw Sales Milestone (as defined in the Sixth Street Financing Agreement).

In March 2021, we entered into Amendment No. 1 (the "First Amendment") to the financing agreement pursuant to which the parties agreed to, among other things, remove the Delayed Draw Sales Milestone tied to the availability of the $125.0 million tranche of delayed draw term loans. In August 2021, we drew the $125.0 million tranche of delayed draw term loans (the "DDTL-2").

In September 2021, we entered into Amendment No. 2 (the “Second Amendment”) to the financing agreement. Pursuant to the Second Amendment, the parties agreed to, among other things, increase the size of the credit facility by providing for additional term loans in an aggregate principal amount of $250.0 million for a total facility size of $750.0 million plus any capitalized interest paid in kind. At the closing of the Second Amendment, we drew an initial term loan of $125.0 million (the "2021 Term Loan") and $100.0 million of delayed draw term loan commitments (the "DDTL-1"). The remaining $125.0 million in delayed draw term loan commitments (the "2021 DDTL Commitment") was available to be drawn by the Borrowers until December 31, 2021 (the "Delayed Draw Term Loan Commitment Termination Date").

In November 2021, we entered into Amendment No. 3 and Limited Consent to Financing Agreement (“the Third Amendment and Limited Consent”) to our Sixth Street Financing Agreement. Pursuant to the Third Amendment and Limited Consent, the Lenders consented to our entry into the Collaboration Agreement with Pfizer.

In December 2021, we entered into Amendment No. 4 (the "Fourth Amendment") to the financing agreement (as previously amended and as amended by the Fourth Amendment, the “Sixth Street Financing Agreement”), pursuant to which the parties agreed to, among other things, extend the Delayed Draw Term Loan Commitment Termination Date to June 30, 2022.

2020 Loans

In August 2020, we borrowed the Initial Term Loan for total proceeds of $262.2 million, net of discounts and issuance costs. In August 2021, we borrowed the DDTL-2 for total proceeds of $123.8 million, net of discounts and issuance costs. The DDTL-2 was borrowed under the same financing terms as the Initial Term Loan. The Initial Term Loan and the DDTL-2 (collectively, the "August 2020 Loans") become due and payable in August 2025. The August 2020 Loans accrue interest at a variable rate, with interest paid on a quarterly basis. The interest rate on the August 2020 Loans as of March 31, 2022 was 10.01%. We have the option to pay-in-kind up to 4.0% interest per annum for the first two years and have elected to pay-in-kind the maximum amount for all interest payments as of March 31, 2022. The proceeds from the August 2020 Loans are being used for general corporate purposes.

2021 Loans

In September 2021, we borrowed the 2021 Term Loan for total proceeds of $119.7 million and the DDTL-1 for total proceeds of $97.8 million, both net of discounts and issuance costs. The 2021 Term Loan and the DDTL-1 (collectively, the "September 2021 Loans") become due and payable in September 2026. The September 2021 Loans accrue interest at a variable rate, with interest paid on a quarterly basis. The interest rate on the September 2021 Loans as of March 31, 2022 was 9.26%. We have the option to pay-in-kind up to 4.0% interest per annum for the first two years that the loans are outstanding. The proceeds from the September 2021 Loans are being used for general corporate purposes.

As of March 31, 2022, we have $125.0 million in delayed draw term loan commitments still available to borrow under the Sixth Street Financing Agreement until June 30, 2022. If drawn, the loans will be borrowed under the same financing terms as the September 2021 Loans.

Equity Distribution Agreement

In December 2020, we entered into an equity distribution agreement in which we may offer and sell common shares having an aggregate offering price of up to $400.0 million from time to time through or to the sales agents, acting as our agents or principals (the "Equity Distribution Agreement"). Sales of our common shares, if any, will be made in sales deemed to be “at the market offerings”. The sales agents are not required to sell any specific amount of securities but will act as our sales agents using commercially reasonable efforts consistent with their normal trading and sales practices, on mutually agreed terms between the sales agents and us. We currently plan to use the net proceeds from the offering for general corporate purposes.

As of March 31, 2022, we have issued and sold 939,328 common shares for net proceeds of approximately $78.7 million all in the first quarter of 2021 under the Equity Distribution Agreement.

46

Series B Preferred Shares Forward Contracts

In August 2020, we entered into the Series B preferred share agreement, whereby RPI will invest in the Company through the purchase of up to 3,992 Series B preferred shares at a price of $50,100 per share for aggregate proceeds of approximately $200.0 million (the "RPI Series B Preferred Share Agreement"). The shares will be issued in quarterly increments from March 31, 2021 to December 31, 2024. We are required to redeem the Series B Preferred Shares for 1.77 times the original purchase price, payable beginning March 31, 2025 in equal quarterly installments through December 31, 2030. The gross proceeds from the transaction with RPI will be used for the clinical development of zavegepant and other general corporate purposes

As of March 31, 2022, we have issued 1,697 Series B preferred shares to RPI for proceeds of $85.0 million.

Funding Requirements

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

•continue and expand our commercial activities related to NURTEC ODT for the acute treatment of migraine;

•advance and expand the development of our CGRP and glutamate modulation platform product candidates and continue development of our MPO platform;

•conduct 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 3 trials of troriluzole in OCD, 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 Phase 3 clinical trial of oral zavegepant and related support activities, and continue other clinical trials of oral zavegepant;

•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;

•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;

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

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

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

As of May 10, 2022, the issuance date of our condensed consolidated financial statements, we expect that our cash, cash equivalents, and marketable securities as of March 31, 2022, our future operating cash flows from sales of NURTEC ODT, the funds available from the Sixth Street Financing Agreement, Series B Preferred Shares receipts, product sales and other proceeds from our Pfizer Collaboration will be sufficient to fund our current forecast for operating expenses, including commercialization of NURTEC ODT, financial commitments and other cash requirements for more than one year. We may need to raise additional capital until we are profitable. If no additional capital is raised through either public or private equity financings, debt financings, strategic relationships, alliances and licensing agreements, or a combination thereof, we may delay, limit or reduce discretionary spending in areas related to research and development activities and other general and administrative expenses in order to fund our operating costs and working capital needs.

We 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 troriluzole, or our other product candidates, we expect to incur additional commercialization expenses related to product manufacturing, sales, marketing and distribution,

47

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

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

•the revenue from NURTEC ODT, and 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 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

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, 2021. See Note 14, "Commitments and Contingencies" 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.

Critical Accounting Policies and Significant Judgments and Estimates

We have prepared our condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States ("GAAP"). Our preparation of our condensed consolidated financial statements requires us to make estimates, assumptions, and judgments that affect the reported amounts of assets, liabilities, expenses, and related disclosures at the date of the condensed consolidated financial statements, as well as revenue and expenses recorded during the reporting periods. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results

48

could therefore differ materially from these estimates under different assumptions or conditions.

Excluding the discussion below, there have been no material changes to our critical accounting policies from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K filed by us with the SEC on February 25, 2022.

Revenue Recognition - Collaboration and other revenue

We recognize revenue associated with our collaboration arrangement, which may require us to exercise considerable judgment in estimating revenue to be recognized, including judgments made on initial accounting and judgments associated with the amount of revenue to be recognized over time as performance obligations are satisfied.

Significant judgment is required to apply the authoritative accounting guidance at the outset of a collaboration arrangement, and over time, as detailed below:

•Measurement of the transaction price - determining the transaction price includes varying levels of judgment. Where amounts are fixed and paid, such as upfront payments, estimation is not required. However, other elements of the transaction price do require estimation or assumptions by management. The calculation of a share issuance premium requires the use of a valuation model for purposes of determining the fair value of the shares for financial reporting purposes, with any resulting premium impacting the transaction price, which ultimately impacts the measurement of revenue.

•Allocation of the transaction price to the performance obligations - there is significant judgment required to allocate the transaction price to performance obligations. Generally, this is done by estimating the standalone selling price of identified performance obligations, and allocating on a relative value basis. The estimate of standalone selling price includes several assumptions that cannot be observed, which may include forecasted revenue, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. The standalone selling price of performance obligations can be very sensitive to many of these underlying assumptions, which are based on management estimates since they cannot be observed. This is a point-in-time assessment performed at the outset of a collaboration arrangement.

•Recognition of revenue when (or as) we satisfy each performance obligation - determining the

timing of revenue recognition includes varying levels of judgment. For revenue recognized over time, this is often based on an underlying measure deemed to approximate the progress towards satisfaction of the performance obligations. These underlying measures, such as costs incurred to date compared with total forecasted costs for a service, may include inherent estimates, which in turn can impact the timing of revenue recognition. The satisfaction of performance obligations assessment is performed at each reporting period.

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.

Item 3. Quantitative and Qualitative Disclosures about Market Risks

Foreign Currency Translation

Our operations include activities in countries outside the U.S. As a result, our financial results are impacted by factors such as changes in foreign currency exchange rates or weak economic conditions in the foreign markets where we operate. Our monetary exposures on our balance sheet are currently immaterial to our financial position.

We do not engage in any hedging activities against changes in foreign currency exchange rates.

Interest Rate Risk

As of March 31, 2022, we invest our excess cash balances in marketable securities of highly rated financial institutions and investment-grade debt instruments. We seek to diversify our investments and limit the amount of investment concentrations for individual institutions, maturities and investment types. Most of our interest-bearing securities are subject to interest rate risk and could decline in value if interest rates fluctuate. Based on the type of securities we hold, we do not believe a change in interest rates would have a material impact on our financial statements. If interest rates were to increase or decrease by 1.00%, the fair value of our investment portfolio would (decrease) increase by approximately $(2.9) million and $2.8 million, respectively.

In August 2020, we became subject to market risk in connection with borrowings under the Sixth Street Financing Agreement. The August 2020 Term Loans borrowed under the agreement accrue interest at the LIBOR Rate, subject to a floor of 1.00%, plus 9.00%. The September 2021 Term Loans borrowed under the agreement accrue interest at the LIBOR Rate, subject to

49

a floor of 1.00%, plus 8.25%. Considering the total outstanding principal balance for all the loans drawn under the Sixth Street Financing Agreement of approximately $651.4 million at March 31, 2022, a 1.00% change in the LIBOR Rate would result in an impact to loss before income taxes of approximately $6.6 million per year.

We do not engage in any hedging activities against changes in interest rates.

Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist of cash, cash equivalents, and marketable securities. Our cash management policy permits investments in U.S. federal government and federal agency securities, corporate bonds or commercial paper, supranational and sovereign obligations, certain qualifying money market mutual funds, certain repurchase agreements, and places restrictions on credit ratings, maturities, and concentration by type and issuer. We are exposed to credit risk in the event of a default by the financial institutions holding our cash, cash equivalents and marketable securities to the extent recorded on the balance sheet.

We are also subject to credit risk from our accounts receivable related to our product sales. Our trade accounts receivable primarily consists of amounts due from pharmacy wholesalers in the U.S. (collectively, our "Customers") related to sales of NURTEC ODT and have standard payment terms. For certain Customers, the trade accounts receivable for the Customer is net of distribution service fees, prompt pay discounts and other adjustments. We monitor the financial performance and creditworthiness of our Customers so that we can properly assess and respond to changes in their credit profile. Our reserves against trade accounts receivable for estimated losses that may arise from a Customer’s inability to pay and any amounts determined to be uncollectible are written off against the reserve when it is probable that the receivable will not be collected. The reserve amount for estimated losses was not significant as of March 31, 2022, and we do not expect any such delays in collections to have a material impact on our financial condition or results of operations.

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 March 31, 2022, our Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2022, 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 March 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

50

PART II — OTHER INFORMATION

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. Our risk factors have not changed materially from thoseIn addition to the information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors described in "Part I, Item 1A. Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the Securities and Exchange Commission on February 25, 2022.

The risks disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and information provided elsewhere in this report, could materially affect our business, financial condition or results of operations. Additional risks and uncertainties not currently known or we currently deem to be immaterial may materially adversely affect our business, financial condition or results of operations. Except for such additional information and the risk factors set forth below, we believe there have been no other material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

The consummation of the Pfizer Merger is subject to a number of conditions, many of which are largely outside of the parties’ control, and, if these conditions are not satisfied or waived on a timely basis, the Pfizer Merger Agreement may be terminated and the Pfizer Merger may not be completed.

The Pfizer Merger is subject to certain customary closing conditions, including: (i) adoption of the Merger Agreement by holders of a majority of the outstanding common shares and Series A preferred shares entitled to vote on such matters at the Company’s shareholders meeting and who are present at the shareholders meeting, in person or by proxy; (ii) the expiration, termination or receipt of any approval or clearances applicable to the consummation of the Merger under applicable antitrust laws, including the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the receipt of certain additional clearances or approvals of certain other governmental bodies applicable to the Merger; (iii) the absence of any law or order prohibiting or making illegal the consummation of the Merger; (iv) effectiveness of the registration statement to be filed with respect to registration of the common shares of New Biohaven; (v) completion of the Spin-Off; (vi) the

absence of certain legal proceedings by governmental authorities imposing certain limitations on Pfizer’s ownership or operation of the Company; (vii) subject to certain qualifications, the accuracy of representations and warranties of the Company, Pfizer and Merger Sub, as applicable, under the Merger Agreement and the performance in all material respects by the Company, Pfizer and Merger Sub, as applicable, of their obligations under the Merger Agreement; and (viii) the absence of any Company Material Adverse Effect (as defined in the Pfizer Merger Agreement).

The failure to satisfy all of the required conditions could delay the completion of the Pfizer Merger by a significant period of time or prevent it from occurring. Any delay in completing the Pfizer Merger could cause the parties to not realize some or all of the benefits that are expected to be achieved if the Pfizer Merger is successfully completed within the expected timeframe. There can be no assurance that the conditions to closing of the Pfizer Merger will be satisfied or waived or that the Pfizer Merger will be completed within the expected timeframe or at all.

Failure to complete the Pfizer Merger could adversely affect the stock price and future business and financial results of the Company.

There can be no assurance that the conditions to the closing of the Pfizer Merger will be satisfied or waived or that the Pfizer Merger will be completed. If the Pfizer Merger is not completed within the expected timeframe or at all, the ongoing business of the Company could be adversely affected and the Company will be subject to a variety of risks and possible consequences associated with the failure to complete the Merger, including the following: (i) upon termination of the Pfizer Merger Agreement under specified circumstances, the Company is required to pay Pfizer a termination fee of $450,000,000; (ii) the Company will incur certain transaction costs, including legal, accounting, financial advisor, filing, printing and mailing fees, regardless of whether the Pfizer Merger closes; (iii) under the Pfizer Merger Agreement, the Company is subject to certain restrictions on the conduct of its business prior to the closing of the Pfizer Merger, which may adversely affect its ability to execute certain of its business strategies; and (iv) the proposed Pfizer Merger, whether or not it closes, will divert the attention of certain management and other key employees of the Company from ongoing business activities, including the pursuit of other opportunities that could be beneficial to the Company as an independent company.

If the Pfizer Merger is not completed, these risks could materially affect the business and financial results of the Company and its stock price, including to the extent that the current market price of the Company’s common stock is positively affected by a market assumption that the Pfizer Merger will be completed.

51

While the Pfizer Merger is pending, the Company will be subject to business uncertainties and certain contractual restrictions that could adversely affect the business and operations of the Company.

In connection with the pending Pfizer Merger, some customers, vendors or other third parties of the Company may react unfavorably, including by delaying or deferring decisions concerning their business relationships or transactions with the Company, which could adversely affect the revenues, earnings, funds from operations, cash flows and expenses of the Company, regardless of whether the Pfizer Merger is completed. In addition, due to certain restrictions in the Pfizer Merger Agreement on the conduct of business prior to completing the Pfizer Merger, the Company may be unable (without the other party’s prior written consent), during the pendency of the Pfizer Merger, to pursue strategic transactions, undertake significant capital projects, undertake certain significant financing transactions and otherwise pursue other actions, even if such actions would prove beneficial and may cause the Company to forego certain opportunities it might otherwise pursue. In addition, the pendency of the Pfizer Merger may make it more difficult for the Company to effectively retain and incentivize key personnel and may cause distractions from the Company’s strategy and day-to-day operations for its current employees and management.

The Company will incur substantial transaction fees and Pfizer Merger-related costs in connection with the Pfizer Merger that could adversely affect the business and operations of the Company if the Pfizer Merger is not completed.

The Company expects to incur non-recurring transaction fees, which include legal and advisory fees and substantial Pfizer Merger-related costs associated with completing the Pfizer Merger, and which could adversely affect the business operations of the Company if the Pfizer Merger is not completed.

The termination fee and restrictions on solicitation contained in the Pfizer Merger Agreement may discourage other companies from trying to acquire the Company.

The Pfizer Merger Agreement prohibits the Company from initiating, soliciting, proposing or knowingly encouraging or knowingly facilitating any competing acquisition proposals, subject to certain limited exceptions. The Pfizer Merger Agreement also contains certain termination rights, including, but not limited to, the right of the Company to terminate the Pfizer Merger Agreement to accept a Superior Proposal (as defined in the Pfizer Merger Agreement), subject to and in accordance with the terms and conditions of the Pfizer Merger Agreement, and provides that, upon termination of the Pfizer Merger Agreement by the Company to enter into an alternative acquisition

agreement with respect to a Superior Proposal, the Company will be required to pay Pfizer a termination fee of $450,000,000 in cash. The termination fees and restrictions could discourage other companies from trying to acquire the Company even though those other companies might be willing to offer greater value to the Company’s stockholders than Pfizer has offered in the Pfizer Merger.

Litigation against the Company, Pfizer, or the members of their respective boards, could prevent or delay the completion of the Pfizer Merger or result in the payment of damages following completion of the Pfizer Merger.

It is a condition to the Pfizer Merger that no injunction or other order preventing the consummation of the Pfizer Merger shall have been issued by any court of competent jurisdiction or other governmental authority of competent jurisdiction and remain in effect. It is possible that lawsuits may be filed by the Company’s stockholders challenging the Pfizer Merger. The outcome of such lawsuits cannot be assured, including the amount of costs associated with defending these claims or any other liabilities that may be incurred in connection with the litigation of these claims. If plaintiffs are successful in obtaining an injunction prohibiting the parties from completing the Pfizer Merger on the agreed-upon terms, such an injunction may delay the consummation of the Pfizer Merger in the expected timeframe, or may prevent the Pfizer Merger from being consummated at all. Whether or not any plaintiff’s claim is successful, this type of litigation can result in significant costs and divert management’s attention and resources from the closing of the Pfizer Merger and ongoing business activities, which could adversely affect the operations of the Company.

Uncertainty about the Pfizer Merger may adversely affect the relationships between the Company and its customers, vendors and employees, whether or not the Pfizer Merger is completed.

In response to the announcement of the Pfizer Merger, existing or prospective customers, vendors and other third party relationships of the Company may delay, defer or cease providing goods or services, delay or defer other decisions concerning the Company, refuse to extend credit to the Company, or otherwise seek to change the terms on which they do business with the Company. Any such delays or changes to terms could materially harm the Company’s business.

In addition, as a result of the Pfizer Merger, current and prospective employees could experience uncertainty about their future with the Company. These uncertainties may impair the Company’s ability to retain, recruit or motivate key management and technical, manufacturing, and other personnel.

If the Pfizer Merger is not consummated by May 9, 2023, either the Company or Pfizer may terminate the Pfizer Merger Agreement, subject to certain exceptions.

52

Either the Company or Pfizer may terminate the Pfizer Merger Agreement if the Merger has not been consummated by May 9, 2023. However, this termination right will not be available to a party if that party failed to fulfill its obligations under the Pfizer Merger Agreement and that failure was the proximate cause of the failure to consummate the Pfizer Merger on time. In the event the Pfizer Merger Agreement is terminated by either party due to the failure of the Pfizer Merger to close by May 9, 2023, the Company will have incurred significant costs and will have diverted significant management focus and resources from other strategic opportunities and ongoing business activities without realizing the anticipated benefits of the Pfizer Merger.

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

In January 2022, we and Katholieke Universiteit Leuven ("KU Leuven") entered into an Exclusive License and Research Collaboration Agreement (the "KU Leuven Agreement") to develop and commercialize first-in-class TRPM3 antagonists. As consideration under the KU Leuven Agreement, we issued 15,340 of our common shares, valued at $1.8 million, that were not registered under the Securities Act to KU Leuven in January 2022. KU Leuven represented that, among other things, it is an institutional accredited investor as defined in Rule 501(a) of Regulation D of the Securities Act, and the foregoing shares were issued in reliance on the private offering exemption provided by Section 4(a)(2) of the Securities Act.

53

Item 6. Exhibits

Exhibit No.	Description
2.1	Membership Interest Purchase Agreement, dated as of February 24, 2022, by and among Biohaven Therapeutics LTD., Knopp Biosciences LLC, Channel Biosciences, LLC and Biohaven Pharmaceutical Holding Company Ltd., solely for the purpose of Section 9.14
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	The following materials from the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2022 are formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations and Comprehensive Loss, (iii) the Condensed Consolidated Statements of Cash Flows and (iv) the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
104	Cover Page Interactive Data File (formatted in iXBRL in Exhibit 101).

___________________________________________________

‡    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.

54

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: May 10, 2022
	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/ Matthew Buten
		Matthew Buten
		Chief Financial Officer
		(Principal Financial Officer)

55

EX-2.1

Exhibit 2.1

EXECUTION VERSION

MEMBERSHIP INTEREST PURCHASE AGREEMENT

by and among

BIOHAVEN THERAPEUTICS LTD.,

KNOPP BIOSCIENCES LLC,

CHANNEL BIOSCIENCES, LLC

and

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.,
solely for the purpose of Section 9.14

Dated as of FEBRUARY 24, 2022

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [**], HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) THE TYPE THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

TABLE OF CONTENTS

	Page
Article I DEFINITIONS
1.1Defined Terms	1
1.2Interpretation; Construction	20
Article II Purchase and Sale; Closing; Closing Deliveries
2.1Purchase and Sale of Interests	21
2.2Time and Place of Closing	21
2.3Deliveries at Closing	22
2.4Contingent Consideration	23
2.5True-Up Payment	34
2.6Withholding	35
Article III Representations and Warranties of SELLER
3.1Organization, Good Standing and Qualification	35
3.2Capital Structure	35
3.3Authority; Approval	36
3.4Governmental Filings; No Violations	36
3.5Financial Statements	37
3.6Absence of Certain Changes	38
3.7No Undisclosed Liabilities	38
3.8Litigation.	38
3.9Employee Benefits	39
3.10Labor Matters	40
3.11Compliance with Laws; Licenses	41
3.12FCPA and Other Anti-Bribery Laws.	41
3.13Trade Control and Sanctions Regulation.	42
3.14Development Matters	42
3.15Material Contracts	43
3.16Assets	46
3.17Affiliate Arrangements	46
3.18Real Property	46
3.19Environmental Matters	46
3.20Taxes	47
3.21Intellectual Property	48
3.22Insurance	51
3.23COVID-19 Relief Laws	51

i

3.24Suppliers	51
3.25Solvency	51
3.26Purchase Entirely for Own Account	52
3.27Investment Experience and Accredited Investor Status	52
3.28Acquiring Person	52
3.29No “Bad Actor” Disqualification	52
3.30Restricted Securities	52
3.31Legends	52
3.32Brokers and Finders	53
3.33No Other Representations or Warranties	53
Article IV Representations and Warranties of Buyer
4.1Organization, Good Standing and Qualification	54
4.2Authority; Approval	54
4.3Valid Issuance of Parent Shares	54
4.4Governmental Filings; No Violations; Certain Contracts	54
4.5Litigation	55
4.6Available Funds	55
4.7Brokers and Finders	55
4.8Financing	55
4.9Solvency	56
4.10Independent Investigation	56
4.11CFIUS	56
4.12Development Efforts	56
4.13No Other Representations or Warranties	56
Article V Covenants
5.1Interim Operations of the Company	57
5.2Member Consent	60
5.3Cooperation and Efforts to Consummate Transactions; Status Updates	60
5.4Regulatory Filings/Approvals	61
5.5Third-Party Consents	62
5.6Pre-Closing Contribution	62
5.7Company Indebtedness	63
5.8Access and Reports; Retention of Books and Records	63
5.9Publicity	64
5.10Exclusive Dealing	64
5.11Employee Benefits	65
5.12Seller Release	67

ii

5.13Confidentiality	68
5.14Tax Matters	68
5.15Non-Solicitation	70
5.16Non-Competition	70
5.17Payments to and from Third Parties	71
5.18Wrong Pockets	71
5.19Insurance Policies	72
5.20Mail and Other Communications	72
5.21Shared Contracts	73
5.22Omitted Data	73
5.23Registration Rights	73
5.24Stock Exchange Listing	74
5.25Restrictions on Dispositions	74
5.26Further Assurances	74
5.27Shared Space & Services Agreement	74
Article VI Conditions
6.1Conditions to Each Party’s Obligation to Consummate the Transactions	74
6.2Conditions to Obligation of Buyer	75
6.3Conditions to Obligations of the Company and Seller	76
Article VII Termination
7.1Termination	77
7.2Effect of Termination and Abandonment	78
Article VIII Indemnification
8.1Survival	79
8.2Indemnification by Seller	79
8.3Indemnification by Buyer	81
8.4Claim Procedures	82
8.5Knowledge and Investigation	85
8.6No Subrogation	85
8.7Fraud and Related Claims	86
8.8Mitigation	86
8.9No Double Recovery	86
8.10Effect of Waiver of Condition	86
8.11Third Party Recovery, Insurance Recovery and Tax Benefits	86
8.12Characterization of Payments	87

iii

8.13Remedies Cumulative	87
8.14Exclusive Remedies and No Rights Against Nonparties	87
Article IX Miscellaneous and General
9.1Amendment; Waiver	88
9.2Expenses	88
9.3Counterparts	88
9.4GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL; SPECIFIC PERFORMANCE	88
9.5Notices	89
9.6Entire Agreement	90
9.7No Third-Party Beneficiaries	91
9.8Obligations of Buyer and the Company	91
9.9Severability	91
9.10Successors and Assigns	91
9.11Fulfillment of Obligations	92
9.12Company Disclosure Letter	92
9.13Conflicts; Privilege	92
9.14Parent Guaranty	93

Exhibit A	Form of Support Agreement
Exhibit B	Form of Contribution Agreement
Schedule 1.1	Key Employees
Schedule 1.1(a)	Registered Patents
Schedule 1.1(b)	Registered Trademarks
Schedule 1.1(c)	Registered Copyrights
Schedule 2.4	Development Plan
Schedule 4.12(a)	Development Efforts—Equipment
Schedule 4.12(b)	Development Efforts—Employees
Schedule 5.7	Debt Documents
Schedule 5.11(c)	Continuing Employee Benefit Plans
Company Disclosure Letter

iv

MEMBERSHIP INTEREST PURCHASE AGREEMENT

This MEMBERSHIP INTEREST PURCHASE AGREEMENT (including the exhibits and schedules hereto, each as amended or restated from time to time, this “Agreement”), dated as of February 24, 2022 (the “Execution Date”), is made by and among Biohaven Therapeutics Ltd., a BVI business company formed under the laws of the territory of the British Virgin Islands and a wholly-owned subsidiary of Parent (“Buyer”), Knopp Biosciences LLC, a Delaware limited liability company (“Seller”), Channel Biosciences, LLC, a Delaware limited liability company and newly-formed, wholly-owned subsidiary of Seller (the “Company”), and, solely for the purposes of Section 9.14, Biohaven Pharmaceutical Holding Company Ltd., a BVI business company formed under the laws of the territory of the British Virgin Islands (“Parent”). All of the signatories to this Agreement are collectively referred to as the “Parties.”

RECITALS

WHEREAS, as of the Execution Date, Seller owns all of the Program Assets and all of the issued and outstanding membership interests of the Company (together with any Interests issued by the Company after the Execution Date and prior to the Closing, the “Interests”);

WHEREAS, prior to the Closing, Seller will complete a Pre-Closing Contribution pursuant to which all of the Program Assets are contributed to the Company;

WHEREAS, following the completion of the Pre-Closing Contribution, Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, all of the Interests, in each case upon the terms and subject to the conditions set forth in this Agreement;

WHEREAS, in connection with the execution of this Agreement, each of the Persons listed on Schedule 1.1 (each, a “Key Employee”) has agreed to execute and deliver an employment agreement with an Affiliate of Buyer prior to Closing on terms consistent with the terms presented by Buyer to each Key Employee as of the date hereof (the “Employment Agreements”); and

WHEREAS, Buyer, Seller and the Company desire to make certain representations, warranties, covenants and agreements in connection with this Agreement.

NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements contained herein, the Parties, intending to be legally bound, agree as follows:

Article I

DEFINITIONS

1.1Defined Terms. Unless otherwise specified in this Agreement and subject to Section 1.2, the following terms have the meanings specified in this Section 1.1.

“Accounting Firm” has the meaning set forth in Section 2.4(k)(i).

“Acquisition Proposal” has the meaning set forth in Section 5.10

“Action” means any civil, criminal or administrative action, suit, demand, claim, complaint, litigation, investigation, review, audit, formal proceeding, arbitration, hearing or other similar dispute.

“Additional Third Party License” has the meaning set forth in Section 2.4(d)(i).

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person. As used in this definition, the term “controls” (including the terms “controlled by” and “under common control with”) means possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through ownership of voting securities, by contract or otherwise. For the avoidance of doubt, (i) prior to the Closing, the Company is an “Affiliate” of Seller and shall not be an “Affiliate” of Buyer and (ii) following the Closing, the Company shall be an “Affiliate” of Buyer and shall not be an “Affiliate” of Seller.

“Agreement” has the meaning set forth in the Preamble.

“Annual Report” means an annual report on Form 10-K filed by Parent with the U.S. Securities and Exchange Commission.

“Arbitration Fees” has the meaning set forth in Section 2.4(f)(ii).

“Arbitration Rules” has the meaning set forth in Section 2.4(f)(ii).

“Bankruptcy and Equity Exception” has the meaning set forth in Section 3.3(a).

“Benefit Plan” means any benefit or compensation plan, program, policy, practice, agreement, contract, arrangement or other obligation, whether or not in writing and whether or not funded, in each case, that is sponsored or maintained by, or required to be contributed to, or with respect to which any potential liability is borne by the Seller and its Subsidiaries. Benefit Plans include, but are not limited to, “employee benefit plans” within the meaning of Section 3(3) of ERISA (“ERISA Plans”), employment, non-compete and/or non-solicit, consulting, retirement, severance, termination or change in control agreements, deferred compensation, equity-based, incentive, bonus, supplemental retirement, profit sharing, insurance, medical, welfare, fringe or other benefits or remuneration of any kind.

“Business” means the operation, research and development of the Program Assets.

“Business Claims” has the meaning set forth in Section 5.19(a).

“Business Day” means any day other than (a) a Saturday or a Sunday or (b) a day on which banking and savings and loan institutions are authorized or required by Law to be closed in New York City.

    -2-

“Business Fundamental Representations” means the representations and warranties set forth in (A) Section 3.14(a), (b), (d), (f) and (g) (Development Matters) and (B) Section 3.21(c), (e), (f),(g) and (h) (Intellectual Property), in each case of the foregoing clauses (A) and (B) solely to the extent that such representations and warranties relate to [**].

“Business Insurance Policies” has the meaning set forth in Section 5.19(a).

“Buyer” has the meaning set forth in the Preamble.

“Buyer Fundamental Representations” means the representations and warranties set forth in Section 4.1 (Organization, Good Standing and Qualification), Section 4.2 (Authority; Approval), Section 4.3 (Valid Issuance of Parent Shares) and Section 4.7 (Brokers and Finders).

“Buyer Indemnified Parties” has the meaning set forth in Section 8.2(a).

“Buyer Obligations” has the meaning set forth in Section 9.14(b).

“Cap Amount” has the meaning set forth in Section 8.2(b).

“CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act.

“Change” means any change, occurrence, development, circumstance, fact or effect.

“Chosen Courts” has the meaning set forth in Section 9.4(b).

“Claim Notice” has the meaning set forth in Section 8.4(a).

“Class C Preferred Units” has the meaning given to such term in the Seller Operating Agreement.

“Closing” has the meaning set forth in Section 2.2.

“Closing Cash Consideration” means an amount in cash equal to $35,000,000 minus any Seller Transaction Expenses set forth in the Funds Flow Memorandum minus any Discharged Indebtedness.

“Closing Consideration Shares” means the Parent Shares constituting the Closing Equity Consideration.

“Closing Date” has the meaning set forth in Section 2.2.

“Closing Equity Consideration” means 493,254 Parent Shares.

“Code” means the Internal Revenue Code of 1986.

    -3-

“Combination Product” means a product that includes or incorporates any Kv7 Compound in combination with one or more Other Active Ingredients, where the Kv7 Compound and such Other Active Ingredients are either formulated or packaged together.

“Commercially Reasonable Efforts” means, with respect to the Kv7 Discovery Platform, the Kv7 Compounds and the Kv7 Products, such efforts and resources (including the manner and timing thereof) [**] for the research, development, regulatory approval and commercialization of similar products with similar market potential at similar development stages and product life, taking into account: (a) [**] (b) issues of safety and efficacy (including the occurrence or absence of significant adverse events, if applicable); (c) product profile (including the expected and actual labeling); (d) [**] (e) [**] (f) [**] (g) any guidance or developments from the FDA, EMA or other Governmental Entity affecting the data or other actions required in order to obtain or maintain regulatory approval from a Governmental Entity; (h) compliance with Healthcare Laws, including whether a product is to be subject to a recall or market withdrawal; (i) pending, actual or threatened Actions with third parties with respect to the product, including with respect to Intellectual Property Rights; (j) [**] (k) [**] (l) [**] (m) the continued availability of qualified employees engaged in such research, development, regulatory approval and commercialization activities; (n) [**] (o) pre-existing contractual and other legal obligations; and (p) all other relevant factors [**] in connection with such similar products. For purposes of determining whether Buyer is in compliance with its obligations under the preceding sentence of this definition, Buyer’s research and development, commercialization, marketing and sales efforts for the Kv7 Products shall be considered in the aggregate and shall be measured by the facts and circumstances in effect at the time such efforts are due. The obligation to use such efforts and resources, however, does not require that Buyer or its Affiliates act in a manner which would otherwise be contrary to prudent business judgment and, furthermore, the fact that the objective is not actually accomplished is not dispositive evidence that Buyer or any of its Affiliates did not in fact utilize its Commercially Reasonable Efforts in attempting to accomplish the objective. The Parties agree and acknowledge that business and marketing and return on investment considerations may change from time to time, which changes may be taken into account in the determination of Commercially Reasonable Efforts. The Parties acknowledge that Buyer does not always seek to market its own products in every country or seek to obtain regulatory approval in every country or for every potential indication.

“Company” has the meaning set forth in the Preamble.

“Company Approvals” has the meaning set forth in Section 3.4(a).

“Company Compounds” has the meaning set forth in Section 3.14(a).

“Company Disclosure Letter” has the meaning set forth in Article III.

“Company IP” means all Intellectual Property Rights included in the Program Assets that are owned by, purported to be owned by, exclusively licensed to or purported to be exclusively licensed to Seller or any of its Subsidiaries.

“Company Owned IP” means all Intellectual Property Rights included in the Program Assets that are owned or purported to be owned by Seller or any of its Subsidiaries.

    -4-

[**]

“Confidential Information” means any information relating to the financial or other affairs of the Business; provided, however, that “Confidential Information” will not include any information that (i) is or becomes (other than as a result of disclosure by such Seller in violation of this Agreement) generally available to, or known by, the public or (ii) is received by Seller from a third party not known by Seller after reasonable inquiry to be bound by a duty of confidentiality to Buyer, the Company or any of their respective Affiliates with respect to such information.

“Confidentiality Agreement” means the Confidentiality Agreement, dated as of January 18, 2022, by and between Seller and Biohaven Pharmaceuticals, Inc.

“Contingent Payment” has the meaning set forth in Section 2.4(c).

“Continuing Employee” has the meaning set forth in Section 5.11(a).

“Contract” means any agreement, undertaking, lease, license, contract, note, mortgage, indenture, arrangement or other obligation, whether oral or written.

“Contribution Agreement” has the meaning set forth in Section 5.6.

“Copyrights” has the meaning set forth in the definition of “Intellectual Property Rights.”

“COVID-19” means COVID-19 or the SARS-CoV-2 virus (or any mutation or variation thereof).

“COVID-19 Relief Law” means any COVID-19 Tax Legislation or any other Law released, issued or promulgated by a Governmental Entity that grants to any Person the ability to borrow or otherwise secure financing (including any PPP Loans) or to obtain grants or other financial benefits, in each case as a result of, or in connection with, the effects of COVID-19, including the Families First Coronavirus Response Act and the Consolidated Appropriations Act, 2021.

“COVID-19 Tax Legislation” means (a) The Families First Coronavirus Response Act (Pub. L. 116-127), (b) the CARES Act, (c) The Paycheck Protection Program (PPP) Flexibility Act of 2020 (H.R. 7010) and (d) any other provision of Law in effect at the time of Closing which was enacted in connection with or in response to COVID-19 and provides for Tax relief or deferral, and includes any Treasury Regulations.

“Data / Market Exclusivity” means, with respect to any Kv7 Product that is commercialized in any country, the period of time granted by the applicable Laws, if any, in that country during which (a) the Buyer or any of its Affiliates or any licensees thereof has the exclusive legal right, pursuant to a grant by a Regulatory Authority, including orphan drug exclusivity, pediatric exclusivity or rights similar thereto in such country, or is otherwise entitled to the exclusive legal right by operation of applicable Law in such country, to market such Kv7 Product in such country, and such right precludes the Regulatory Approval of any third-party

    -5-

product that is deemed to be the same or similar drug, or (b) the data and information submitted by the Buyer or any of its Affiliates or any licensees thereof to the Regulatory Authority in such country for purposes of obtaining Regulatory Approval of such Kv7 Product may not be disclosed, referenced or relied upon in any way by any third party or such Regulatory Authority to support the Regulatory Approval or marketing of any third-party product.

“De Minimis Claim Threshold” has the meaning set forth in Section 8.2(b).

“Debt Pay-Off Letter” has the meaning set forth in Section 5.7.

“Deductible” has the meaning set forth in Section 8.2(b).

“Development Plan” means the development plan for the Program Assets set forth on Schedule 2.4.

“Discharged Indebtedness” means any Indebtedness that will be repaid at Closing from the portion of the Transaction Consideration payable at Closing, as set forth in the Funds Flow Memorandum.

“Earn-Out Arbitration” has the meaning set forth in Section 2.4(f)(i).

“Earn-Out Confidential Information” has the meaning set forth in Section 2.4(m).

“Earn-Out Dispute Notice” has the meaning set forth in Section 2.4(e)(i).

“Earn-Out Resolution Period” has the meaning set forth in Section 2.4(f)(i).

“Earn-Out Resolved Matters” has the meaning set forth in Section 2.4(f)(i).

“Earn-Out Review Period” has the meaning set forth in Section 2.4(e)(ii)(B).

“Earn-Out Shares” means the Parent Shares issued as payment for the Regulatory Milestone Payments and the Sales Milestone Payments.

“Effective Time” has the meaning set forth in Section 2.2.

“EMA” means the European Medicines Agency.

“Employee” means any current or former employee (whether full- or part-time), director, officer or independent contractor (who is a natural person) of Seller or any of its Subsidiaries.

“Employment Agreements” has the meaning set forth in the Recitals.

“Employment Offer Letters” has the meaning set forth in Section 5.11(a).

“Environmental Law” means any Law relating to: (a) the protection of the environment, health and safety as it relates to any Hazardous Substance or natural resources,

    -6-

(b) the handling, use, presence, disposal, release or threatened release of any Hazardous Substance or (c) noise, odor, indoor air, employee exposure, wetlands, pollution, contamination or any injury or threat of injury to Persons or property relating to any Hazardous Substance.

“Equity Interests” means, with respect to any Person, any partnership interest, membership interest, share of capital stock or other equity or ownership interest issued by such Person, and any warrant, option or other right to acquire any partnership interest, membership interest, share of capital stock or other equity or ownership interest of such Person, and any bond, note or other security exchangeable for or convertible into or exercisable for any partnership interest, membership interest, share of capital stock or other equity or ownership interest of such Person.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means all employers (whether or not incorporated) that would be treated together with the Company or any of its Subsidiaries as a “single employer” within the meaning of Section 414 of the Code.

“ERISA Plans” has the meaning set forth in the definition of “Benefit Plan.”

“Exchange Act” means the Securities Exchange Act of 1934.

“Excluded Assets” means all assets of Seller and its Subsidiaries other than the Program Assets and the Interests.

“Excluded Liabilities” means all Liabilities of Seller and its Subsidiaries, including all Liabilities of Seller and its Subsidiaries as of immediately prior to the Pre-Closing Contribution, whether or not related to the Program Assets.

“Excluded Payment” has the meaning set forth in Section 5.17.

“Execution Date” has the meaning set forth in the Preamble.

“FCPA” means the U.S. Foreign Corrupt Practices Act of 1977.

“FDA” means the United States Food and Drug Administration.

“Final Award” has the meaning set forth in Section 2.4(f)(ii).

“Final Determination” means, with respect to a dispute, an occurrence where (a) the parties to the dispute have reached an agreement in writing, (b) a court of competent jurisdiction shall have entered a final and non-appealable Order or judgment with respect to a claim, or (c) an arbitration or like panel shall have rendered a final non-appealable determination with respect to disputes the parties have agreed to submit thereto.

“First Commercial Sale” means, with respect to any Kv7 Product in a country, the first sale for use or consumption by the general public of such Kv7 Product by or on behalf of Buyer or any of its Affiliates to a third party for an Indication in such country after Regulatory

    -7-

Approval of such Kv7 Product has been granted, or such marketing and sale is otherwise permitted, by the appropriate Regulatory Authority for such Indication in such country.

“Fraud” means an act committed or statement made by or on behalf of a Party in connection with this Agreement that (i) involves a false representation of fact; (ii) is committed or made (A) with actual knowledge or belief that such representation is false or (B) recklessly without sufficient knowledge as to the truth of such representation; (iii) is committed or made with an intention to induce (or expectation that it will induce) the party to whom such representation is made to act or refrain from acting in reasonable or justified reliance upon it; and (iv) causes such other party, in reasonable reliance upon such false representation, to take or refrain from taking action.

“Fundamental Representations” means the Buyer Fundamental Representations and the Seller Fundamental Representations.

“Funds Flow Memorandum” means the funds flow memorandum delivered by Seller to Buyer at least four Business Days prior to the Closing Date setting forth any Seller Transaction Expenses and any Discharged Indebtedness to be paid by Buyer at the Closing and the wire instructions for all payments to be delivered pursuant to Section 2.3(b) and Section 2.4.

“GAAP” means United States generally accepted accounting principles, consistently applied in accordance with past practice.

“Generic Product” means, with respect to a particular Kv7 Product in a particular country, any product that (a) is sold by a third party that is not an Affiliate of Buyer, or a licensee, sublicensee or other authorized third party of Buyer to whom Buyer has granted Intellectual Property Rights in or to such Kv7 Product, in each case, under a marketing authorization granted by a Regulatory Authority to such third party, (b) contains the same Kv7 Compound as such Kv7 Product and (c) is approved in reliance on and without a right of reference to a prior Regulatory Approval of a Kv7 Product granted to Buyer or its Affiliate by the applicable Regulatory Authority.

“Good Laboratory Practices” means the FDA’s standards for conducting non-clinical laboratory studies, including those standards contained in 21 C.F.R. Part 58.

“Governmental Entity” means any domestic or non-U.S. legislative, administrative or regulatory authority, agency, commission, body, court or other governmental or quasi-governmental entity of competent jurisdiction, including any supranational body.

“Hazardous Substance” means (a) any substance that is listed, classified or regulated pursuant to any Environmental Law, (b) any petroleum product or by-product, asbestos-containing material, lead-containing paint or plumbing, polychlorinated biphenyls, mold, radioactive material, PFAS compounds or radon and (c) any other substance that may be the subject of regulatory action by any Governmental Entity in connection with any Environmental Law.

“Healthcare Laws” means all healthcare-related Laws applicable to the Business or any Company Compound, including, as applicable: (a) the Federal Food, Drug and Cosmetic

    -8-

Act and all related guidelines, including those requirements relating to the FDA’s current Good Laboratory Practices, investigational use, pre-market approval and applications to market new pharmaceutical or biological products; (b) the Clinical Laboratory Improvement Amendments of 1988; (c) the Health Insurance Portability and Accountability Act of 1996, the Health Information and Technology for Economic and Clinical Health Act, and the regulations promulgated pursuant thereto; (d) the U.S. Patient Protection and Affordable Care Act, (e) the Physician Payment Sunshine Act (42 U.S.C. § 1320a-7h); (f) federal and state anti-kickback Laws (including the federal Anti-Kickback Statute (42 U.S.C. § 1320-7(b))); (g) federal and state referral Laws (including the Stark Law (42 U.S.C. § 1395nn)); (h) false claims Laws (including the Federal False Claims Act (31 U.S.C. §§ 3729, et seq.)); (i) Laws governing the development, conduct, monitoring, patient informed consent, auditing, analysis and reporting of clinical trials; (j) Laws governing data gathering activities relating to the detection, assessment, and understanding of adverse events (including pharmacovigilance and adverse event regulations and guidance of FDA and the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use); (k) Laws governing government and private healthcare programs, including the federal Medicare and Medicaid statutes; (l) Laws, the violation of which is cause for exclusion from any federal health care program; and (m) all comparable state, federal or foreign Laws relating to any of the foregoing.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

“ICC” has the meaning set forth in Section 2.4(f)(ii).

“Indebtedness” means borrowings and indebtedness (a) of the Company or (b) pursuant to which a Lien or other security interest encumbers the Program Assets.

“Indemnified Party” has the meaning set forth in Section 8.4(a).

“Indemnified Taxes” means, determined in the case of any Straddle Period in accordance with Section 5.14(f), any and all Taxes (a) imposed on or with respect to the Company, or any assets of the Company for which the Company may otherwise be liable, for any Pre-Closing Tax Period or as a result of the failure of any representation or warranty of the Company in Section 3.20 to be true and correct on the Execution Date and as of the Closing Date as if made on and as of the Closing Date (disregarding any disclosures made in the Company Disclosure Letter for this purpose), (b) that are Taxes of Seller or its Affiliates (other than the Company) for which the Company becomes liable, whether such Taxes arise in a Pre-Closing Tax Period or Post-Closing Tax Period, or (c) of any Person (other than the Company) for which the Company becomes liable (i) as a result of the Company being included in a consolidated, affiliated, combined, unitary or similar group with such Person for Tax purposes prior to the Closing, (ii) as transferee or successor to such Person under Law as a result of an event or a transaction occurring prior to the Closing or (iii) by Contract entered into prior to the Closing.

“Indemnifying Party” has the meaning set forth in Section 8.4(a).

“Indication” means an individual, separate and distinct disease or medical condition for which clinical results for such disease or condition and a new drug application, or supplement (or other addition) to an existing new drug application, would be required for Regulatory Approval in the United States. For the avoidance of doubt, the treatment of

    -9-

(a) subtypes of the same disease or (b) a disease or disease subtype compared to prevention of the same disease or disease subtype shall not be considered different Indications.

“Insurance Policies” has the meaning set forth in Section 3.22.

“Intellectual Property Rights” means all rights anywhere in the world in or to: (a) trademarks, service marks, brand names, certification marks, collective marks, d/b/a’s, logos, symbols, trade dress, trade names, and other indicia of origin, all applications and registrations for the foregoing, and all goodwill associated therewith and symbolized thereby, including all renewals of the same (collectively, “Trademarks”); (b) patents, patent applications, registrations and invention disclosures, including divisionals, revisions, supplementary protection certificates, continuations, continuations-in-part, renewals, extensions, substitutes, re-issues and re-examinations (collectively, “Patents”); (c) tangible and intangible information, techniques, technology, inventions (whether patentable or not), methods, know-how, trade secrets, data and results (including all biological, chemical, pharmacological, toxicological, clinical, analytical and quality control data and methods, reference standards, and manufacturing assays) (collectively, “Know-How”); (d) published and unpublished works of authorship, whether copyrightable or not (including Software, website and mobile content, data, databases and other compilations of information), copyrights therein and thereto, and registrations and applications therefor, and all renewals, extensions, restorations and reversions thereof (collectively, “Copyrights”); (e) Internet domain names, social media accounts and URLs; and (f) all other intellectual property, industrial or proprietary rights.

“Interests” has the meaning set forth in the Recitals.

“IRS” means the Internal Revenue Service.

“IT Assets” means technology devices, computers, Software, servers, networks, workstations, routers, hubs, circuits, switches, data communications lines, and all other information technology equipment, and all associated documentation.

“Key Employee” has the meaning set forth in the Recitals.

“Know-How” has the meaning set forth in the definition of “Intellectual Property Rights.”

“Knowledge” means (a) with respect to an individual, that the individual is actually aware of such fact or other matter, and (b) with respect to Seller or the Company, that any of Michael E. Bozik, Mark Kreston, Gregory T. Hebrank, Steven Dworetzky, Frank J. Lucchino, James Mather or Lynn Resnick is actually aware of such fact or other matter.

“Kv7 Commercialization” has the meaning set forth in Section 2.4(i)(iii).

“Kv7 Compound” means [**].

“Kv7 Discovery Platform” means the drug-discovery platform of Seller and its Subsidiaries targeting modulators of the Kv7 protein.

    -10-

“Kv7 Discovery Platform Patent” means any Patent filed by or on behalf of Buyer or any of its Affiliates that covers any compound that modulates the Kv7 drug target that is identified or synthesized by (or on behalf of) Buyer or any of its Affiliates using Transferred Know-How (where such Transferred Know-How is documented as of the Closing Date and owned or licensed by Buyer or any of its Affiliates as of the Closing) or the Kv7 Discovery Platform (whether as part of Buyer or any of its Affiliates or any successor of Buyer or any of its Affiliates), in each case, pursuant to the Development Plan within seven years after the Closing Date.

“Kv7 Product” means any product, whether alone or together with other active ingredients, in any dosage strength, form or formulation and for any mode of administration that contains a Kv7 Compound, including an Other Kv7 Product.

“Law” means any law, statute, ordinance, common law, rule, regulation, Order or other legal requirement enacted, issued, promulgated, enforced or entered by a Governmental Entity of competent jurisdiction.

“Lease” has the meaning set forth in Section 3.18(b).

“Leased Real Property” has the meaning set forth in Section 3.18(b).

“Liability” means any liability, obligations or commitment of any kind, whether accrued, absolute, fixed or contingent, matured or unmatured, known or unknown, determined or determinable or otherwise and whether or not required to be recorded or reflected on a balance sheet prepared in accordance with GAAP.

“Licenses” means all licenses, permits, certifications, approvals, clearances, registrations, consents, accreditations, authorizations, franchises, variances and exemptions required, issued or granted by a Governmental Entity.

“Lien” means any lien, charge, pledge, mortgage, easement, hypothecation, usufruct, deed of trust, security interest, claim or other encumbrance, other than, in each case, restrictions on transfer arising solely under applicable federal and state securities Laws.

“Losses” means any damages, losses, payments, Liabilities, Taxes, deficiencies, assessments, interest, penalties, fees, costs (including costs of investigation, defense and enforcement of this Agreement), amounts paid in settlement (including royalties paid or payable to third parties in connection with any settlement or other resolution of any claim) and expenses (including reasonable attorneys’ and experts’ fees and expenses, whether or not involving a Third-Party Claim).

“Market Price” means, as of any date, the volume-weighted average sales price per Parent Share taken to four decimal places on the NYSE over the 20-consecutive-trading-day period preceding such date, as calculated by Bloomberg Financial LP under the function “VWAP” (or, if not available, in another authoritative source reasonably selected by Buyer).

“MaterialAdverse Effect” means any Change that, individually or taken together with any other Changes is, or would reasonably be expected to be, materially adverse to the

    -11-

condition (financial or otherwise), assets, Liabilities (contingent or otherwise), business operations or results of operations of the Company or the Business and in each case, whether known or unknown and whether on a short- or long-term basis; provided, however, that none of the following, either alone or in combination, shall be deemed to constitute or be taken into account in determining whether a Material Adverse Effect is occurring, has occurred or would reasonably be expected to occur:

(a)Changes in or with respect to the economy, credit, capital, securities or financial markets or political, regulatory or business conditions in the United States;

(b)Changes that are the result of factors generally affecting the biopharmaceutical industry;

(c)changes in applicable accounting standards, including GAAP, or in any Law of general applicability, in each case, after the Execution Date;

(d)any Change resulting from acts of war (whether or not declared), sabotage, terrorism, military actions or the escalation of any of the foregoing, whether perpetrated or encouraged by a state or non-state actor or actors (other than cyberattacks), any weather or natural disaster, whether or not caused by any Person (other than the Company, its Subsidiaries or any of their respective Affiliates or Representatives); or

(e)any actions taken or not taken by Seller or any of its Subsidiaries at Buyer’s written request after the Execution Date;

provided, further, that, with respect to clauses (a), (b), (c) and (d) of this definition, such Changes shall be taken into account in determining whether a “Material Adverse Effect” is occurring, has occurred or would reasonably be expected to occur to the extent it disproportionately and adversely affects the Company or the Business relative to other companies of similar size operating in the geographic markets or industries in which the Business operates.

“Material Contract” has the meaning set forth in Section 3.15(a).

“Member Consent” means the execution and delivery of Support Agreements approving this Agreement and the Transactions by members of Seller holding both (a) more than 50% of all of the issued and outstanding Units and (b) a majority of the Class C Preferred Units.

“Member Consent Delivery Period” has the meaning set forth in Section 5.2.

“Milestone Dispute” has the meaning set forth in Section 2.4(e)(i).

“Net Sales” means, with respect to any Kv7 Product, the gross amount billed by Buyer and its Affiliates and its and their respective licensees (each of the foregoing Persons, a “Selling Party”) from the sale of such Kv7 Products to a third party anywhere in the world, less the sum of the following items (to the extent not reimbursed by any third party and to the extent actually incurred, allowed, accrued, paid or taken with respect to such sale):

    -12-

(i)    sales returns, credits or allowances actually paid, granted or accrued, including trade, quantity and cash discounts, other adjustments, including those granted on account of price adjustments, returns, rebates, chargebacks (including for spoiled, damaged, outdated, rejected or returned Kv7 Product) or similar payments granted or given to wholesalers, purchasers (direct or indirect) or payors;

(ii)    adjustments arising from consumer discount programs or other similar programs;

(iii)    customs or excise duties, value-added Taxes, sales Taxes, consumption Taxes, or other Taxes (except Taxes on net income) or duties relating to sales, or any payment in respect of sales provided such duties or Taxes are recorded in gross sales;

(iv)    any actual bad debt expense recorded in accordance with GAAP from customers related to sales of such Kv7 Product; provided, that if such bad debt expense recorded shall thereafter be paid or otherwise satisfied, the amount thereof shall be added to Net Sales for the calendar quarter in which so paid or satisfied. Net Sales shall be determined from each Selling Party’s books and records maintained in accordance with GAAP consistently applied;

(v)    inventory management fees paid to distributors and allocated to such Kv7 Product;

(vi)    actual freight, shipping, handling and insurance costs which deduction under this subclause (vi) will in no event exceed one percent of the amount arrived at after the application of items (i) – (v) above and (vii) below; and

(vii)    discounts (including cash discounts and quantity discounts), cash and non-cash coupons, retroactive price reductions, charge-back payments and rebates granted to managed care organizations or to federal, state and local governments, their agencies, and purchasers and reimbursors or to customers, or in connection with patient assistance programs, named patient programs, or other compassionate use or charitable purposes; the portion of administrative fees paid during the relevant time period to group purchasing organizations or pharmaceutical benefit and patient assistance program managers relating to such Kv7 Product.

Such amounts shall be determined consistent with each Selling Party’s customary practices and in accordance with GAAP.

It is understood that any accruals for individual items reflected in Net Sales are periodically (at least quarterly) trued up and adjusted by each Selling Party consistent with its customary practices and in accordance with GAAP. [**].

“Net Sales Payment” has the meaning set forth in Section 2.4(c).

“Net Sales Purchaser” has the meaning set forth in Section 2.4(g)(ii).

“Net Sales Statement” has the meaning set forth in Section 2.4(e)(ii)(A).

“Net Sales Term” has the meaning set forth in Section 2.4(c).

    -13-

“No-Hedging Condition” has the meaning set forth in Section 2.5(a).

“Non-Fundamental Buyer Representations” means any representation made by Buyer in Article IV that is not a Buyer Fundamental Representation.

“Non-Fundamental Seller Representations” means any representation made by such Seller or the Company in Article III that is not a Seller Fundamental Representation.

“Nonparty” has the meaning set forth in Section 8.14(b).

“NYSE” means the New York Stock Exchange, Inc.

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

“Offer Notice” has the meaning set forth in Section 2.4(g)(iii).

“Open Claim Amount” means the amount that would be necessary in Buyer’s reasonable good-faith judgment to satisfy any Pending Claim if such Pending Claim were resolved in full favor of the Buyer Indemnified Party.

“Open Source License” has the meaning set forth in Section 3.21(l).

“Order” means any administrative decision or award, decree, injunction, judgment, order, quasi-judicial decision or award, ruling or writ, whether temporary, preliminary or permanent, of any arbitrator, mediator or Governmental Entity.

“Organizational Documents” has the meaning set forth in Section 3.1.

[**]

“Other Anti-Bribery Laws” means, other than the FCPA, all applicable antibribery, anti-corruption, anti-money-laundering and similar Laws in jurisdictions in which the Company or any of its Subsidiaries do business, have done business, in which any Person associated with or acting on behalf of Seller or any of its Subsidiaries is conducting or has conducted business involving Seller or any of its Subsidiaries or Seller or any of its Subsidiaries are otherwise subject.

“Other Kv7 Product” means any Kv7 Product other than a product containing [**].

“Outside Date” means April 6, 2022.

“Parent” has the meaning set forth in the Preamble.

“Parent Shares” means the common shares, no par value per share, of Parent.

“Parent Successor Entity” has the meaning set forth in Section 9.14(d).

    -14-

“Parties” has the meaning set forth in the Preamble.

“Patents” has the meaning set forth in the definition of “Intellectual Property Rights”.

“Pay-Off Debt” has the meaning set forth in Section 5.7.

“Pending Claim” means any claim for indemnification under Section 8.2 that has been made by any Buyer Indemnified Party in accordance with Article VIII and remains pending but unresolved at the time of determination.

“Permitted Liens” means the following Liens: (a) the non-terminable rights granted to the federal government of the United States in connection with the federal funding of the Program Assets through those certain grants as set forth in Section 1.1 of the Company Disclosure Letter; (b) with respect to leasehold interests, mortgages and other Liens incurred, created, assumed or permitted to exist and arising by, through or under a landlord or owner of the Leased Real Property; (c) zoning, building, subdivision or other similar requirements or restrictions, none of which interfere with the present use of the property, (d) any Liens that will be terminated at or prior to the Closing in accordance with this Agreement; and (e) unpaid taxes not yet due.

“Person” means any natural person and any corporation, company, partnership (general or limited), unincorporated association (whether or not having separate legal personality), trust or other entity.

“Personal Information” means any information that (a) alone or in combination with other information held by Seller or any of its Subsidiaries, identifies or could reasonably be used to identify an individual person, an individual’s health information or a household, browser or device, or (b) is otherwise protected under applicable Laws relating to privacy, data security or personal information or subject to the Seller’s or any of its Subsidiaries’ privacy policies.

“Post-Closing Tax Period” means any Tax period that is not a Pre-Closing Tax Period.

“PPP Loan” means (a) any covered loan under paragraph (36) of Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as added by Section 1102 of the CARES Act, or (b) any loan that is an extension or expansion of, or is similar to, any covered loan described in the foregoing clause (a) pursuant to any COVID-19 Relief Law.

“Pre-Closing Contribution” has the meaning set forth in Section 5.6.

“Pre-Closing Tax Period” means any Tax period ending on or before the Closing Date, and, in the case of a Straddle Period, the portion of such Straddle Period ending on and including the Closing Date.

“Privacy and Security Policies” has the meaning set forth in Section 3.21(o).

    -15-

“Program Assets” means all assets of Seller and its Affiliates required for, related to, or used or useful in connection with the Kv7 Discovery Platform, including (a) all of Seller’s lab facilities in Pittsburgh, Pennsylvania, and all laboratory equipment and supplies, Kv7 Compounds in inventory, raw materials and reagents that are used or useful in connection with the Kv7 Discovery Platform; (b) the Registered Patents set forth on Schedule 1.1(a); (c) the Registered Trademarks set forth on Schedule 1.1(b), (d) the Registered Copyrights set forth on Schedule 1.1(c); and (e) all other Intellectual Property Rights owned by or licensed to Seller and its Affiliates that are used in connection with the Kv7 Discovery Platform, but excluding, for the avoidance of doubt, any rights or assets exclusively relating to dexpramipexole or pramipexole or any cash, cash equivalents or accounts receivable.

“Program IT Assets” has the meaning set forth in Section 3.21(m).

“Public Financial Statements” means the Form 10-K and the Form 10-Qs filed by Parent with the U.S. Securities and Exchange Commission.

“Qualified Purchaser” means, with respect to a transaction, any Person that is engaged in the pharmaceutical or biotechnology business which Person, together with its Affiliates, has any of (a) aggregate annual revenue for the fiscal year immediately preceding the effective date of such transaction which is not less than [**] or (b) total assets as of the end of the fiscal year immediately preceding the effective date of such transaction of not less than [**], in each case, on a pro forma basis after giving effect to such Sale Transaction.

“Qualified Transaction” has the meaning set forth in Section 2.4(l).

“Records” has the meaning set forth in Section 5.8(b).

“Reference Price” means the Market Price of the Parent Shares as of the date hereof.

“Registered Intellectual Property” means any Intellectual Property Rights that are issued by, registered with, renewed by or the subject of a pending application before any Governmental Entity or Internet domain name registrar.

“Registrable Shares” means the Closing Consideration Shares and the Earn-Out Shares held by Seller that have been held for at least 60 days following the date of issuance, including, without limitation, any Parent Shares paid, issued or distributed in respect of any such Parent Shares by way of stock dividend, stock split or distribution, or in connection with a combination of recapitalization, reorganization, merger or consolidation, or otherwise, but excluding Parent Shares acquired before or after the Closing Date other than Earn-Out Shares; provided, however, that such Parent Shares will not be “Registrable Shares” (a) after such Parent Shares have been sold pursuant to an effective registration statement or in compliance with Rule 144 or other exemptions from registration or (b) when the remainder of such Parent Shares held by Seller could, in the opinion of counsel satisfactory to Buyer, be sold by Seller in a single transaction without the volume and manner of sale limitations under Rule 144 unless Seller has taken action, without the consent or agreement of Buyer, subsequent to the date hereof to cause such Parent Shares not to be eligible for such sale under Rule 144.

    -16-

“Registration Statement” has the meaning set forth in Section 5.23.

“Regulatory Approval” means any and all licenses, registrations, authorizations and approvals (including approvals of a new drug application in the United States and including pricing and third party reimbursement approvals in the European Union, but only to the extent such pricing and third party reimbursement approvals are required to market or sell or obtain reimbursement for a Kv7 Product) of any Governmental Entity, sufficient to allow the commercialization of a pharmaceutical or medicinal product in a regulatory jurisdiction.

“Regulatory Authority” means the FDA, the EMA, or any other national, supra-national, regional, state or local regulatory agency, department, bureau, commission, council or other Governmental Entity involved in the granting of any approval required by applicable Laws to promote, market and sell pharmaceutical products.

“Regulatory Milestone” has the meaning set forth in Section 2.4(a).

“Regulatory Milestone Payment” has the meaning set forth in Section 2.4(a).

“Related Party” means Buyer’s Affiliates and third parties to which it grants any right, assignment or license to commercialize, develop or manufacture Kv7 Products.

“Related Patents” means, with respect to a specified Patent, all Patents in any country of the world claiming priority to, sharing priority with, or from which priority is claimed by, such specified Patent, together with any and all foreign counterparts thereof.

“Releasee” has the meaning set forth in Section 5.12.

“Representative” of a Person means any Affiliate, officer, director, employee, stockholder, member or equityholder of such Person or any investment banker, attorney, accountant or other advisor, agent or representative of such Person.

“Requesting Party” has the meaning set forth in Section 5.22.

“Responding Party” has the meaning set forth in Section 5.22.

“ROFR Election Period” has the meaning set forth in Section 2.4(g)(iii).

“Rule 144” means Rule 144 of the Securities Act, as presently in effect.

“Sale Transaction”means a sale or transfer, exclusive license or other transaction, or series of transactions, resulting in any Person or Persons (other than Buyer and its Affiliates) owning or controlling the right to manufacture, market and sell any Kv7 Products; provided, that neither (i) any sale, merger or change-of-control of Parent or Buyer nor (ii) any transaction solely among Buyer and its Affiliates shall constitute a Sale Transaction (for the avoidance of doubt, including a spin-off).

“Sales Milestone” has the meaning set forth in Section 2.4(b).

    -17-

“Sales Milestone Payment” has the meaning set forth in Section 2.4(b).

“Securities Act” means the Securities Act of 1933.

“Seller” has the meaning set forth in the Preamble.

“Seller Financial Statements” has the meaning set forth in Section 3.5(a).

“Seller Fundamental Representations” means (A) the representations and warranties set forth in Section 3.1 (Organization, Good Standing and Qualification);Section 3.2 (Capital Structure); Section 3.3 (Authority; Approval); Section 3.16(a) (Assets); Section 3.17 (Affiliate Arrangements); Section 3.20(b) (Disregarded Entity); Section 3.21(a) and (b) (Intellectual Property); Section 3.25 (Solvency); and Section 3.32 (Brokers and Finders) and (B) the Business Fundamental Representations.

“Seller Indemnified Parties” has the meaning set forth in Section 8.3(a).

“Seller Interim Financial Statements” has the meaning set forth in Section 3.5(a).

“Seller Operating Agreement” means the Third Amended and Restated Operating Agreement of Seller, as amended prior to the date hereof.

“Seller Releasing Party” has the meaning set forth in Section 5.12.

“Seller Representations” means the Seller Fundamental Representations and the Non-Fundamental Seller Representations.

“Seller Transaction Expenses” means (a) all unpaid fees and expenses incurred by or charged to or payable by Seller or any of its Affiliates for services provided through the Closing in connection with this Agreement and the Transactions and any alternative transaction, including legal fees and related expenses, investment banking fees and related expenses, if any, and accounting fees and related expenses, (b) all Taxes, fees and expenses arising from or incurred in connection with the Pre-Closing Contribution; (c) all bonuses, change-of-control, success, retention or similar payments which vest or become payable (in each case, pursuant to any agreement entered into prior to the Closing) to any current or former employees, directors, officers or other service providers of Seller or its Affiliates as a result of or in connection with the Transactions and the employer share of any payroll or other Taxes with respect thereto and (d) the employer share of any payroll or other Taxes due in respect of any Seller equity compensation awards. For the avoidance of doubt, Buyer shall be solely responsible for the following fees, costs, charges, expenses and obligations, none of which will be deemed to be Seller Transaction Expenses hereunder:  (i) all payments, costs and expenses incurred by Buyer or its Affiliates related to the hiring by Buyer or its Affiliates of each of the Key Employees and Continuing Employees; and (ii) any fees of any broker, finder, or agent engaged by Buyer or any of its Affiliates for services provided in connection with this Agreement and the Transactions.

“Selling Party” has the meaning set forth in the definition of “Net Sales.”

“Set-Off Amount Escrow Agent” has the meaning set forth in Section 2.4(h)(ii).

    -18-

“Shared Contract” means any Contract, contract right, bid, tender, purchase order or other agreement, whether written or oral, relating to (a) the Business and (b) one or more other businesses of Seller or one or more of its Affiliates.

“Significant Supplier” has the meaning set forth in Section 3.24(a).

“Software” means any computer program, application, middleware, firmware, microcode and other software, including operating systems, software implementations of algorithms, models and methodologies, in each case, whether in source code, object code or other form or format, including libraries, subroutines and other components thereof, and all documentation relating thereto.

“Straddle Period” means a Tax period beginning on or before the Closing Date and ending after the Closing Date.

“Subsidiary” means, with respect to any Person, any other Person of which at least a majority of the securities or ownership interests having by their terms ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions is directly or indirectly owned or controlled by such Person and/or by one or more of its Subsidiaries.

“Superior Proposal” means an unsolicited, bona fide written Acquisition Proposal, which Acquisition Proposal was first made on or after the date of this Agreement (and has not been withdrawn) and did not arise from or in connection with any breach of Section 5.10(a), that would result in a Person or group becoming the beneficial owner of, directly or indirectly, more than 50% of the Program Assets (whether by purchase of equity (including the equity of Seller or the Interests), purchase of assets, merger, or otherwise) that the Board of Managers of Seller has determined in good faith, after consultation with outside legal counsel, taking into account all legal, financial, financing and regulatory aspects of the proposal, the identity of the Person(s) making the proposal, the likelihood of the proposal being consummated in accordance with its terms and any revisions to the terms of the Transactions proposed by Buyer after notification of such Acquisition Proposal, that, if consummated, would result in a transaction (A) more favorable to the equityholders of Seller from a financial point of view than the transactions contemplated by this Agreement, (B) that is reasonably likely to be completed, taking into account any regulatory, financing or approval requirements and (C) for which financing, if a cash transaction (in whole or in part), is, or in the good faith determination of the Board of Managers of Seller is reasonably capable of being, fully committed.

“Support Agreement” means the Written Consent and Support Agreement in the form attached hereto as Exhibit A.

“Tax” means taxes including all federal, state, local and foreign income, profits, franchise, gross receipts, environmental, customs duty, capital stock, severances, stamp, payroll, sales, employment, unemployment, disability, use, property, withholding, excise, production, value-added, occupancy and other taxes, duties or assessments of any nature whatsoever, together with all interest, penalties and additions imposed with respect to such amounts and any interest in respect of such penalties and additions.

    -19-

“Tax Claim” has the meaning set forth in Section 5.14(e).

“Tax Return” means any returns and reports (including elections, declarations, disclosures, schedules, estimates and information returns) required to be supplied to a Taxing Authority relating to Taxes.

“Taxing Authority” means any Governmental Entity having or purporting to exercise jurisdiction with respect to any Tax.

“Third-Party Claim” has the meaning set forth in Section 8.4(b).

“Trade Control and Sanctions Regulations” means all applicable sanctions, export control, anti-boycott, customs and similar Laws in the United States and other jurisdictions (to the extent consistent with U.S. Law) in which Seller or any of its Subsidiaries do business, have done business or are otherwise subject to, including without limitation the U.S. International Traffic in Arms Regulations, the Export Administration Regulations, U.S. sanctions Laws administered by OFAC, Section 999 of the Code, U.S. customs regulations and the Foreign Trade Regulations.

“Transaction Consideration” means the Closing Cash Consideration plus the Closing Equity Consideration plus the Contingent Payments.

“Transaction Consideration Allocation” has the meaning set forth in Section 5.14(d).

“Transaction Documents” means this Agreement, the Support Agreements and all other agreements, certificates or other instruments or documents delivered or given pursuant to this Agreement.

“Transactions” means transactions contemplated hereby or by the Transaction Documents.

“Transfer” means to, directly or indirectly, sell, transfer, distribute, assign, pledge, encumber, hypothecate or similarly dispose of, either voluntarily or involuntarily, or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation or similar disposition of, any Equity Interests owned by a Person or any interest (including a beneficial interest) in, or the ownership, control or possession of, any Equity Interest owned by a Person.

“Transfer Taxes” has the meaning set forth in Section 5.14(a).

“Transferred Know-How” means all Know-How owned by the Company as of the Closing.

“Transferred Patent” means all Patents that are owned by the Company as of the Closing.

“True-Up Payment” has the meaning set forth in Section 2.5(a).

    -20-

“True-Up Request Period” has the meaning set forth in Section 2.5(a).

“Units” has the meaning given to such term in the Seller Operating Agreement.

“Valid Claim” means, with respect to a particular country, a claim of (i) a Patent that is issued and unexpired and has not been (a) held permanently revoked, unenforceable or invalid by a decision of a court or other Governmental Entity of competent jurisdiction, from which decision is unappealable or unappealed within the time allowed for appeal, or (b) cancelled, withdrawn, abandoned, disclaimed or admitted to be invalid or unenforceable through reissue, disclaimer or otherwise or (ii) a Patent that is a pending patent application that has not been pending for more than seven (7) years from the earliest priority date, unless and until such claim is granted, at which time such claim will then fall within foregoing clause (i), if and for so long as it otherwise meets the requirements of foregoing clause (i).

“Written Consent” has the meaning set forth in the definition of Member Consent.

1.2Interpretation; Construction.

(a)The table of contents and headings herein are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof. Where a reference in this Agreement is made to an Annex, Exhibit, Section or Schedule, such reference shall be to an Annex, Exhibit, Section or Schedule to this Agreement unless otherwise indicated.

(b)If a term is defined as one part of speech (such as a noun), it shall have a corresponding meaning when used as another part of speech (such as a verb). The terms defined in the singular have a comparable meaning when used in the plural and vice versa. The rule known as the ejusdem generis rule shall not apply, and accordingly, general words introduced by the word “other” shall not be given a restrictive meaning by reason of the fact that they are preceded by words indicating a particular class of acts, matters or things. Unless the context of this Agreement clearly requires otherwise, words importing the masculine gender shall include the feminine and neutral genders and vice versa. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word “or” shall not be exclusive. Currency amounts referenced herein are in U.S. Dollars. Any capitalized term used in any Schedule or Exhibit but not otherwise defined therein shall have the meaning given to them as set forth in this Agreement. All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP. References to “written” or “in writing” include documents in electronic form or transmission by email. A reference to any Person includes such Person’s successors and permitted assigns.

(c)Except as otherwise specifically provided herein, all references in this Agreement to any Law include the rules and regulations promulgated thereunder, in each case as amended, re-enacted, consolidated or replaced from time to time and in the case of any such amendment, re-enactment, consolidation or replacement, reference herein to a particular provision shall be read as referring to such amended, re-enacted, consolidated or replaced

    -21-

provision and shall also include, unless the context otherwise requires, all applicable guidance and policies made in connection therewith; provided, that for purposes of any representations and warranties contained in this Agreement that are made as of a specific date, references to any Law shall be deemed to refer to such Law as amended as of such date. Any agreement or instrument referred to herein means such agreement or instrument as from time to time amended, modified or supplemented, including by waiver or consent and all attachments thereto and instruments incorporated therein.

(d)Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. Whenever any action must be taken hereunder on or by a day that is not a Business Day, then such action may be validly taken on or by the next day that is a Business Day.

(e)Each representation, warranty, covenant and condition herein shall be given full, separate and independent effect. The provisions hereof are cumulative. A more specific provision shall limit the applicability of any other, more general, provision.

(f)The Parties drafted this Agreement jointly through the exchange of drafts hereof, so no presumption or burden of proof favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement.

Article II

PURCHASE AND SALE; CLOSING; CLOSING DELIVERIES

2.1Purchase and Sale of Interests. Upon the terms and subject to the conditions set forth in this Agreement and the Transaction Documents, and in reliance on the representations, warranties and covenants contained herein, at the Closing, Seller agrees to sell, assign, convey, transfer and deliver to Buyer, and Buyer agrees to purchase and accept from Seller, all of the Interests, free and clear of any Liens, in exchange for the Transaction Consideration.

2.2Time and Place of Closing. The closing of the purchase and sale of Interests provided for in this Agreement (the “Closing”) will take place by remote communications and by the exchange of signatures by electronic transmission on the fifth Business Day following the satisfaction or, to the extent permitted by applicable Law, waiver of the last condition in Article VI to be satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or, to the extent permitted by applicable Law, waiver of those conditions) or at such other time and place as Buyer and Seller mutually agree (the “Closing Date”). The Closing will be effective as of 12:01 a.m., New York City time, on the Closing Date (the “Effective Time”).

2.3Deliveries at Closing.

(a)By Seller and the Company. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, Seller and the Company shall deliver or cause to be delivered to Buyer:

    -22-

(i)Seller’s Interests, in book-entry form, accompanied with an appropriate instrument of transfer;

(ii)counterparts to the Employment Agreements duly executed by the Key Employees and counterparts of each of the Transaction Documents to which Seller, the Company or any of their respective Affiliates or equityholders is a party, duly executed by Seller, the Company or its applicable Affiliates or equityholders party thereto, as applicable;

(iii)a properly completed and executed IRS Form W-9;

(iv)the certificate contemplated by Section 6.2(c);

(v)(A) executed versions of each Debt Pay-Off Letter required pursuant to Section 5.7, which shall indicate that, at or prior to the Closing, the applicable creditor shall release its Liens and other security interests in, and agree to execute Uniform Commercial Code termination statements and such other documents or endorsements necessary to release its Liens and other security interests in, the Interests and the assets and properties of the Company and (B) evidence of releases of Liens and other security interests encumbering the Interests or any assets or properties of the Company (or the authorization of Buyer by the holders of such Liens and other security interests to file UCC financing statement terminations) and termination of all guaranties granted in respect of any Pay-Off Debt; and

(vi)the written resignations of each of the directors and officers of the Company as Buyer may request.

(b)By Buyer. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, Buyer shall deliver or cause to be delivered the items set forth in clauses (i), (ii), (iii), and (v) below and Parent shall deliver or cause to be delivered the item set forth in clause (iv) below:

(i)pursuant to instructions set forth in the Funds Flow Memorandum, to Seller, the Closing Cash Consideration;

(ii)to the Persons and in the amounts set forth in the Funds Flow Memorandum, the Discharged Indebtedness;

(iii)to the Persons and in the amounts set forth in the Funds Flow Memorandum, the Seller Transaction Expenses;

(iv)to Seller, the Closing Equity Consideration in book-entry form; and

(v)the certificate contemplated by Section 6.3(c).

2.4Contingent Consideration.

    -23-

(a)Regulatory Milestone Payments. As additional consideration for the Transactions, upon the satisfaction of the criteria described in each subsection of this Section 2.4(a) (each, a “Regulatory Milestone”), Buyer shall, subject to the terms of this Section 2.4, pay or cause to be paid to Seller in cash the amount specified in such subsection (each such payment, a “Regulatory Milestone Payment”). Except as expressly specified below, each Regulatory Milestone Payment shall be payable only once [**]:

(i)[**];

(ii)[**];

(iii)[**];

(iv)[**];

(v)[**];

(vi)[**];

(vii)[**];

(viii)[**];

(ix)[**]; and

(x)[**].

(b)Sales Milestones. As additional consideration for the Transactions, upon the satisfaction of the criteria described in each subsection of this Section 2.4(b) (each, a “Sales Milestone”), Buyer shall, subject to the terms of this Section 2.4, pay or cause to be paid to Seller in cash the amount specified in such subsection (each such payment, a “Sales Milestone Payment”). For the avoidance of doubt, each Sales Milestone Payment shall be payable only once, provided that multiple Sales Milestone Payments may be payable for the same calendar year, if multiple Sales Milestones are first achieved in such calendar year:

(i)[**];

(ii)[**];

(iii)[**]; and

(iv)[**].

(c)Net Sales Payments. As additional consideration for the Transactions, on a Kv7 Product-by-Kv7 Product and country-by-country basis, with respect to the Net Sales of a particular Kv7 Product in a country until the latest of: (a) [**] after the First Commercial Sale of such Kv7 Product in such country, (b) the expiration of the last to expire of a Valid Claim of a Transferred Patent (or any Related Patent thereof) or a Kv7 Discovery Platform Patent (or any

    -24-

Related Patent thereof), in each case, that would be infringed by the manufacture, use, sale, importation or offer for sale in such country of such Kv7 Product and (c) [**] (the “Net Sales Term”), Buyer shall, subject to the terms of this Section 2.4, pay or cause to be paid to Seller in cash the amount based on the Net Sales of each Kv7 Product in such calendar quarter as follows (each such payment, a “Net Sales Payment” and together with the Regulatory Milestone Payments and the Sales Milestone Payments, the “Contingent Payments”):

(i)with respect to [**], on a Kv7 Product-by-Kv7 Product basis, the sum of:

(A)[**] of Net Sales of such Kv7 Product containing [**]; plus

(B)[**] of Net Sales of such Kv7 Product containing [**] in excess of [**]; plus

(C)[**] of Net Sales of such Kv7 Product containing [**] in excess of [**]; plus

(D)[**] of Net Sales of such Kv7 Product containing [**] in excess of [**]; plus

(E)[**] of Net Sales of such Kv7 Product containing [**] in excess of [**]; and

(ii)with respect to each Other Kv7 Product, on an Other Kv7 Product-by-Other Kv7 Product basis, the sum of:

(A)[**] of Net Sales of such Other Kv7 Product; plus

(B)[**] of Net Sales of such Other Kv7 Product in excess of [**]; plus

(C)[**] of Net Sales of such Other Kv7 Product in excess of [**]; plus

(D)[**] of Net Sales of such Other Kv7 Product in excess of [**].

(d)Net Sales Payment Adjustments. The following adjustments will be made, on a Kv7 Product-by-Kv7 Product and country-by-country basis, to the Net Sales Payments:

(i)Third Party Rights. If it is necessary or reasonably useful for Buyer to license one or more Patents or any Know-How from one or more third parties (other than a Patent or Know-How to which Buyer is already granted a license or sublicense as of the Execution Date) in order to use, develop, commercialize, market, sell, or otherwise exploit the Kv7 Compound or the Kv7 Products, whether directly or through any Affiliate of Buyer, then Buyer may, in its sole discretion, negotiate and obtain a license under such Patent(s) or Know-How (each such third party license

    -25-

referred to herein as an “Additional Third Party License”). The Net Sales Payments otherwise payable to Seller under this Agreement with respect to Net Sales of a given Kv7 Product in a given country will be reduced by [**] of the amounts payable to third parties pursuant to any Additional Third Party License, such reduction to continue until all such amounts have been expended, provided, that in no event (without prejudice to the remedies and limitations contained in Article VIII) will the total amount payable to Seller as a Net Sales Payment for any Kv7 Product be less than [**] of the amount otherwise payable for such Kv7 Product as a result of such reduction for amounts payable pursuant to any Additional Third Party Licenses.

(ii)Generic Entry. For any Net Sales Payments otherwise payable to Seller under this Agreement with respect to Net Sales based on sales of a Kv7 Product in a given country, the Net Sales Payments owed with respect to such Kv7 Product in such country will be reduced by [**] for the remainder of the applicable Net Sales Term, but only for so long as a Generic Product is being sold in that country.

(iii)Valid Claim Stepdown. With respect to each Kv7 Product in any particular country, if at any time such Kv7 Product is not covered by a Valid Claim of a Transferred Patent (or any Related Patent thereof) or a Kv7 Discovery Platform Patent (or any Related Patent thereof) in such country, any Net Sales Payments owed with respect to such Kv7 Product in such country shall be reduced by [**] for the remainder of the applicable Net Sales Term upon the expiration of the last applicable Valid Claim of a Transferred Patent (or any Related Patent thereof) or Kv7 Discovery Platform Patent (or any Related Patent thereof) in such a country.

(iv)Cumulative Reduction Floor. In no event (without prejudice to the remedies and limitations contained in Article VIII) will the aggregate Net Sales Payments due to Seller with respect to any calendar quarter during the Net Sales Term for a given Kv7 Product in a given country be reduced under this Section 2.4(d) by more than [**] of the amount that otherwise would have been due and payable to Seller with respect to such calendar quarter for such Kv7 Product under Section 2.4(c). Notwithstanding the foregoing, any excess amounts that would have otherwise been deducted from the Net Sales Payments with respect to such calendar quarter with respect to a given Kv7 Product in a given country but for this Section 2.4(d)(iv) shall be deducted from the Net Sales Payment payable to Seller with respect to successive calendar quarters with respect to such Kv7 Product in such country until the earlier of (A) such excess amounts having been deducted in full or (B) the end of the applicable Net Sales Term.

(e)Payment of Contingent Consideration.

(i)Payment of Regulatory Milestone Payments. Buyer shall deliver, or cause to be delivered, written notice to Seller of the achievement of any Regulatory Milestone no later than [**] after the occurrence thereof, and, subject to Section 2.4(h), within 30 days of the delivery of such notice, Buyer shall deliver, or cause to be delivered, the applicable Regulatory Milestone Payment to Seller. In no event shall any Regulatory Milestone Payment be paid more than once [**]. If at any time Seller believes that any Regulatory Milestone has been achieved and the applicable Regulatory Milestone Payment has not been delivered (a “Milestone Dispute”) pursuant to the terms

    -26-

of this Section 2.4(e) it shall deliver to Buyer a written statement (an “Earn-Out Dispute Notice”) setting forth with reasonable supporting detail the basis for such belief. In the case of any Milestone Dispute which is reasonably identifiable by Seller based solely on the facts contained in an annual progress report which has been delivered by Buyer pursuant to Section 2.4(j) or in an Annual Report, such Earn-Out Dispute Notice shall be provided within [**] following the date on which Seller receives such annual progress report or the filing of such Annual Report; provided that Seller may assert any other Milestone Dispute (which was not reasonably identifiable by Seller based on the facts contained in an annual progress report delivered by Buyer pursuant to Section 2.4(j) or in an Annual Report) at any time. Any dispute in connection with such Earn-Out Dispute Notice shall be resolved in accordance with Section 2.4(f). No Regulatory Milestone Payment that is the subject of an Earn-Out Dispute Notice shall be payable until the resolution of such Earn-Out Dispute Notice.

(ii)Payment of Sales Milestone Payments and Net Sales Payments.

(A)Within 60 days following the date on which Parent files the Public Financial Statements with respect to each calendar quarter, Buyer shall prepare and deliver to Seller a good-faith calculation of the amount of the Net Sales (whether such amount is positive or zero) attributable to each Kv7 Product and any applicable Sales Milestone Payments (if the quarterly statement is for year end) and Net Sales Payments (a “Net Sales Statement”). The Parties acknowledge and agree that each Net Sales Statement, and the component items and calculations therein, shall be prepared in a manner consistent with the terms of this Agreement.

(B)If Seller has any objection to any Net Sales Statement or the calculations of the Sales Milestone Payments or Net Sales Payments set forth therein, it shall deliver to Buyer an Earn-Out Dispute Notice setting forth with reasonable supporting detail the basis for such objection within 20 Business Days following receipt of such Net Sales Statement (such period, the “Earn-Out Review Period”). During the Earn-Out Review Period, at Seller’s request, in order to allow Seller to verify the calculations set forth in the Net Sales Statement, Buyer shall provide copies of any records or other documentation reasonably requested by Seller that were used by Buyer in making such calculations. Subject to Section 2.4(h), if Seller fails to deliver to Buyer an Earn-Out Dispute Notice prior to the expiration of the Earn-Out Review Period or otherwise earlier notifies Buyer in writing that Seller has no disputes or objections to the Net Sales Statement, the calculations set forth therein, including any Sales Milestone Payments or Net Sales Payments, shall be deemed final, and, within 30 days of the expiration of the Earn-Out Review Period or such earlier written notice that Seller has no disputes or objections, Buyer shall deliver, or cause to be delivered, to Seller in accordance with the instructions set forth in the Funds Flow Memorandum (as may be updated by Seller in a written notice followed by oral confirmation) any Sales Milestone Payment and Net Sales Payment as calculated in the Net Sales Statement. No Sales Milestone Payment or Net Sales Payment that is the

    -27-

subject of an Earn-Out Dispute Notice shall be payable until the resolution of such Earn-Out Dispute Notice.

(C)Each Sales Milestone Payment is payable only once, regardless of the number of times the Kv7 Products achieve the corresponding Sales Milestone. If more than one Sales Milestone is first achieved with respect to the same calendar year, Buyer shall pay each corresponding Sales Milestone Payment for such year.

(iii)Method of Payment.

(A)At the election of Buyer (subject solely to the consent of Parent), subject to clause (C) below, Buyer may choose to pay, or cause to be paid, any Regulatory Milestone Payments and Sales Milestone Payments in cash, Parent Shares or a combination of both, so long as the aggregate Market Price of the Parent Shares as of the date of issuance thereof is equal to the applicable Regulatory Milestone Payment or Sales Milestone Payment; provided, that the amount owed by Buyer in respect of a Regulatory Milestone Payment or a Sales Milestone Payment shall be increased by [**] to the extent that Buyer pays such Regulatory Milestone Payment or Sales Milestone Payment with Parent Shares.

(B)Buyer shall pay, or cause to be paid, all Net Sales Payments in cash in immediately available funds in accordance with the instructions set forth in the Funds Flow Memorandum (as may be updated by Seller in a written notice followed by oral confirmation).

(C)The Parties acknowledge and agree that Parent shall not issue Parent Shares in an amount that would require the shareholder approval of such issuance pursuant to Rule 312.03 of the NYSE Listed Company Manual unless Parent has first obtained such required shareholder approval. Regulatory Milestone Payments and Sales Milestone Payments may be made in Parent Shares only if both of the following conditions are satisfied:

(AA) Parent Shares are listed on the NYSE on the date of issuance; and

(BB) Parent has an effective Form S-3 Registration Statement filed with the SEC on the date of issuance.

Seller hereby agrees to deliver a representation letter affirming the representations and warranties set forth in Sections 3.26 through 3.31 in connection with the issuance of any Earn-Out Shares; provided that the representations and warranties contained in Section 3.28 shall not be affirmed by Seller with respect to any Parent Shares previously acquired by Seller pursuant to the provisions of this Agreement.

    -28-

(D)Parent hereby agrees to issue any Parent Shares hereunder as elected and consented to in accordance with clause (A) above and required in connection with the Regulatory Milestone Payments and Sales Milestone Payments.

(f)Earn-Out Disputes.

(i)If Seller delivers an Earn-Out Dispute Notice pursuant to Section 2.4(e)(i) or Section 2.4(e)(ii)(B), Buyer and Seller shall, for a period of 10 Business Days (or such longer period as Buyer and Seller may agree in writing) following delivery of such Earn-Out Dispute Notice (the “Earn-Out Resolution Period”), attempt in good faith to resolve their differences, and any such resolution shall be conclusive, final and binding on all Parties absent manifest error. Any disputed items agreed to by Buyer and Seller in writing, together with, in the case of an Earn-Out Dispute Notice delivered pursuant to Section 2.4(e)(ii)(B), any items or calculations set forth in the Net Sales Statement not disputed or objected to Seller in such Earn-Out Dispute Notice, are collectively referred to herein as the “Earn-Out Resolved Matters.” Any Earn-Out Resolved Matters shall be conclusive, final and binding on all Parties absent manifest error, except, in the case of an Earn-Out Dispute Notice delivered pursuant to Section 2.4(e)(ii)(B), to the extent such component could be affected by other components of the calculations set forth in the Net Sales Statement that are the subject of such Earn-Out Dispute Notice. If at the end of the Earn-Out Resolution Period, Buyer and Seller have been unable to resolve any differences that they may have with respect to the matters specified in the Earn-Out Dispute Notice, either of Buyer or Seller may, upon written notice to the other, refer all matters that remain in dispute with respect to the Earn-Out Dispute Notice to be exclusively and definitively resolved, without any recourse to appeal, by final and binding arbitration (the “Earn-Out Arbitration”) pursuant to Section 2.4(f)(ii).

(ii)Any Earn-Out Arbitration shall be seated in the County of New York, New York, where the arbitration award shall be rendered. The arbitration shall be administered by the International Court of Arbitration of the International Chamber of Commerce (“ICC”) in accordance with the Rules of Arbitration of the ICC (“Arbitration Rules”), as in effect as of the date of commencement of the arbitration, as modified by this Agreement or mutual agreement of the Parties. The law of this arbitration clause shall be the Law of the State of Delaware. The arbitration shall be conducted in the English language, though documents or testimony may be submitted in other languages if a translation to English is provided. The arbitration panel shall be composed of three arbitrators. The first arbitrator shall be appointed by the claimant. The second arbitrator shall be appointed by the respondent. The third arbitrator (who shall act as chairman) shall be appointed by the two party-appointed arbitrators, within 15 calendar days from the date of confirmation of the second party-appointed arbitrator. If any party fails to appoint an arbitrator within the required period, or if the two arbitrators cannot reach an agreement with respect to the third arbitrator within the applicable periods, the appointment shall be made by the ICC pursuant to the Arbitration Rules. To the extent that an Earn-Out Arbitration involves more than one party as claimant, such claimants shall jointly appoint the first arbitrator. To the extent that any dispute involves more than one respondent, such respondents shall jointly appoint the second arbitrator. The Parties

    -29-

consent to the consolidation of arbitrations commenced hereunder or under any of the other Transaction Documents pursuant to the Arbitration Rules. Any award of the arbitration panel must be in writing and state the grounds upon which it is based (in each case, a “Final Award”). In no event shall any Final Award exceed the amount in dispute with respect to the applicable Contingent Payment together with any Arbitration Fees (defined below). The Final Award shall be final and binding on the Parties and their successors, and a judgment upon the Final Award may be recognized and enforced in any court of competent jurisdiction. The fees and expenses of the arbitration and other reasonable and documented costs of the party which has prevailed in such arbitration (the “Arbitration Fees”), including reasonable attorney’s fees, shall be borne as established by the arbitration panel.

(iii)Subject to Section 2.4(h), within five Business Days of the resolution or final determination of all matters set forth in an Earn-Out Dispute Notice, Buyer shall pay, or cause to be paid, to Seller in immediately available funds, any amounts payable to Seller as set forth in the Final Award.

(g)Transferability.

(i)The right of Seller to receive the Contingent Payments (i) is solely a contractual right and will not be evidenced by a certificate or other instrument, (ii) does not represent any equity or ownership interest in Parent, Buyer, the Company or any of their respective Affiliates and (iii) may not be sold, assigned, transferred, distributed, pledged, encumbered or in any other manner transferred or disposed of, in whole or in part, except as expressly set forth in Section 2.4(g)(ii) and Section 2.4(g)(iii).

(ii)Seller shall have the right to transfer all (but not less than all) of its right to receive Net Sales Payments hereunder (A) to a single Affiliate of Seller or (B) subject to Section 2.4(g)(iii), for cash to a single third party (a “Net Sales Purchaser”) that (I) does not operate in the biopharmaceutical industry, (II) has not filed a Schedule 13D with respect to Parent or any of its Affiliates, (III) has not publicly disclosed a short position in Parent Shares during the prior three years, (IV) has not run (or publicly announced an intention to run) a proxy contest, an unsolicited tender offer or consent solicitation with respect to any company in the prior three years and (V) has not conducted a “short attack campaign” or “short selling campaign” with respect to any company in the prior three years. For the avoidance of doubt, no transfer pursuant to this Section 2.4(g)(ii) shall impact or reduce Buyer’s rights to offset or reduce any Net Sales Payments pursuant to Section 2.4(h).

(iii)At least 25 Business Days prior to transferring Seller’s rights to receive Net Sales Payments to any Net Sales Purchaser, Seller shall give written notice (an “Offer Notice”) to Buyer. The Offer Notice shall disclose in reasonable detail the cash purchase price being paid by such Net Sales Purchaser, the other terms and conditions of the transfer and the identity, background and ownership of the proposed Net Sales Purchaser, and the Offer Notice shall constitute a binding offer to sell Seller’s rights to receive Net Sales Payments to Buyer on the terms and conditions provided in this Section 2.4(g)(iii). Buyer may elect to purchase (directly or through a designee) Seller’s rights to receive Net Sales Payments for the cash purchase price set forth in the Offer

    -30-

Notice by giving written notice of such election to Seller within 20 Business Days after the Offer Notice has been given to Buyer (the “ROFR Election Period”). If Buyer has not elected during the ROFR Election Period to purchase Seller’s rights to receive Net Sales Payments, Seller may transfer its rights to receive Net Sales Payments to the Net Sales Purchaser specified in the Offer Notice at a price and on terms no more favorable to the Net Sales Purchaser than specified in the Offer Notice during the 90-day period immediately following the ROFR Election Period. If Seller does not transfer its rights to receive Net Sales Payments within such 90-day period, such rights shall again be subject to the provisions of this Section 2.4(g)(iii) with respect to any subsequent transfer. If Buyer has elected during the ROFR Election Period to purchase Seller’s rights to receive Net Sales Payments, the transfer of such rights shall be consummated as soon as practicable after the delivery of the election notice to Seller and in no event later than the date proposed by the Net Sales Purchaser.

(h)Offset and Reduction of Contingent Payments.

(i)Notwithstanding Section 2.4(e) and Section 2.4(f)(iii), if at any time any Contingent Payment is payable pursuant to this Section 2.4 and any Buyer Indemnified Party has not yet received payment of any amount payable in respect of any claim pursuant to Section 8.2(a) as to which a Final Determination has been effected, subject to compliance with Section 8.2, Buyer may offset any such amount from such Contingent Payment and reduce the Contingent Payment accordingly.

(ii)Notwithstanding Section 2.4(e) and Section 2.4(f)(iii), if at the time any Contingent Payment is payable pursuant to this Section 2.4, any Pending Claimremains outstanding and there has been effected no Final Determination thereof, Buyer may, at its sole discretion, offset and reduce such Contingent Payment by the sum of all Open Claim Amounts and place such amount into an escrow account to secure its right of offset with an escrow agent (the “Set-Off Amount Escrow Agent”) which is mutually acceptable to Buyer and Seller (and with Buyer and Seller agreeing to enter into an escrow agreement governing such funds with customary terms that are mutually acceptable to Buyer and Seller) until such Pending Claims shall have been resolved or satisfied. Promptly following the Final Determination or satisfaction of any such Pending Claim, Buyer and Seller shall issue a joint instruction letter signed by Buyer and Seller to the Set-Off Amount Escrow Agent instructing the Set-Off Amount Escrow Agent to release such funds in accordance with such resolution.

(i)Commercially Reasonable Efforts; Buyer Obligations.

(i)Following the Effective Time, Buyer shall, and shall cause its Affiliates to, use Commercially Reasonable Efforts [**]. Notwithstanding the foregoing, the obligation of Buyer to use Commercially Reasonable Efforts shall not be deemed a guarantee that any Contingent Payments will be earned.

(ii)After the Closing, but subject to and without limiting the express obligations of Buyer under Section 2.4(i)(i), Buyer shall be entitled to conduct the Business in a manner that is in the best interests of it and its stockholders and shall have full control and sole discretion over all matters relating to the Kv7 Products, the operation

    -31-

of the Business and the use of Program Assets. Without limiting any express obligation of Buyer pursuant to Section 2.4(i)(i) after the Closing, Buyer is under no obligation to operate the Business to maximize the Contingent Payments. The Parties further acknowledge and agree that, despite the use by Buyer of its Commercially Reasonable Efforts in accordance with Section 2.4(i)(i), there is no assurance that any Contingent Payments will be realized by Seller and that neither Buyer nor any Affiliate or Representative thereof has promised or projected any specific amount. None of Buyer, its Affiliates or any of their respective Representatives owes any fiduciary duty to the Seller with respect to the Contingent Payments. Further, the Parties acknowledge that Buyer’s sole obligations with respect to any potential Contingent Payments are expressly set forth in this Section 2.4, and Buyer hereby disclaims (and Seller hereby waives and acknowledges and agrees to such disclaimer) any obligation to take any other action, or fail to take action, with respect to the Business, the Kv7 Products or the Program Assets or any other implied covenants or obligations with respect to such Contingent Payments. Seller agrees and acknowledges that, subject to Sections 2.4(i)(iii) and 2.4(i)(i), Buyer and its Affiliates may currently or in the future research, develop or commercialize products that are competitive with Kv7 Products and that nothing in this Agreement shall restrict Buyer and its Affiliates from researching, developing, acquiring or commercializing any such products that may be competitive with any Kv7 Products or from making any decisions with respect to such products that may adversely affect the value of the Contingent Payments.

(iii)Notwithstanding the foregoing, Buyer agrees that, for the period commencing on the Closing Date and expiring [**], Buyer shall not, and shall cause its Subsidiaries not to, and, so long as Buyer is an Affiliate of Parent, Parent shall not, and shall cause its Subsidiaries not to, [**].

(iv)[**].

(v)Any disputes arising under this Section 2.4(i) shall be resolved pursuant to Section 2.4(f)(ii).

(j)Progress Reports.

(i)     Following the Closing and until [**], Buyer shall provide Seller, within [**] following the end of each calendar year, with an annual written report of the efforts of Buyer and its Affiliates to achieve the Regulatory Milestones and their progress with respect thereto, as well as any progress toward achievement of goals or objectives in the Development Plan, which report shall generally describe the status of the development of each Kv7 Product. For the avoidance of doubt, such annual written report shall in all cases include a description of all material pre-clinical and clinical activities during the applicable calendar year, including descriptions and summaries of [**].

(k)Audit Rights.

(i)Buyer shall, and shall cause its Affiliates to, for a period of three years following the end of the calendar year to which they relate, keep true and accurate

    -32-

books of accounts, work papers, and other records containing information sufficient to review and calculate the Sales Milestone Payments, Net Sales Payments, Net Sales of the Kv7 Products, and all components of each Net Sales Statement (including the applicable calculation on a product-by-product and country-by-country basis). During the Earn-Out Review Period with respect to a calendar quarter and for a period of one year thereafter, Seller may engage a nationally recognized independent accounting firm chosen by Seller and reasonably acceptable to Buyer (the “Accounting Firm”) to audit the Company’s books and records with respect to such calendar quarter solely for the purpose of validating the accuracy of any Net Sales Statements.

(ii)Following Seller’s request of an audit pursuant to this Section 2.4(k) and subject to the execution and delivery by the Accounting Firm of a customary confidentiality agreement reasonably acceptable to Buyer, Buyer shall afford the Accounting Firm reasonable access to and an opportunity to examine such books and records of the Company as may be reasonably requested by the Accounting Firm, during regular business hours, in a manner designed to avoid disruption to the business of Buyer, the Company and their respective Affiliates for the sole purpose of validating the accuracy of any Net Sales Statement.

(iii)Each of Seller and the Buyer will be entitled to receive (substantially simultaneously) a full written report of the Accounting Firm with respect to its findings directly from the Accounting Firm, the contents of which shall be limited to such information as is reasonably necessary to inform the parties of any actual or potential discrepancies in calculating the Sales Milestone Payments and Net Sales Payments set forth in the Net Sales Statement and the amounts payable with respect to such calendar quarter pursuant to this Agreement. The contents of such report shall be subject to Section 2.4(m).

(iv)Seller shall bear the full cost of such audit, unless such audit discloses that either (A) a Sales Milestone was achieved but not reported by Buyer or (B) the amount of the Net Sales Payment set forth in the Net Sales Statement was less than [**] of the Net Sales Payment payable for such calendar quarter pursuant to this Agreement, in which case Buyer shall bear the reasonable cost of the Accounting Firm for such audit.

(v)Seller’s exercise of its audit rights under this Section 2.4(k) may not be conducted more than once for the same calendar quarter.

(vi)Any dispute between Seller and Buyer regarding the findings of an audit under this Section 2.4(k) shall be resolved in accordance with Section 2.4(f).

(l)Sale Transaction. If Buyer or any of its Affiliates enters into or consummates a Sale Transaction to a Qualified Purchaser, where such Qualified Purchaser irrevocably and unconditionally assumes and succeeds to, in a writing for the benefit Seller, all of the obligations of Buyer arising after such Sale Transaction under this Section 2.4 with respect to any Kv7 Products sold, transferred or licensed to such Qualified Purchaser pursuant to such Sale Transaction (any such transaction, a “Qualified Transaction”), then neither Buyer nor any of its Affiliates shall have any obligation for any periods following the date of consummation of

    -33-

such transaction with respect to such Kv7 Products pursuant to this Section 2.4. For the avoidance of doubt, nothing herein shall prevent Buyer or any of its Affiliates from entering into or consummating a Sale Transaction with a counterparty other than a Qualified Purchaser, after the consummation of which Buyer shall have no obligations under this Section 2.4, provided, that, unless the Sale Transaction is to a Related Party and the sales recognized by such Related Party are included in the definition of “Net Sales,” the consummation of such Sale Transaction shall be deemed to be a determination by Buyer to cease the development, marketing and sale of the applicable Kv7 Products for the purposes of determining compliance by Buyer with Section 2.4(i)(i).

(m)Confidentiality. From and after the Closing, Seller shall (and shall cause Representatives to) keep confidential all information provided to each such Person pursuant to this Section 2.4 (“Earn-Out Confidential Information”) and shall not disclose to any other Person, or use, any such information, directly or indirectly, except to the extent (i) such information was available, or has become available, to the public generally or was or is generally known in the industry, in each case other than by acts or omissions of Seller, any of their Affiliates, or any of such Person’s Representatives, (ii) such information is obtained by Seller or its Representatives from a third party who is not under an obligation of confidentiality to Buyer or its Affiliates with respect to such information, (iii) necessary to enforce Seller’s rights hereunder, including in connection with any Earn-Out Arbitration, (v) such information is independently developed by Seller or its Representatives without use of or reference to the Earn-Out Confidential Information, or (vi) required by Law or legal process, or pursuant to any subpoena or Order to be disclosed; provided, that, prior to making any such disclosure in the case of the foregoing clause (vi) Seller, to the extent legally permissible, shall, and shall cause its Affiliates and Representatives to, provide reasonable advance notice to Buyer and reasonable assistance to Buyer (at Buyer’s sole cost and expense, and without any obligation on the part of Seller to undertake litigation) in attempting to obtain a protective order or other appropriate remedy concerning such disclosure. In the event that such a protective order or other remedy is not obtained, Seller will, and will cause its Affiliates and Representatives to, as applicable, (A) furnish only such information that, on the advice of its legal counsel, is required by such Law, legal process, subpoena or Order to be disclosed and (B) use its commercially reasonable efforts (at the expense of Buyer) to obtain assurance that confidential treatment will be accorded to such information. Notwithstanding the foregoing, Seller may disclose Earn-Out Confidential Information to any assignee or transferee or potential assignee or transferee solely in connection with the sale or potential sale of Seller’s right to receive Net Sales Payments pursuant to Section 2.4(g)(ii), provided that such assignee or transferee or potential assignee or transferee (1) does not have an economic interest in any competing product and (2) agrees to obligations of confidentiality with respect to such Earn-Out Confidential Information enforceable by Buyer that are at least as stringent as those contained in this Section 2.4(m).

2.5True-Up Payment.

(a)If Seller continues to own any Closing Consideration Shares on December 1, 2022, it may deliver written notice to Buyer on December 1, 2022 or within five Business Days thereafter (the “True-Up Request Period”) requesting a one-time payment from Buyer (the “True-Up Payment”) in an amount equal to (i) the number of Closing Consideration Shares held by Seller at the end of the day on December 1, 2022, multiplied by (ii)(A) the Reference Price, minus (B) the sum of (I) the Market Price of the Parent Shares as of December

    -34-

1, 2022, plus (II) the aggregate amount of cash dividends declared in respect of each Parent Share with a record date between the Closing Date and December 1, 2022; provided, that notwithstanding the foregoing, the True-Up Payment amount shall be reduced by the product of (X) the amount (if any) by which the volume-weighted average sales price of all Closing Consideration Shares sold prior to December 1, 2022 exceeded the Reference Price, multiplied by (Y) the number of Closing Consideration Shares sold on or prior to December 1, 2022. If such notice is received during the True-Up Request Period, Buyer shall promptly, and in any event within ten Business Days, pay, or cause to be paid, the True-Up Payment to Seller in cash in accordance with the instructions set forth in the Funds Flow Memorandum (as may be updated by Seller in a written notice followed by oral confirmation); provided, that the True-Up Payment shall only be available to Seller if at no time between the date hereof and the payment of the True-Up Payment has Seller or any of its Subsidiaries maintained any short position in the Parent Shares or entered into any other derivative or other agreement, arrangement or understanding that hedges or transfers, in whole or in part, directly or indirectly, any of the economic consequences of ownership of Parent Shares (the “No-Hedging Condition”). The True-Up Payment, if any, shall be treated as adjustments to the consideration paid pursuant to the Transactions for Tax purposes.

(b)The Notice delivered by Seller in clause (a) shall provide a reasonably detailed reporting of, and support for, all sales of Closing Consideration Shares prior to December 1, 2022, including the price of such sales, and a certification of any executive officer of Seller that the No-Hedging Condition has not been violated. Seller acknowledges and agrees that it shall not be entitled to receive the True-Up Payment if the condition in the proviso in the foregoing sentence is violated.

(c)In the event that Parent changes the number of Parent Shares or securities convertible or exchangeable into or exercisable for Parent Shares issued and outstanding prior to December 1, 2022 as a result of a reclassification, stock split (including a reverse stock split), stock dividend or distribution, recapitalization, merger, issuer tender or exchange offer or other similar transaction, the True-Up Payment shall be equitably adjusted.

2.6Withholding. Notwithstanding any other provision of this Agreement, Buyer and any of its Affiliates shall be entitled to deduct and withhold from any consideration payable or otherwise deliverable pursuant to this Agreement such amounts as are required to be deducted or withheld therefrom under any provision of U.S. federal, state, local or non-U.S. Tax Law. Before making any such deduction or withholding, Buyer shall provide recipients reasonable advance written notice of the intention to make such deduction or withholding and shall cooperate with recipients using commercially reasonable efforts to establish an exemption from or reductions of such withholdings. To the extent any such amounts are so deducted or withheld and timely paid to the proper Governmental Entity in accordance with applicable Law, such amounts shall be treated for all purposes under this Agreement as having been paid to the Person to whom such amounts would otherwise have been paid.

    -35-

Article III

REPRESENTATIONS AND WARRANTIES OF SELLER

Except as set forth in the corresponding sections or subsections of the confidential disclosure letter delivered to Buyer by Seller and the Company prior to the Execution Date (the “Company Disclosure Letter”), Seller and the Company hereby represent and warrant to Buyer as of the Execution Date and as of the Closing (or in the case of representations and warranties that speak of a specified date, as of such specified date) as follows:

3.1Organization, Good Standing and Qualification. Each of Seller and the Company (a) is a legal entity duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization, (b) has all requisite corporate or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted and (c) is qualified to do business and, to the extent such concept is applicable, is in good standing as a foreign corporation or other legal entity in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except in the case of clauses (b) and (c) where the failure to be so qualified or in good standing, or to have such power or authority, would not, individually or in the aggregate, reasonably be expected to be material to the Company or the Business or prevent, materially delay or materially impair the consummation of the Transactions. Seller has made available to Buyer complete and correct copies of its and the Company’s certificates of formation and operating agreement or comparable governing documents, each as amended to the Execution Date (“Organizational Documents”), and each as so delivered is in full force and effect. The Company was formed solely for the purpose of completing the Transactions, has not conducted any business prior to the Execution Date and has no assets or Liabilities of any nature other than those incident to its formation and pursuant to this Agreement and the Transactions.

3.2Capital Structure. All of the outstanding Interests have been duly authorized and are validly issued, fully paid and nonassessable. Seller is the sole record and beneficial owner of all such issued and outstanding Interests as of the Execution Date and will be the sole record and beneficial owners of all of the Interests of the Company as of the Closing Date. Seller has good and valid title to all such Interests, free and clear of all Liens (other than any transfer restrictions imposed by federal and state securities laws), and upon delivery by Seller of such Interests at the Closing, good and valid title to such Interests will pass to Buyer. The Company has no Interests reserved for issuance, and the Company does not have any outstanding Equity Interests, bonds, debentures, notes or other obligations other than the Interests. There are no preemptive or other outstanding rights, options, warrants, agreements, arrangements or commitments of any character under which Seller is or may become obligated to sell, or giving any Person a right to acquire, or in any way dispose of, any of the Interests or any securities or obligations exercisable or exchangeable for, or convertible into, the Interests, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Except for this Agreement and the Company’s Organizational Documents, Seller is not a party to any Contracts with respect to the voting, purchase, dividend rights, disposition or transfer of the Interests. The Company does not have and has not at any time since its inception had any Subsidiaries or held any Equity Interests of any Person.

3.3Authority; Approval.

    -36-

(a)Each of Seller and the Company has all requisite corporate or similar power and authority and has taken all corporate or similar action necessary in order to execute, deliver and perform its obligations under this Agreement and each of the Transaction Documents to which it is a party. This Agreement has been, and each of the Transaction Documents to which it is a party will be at Closing, duly executed and delivered by Seller and the Company and, when executed and delivered by Buyer and the other parties hereto and thereto, will constitute a valid and binding agreement of Seller and the Company enforceable against Seller and the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance, preferential transfer, reorganization, moratorium and similar Laws relating to or affecting creditors’ rights and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) (the “Bankruptcy and Equity Exception”).

(b)The board of managers of Seller has unanimously approved this Agreement. Except for the Member Consent, no other company or equity holder proceedings are necessary to authorize this Agreement or to consummate the Transactions.

3.4Governmental Filings; No Violations.

(a)Other than the filings, notices, reports, consents, registrations, approvals, permits, expirations of waiting periods or authorizations which may be required (i) under the HSR Act, the Exchange Act and the Securities Act or state securities, takeover and “blue sky” Laws or (ii) to be made with the NYSE (collectively, the “Company Approvals”), no expirations of waiting periods under applicable Laws are required and no notices, reports or other filings are required to be made by Seller or the Company with, nor are any consents, registrations, approvals, permits or authorizations required to be obtained by Seller or the Company from, any Governmental Entity in connection with the execution, delivery and performance of this Agreement and the Transaction Documents by Seller or the Company or the consummation of the Transactions, or in connection with the continuing operation of the Business following the Execution Date, except those that the failure to make or obtain would not, individually or in the aggregate, reasonably be expected to be material to the Company or the Business.

(b)The execution, delivery and performance of this Agreement and the Transaction Documents by Seller and the Company do not, and the consummation of the Transactions will not, conflict with, or result in any breach or violation of or default (with or without notice, lapse of time, or both) under, or give rise to any right of termination, loss of rights, adverse modification of provisions, cancellation or acceleration of any obligation under, or result in the creation of a Lien on any of the assets of Seller, the Company or any of their Affiliates under any provision of (i) the Organizational Documents of Seller, the Company or any of their Affiliates, (ii) any Contract binding upon Seller, the Company or any of their Affiliates or (iii) assuming (solely with respect to performance of this Agreement and the Transaction Documents and consummation of the Transactions) receipt of the Company Approvals, any Laws to which Seller, the Company or any of their Affiliates is subject, except, in the case of clauses (ii) and (iii) above, for any breach, violation, default, termination, loss, adverse modification, cancellation, acceleration or creation that would not, individually or in the aggregate, reasonably be expected to be material to the Company or the Business. Section 3.4(b) of the Company Disclosure Letter sets forth a correct and complete list of Contracts pursuant to

    -37-

which consents or waivers are or may be required prior to consummation of the Transactions (whether or not subject to the exception set forth with respect to clauses (ii) and (iii) above).

3.5Financial Statements.

(a)Set forth in the Company Disclosure Letter are correct and complete copies of (i) the audited consolidated balance sheets of Seller and its Subsidiaries as of December 31, 2020 and December 31, 2019, and the related audited consolidated statements of operations and comprehensive loss, consolidated statements of members’ equity (deficit) and consolidated statements of cash flows for the 12-month periods then ended (collectively, the “Seller Financial Statements”); and (ii) the unaudited balance sheet of the Seller as of December 31, 2021 and the related statements of operations and comprehensive loss, consolidated statements of members’ equity (deficit) and consolidated statements of cash flow (collectively referred to as the “Seller Interim Financial Statements”).

(b) The Seller Financial Statements and Seller Interim Financial Statements (including the related notes and schedules thereto) fairly present the consolidated financial position of Seller and its consolidated Subsidiaries as of the date or period set forth therein and the consolidated balance sheets, consolidated statements of operations and comprehensive loss, consolidated statements of members’ equity (deficit) and consolidated statements of cash flows included in the Seller Financial Statements and Seller Interim Financial Statements (including any related notes and schedules thereto) fairly present the financial condition, results of operations, changes in members’ equity and cash flows of Seller and its consolidated Subsidiaries for the periods set forth therein, in each case in accordance with GAAP, consistently applied during the periods involved, except as may be noted therein, and subject, in the case of the Seller Interim Financial Statements, to normal and recurring year-end adjustments that will not, individually or in the aggregate, be material and the absence of disclosures normally made in notes to the Seller Financial Statements.

(c)Seller maintains a system of internal accounting controls sufficient to provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP.

(d)Seller has disclosed, based on its most recent evaluation of its internal accounting controls prior to the Execution Date, to Seller’s auditors and audit committee (i) any significant deficiencies and material weaknesses in the design or operation of internal controls that would be reasonably expected to adversely affect Seller’s ability to record, process, summarize and report financial information for inclusion in the applicable combined financial statements and (ii) any fraud, whether or not material, that involves any current or former employees who have (or had) a significant role in Seller’s internal controls over financial reporting. Since December 31, 2018, to the Knowledge of Seller, no material complaints from any source regarding accounting, internal accounting controls or auditing matters have been received by Seller. Seller has made available to Buyer a summary of all material complaints or concerns relating to other matters made since December 31, 2018.

3.6Absence of Certain Changes. From December 31, 2021 through the Execution Date, (a) Seller and its Subsidiaries have conducted the Business in the ordinary course, consistent with past practices, (b) there has not been any change, occurrence or

    -38-

development in the financial condition, properties, assets, Liabilities, business or results of operations or any other change, occurrence or development which has had, or would, individually or in the aggregate, reasonably be expected to have, a Material Adverse Effect and (c) there has not been any action taken by Seller or any of its Subsidiaries that, if taken during the period from the Execution Date through the Closing Date without Buyer’s consent, would constitute a breach of Section 5.1(b).

3.7No Undisclosed Liabilities.

(a)Seller does not have any Liabilities related to the Business other than Liabilities that (i) have been adequately reserved against or reflected in the Seller Financial Statements, (ii) were incurred since December 31, 2021 in the ordinary course of business consistent with past practice, (iii) have been incurred pursuant to this Agreement or in connection with the Transactions, or (iv) would not, individually or in the aggregate, reasonably be expected to be material to the Company or the Business.

(b)The Company does not have any Liabilities other than Liabilities arising under this Agreement.

3.8Litigation.

(a)There are no Actions pending or, to the Knowledge of Seller, threatened against Seller, the Company or any of their Subsidiaries (nor has any Governmental Entity indicated to Seller or any of its Affiliates an intention to initiate an Action) that (i) would, individually or the in the aggregate, reasonably be expected to be material to the Company or the Business or (ii) would reasonably be expected to prevent, materially delay or materially impair the consummation of the Transactions. To the Knowledge of Seller, no event has occurred or circumstances exist that would reasonably be expected to give rise to, or serve as a basis for, any such Action.

(b)Neither Seller nor any of its Subsidiaries is a party to or subject to the provisions of any Order that (i) restricts the manner in which Seller and its Subsidiaries conduct their businesses in any material respect, (ii) has been, or would, individually or in the aggregate, reasonably be expected to be, material to the Company or the Business or (iii) would reasonably be expected to prevent, materially delay or materially impair the consummation of the Transactions. To the Knowledge of Seller, no event has occurred or circumstances exist that would reasonably be expected to give rise to, or serve as a basis for, any such Order.

3.9Employee Benefits.

(a)Section 3.9(a) of the Company Disclosure Letter sets forth a correct and complete list of each Benefit Plan and separately identifies each Benefit Plan that provides retiree or post-employment medical, disability, life insurance or other welfare benefits to any Person. Such Benefit Plans are the only Benefit Plans that cover employees of the Business. Except as set forth in Section 3.9(a) of the Company Disclosure Letter as a “Company Benefit Plan,” none of the Benefit Plans is sponsored or maintained by, or required to be contributed to by the Company.

    -39-

(b)With respect to each Benefit Plan set forth in Section 3.9(a) of the Company Disclosure Letter, each such Benefit Plan has been operated and administered in all material respects in accordance with the terms of such Benefit Plan and applicable Laws and applicable administrative or governmental rules and regulations, including ERISA and the Code, except to the extent any noncompliance could not reasonably be expected to result in any material Liability to the Company or the Buyer.

(c)There are no pending or, to the Knowledge of the Seller, claims (other than routine claims for benefits) or proceedings threatened by a Governmental Entity by, on behalf of or against any Benefit Plan or any trust related thereto that could reasonably be expected to result in any Liability to the Buyer.

(d)Each ERISA Plan that is intended to be qualified under Section 401(a) of the Code has been determined by the IRS to be qualified under Section 401(a) of the Code and, to the Knowledge of Seller, nothing has occurred that would adversely affect the qualification or tax exemption of any such Benefit Plan. With respect to any ERISA Plan, the Company has not engaged in a transaction in connection with which the Company reasonably could be subject to either a civil penalty assessed pursuant to Section 409 or Section 502(i) of ERISA or a tax imposed pursuant to Section 4975 or Section 4976 of the Code.

(e)Neither the Company nor any ERISA Affiliate has contributed (or had any obligation of any sort) in the last six years to a plan that is subject to Section 412 of the Code or Section 302 or Title IV of ERISA.

(f)Neither the Seller nor any ERISA Affiliate has maintained, established, participated in or contributed to, or is or has been obligated to contribute to, or has otherwise incurred any obligation or liability (including any contingent liability) under, any multiemployer plan (as defined in Section 3(37) of ERISA) in the last six years.

(g)No Benefit Plan is a “multiple employer welfare arrangement” (as defined in Section 3(40) of ERISA).

(h)Except as required by applicable Law, no Benefit Plan provides retiree or post-employment medical, disability, life insurance or other welfare benefits to any Person, and the Company does not have any obligation to provide such benefits. To the extent that the Company sponsors such plans, the Company has reserved the right to amend, terminate or modify at any time each Benefit Plan that provides retiree or post-employment disability, life insurance or other welfare benefits to any Person.

(i)Each Benefit Plan that is a “nonqualified deferred compensation plan” (within the meaning of Section 409A of the Code) is in documentary compliance with, and has been operated and administered in all respects in compliance with, Section 409A of the Code and the guidance issued by the IRS provided thereunder.

(j)Neither the execution and delivery of this Agreement nor the consummation of the Transactions could, either alone or in combination with another event, (i) entitle any Employee to severance pay or any material increase in severance pay, (ii) accelerate the time of payment or vesting, or materially increase the amount of compensation

    -40-

due to any such Employee, (iii) directly or indirectly cause the Company to transfer or set aside any assets to fund any material benefits under any Benefit Plan, (iv) otherwise give rise to any material liability under any Company Benefit Plan or (v) limit or restrict the right to merge, materially amend, terminate or transfer the assets of any Company Benefit Plan on or following the Closing.

(k)Neither the execution and delivery of this Agreement nor the consummation of the Transactions could, either alone or in combination with another event, result in the payment of any amount that could, individually or in combination with any other such payment, constitute an “excess parachute payment” as defined in Section 280G(b)(1) of the Code.

(l)The Company does not have any obligation to provide, and no Benefit Plan or other agreement provides any individual with the right to, a gross up, indemnification, reimbursement or other payment for any excise or additional taxes, interest or penalties incurred pursuant to Section 409A or Section 4999 of the Code or due to the failure of any payment to be deductible under Section 280G of the Code.

(m)No Benefit Plan is maintained outside the jurisdiction of the United States or covers any Employees who reside or work outside of the United States.

3.10Labor Matters.

(a)Neither Seller nor any of its Subsidiaries is a party to or bound by any collective bargaining agreement or other agreement with a labor union or like organization, and to the Knowledge of Seller, there are no activities or proceedings by any individual or group of individuals, including representatives of any labor organizations or labor unions, to organize any employees of Seller or any of its Subsidiaries.

(b)During the prior five years, there has not been any strike, lockout, slowdown, work stoppage, unfair labor practice or other labor dispute, or arbitration or grievance pending or, to the Knowledge of Seller, threatened. To the Knowledge of Seller, each of Seller and its Subsidiaries is in compliance with all applicable Laws respecting labor, employment and employment practices, terms and conditions of employment, wages and hours (including classification of employees, discrimination, harassment and equitable pay practices), and occupational safety and health. Neither Seller nor any of its Subsidiaries has incurred any liability or obligation under the Worker Adjustment and Retraining Notification Act or any similar state or local Law that remains unsatisfied.

(c)None of Seller or any of its Subsidiaries is or has in the past three years been party to a settlement agreement with a current or former officer, employee or independent contractor that involves allegations relating to sexual harassment by an officer or employee of Seller or any of its Subsidiaries. In the prior three years, no allegations of sexual harassment have been made against a current or former officer or employee of Seller or any of its Subsidiaries.

3.11Compliance with Laws; Licenses. The Business has not been, and is not being, conducted in material violation of any Laws. Seller and its Subsidiaries have not received

    -41-

any written communication alleging any noncompliance with any such Laws that has not been cured as of the Execution Date. Each of Seller and each of its Subsidiaries has obtained and is in compliance with, and as of the Closing the Company will have obtained and will be in compliance with, all permits, licenses, certifications, approvals, registrations, consents, authorizations, franchises, variances, exemptions and orders issued or granted by a Governmental Entity necessary to conduct the Business as currently conducted except where such non-compliance, individually or in the aggregate, would not, individually or in the aggregate, reasonably be expected to be material to the Company or the Business.

3.12FCPA and Other Anti-Bribery Laws.

(a)Each of Seller, its Subsidiaries and their respective owners, directors, employees (including officers), and, to the Knowledge of Seller, agents, distributors, consultants and other intermediaries while acting in connection with the Business is in compliance with the FCPA and the Other Anti-Bribery Laws and during the previous five years has not made, authorized, solicited or received any unlawful bribe, rebate, payoff, influence payment or kickback in connection with the Business.

(b)None of Seller, any of its Subsidiaries or any of their respective owners or directors, employees (including officers), or, to the Knowledge of Seller, agents, distributors, consultants or other intermediaries while acting in connection with the Business has during the previous five years (i) established or maintained any unlawful fund of corporate monies or other properties, or (ii) paid, offered or promised to pay, or authorized or ratified the payment of, or solicited or received, directly or indirectly, any monies or anything else of value to any official or Representative (including anyone elected, nominated or appointed to be a Representative) of, or any Person acting in an official capacity for or on behalf of, any Governmental Entity (including any official or employee of any entity directly or indirectly owned or controlled by any Governmental Entity), any royal or ruling family member or any political party, political party official or candidate for public or political office, or any officer, director, employee or Representative of any other company or organization without that company’s or organization’s knowledge and consent, in each case, for the purpose of (A) improperly influencing any act or decision of any such Governmental Entity or Person to obtain or retain business, (B) inducing the recipient to violate a lawful duty or duty of loyalty to the recipient’s employer, or (C) securing any other improper benefit or advantage, in the case of each of the foregoing clauses (A), (B) and (C), in connection with the Business.

(c)There have been no Actions against Seller or any of its Subsidiaries or any of their respective directors or officers or, to the Knowledge of Seller, threatened against Seller or any of its Subsidiaries or any of their respective directors or officers, and there are no Actions against Seller or any of its Subsidiaries or any of their respective directors or officers pending by or before any Governmental Entity or, to the Knowledge of the Seller, threatened against Seller or any of its Subsidiaries or any Indemnified Party by any Governmental Entity, in each case with respect to the FCPA and the Other Anti-Bribery Laws.

(d)Neither Seller nor any of its Subsidiaries has made a voluntary disclosure to a Governmental Entity related to the FCPA or any of the Other Anti-Bribery Laws.

3.13Trade Control and Sanctions Regulation.

    -42-

(a)Seller and each of its Subsidiaries are in compliance and have during the previous five years been in compliance with the Trade Control and Sanctions Regulations.

(b)Section 3.13(b) of the Company Disclosure Letter sets forth a correct and complete list, as of the Execution Date, of active Licenses held or relied upon by the Seller or any of its Subsidiaries under the Trade Control and Sanctions Regulations, if any.

(c)Within the past five years, there have not been any Actions against Seller or any of its Subsidiaries or any Indemnified Party or, to the Knowledge of Seller, threatened against Seller or any of its Subsidiaries or any of their respective directors or officers, and there are no Actions against Seller or any of its Subsidiaries or any of their respective directors or officers pending by or before any Governmental Entity or, to the Knowledge of Seller, threatened against Seller or any of its Subsidiaries or any of their respective directors or officers by any Governmental Entity, in each case with respect to the Trade Control and Sanctions Regulations.

(d)Neither Seller nor any of its Subsidiaries has within the past five years engaged in, nor is now engaging in, any dealings or transactions (i) with any Person that at the time of the dealing or transaction is or was the subject or target of sanctions administered by OFAC, or (ii) in or with Cuba, Iran, Sudan, Syria, North Korea or the Crimea region of Ukraine, the government of any of these jurisdictions or the Government of Venezuela, or any Person who is resident in or a blocked national of any of these jurisdictions.

(e)Neither Seller nor any of its Subsidiaries has within the past five years made a disclosure to a Governmental Entity related to actual or potential noncompliance with the Trade Control and Sanctions Regulations, whether a voluntary disclosure, directed disclosure or in response to a subpoena or other request from a Governmental Entity.

3.14Development Matters.

(a)All Kv7 Compounds existing as of the Execution Date (collectively, the “Company Compounds”) are being, and at all times have been, developed, tested, processed, manufactured, stored, and shipped, as applicable, in material compliance with all applicable Laws, including all Healthcare Laws. No Company Compounds are currently in commercial distribution by or on behalf of Seller, or to the Knowledge of Seller.

(b)Seller has made available to Buyer all material facts, data and information known to Seller relating to the efficacy, toxicity, stability, synthesis and selectivity of [**].

(c)No facts, data or information materially adverse to the Kv7 Discovery Platform and known to Seller have been omitted from disclosures made to Buyer and its Affiliates prior to the Closing Date.

(d)All analyses, presentations and results that have been provided by Seller to Buyer and its Affiliates were unbiased and complete with respect to the efficacy, toxicity, stability, synthesis and selectivity of [**].

    -43-

(e)Any facts, data or information materially adverse to the Kv7 Discovery Platform and known to Seller have been specifically identified and disclosed to Buyer or its Affiliates.

(f)Seller and its Subsidiaries have not received or been subject to any notice, warning, administrative proceeding, order, complaint, or other written communication of any actual or threatened Action, investigation or allegation that Seller or any of its Subsidiaries has violated any applicable Law related to the Company Compounds or Program Assets. To the Knowledge of Seller, no Person has filed or has threatened to file against Seller or any of its Subsidiaries any Action under any federal or state whistleblower statute or equivalent Law in the applicable jurisdiction. None of Seller or any of its Subsidiaries or any officer, employee, agent or clinical investigator thereof has been suspended, debarred, excluded or convicted of any crime or engaged in any conduct that would reasonably be expected to result in debarment under 21 U.S.C. Section 335a, exclusion under 42 U.S.C. Section 1320a-7 or any similar Action.

(g)All preclinical work related to the Company Compounds sponsored or conducted by Seller and its Subsidiaries have been and are being conducted in, and all Company Compounds used in connection with such investigations are and have been in, material compliance with all applicable Laws, including Good Laboratory Practices, other Healthcare Laws, applicable research protocols and corrective action plans. No clinical trials are being or have been sponsored or conducted by or on behalf of Seller, or to the Knowledge of Seller, in each case involving any Company Compound. Seller and its Subsidiaries have not received any notice from any Governmental Entity, and no Governmental Entity has issued any such notice to any other Person that any Company Compound cannot be developed, investigated, or shipped substantially in the manner presently performed or contemplated by the Company.

3.15Material Contracts.

(a)Section 3.15(a) of the Company Disclosure Letter sets forth a correct and complete list of each of the following Contracts related to the Business to which Seller or any of its Subsidiaries is a party or by which Seller or any of its Subsidiaries or any of the Program Assets is bound as of the Execution Date (each, a “Material Contract”):

(i)each Contract pursuant to which Seller or any of its Subsidiaries currently leases or subleases real property to or from any Person;

(ii)each Contract (or group of related Contracts with respect to a single transaction or series of related transactions) that involves future payments, other residual Liability, performance or services or delivery of goods or materials to or by Seller or any of its Subsidiaries of any amount or value reasonably expected to exceed [**] in any future 12-month period or [**] over the life of the Contract;

(iii)each Contract pursuant to which Seller or any of its Subsidiaries has received grant funding or any other revenues in excess of [**];

(iv)each Contract pursuant to which Seller or any of its Subsidiaries could be required to pay any royalties, earn-out payments or other deferred or contingent consideration to any Person;

    -44-

(v)each Contract with any academic institution or research center (or any Person working for or on behalf of any of the foregoing);

(vi)each Contract that contains a covenant restricting any research, development, product design, manufacturing, supply, production, distribution, marketing, sale or commercialization of any Program Assets;

(vii)each Contract relating to the conduct of research and development activities or clinical trials with respect to any Program Assets, or otherwise involving the development of any material Intellectual Property Rights related to the Business on behalf or at the request of Seller or any of its Subsidiaries;

(viii)each Contract pursuant to which Seller or any of its Subsidiaries is a party, or is otherwise bound, and the ultimate contracting counterparty of which is a Governmental Entity (including any subcontract with a prime contractor or other subcontractor that is a party to any such contract);

(ix)each Contract pursuant to which Seller or any of its Subsidiaries grants or receives a license or other right under any Intellectual Property Rights that are material to the Business, other than non-exclusive licenses to commercially available Software granted to Seller or any of its Subsidiaries;

(x)each Contract concerning the establishment or operation of a partnership, strategic alliance, collaboration relationship, joint venture, limited liability company or similar agreement or arrangement;

(xi)each Contract entered into at any time within the three-year period prior to the Execution Date pursuant to which Seller or any of its Subsidiaries acquired another operating business and each other Contract entered into at any time prior to the Execution Date pursuant to which Seller or any of its Subsidiaries acquired another operating business;

(xii)each Contract that limits or purports to limit, directly or indirectly, the freedom of Seller or any of its Subsidiaries (or, after the Closing, Buyer or any of its Affiliates) to compete in any line of business or with any Person or engage in any line of business within any geographic area, or restricts, directly or indirectly, Seller’s or any of its Subsidiaries’ (or, after the Closing, Buyer’s or any of its Affiliates’) ability to solicit or hire any Person or solicit business from any Person, and each Contract that could require the disposition of any material assets or line of business of Seller or its Subsidiaries (or, after the Closing, Buyer or any of its Subsidiaries);

(xiii)each Contract obligating Seller or any of its Subsidiaries to purchase or otherwise obtain any product or service exclusively from a single third party or granting any third party the exclusive right to develop, market, sell or distribute Seller’s or any of its Subsidiaries’ products or services;

    -45-

(xiv)each Contract containing a “most favored nation” or similar provision in favor of any counterparty of Seller or any of its Subsidiaries or a limitation on Seller’s or any of its Subsidiaries’ ability to increase prices;

(xv)each Contract creating Indebtedness or guaranteeing any such obligations;

(xvi)each Contract creating or granting a Lien on any Program Assets, other than purchase money security interests in connection with the acquisition of equipment in the ordinary course of business consistent with past practice;

(xvii)each Contract containing covenants requiring capital expenditures;

(xviii)each Contract related to any settlement of any Action;

(xix)each Contract that was not negotiated and entered into on an arm’s-length basis;

(xx)each Contract that would reasonably be expected to prevent, materially delay or materially impair the consummation of the Transactions; and

(xxi)each collective bargaining agreement or Contract with any union, staff association, works council or other agency or representative body certified or otherwise recognized for the purposes of bargaining collectively.

(b)Seller has previously delivered to, or made available to, Buyer current and complete copies of each written Material Contract and a detailed written description of each oral Material Contract, in each case, including all amendments and waivers thereto. Each Material Contract is valid, binding and enforceable against Seller or its Subsidiaries, as the case may be, and, to the Knowledge of Seller, each other party thereto, and is in full force and effect. Other than any consent or waiver that may be required in connection with the consummation of the Transactions, there is no breach or violation of, or default under, any such Material Contract by Seller or any of its Subsidiaries and no event has occurred that, with the lapse of time or the giving of notice or both, would constitute a default thereunder by Seller or any of its Subsidiaries or would permit or cause the termination, non-renewal or modification thereof or acceleration or creation of any right or obligation thereunder. To the Knowledge of Seller, no counterparty to any Material Contract is in breach or violation thereof.

3.16Assets.

(a)Seller or its Subsidiaries have good title to, or enforceable license to use, the personal tangible properties that are the Program Assets, in each case free and clear of all Liens, except Permitted Liens. No Person other than Seller or its Subsidiaries owns, leases or operates any of the Program Assets.

(b)Following the Pre-Closing Contribution, the assets, properties and rights of the Company shall constitute all the assets, properties and rights necessary and sufficient for the Company to conduct the Business as currently conducted and, immediately after the Closing,

    -46-

necessary for Buyer to continue to operate and conduct the Business as currently conducted. The Company will own, lease or have the legal right to the use of such assets, properties and rights, including all of the Program Assets, free and clear of all Liens, except for Permitted Liens.

3.17Affiliate Arrangements. As of the Closing, there will be no Contracts, commitments, obligations or arrangements between the Company, on the one hand, and Seller or any of its Subsidiaries (other than the Company), or any of their Affiliates, officers, directors, stockholders, members or employees, or any family member or other related party of any of the foregoing, on the other hand.

3.18Real Property.

(a)Neither Seller nor any of its Subsidiaries owns any real property.

(b)Section 3.18(b) of the Company Disclosure Letter sets forth a correct and complete list of all real property leased or subleased to Seller or any of its Subsidiaries (collectively, the “Leased Real Property”) and a list of all leases (the “Leases”) entered into by Seller or its Subsidiaries with respect to the Leased Real Property. Seller and its Subsidiaries, as applicable, have a valid leasehold interest in all Leased Real Property, free and clear of all Liens, except Permitted Liens. To the Knowledge of the Seller, there exists no default or event of default under the Leases. There are no written or oral subleases, concessions, licenses, occupancy agreements or other Contracts or arrangement granting to any Person other than Seller or its Subsidiaries the right to use or occupy the Leased Real Property.

3.19Environmental Matters. Except for such matters that would not, individually or in the aggregate, reasonably be expected to be material to the Company or the Business, (a) Seller and its Subsidiaries have complied at all times with all applicable Environmental Laws, (b) no property currently or, to the Seller’s Knowledge, formerly owned, leased or operated by Seller or any of its Subsidiaries (including soils, groundwater, surface water, buildings or other structures) is contaminated with any Hazardous Substance in violation of, or as could be expected to result in liability under, any Environmental Law, (c) to the Seller’s Knowledge, neither Seller nor any of its Subsidiaries is subject to liability for any Hazardous Substance disposal or contamination on any third-party property, (d) neither Seller nor any of its Subsidiaries has received any notice, demand, letter, claim or request for information alleging that Seller or any of its Subsidiaries may be in violation of or subject to liability under any Environmental Law, (e) neither Seller nor any of its Subsidiaries is subject to any Order or any indemnity or other agreement with any third party relating to any Environmental Law, (f) to the Seller’s Knowledge, there are no other circumstances or conditions involving Seller or any of its Subsidiaries that would, individually or in the aggregate, reasonably be expected to result in any claim, liability, investigation, cost or restriction on the ownership, use or transfer of any property pursuant to any Environmental Law, and (g) Seller has made available to Buyer copies of all material environmental reports, studies and assessments in the possession of Seller relating to Seller’s or any of its Subsidiaries’ facilities or operations.

3.20Taxes.

(a)Seller and its Subsidiaries (i) have prepared in good faith and duly and timely filed (taking into account any extension of time within which to file) all Tax Returns

    -47-

required to be filed and all such filed Tax Returns are complete and accurate in all respects, (ii) have paid all Taxes that are required to be paid (whether or not shown on a Tax Return), (iii) have withheld and paid all material Taxes required to be withheld in connection with any amounts paid or owing to any employee, creditor, independent contractor, shareholder or other third party and (iv) have not waived any statute of limitations with respect to Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency, in each case, with respect to the Company and its assets.

(b)The Company is, and has been at all times since the time of its formation, classified for U.S. federal, state and local income tax purposes as an entity disregarded as separate from its owner.

(c)Neither the Company nor the Company’s assets are subject to Tax in any country other than its country of incorporation or formation by virtue of having a permanent establishment (within the meaning of an applicable tax treaty) or other fixed place of business in such other country.

(d)There are no pending or threatened in writing audits, examinations, investigations or other proceedings in respect of Taxes or Tax matters.

(e)No closing agreements, private letter rulings, technical advice memoranda or similar agreements or rulings have been entered into with or issued by any Taxing Authority with respect to the Company or the assets of the Company.

(f)The Company (i) has not been a member of an affiliated, consolidated, combined or unitary Tax group for purposes of filing any Tax Return and (ii) does not have any liability for the Taxes of any Person under Treas. Reg. Section 1.1502-6 (or any similar provision of U.S. state or local or non-U.S. income Tax law), or as a transferee or successor.

(g)There are no Liens on the Company’s assets that arose in connection with any failure (or alleged failure) to pay any Tax.

(h)The Company is not a party to, or bound by, any Tax allocation, Tax indemnity or Tax sharing agreement or any current or potential contractual obligation to indemnify any other person with respect to Taxes (other than agreements entered into in the ordinary course of business the principal purpose of which is unrelated to Taxes).

(i)The Company will not be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any Taxable period (or portion thereof) ending after the Closing Date as a result of any (i) change in or use of an improper method of accounting for a taxable period ending on or prior to the Closing Date; (ii) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local, or foreign Tax Law) entered into prior to the Closing; (iii) intercompany transaction or excess loss account described in the Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local, or foreign Tax Law); (iv) installment sale or open transaction disposition made on or prior to the Closing Date; (v) prepaid amount, advanced payment or deferred revenue received or accrued on or prior to the Closing Date; or (vi) election under Section 965 of the Code

    -48-

(j)The Company has not entered into any “listed transaction” within the meaning of Section 6707A(c)(2) of the Code and Treasury Regulations Section 1.6011 4(b)(2).

3.21Intellectual Property.

(a)Seller and its Subsidiaries solely and exclusively own, and upon completion of the Pre-Closing Contribution, the Company will solely and exclusively own, all Company Owned IP, in each case, free and clear of all Liens other than Permitted Liens.

(b)Seller and its Subsidiaries own or have the right to use, pursuant to valid and enforceable written licenses, all Company IP and such Intellectual Property Rights will be owned or available for use by the Company, following the Pre-Closing Contribution, on the same terms as they were owned or available for use by Seller and its Subsidiaries.

(c)The Company IP is subsisting, and all issued or granted items included therein are valid and, to the Knowledge of Seller, enforceable. Each item of Registered Intellectual Property included in the Company IP is currently in compliance with all formal legal requirements necessary to (i) maintain its validity and enforceability and (ii) record and perfect Seller’s or its Subsidiaries’, as applicable, interest in, and the chain of title of, such Registered Intellectual Property.

(d)There is no outstanding Order (other than standard prosecution before the United States Patent and Trademark Office or any foreign equivalent thereof) adversely affecting the validity or enforceability of Seller’s or any of its Subsidiaries’ ownership or use of, or rights in or to, any Company IP.

(e)There has been no Action against Seller or any of its Subsidiaries, and neither Seller nor any of its Subsidiaries has received any written claim (including “cease and desist” letters and written invitations to take a patent license), or to the Knowledge of Seller, been threatened with any such claim, in each case, within the prior six years, (i) contesting or challenging the use, validity, enforceability or ownership of any Company IP (other than standard prosecution before the United States Patent and Trademark Office or any foreign equivalent thereof), or (ii) alleging that (A) the conduct of the Business by Seller or any of its applicable Subsidiaries or (B) the use, sale, manufacture, import, commercialization or other exploitation of any products of the Business, in each case, has infringed, misappropriated or otherwise violated the Intellectual Property Rights of any Person, whether directly or indirectly.

(f)To the Knowledge of Seller, none of (i) the conduct of the Business as currently conducted; (ii) the conduct of the Business as proposed to be conducted pursuant to the Development Plan; or (iii) the use, sale, manufacture, import, commercialization or other exploitation of any products of the Business has, as applicable, infringed, misappropriated or otherwise violated within the prior six years, or to the Knowledge of Seller, will infringe, misappropriate or otherwise violate, any valid and enforceable Intellectual Property Rights of any Person, whether directly or indirectly.

(g)To the Knowledge of Seller, within the prior six years, no Person has infringed, misappropriated or otherwise violated any Company IP, whether directly or indirectly.

    -49-

(h)During the prior six years, neither Seller nor any of its Subsidiaries has asserted or, to Seller’s knowledge, threatened, an Action (including “cease and desist” letters and written invitations to take a patent license) against any other Person alleging infringement, misappropriation or other violation of any Company IP.

(i)Seller and its applicable Subsidiaries have taken commercially reasonable measures to protect the confidentiality and value of all Know-How included in the Company IP, and no such Know-How has been disclosed to or accessed by any Person except pursuant to valid and enforceable nondisclosure agreements that, to the Knowledge of Seller, have not been breached by any such Person.

(j)All of Seller’s and its Subsidiaries’ current and former employees and contractors who have been involved in the development of material Intellectual Property Rights related to the Business for or on behalf of Seller or any of its applicable Subsidiaries have executed valid written agreements containing binding and enforceable confidentiality provisions and presently assigning all right, title and interest in and to such Intellectual Property Rights to Seller or any of its applicable Subsidiaries, and no such employee or contractor retains, or to the Knowledge of Seller, claims to retain, any right, title or interest in or to any such Intellectual Property Rights, including any entitlement to specific compensation due under applicable Law in relation to those rights.

(k)No funding, facilities or personnel of any Governmental Entity, university, college or other educational institution or research center was used in the development of any of the Company IP, except as would not result in any such Person obtaining any ownership interest license under, or other right to any such Company IP.

(l)No Software included in the Company IP is subject to any obligation or condition under any license identified as an open source license by the Open Source Initiative (www.opensource.org/) (each, an “Open Source License”) that conditions the distribution of such Software on (i) the disclosure, licensing or distribution of any source code for any portion of such Software, (ii) the granting to licensees of the right to make derivative works of, or other modifications to, such Software, (iii) the licensing under terms that allow such Software or portions thereof or interfaces therefor to be reverse engineered, reverse assembled or disassembled (other than by operation of Law), or (iv) the redistribution of such Software at no license fee. Neither Seller nor any of its applicable Subsidiaries is in breach of any Open Source License.

(m)The IT Assets owned, used or held for use by Seller or its applicable Subsidiaries in connection with the Business (the “Program IT Assets”) (i) operate and perform in all material respects in accordance with their documentation and functional specifications and otherwise as required by Seller and its Subsidiaries in connection with the Business, (ii) have not materially malfunctioned or failed within the past six years in a manner that has had a material impact on the Business and (iii) are free from material bugs or other defects, and do not contain any “back door,” “drop dead device,” “time bomb,” “Trojan horse,” “virus,” “worm,” “spyware” or other malicious code.

(n)In the prior six years, there has been no unauthorized access to or unauthorized use of (i) any Program IT Assets, (ii) any information stored on or processed by

    -50-

any Program IT Assets, or (iii) any confidential or proprietary information that is in Seller’s or any of its applicable Subsidiaries’ possession or control that relates to the Business or the Company IP, in each case, in a manner that, individually or in the aggregate, has had or is reasonably expected to result in material liability to, or material disruption of the Business.

(o)Seller and its applicable Subsidiaries have established and implemented written policies and organizational, physical, administrative and technical measures regarding privacy, cyber security and data security in connection with the Business that are commercially reasonable, and consistent in all material respects with (i) reasonable practices in the industry, (ii) any written commitments of Seller and its applicable Subsidiaries and (iii) any publicly-facing statements or policies adopted by Seller or its applicable Subsidiaries (such policies and measures, collectively, the “Privacy and Security Policies”).

(p)In the prior six years, (i) Seller and its applicable Subsidiaries have, as it relates to the Business, (A) complied in all material respects with all of their respective Privacy and Security Policies and contractual obligations, and with all applicable Laws, in each case, regarding Personal Information, including with respect to the collection, use, storage, processing, transmission, transfer (including cross-border transfers), disclosure and protection of Personal Information, and (B) used commercially reasonable measures consistent with reasonable practices in the industry to ensure the confidentiality, privacy and security of Personal Information, and (ii) no Person has gained unauthorized access to or misused any Personal Information in a manner that, individually or in the aggregate, has resulted in or is reasonably expected to result in material liability to, or material disruption of, the Business or any obligation for Seller, its applicable Subsidiaries or the Company to notify any Governmental Entity about such unauthorized access or misuse.

3.22Insurance. Seller has made available to Buyer true and correct copies of all material insurance policies or insurance binders relating to the Business that are maintained by Seller or any of its Subsidiaries (“Insurance Policies”). Each Insurance Policy is in full force and effect, subject to the Bankruptcy and Equity Exception, and all premiums due with respect to all Insurance Policies have been paid, and, to the extent applicable, to the Knowledge of Seller, neither Seller nor any of its Subsidiaries has taken any action or failed to take any action that (including with respect to the Transactions), with or without notice, lapse of time or both, would constitute or result in a breach or violation of, or default under, any of the Insurance Policies or would permit or cause the termination, non-renewal or modification thereof or acceleration or creation of any right or obligation thereunder, in each case as would not, individually or in the aggregate, reasonably be expected to be material to the Company or the Business.

3.23COVID-19 Relief Laws. Neither Seller nor any of its Affiliates has applied for or received a PPP Loan other than any PPP Loan that has been repaid or forgiven in full as of the Execution Date.

3.24Suppliers.

(a)Section 3.24(a) of the Company Disclosure Letter sets forth a complete and accurate list of the top 10 suppliers of the Business for the 12-month period ended December 31, 2021 based on payments made to each supplier during such period (each, a

    -51-

“Significant Supplier”), together with the amount paid to each Significant Supplier during such period.

(b)Since December 31, 2020, and through the Execution Date, no Significant Supplier or other material supplier, vendor, collaborator or licensor of the Business has cancelled or otherwise terminated its relationship with Seller or any of its Subsidiaries or has materially altered, in a manner adverse to Seller or any of its Subsidiaries, its relationship with Seller or any of its Subsidiaries. To the Knowledge of Seller, no such Significant Supplier or other material supplier, vendor, collaborator, distributor or licensor has any plan or intention, and has not threatened, to terminate, cancel or otherwise materially modify its relationship with Seller or any of its Subsidiaries.

3.25Solvency.

(a)Seller is not entering into this Agreement or the Transactions with the intent to hinder, delay or defraud creditors.

(b)After giving effect to the Transactions, at and immediately after the Closing, (A) the sum of the fair value (on a going concern basis) of the assets, at a fair valuation, of Seller, will exceed its debts, (B) the sum of the present fair salable value of the assets (on a going concern basis) of Seller will exceed its debts, (C) Seller has not incurred and does not intend to incur, and does not believe that it will incur, debts beyond its ability to pay such debts as debts mature, and (D) Seller will have sufficient capital with which to conduct its businesses as currently conducted or proposed to be conducted.

3.26 Purchase Entirely for Own Account. Seller acknowledges that the Closing Consideration Shares and the Earn-Out Shares shall be acquired for investment for Seller’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and Seller has no present intention of selling, granting any participation or otherwise distributing such Parent Shares. Seller can bear the economic risk of an investment in such Parent Shares indefinitely and a total loss with respect to such investment. Seller does not have and will not have as of the Closing any contract, undertaking, agreement, arrangement or understanding with any Person to sell, transfer or grant participation to a Person any of such Parent Shares.

3.27Investment Experience and Accredited Investor Status. Seller is an “accredited investor” (as defined in Regulation D under the Securities Act). Seller has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Closing Consideration Shares and the Earn-Out Shares.

3.28Acquiring Person. Neither Seller nor any of its Affiliates beneficially owns (as determined pursuant to Rule 13d-3 under the Exchange Act without regard for the number of days in which a Person has the right to acquire such beneficial ownership, and without regard to Seller’s rights under this Agreement), any securities of Parent, except for securities that may be beneficially owned by either (a) employee benefit plans of Seller or any of its Affiliates or (b) any executive officer or director of Seller.

    -52-

3.29No “Bad Actor” Disqualification. Seller has not taken any of the actions set forth in, and is not subject to, the disqualification provisions of Rule 506(d)(1) of the Securities Act. Seller’s responses in the questionnaire delivered to Buyer by Seller related to qualification under Rule 506(d)(1) are true and correct.

3.30Restricted Securities. Seller understands that the Closing Consideration Shares and the Earn-Out Shares, when issued, shall be “restricted securities” under the federal securities Laws inasmuch as they are being acquired from an Affiliate of Parent in a transaction not involving a public offering and that under such Laws such Parent Shares may be resold without registration under the Securities Act only in certain limited circumstances. Seller represents that it is familiar with Rule 144. Seller understands that such Parent Shares are being offered and issued to it in reliance on specific exemptions from the registration requirements of United States federal and state securities Laws and Buyer is relying in part upon the truth and accuracy of, and Seller’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of Seller set forth in this Agreement in order to determine the availability of such exemptions and the eligibility of Seller to acquire such Parent Shares.

3.31Legends. Seller understands that any certificates representing the Closing Consideration Shares or the Earn-Out Shares shall bear the following legends:

(a)“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE REASONABLY SATISFACTORY TO BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.) THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF THE SECURITIES ACT.”;

(b)any legend required by applicable state securities Laws; and

(c)“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AND SHALL BE TRANSFERABLE ONLY UPON THE TERMS AND CONDITIONS OF A MEMBERSHIP INTEREST PURCHASE AGREEMENT DATED AS OF FEBRUARY 24, 2022 BY AND AMONG BIOHAVEN THERAPEUTICS LTD., KNOPP BIOSCIENCES LLC, CHANNEL BIOSCIENCES, LLC, AND, SOLELY FOR THE PURPOSES OF SECTION 9.14 THEREOF, BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD., A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.”

3.32Brokers and Finders. Neither Seller nor any of its Subsidiaries, nor any of their respective directors or officers, as applicable, has employed any investment banker, broker or finder or incurred or will incur any liability for any brokerage payments, investment banking fees, commissions, finders’ fees or other similar payments in connection with the Transactions.

    -53-

3.33No Other Representations or Warranties.

(a)Seller and the Company acknowledge and agree that Buyer has relied on the representations and warranties set forth in this Article III in making the decision to enter into this Agreement. Except for the representations and warranties expressly set forth in this Article III, in the Company Disclosure Letter and in the Transaction Documents, none of the Company, Seller or any other Person makes (and each of Seller and the Company, on behalf of itself, its Subsidiaries and their respective Affiliates hereby disclaims) any other express or implied representation or warranty with respect to the Transactions, Seller, the Company or any of their respective Affiliates or to any of their respective businesses, operations, assets, Liabilities, conditions (financial or otherwise) or prospects in connection with this Agreement or the Transactions (including any implied warranties that may otherwise be applicable because of the provisions of the Uniform Commercial Code or any other applicable Law, including the warranties of merchantability and fitness for a particular purpose).

(b)Seller and the Company acknowledge and agree that, except for the representations and warranties expressly set forth in Article IV of this Agreement and in the Transaction Documents, none of Buyer, any of its Affiliates or any other Person has made any express or implied representation or warranty with respect to the Transactions, Buyer or any of its respective Affiliates or to any of their respective businesses, operations, assets, Liabilities, conditions (financial or otherwise) or prospects in connection with this Agreement or the Transactions (including any implied warranties that may otherwise be applicable because of the provisions of the Uniform Commercial Code or any other applicable Law, including the warranties of merchantability and fitness for a particular purpose) and Seller and the Company have not relied on any representation or warranty other than those expressly set forth in Article IV of this Agreement and in the Transaction Documents; provided, however, that notwithstanding anything to the contrary set forth in the foregoing provisions of this Section 3.33(b), nothing in this Section 3.33(b) shall limit Seller’s or the Company’s remedies with respect to claims of Fraud in connection with, arising out of or otherwise related to the express written representations and warranties made by Buyer in this Agreement and in any Transaction Document.

Article IV

REPRESENTATIONS AND WARRANTIES OF BUYER

Except as set forth in Parent’s most recent Annual Report (including all exhibits and filings incorporated therein), Buyer hereby represents and warrants to the Company and Seller as of the Execution Date and as of the Closing (or in the case of representations and warranties that speak of a specified date, as of such specified date) as follows:

4.1Organization, Good Standing and Qualification. No vote of holders of shares of Parent is necessary to approve this Agreement and the Transactions. Buyer (a) is a legal entity duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization, (b) has all requisite corporate or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted and (c) is qualified to do business and, to the extent such concept is applicable, is in good standing as a foreign corporation or other legal entity in each jurisdiction where the ownership, leasing or

    -54-

operation of its assets or properties or conduct of its business requires such qualification, except in the case of clause (b) or (c) where the failure to be so qualified or in good standing or to have such power or authority, would not, individually or in the aggregate, reasonably be expected to prevent, materially delay or materially impair the consummation of the Transactions.

4.2Authority; Approval. Buyer has all requisite corporate power and authority and has taken all corporate or similar action necessary in order to execute, deliver and perform its obligations under this Agreement and each of the Transaction Documents to which it is a party. This Agreement has been, and each of the Transaction Documents to which it is a party will be at the Closing, duly executed and delivered by Buyer, and, when executed and delivered by Seller, the Company and the other parties hereto and thereto, will constitute a valid and binding agreement of Buyer enforceable against Buyer in accordance with its terms, subject to the Bankruptcy and Equity Exception.

4.3Valid Issuance of Parent Shares. When issued and delivered at the Closing in accordance with the terms hereof, the Closing Consideration Shares and the Earn-Out Shares shall be duly authorized, validly issued, fully paid and nonassessable, free from any liens, encumbrances or restrictions on transfer, including preemptive rights, rights of first refusal or other similar rights, other than as arising pursuant to this Agreement, as a result of any action by Seller or under federal or state securities Laws.

4.4Governmental Filings; No Violations; Certain Contracts.

(a)Other than the Company Approvals, no expirations of waiting periods under applicable Laws are required and notices, reports or other filings are required to be made by Buyer with, nor are any consents, registrations, approvals, permits or authorizations required to be obtained by Buyer from, any Governmental Entity in connection with the execution, delivery and performance of this Agreement and the Transaction Documents by Buyer or the consummation of the Transactions, except those that the failure to make or obtain would not, individually or in the aggregate, reasonably be expected to prevent, materially delay or materially impair the consummation of the Transactions.

(b)The execution, delivery and performance by Buyer of this Agreement and the Transaction Documents to which it is a party do not, and the consummation of the Transactions will not, conflict with, or result in any breach or violation of, or default (with or without notice, lapse of time or both) under, or give rise to any right of termination, loss of rights, adverse modification of provisions, cancellation or acceleration of any obligations under, or result in the creation of a Lien on any of the assets of Buyer under any provision of (i) its Organizational Documents, (ii) any Contract binding upon Buyer or its Affiliates or (iii) assuming (solely with respect to performance of this Agreement and the Transaction Documents and consummation of the Transactions) receipt of the Company Approvals, any Law to which Buyer or its Affiliates is subject, except, in the case of clauses (ii) and (iii) above, for any such breach, violation, default, termination, loss, adverse modification, cancellation, acceleration or creation that would not, individually or in the aggregate, reasonably be expected to prevent, materially delay or materially impair the consummation of the Transactions.

(c)None of Buyer or any of its Affiliates or any officer, employee, agent or clinical investigator thereof has been suspended, debarred, excluded or convicted of any crime or

    -55-

engaged in any conduct that would reasonably be expected to result in debarment under 21 U.S.C. Section 335a, exclusion under 42 U.S.C. Section 1320a-7 or any similar Action.

4.5Litigation. There are no Actions pending or, to the Knowledge of Buyer, threatened against Buyer that would reasonably be expected to prevent, materially delay or materially impair the consummation of the Transactions. Buyer is not a party to or subject to the provisions of any Order that would, individually or in the aggregate, reasonably be expected to prevent, materially delay or materially impair the consummation of the Transactions.

4.6Available Funds. Buyer, together with its Affiliates, has cash on hand or existing credit facilities of immediately available funds sufficient to enable it to consummate the Transactions and satisfy all of its obligations under this Agreement when required to do so pursuant to the terms hereof.

4.7Brokers and Finders. Neither Buyer nor any of its Affiliates, nor any of their respective directors or employees (including any officers) has employed any broker, finder or investment bank or has incurred or will incur any obligation or liability for any brokerage fees, commissions or finders fees in connection with the transactions contemplated by this Agreement. Buyer shall be solely responsible for the fees of any broker, finder, or agent engaged by Buyer or any of its Affiliates in connection with the Transactions or otherwise.

4.8Financing. Buyer has sufficient cash and/or available lines of credit under its existing credit facilities to make payment of all amounts to be paid by it hereunder on the Closing Date. The obligations of Buyer under this Agreement are not subject to any conditions regarding Buyer’s or any other Person’s ability to obtain any financing for the consummation of the Transactions contemplated hereby.

4.9Solvency. At the Closing, each of Buyer and its Affiliates, after taking into account consummation of the Transactions and the way the Buyer intends the Business of the Company to be operated after the Closing, (a) will be able to pay its debts, including its stated and contingent liabilities as they mature, (b) will not have unreasonably small capital for the Business of the Company, and (c) will be solvent.

4.10Independent Investigation. Buyer acknowledges that (a) it has conducted its own independent investigation, review and analysis of the Business, results of operations, prospects, condition (financial or otherwise) and the Program Assets, and (b) it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of the Seller and Company for such purpose. Buyer acknowledges that: (i) in making its decision to enter into this Agreement and to consummate the Transactions, Buyer has relied solely upon its own investigation and the express representations and warranties of the Seller and Company set forth in Article III of this Agreement (including the related portions of the Company Disclosure Letter); and (ii) neither the Seller nor the Company (nor any of their respective directors, officers, or employees), nor any of their respective Affiliates or representatives, nor any other Person has made any representation or warranty, either express or implied, as to the Seller or Company, this Agreement, or the accuracy or completeness of any of the information provided or made available to Buyer or its directors, officers, employees, Affiliates, controlling persons, agents, advisors or representatives, except as expressly set forth in Article III of this Agreement (including the related portions of the Company Disclosure Letter).

    -56-

4.11CFIUS. Buyer is not a “foreign person” as that term is defined in Part 800 of the regulations of the Committee on Foreign Investment in the United States (31 C.F.R. § 800.224).

4.12Development Efforts. As of the date hereof, Buyer intends to use good faith efforts to purchase the equipment set forth on Schedule 4.12(a) and to fill the open positions set forth on Schedule 4.12(b).

4.13No Other Representations or Warranties.

(a)Buyer acknowledges and agrees that Seller and the Company have relied on the representations and warranties set forth in this Article IV in making the decision to enter into this Agreement. Except for the representations and warranties expressly set forth in this Article IV and in the Transaction Documents, none of Buyer, any of its Affiliates or any other Person makes (and Buyer, on behalf of itself and its Affiliates, hereby disclaims) any other express or implied representation or warranty with respect to the Transactions, Buyer or any of its respective Affiliates or to any of their respective businesses, operations, assets, Liabilities, conditions (financial or otherwise) or prospects in connection with this Agreement or the Transactions (including any implied warranties that may otherwise be applicable because of the provisions of the Uniform Commercial Code or any other applicable Law, including the warranties of merchantability and fitness for a particular purpose).

(b)Buyer acknowledges and agrees that, except for the representations and warranties expressly set forth in Article III of this Agreement, in the Company Disclosure Letter and in the Transaction Documents, none of the Company, Seller or any other Person has made any express or implied representation or warranty with respect to the Transactions, to Seller, the Company or any of their respective Subsidiaries or their respective Affiliates or to any of their respective businesses, operations, assets, Liabilities, conditions (financial or otherwise) or prospects in connection with this Agreement or the Transactions (including any implied warranties that may otherwise be applicable because of the provisions of the Uniform Commercial Code or any other applicable Law, including the warranties of merchantability and fitness for a particular purpose) and Buyer has not relied on any representation or warranty other than those expressly set forth in Article III of this Agreement, in the Company Disclosure Letter and in the Transaction Documents; provided, however, that notwithstanding anything to the contrary set forth in the foregoing provisions of this Section 4.13(b), nothing in this Section 4.13(b) shall limit Buyer’s remedies with respect to claims of Fraud in connection with, arising out of or otherwise related to the express written representations and warranties made by Seller or the Company in this Agreement and in any Transaction Document.

Article V

COVENANTS

5.1Interim Operations of the Company.

(a)Except as described in Section 5.1(a) of the Company Disclosure Letter, or as otherwise expressly required or permitted by this Agreement, each of Seller and the Company covenant and agree as to itself and its Subsidiaries that, during the period from the Execution

    -57-

Date until the Closing, unless Buyer shall otherwise approve in writing, and except as required by applicable Laws, the Business shall be conducted in the ordinary course consistent with past practice and, to the extent consistent therewith, each of the Seller (solely as it relates to the Business), the Company and their Affiliates shall use their respective commercially reasonable efforts to preserve their business organizations intact and maintain the Business’ existing relations with Governmental Entities, grant providers, suppliers, creditors, lessors and employees and other parties with whom the Business has a material business relationship.

(b)Without limiting the generality of, and in furtherance of, the foregoing, from the Execution Date until the Closing, except (x) as otherwise expressly required by this Agreement or as described in Section 5.1(a) of the Company Disclosure Letter or (y) as Buyer may approve in writing, Seller and the Company shall not, and shall not permit their Subsidiaries to:

(i)adopt any change in the Company’s Organizational Documents or any change in the Organizational Documents of Seller or any of its Subsidiaries that could prevent, materially delay or materially impair the consummation of the Transactions;

(ii)sell, convey, transfer, pledge or otherwise encumber or dispose of any of the Interests, except pursuant to this Agreement;

(iii)deposit any Interests held into a voting trust or enter into a voting agreement or arrangement with respect to any such Interests or grant any proxy with respect thereto;

(iv)create any Subsidiaries of the Company;

(v)enter into any agreements or arrangements imposing material changes or restrictions on the Program Assets or the Business;

(vi)obligate the Company to acquire (A) assets from any other Person or (B) any business or Person, by merger or consolidation, purchase of substantially all assets or equity interests or by any other manner, in each case, in any transaction or series of related transactions;

(vii)other than pursuant to Contracts to which Seller or any of its Subsidiaries are a party that are in effect as of the Execution Date, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of the Program Assets;

(viii)issue, sell, pledge, dispose of, grant, transfer, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of any Equity Interests of Seller or the Company;

(ix)except for the grant of non-exclusive licenses in the ordinary course of business and the statutory expiration of Intellectual Property Rights, sell, assign

    -58-

or transfer, license, subject to a Lien (other than a Permitted Lien), abandon, allow to lapse or otherwise dispose of any Company IP;

(x)reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of the Interests;

(xi)create or incur any Lien material to the Business;

(xii)incur any Indebtedness or guarantee any such Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of Seller or any of its Subsidiaries; provided that any Indebtedness that is extinguished in full prior to, or concurrently with, the Closing shall not be deemed to be a breach of this provision;

(xiii)(A) except as set forth in the capital budget set forth in Section 5.1(b)(xiii) of the Company Disclosure Letter, make or authorize any capital expenditures in excess of [**] at the Company or otherwise related to the Business in the aggregate during any 12-month period; (B) fail to make any capital expenditures related to the Business described in the capital budget set forth in Section 5.1(b)(xiii); or (C) fail to use good faith efforts to make any additional capital expenditure otherwise required to operate the Business in substantially the same manner as presently conducted;

(xiv)enter into any Contract that would have been a Material Contract had it been entered into prior to the Execution Date;

(xv)amend, modify, fail to renew or terminate any Material Contract;

(xvi)other than in the ordinary course of business, consistent with past practice, amend, modify, cancel or waive any debts or claims held by it or waive any material rights related to the Business;

(xvii)make any changes with respect to its accounting policies or procedures, except as required by changes in Law or GAAP;

(xviii)settle any Action at the Company or otherwise related to the Business or the Program Assets or any other obligation or liability of Seller or any of its Subsidiaries related to the Business or the Program Assets;

(xix)(A) make, change or revoke any material Tax election, (B) change any material method of Tax accounting, (C) adopt or change any material Taxable year or period, (D) enter into any material closing agreement with respect to Taxes, (E) file any material amended Tax Return, (F) settle or compromise any material Tax claim or assessment or (G) surrender any material claim for a refund of Taxes;

(xx)except as required pursuant to the terms of any Benefit Plan in effect as of the date of this Agreement and set forth in Section 5.1(b)(xx) of the Company Disclosure Letter, or as otherwise required by applicable Law, (A) increase in any manner the compensation or consulting fees, bonus, pension, welfare, fringe or other

    -59-

benefits, severance or termination pay of any Employee, except for the payment of annual bonuses for completed periods based on actual performance in the ordinary course of business consistent with past practice, (B) cause or permit the Company to become a party to, establish, adopt, amend, commence participation in or terminate any Benefit Plan or any arrangement that would have been a Benefit Plan had it been entered into prior to this Agreement, (C) cause or permit the Company to grant any new awards, or amend or modify the terms of any outstanding awards, under any Benefit Plan, (D) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to any Employee, (E) cause or permit the Company to hire any employee or engage any independent contractor (who is a natural person) or (F) terminate the employment of any Employee other than for cause;

(xxi)become a party to, establish, adopt or enter into any collective bargaining or other labor union Contract;

(xxii)fail to pay or satisfy when due any material account payable or other material liability related to the Business or the Program Assets, other than any such liability that is being contested in good faith by the Company or any of its Subsidiaries;

(xxiii)fail to keep current and in full force and effect, or to apply for or renew, any material permit, approval, authorization, consent, license, registration or certificate issued by any Governmental Entity related to the Business or the Program Assets;

(xxiv)subject the Company or any of its Subsidiaries to any bankruptcy, receivership, insolvency or similar proceeding;

(xxv)take any actions or omit to take any actions that would, individually or in the aggregate, reasonably be expected to result in any of the conditions set forth in Article VI not being satisfied; or

(xxvi)agree, authorize or commit to do any of the foregoing.

(c)Nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct the Company or the operations of the Business prior to the Closing Date. Prior to the Closing Date, Seller shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over the operations of the Company and the Business.

5.2Member Consent. In accordance with applicable Laws and the Seller Operating Agreement, promptly following the execution of this Agreement, Seller shall seek and shall use its commercially reasonable efforts (a) as promptly as practicable, and in any event within 24 hours following the execution of this Agreement (the “Member Consent Delivery Period”), to obtain the Member Consent and to deliver to Buyer a copy thereof certified as correct and complete by Seller and (b) as promptly as practicable, and in any event prior to the Closing, to obtain Support Agreements executed and delivered by the remaining members of Seller. In connection with its solicitation of Support Agreements from the members of Seller,

    -60-

Seller shall prepare and deliver to each member of Seller an information statement regarding the Transactions, which shall be in a form reasonably acceptable to Buyer.

5.3Cooperation and Efforts to Consummate Transactions; Status Updates.

(a)Cooperation and Efforts. Upon the terms and subject to the conditions set forth in this Agreement, Seller and Buyer shall cooperate with each other and use (and shall cause their respective controlled Affiliates to use) their respective commercially reasonable efforts to take or cause to be taken all actions reasonably necessary or advisable on their part under this Agreement to consummate the Transactions as promptly as reasonably practicable and not to take any action after the Execution Date that would reasonably be expected to prevent, materially delay or materially impair the consummation of the Transactions.

(b)Status Updates. Subject to applicable Laws and as required by any Governmental Entity, Seller and Buyer shall each keep the other apprised of the status of matters relating to the consummation of the Transactions, including promptly furnishing the other with copies of notices or other communications (or where no such copies are available, a reasonably detailed written description thereof) received by Seller or Buyer, as the case may be, or any of its Subsidiaries, from any third party and/or any Governmental Entity with respect to the Transactions. Each of the Parties shall give prompt notice to the other Party of any change, occurrence, fact or condition with respect to which such other Party may terminate this Agreement pursuant to Section 7.1.

5.4Regulatory Filings/Approvals.

(a)Submission of Filings and Notices.

(i)Exchanging Information. Seller and Buyer shall each, upon request by the other, furnish the other with all information concerning itself, its Subsidiaries, directors, officers and members and stockholders and such other matters as may be reasonably necessary or advisable in connection with any statement, filing, notice or application made by or on behalf of Seller, Buyer or any of their respective Subsidiaries to any Governmental Entity in connection with the Transactions.

(ii)Initial Submissions. Seller and Buyer shall prepare and file as promptly as reasonably practicable all documentation to effect all necessary notices, reports and other filings and to obtain as promptly as practicable all consents, clearances, registrations, approvals, permits and authorizations necessary or advisable to be obtained from any Governmental Entity in order to consummate the Transactions.

(iii)Subsequent Submissions. Buyer and Seller shall promptly provide all documents requested by any Governmental Entity to the extent reasonably necessary or advisable to obtain as promptly as practicable all consents, registrations, approvals, permits and authorizations necessary or advisable to be obtained from such Governmental Entity in order to consummate the Transactions.

(iv)Conduct of Interactions with Government Entities. Subject to applicable Laws relating to the exchange of information, Buyer shall have the right to

    -61-

direct the strategy with respect to all matters with any Governmental Entity; provided, that Seller shall have the right to review in advance, and, to the extent reasonably practicable, Buyer will consult with Seller on and consider in good faith the views of Seller in connection with, the strategy and in connection with all statements in any filing made with, or written materials submitted to, any Governmental Entity in connection with the Transactions. In exercising the foregoing rights, Seller and Buyer shall act reasonably and as promptly as practicable. Neither Buyer nor Seller shall permit any of its officers or any other representatives or agents to participate in any meeting with any Governmental Entity in respect of any filing, investigation or other inquiry relating to the Transactions unless it consults with the other Party in advance and, to the extent permitted by such Governmental Entity, gives the other Party the opportunity to attend and participate thereat. Nevertheless, each Party and each representative thereof shall respond to all inquiries in a manner which he, she or it considers true and correct. Seller and its Subsidiaries shall not agree to any actions, restrictions or conditions with respect to obtaining any consents, registrations, approvals, permits, expirations of waiting periods or authorizations in connection with the Transactions without the prior written consent of Buyer.

(b)Remedies. Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement, including Section 5.3(a), shall require Buyer or any of its Affiliates to:

(i)proffer to, agree to, or sell, divest, lease, license, transfer, dispose of or otherwise encumber or hold separate, before or after the Closing, any assets of Buyer, the Company or any of their respective Affiliates (or consent thereto);

(ii)proffer to, agree to or implement any changes in (including through a licensing arrangement), or any restrictions on or other impairment of, Buyer’s ability to use, own, operate or take any other actions with respect to any assets of Buyer, the Company or any of their respective Affiliates or Buyer’s ability to vote, transfer, receive dividends or otherwise exercise full ownership rights with respect to the Equity Interests of the Company and equity and debt securities held directly or indirectly by the Company; or

(iii)take any action to overturn, defend against or oppose any action by any Governmental Entity to prohibit the Transactions or prevent consummation of the Transactions prior to the Outside Date.

5.5Third-Party Consents. Upon the terms and subject to the conditions set forth in this Agreement, Seller shall use (and shall cause its controlled Affiliates to use) its commercially reasonable efforts to obtain at or prior to the Closing any consents required from third parties in connection with the consummation of the Transactions in order for the continued operation of the Business as currently conducted and as proposed to be conducted following the Closing. For the avoidance of doubt, such “commercially reasonable efforts” shall not require the Seller or any of its Affiliates to (a) make any payment of a consent fee, “profit sharing” payment or other consideration (including increased or accelerated payments) or concede

    -62-

anything of value, (b) amend, supplement or otherwise modify any Contract or (c) agree or commit to do any of the foregoing.

5.6Pre-Closing Contribution. Prior to the Closing, Seller shall contribute to the Company all of the Program Assets, free and clear of all Liens (other than Permitted Liens), but shall retain all Liabilities attributable to the Program Assets or the ownership thereof prior to the Closing (the “Pre-Closing Contribution”) pursuant to a contribution agreement in the form attached hereto as Exhibit B (the “Contribution Agreement”). To the extent that any other Contracts or other instruments are required in connection with the Pre-Closing Contribution, Seller shall provide Buyer with copies thereof at least three Business Days prior to execution, and Seller and its Affiliates shall not enter into any Contract or execute any other instrument without the consent of Buyer (not to be unreasonably withheld, conditioned or delayed). Seller shall deliver, or cause to be delivered, to Buyer at or prior to Closing reasonably satisfactory evidence that the Pre-Closing Contribution has been completed, including a duly executed copy of the Contribution Agreement. Seller and Company shall populate Schedule 2.1(e) (Transferred Contracts) and Schedule 2.2(h) (Excluded Assets) of the Contribution Agreement prior to the Closing to include the items corresponding to the respective descriptions therein, it being understood that no Contract shall be scheduled as a “Transferred Contract” without the consent of Buyer and no Program Asset shall be scheduled as an “Excluded Asset” without the consent of Buyer.

5.7Company Indebtedness. On or prior to the Closing Date, Seller shall (a) deliver (or cause to be delivered) notices of the payoff, discharge and termination of any outstanding Indebtedness and other obligations under (i) each document listed on Schedule 5.7 or other Contracts governing such Indebtedness and (ii) each other Contract or instrument evidencing Indebtedness pursuant to which a Lien or other security interest encumbers the Interests or any assets or properties of the Company (such Indebtedness and other obligations in clauses (i) and (ii), the “Pay-Off Debt”), in each case in accordance with and within the time periods required by the applicable document governing such Pay-Off Debt in order that such Pay-Off Debt may be fully paid-off, discharged or terminated on or prior to the Closing Date, (b) take all actions required, necessary or advisable to facilitate the repayment of all the obligations with respect to, and termination of the commitments under, such Pay-Off Debt and the release of any Liens or other security interests and termination of all guarantees granted in connection with such Pay-Off Debt, (c) at least two Business Days prior to the Closing, deliver to Buyer drafts of customary debt pay-off and lien release letters providing for the termination of such Pay-Off Debt, the termination of any guarantees provided by the Company in connection with such Pay-Off Debt and for the release of all Liens and other security interests encumbering the Interests or any assets or properties of the Company in respect of such Pay-Off Debt, which shall specify the aggregate amount required to be paid to fully satisfy all amounts outstanding as of the Closing with respect to such Pay-Off Debt and be in form and substance reasonably satisfactory to Buyer (each such letter, a “Debt Pay-Off Letter”) and (d) on the Closing Date, deliver to Buyer executed Debt Pay-Off Letters and evidence of releases of Liens and other security interests encumbering the Interests or any assets or properties of the Company (or the authorization of Buyer by the holders of such Liens and other security interests to file UCC financing statement terminations) and termination of all guarantees granted in respect of such Pay-Off Debt.

5.8Access and Reports; Retention of Books and Records.

    -63-

(a)Pre-Closing Access. Subject to applicable Law, upon reasonable advance notice, Seller shall, and shall cause its Subsidiaries to, afford Buyer’s officers and other authorized representatives reasonable access, during normal business hours throughout the period prior to the Closing, to its employees, properties, books, contracts and records, in each case to the extent relating to the Business and Program Assets, and, during such period, Seller shall, and shall cause its Subsidiaries to, furnish promptly to Buyer all information concerning the Business as Buyer may reasonably request; provided, that no investigation pursuant to this Section 5.8(a) shall affect or be deemed to modify any Seller Representation; provided,further, that the foregoing shall not require Seller (a) to permit any inspection, or to disclose any information, that in the reasonable judgment of Seller would result in the disclosure of any trade secrets of third parties or violate any of its obligations with respect to confidentiality if Seller shall have used commercially reasonable efforts to obtain the consent of such third party to such inspection or disclosure or if any Law applicable to the Company requires the Company to restrict or prohibit access to such information or (b) to disclose any privileged information of Seller or any of its Subsidiaries. All requests for information made pursuant to this Section 5.8(a) shall be directed to Persons designated by Seller. All such information shall be governed by the terms of the Confidentiality Agreement.

(b)Post-Closing Access. Subject to applicable Law, from and after the Closing, Buyer shall cause the Company to, and the Company shall, (a) retain all books, ledgers, files, reports, plans, operating records and any other material documents pertaining to the Company and its Subsidiaries in existence at the Closing that are required to be retained under current retention policies (collectively, the “Records”) for a period of five years from the Closing Date, and (b) provide Seller or its representatives at Seller’s expense with reasonable access without hindering the normal operations of the Company and its Subsidiaries (solely for the purpose of inspection and copying), during normal business hours, and upon reasonable advance notice and under the supervision of Buyer’s or the Company’s personnel, to the Records with respect to periods or occurrences prior to the Closing Date. Notwithstanding the foregoing provisions of this Section 5.8(b), Buyer and the Company may withhold access, documents or information that in the reasonable judgment of Buyer or the Company would result in the disclosure of any trade secrets of third parties or violate any of its obligations with respect to confidentiality if the Company shall have used commercially reasonable efforts to obtain the consent of such third party to such inspection or disclosure or if any Law applicable to the Company requires the Company to restrict or prohibit access to such information.

5.9Publicity.

(a)The initial press release regarding the Transactions shall be a joint press release, and thereafter, until the Closing, none of the Parties or their respective Affiliates shall make any press release or other public announcement, or public statement or comment in response to any inquiry relating to the Transactions without the consent of the other Parties (such consent not to be unreasonably withheld, conditioned or delayed), except for any public announcements or filings that may be required by Law or by obligations pursuant to any listing agreement with or rules of any national securities exchange or interdealer quotation service or by the request of any Governmental Entity or for statements that are consistent with prior statements made by such Party that were permitted by this Section 5.9.

    -64-

(b)Following the Closing, neither Seller nor its Affiliates shall make any press release or other public announcement, or public statement or comment in response to any inquiry relating to the Transactions without the consent of Buyer, except for any public announcements or filings that may be required by Law.

5.10Exclusive Dealing.

(a)From the Execution Date until the Closing, neither Seller nor the Company shall, and each shall cause its respective Representatives not to, directly or indirectly, initiate, negotiate, facilitate, engage in any discussions or negotiations with or solicit any offers from any Person (other than Buyer and its Affiliates) concerning the acquisition, license or lease of Seller, the Company, any Program Assets or the Interests (an “Acquisition Proposal”), or discuss or provide any non-public information regarding the Program Assets in contemplation of any such Acquisition Proposal with or to any Person (other than Buyer and its Representatives); provided, that this Section 5.10(a) shall not prohibit Seller from initiating, negotiating, facilitating, engaging in discussions or negotiations with or soliciting any offers from any Person solely regarding the financing, acquisition or licensing of dexpramipexole or pramipexole.

(b)Notwithstanding anything to the contrary in this Agreement (including Section 5.10(a)), prior to the time, but not after, the Member Consent is obtained, in response to an unsolicited, bona fide written Acquisition Proposal, which was first made on or after the date of this Agreement (and has not been withdrawn) and did not arise from or in connection with any breach of Section 5.10(a), Seller and the Company may: (i) provide information (including non-public information) regarding Seller and the Company or any of their respective Affiliates by the Person who made such Acquisition Proposal in response to a request from such Person, if Seller receives from such Person an executed non-disclosure agreement enforceable by the Company with terms no less restrictive to the other party than those contained in the Confidentiality Agreement; and (ii) participate in any discussions or negotiations with any such Person regarding such Acquisition Proposal; in each case, if, and only if, prior to taking any action described in clause (i) or (ii) above, the Board of Managers of Seller determines in good faith after consultation with outside legal counsel that (A) based on the information then available and after consultation with its legal advisor that such Acquisition Proposal either constitutes a Superior Proposal or could reasonably be expected to result in a Superior Proposal and (B) failure to take such action would be inconsistent with the managers’ fiduciary duties under Seller’s Organizational Documents or applicable Law. Seller shall promptly notify Buyer in writing upon receipt of an Acquisition Proposal and upon determination that an Acquisition Proposal is a Superior Proposal. Seller agrees (x) that it shall not enter into any definitive agreement with respect to an Acquisition Proposal or terminate this Agreement pursuant to Section 7.1(c)(ii) until at least the fifth Business Day after it has provided Buyer with written notice of its intention to enter into such agreement or terminate this Agreement and (y) during such five-Business-Day period, to negotiate in good faith with Buyer with respect to any revisions to the terms of the Transactions proposed by Buyer in response to such Superior Proposal.

5.11Employee Benefits.

(a)Buyer (or one of its Affiliates) shall make offers of employment to each of the employees listed in Section 5.11(a) of the Company Disclosure Letter at or prior to the Closing (collectively, the “Employment Offer Letters”) containing a base salary or base wage

    -65-

that is at least as favorable as the base salary or base wage provided by Seller and its Subsidiaries to such employees immediately prior to the Closing and other employment terms substantially comparable in the aggregate as those provided to similarly situated employees of Buyer, and which shall be in a form reasonably acceptable to Buyer (each such person that executes an Employment Offer Letter, a “Continuing Employee”). For the avoidance of doubt, Buyer shall be solely responsible for payments to be made in connection with (i) the hiring by Buyer or the Company or their respective Affiliates of each of any Continuing Employees, including under any Employment Offer Letters, (ii) the future retention of any Continuing Employee after the Closing and (iii) any severance payments owed to any Continuing Employee who is terminated after the Closing. In addition, Buyer (or one of its Affiliates) may make offers of employment on or after the Closing to employees of the Company who are not listed in Section 5.11(a) of the Company Disclosure Letter and any employee who receives and accepts such an offer will become a Continuing Employee at such time.

(b)Buyer agrees that the Continuing Employees shall, during the period commencing on the Closing Date and ending on December 31 of the year in which the Closing occurs, be provided with (i) base salary or base wage that is no less than that provided by Seller and its Subsidiaries to such employees immediately prior to the Closing and (ii) other compensation and benefits entitlements (including 2022 cash bonus opportunity and equity sign-on grants) that are substantially comparable to what Buyer provides to its similarly situated employees; provided, however, that the requirements of this sentence shall not apply to Continuing Employees who are covered by a collective bargaining agreement.

(c)Effective as of the Closing, the Continuing Employees shall cease participation in all Benefit Plans, other than those Benefit Plans listed on Schedule 5.11(c). Effective as of the Closing Date, Buyer shall provide, for the benefit of the Continuing Employees, a tax-qualified defined contribution savings plan that permits the rollover of assets (including promissory notes and other documentation associated with any participant loan) from accounts of the Continuing Employees held under the Knopp Biosciences LLC 401(k) Plan.

(d)Buyer shall use commercially reasonable efforts to (i) cause any pre-existing conditions or limitations and eligibility waiting periods under any group health plans of Buyer or its Affiliates to be waived with respect to the Continuing Employees and their eligible dependents, (ii) give each Continuing Employee credit for the plan year in which the Closing occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing for which payment has been made and (iii) give each Continuing Employee service credit for such Continuing Employee’s employment with Seller and its Subsidiaries for purposes of vesting, benefit accrual and eligibility to participate under each applicable benefit plan of Buyer, as if such service had been performed with Buyer, except for benefit accrual under defined benefit pension plans, for purposes of qualifying for subsidized early retirement benefits or to the extent it would result in a duplication of benefits.

(e)Prior to making any written or oral communications to employees who are not directors or officers of Seller or any of its Subsidiaries pertaining to compensation or benefit matters that are both (i) affected by the Transactions and (ii) will be in effect following the Closing, Seller shall provide Buyer with a copy of the intended communication, Buyer shall have a reasonable period of time to review and comment on the communication, and Seller shall consider any such comments in good faith.

    -66-

(f)Seller agrees that (i) the Closing of the transaction provided for in this Agreement is a “Change in Control” and “Significant Transaction” that results in vesting of awards in Knopp Profits Interests Incentive Plan and Knopp Employee Incentive Plan, respectively, (ii) Seller will retain all Liabilities for awards under these plans and (iii) Seller will pay out awards under these plans per their current terms.

(g)Seller agrees that it remains solely liable for all Benefit Plans other than any Benefit Plans that are listed as “Company Benefit Plans” in Section 3.9(a) of the Company Disclosure Letter.

(h)If requested by Buyer after the Closing, Seller agrees to use commercially reasonable efforts to enforce the existing Seller restrictive covenants (as related to the Program Assets) against persons who are current or former employees of Seller as of the Closing. If so requested, Buyer will be responsible for any reasonable out-of-pocket expenses Seller incurs in connection with such enforcement effort.

(i)Nothing contained in this Agreement is intended to (i) be treated as an amendment of any particular Benefit Plan or the adoption of a new Benefit Plan, (ii) prevent Buyer or any of its Affiliates from amending or terminating any of their benefit plans or, after the Closing, any Benefit Plan in accordance their terms, (iii) prevent Buyer, the Company or any of their Affiliates, after the Closing, from terminating the employment of any Continuing Employee or (iv) create any third-party beneficiary rights in any employee of Seller or any of its Subsidiaries, any beneficiary or dependent thereof, or any collective bargaining representative thereof, with respect to the compensation, terms and conditions of employment and/or benefits that may be provided to any Continuing Employee by Buyer, the Company or any of their Affiliates or under any benefit plan which Buyer, the Company or any of their Affiliates may maintain.

(j)Prior to the Closing, Buyer or one of its Affiliates shall extend Employment Agreements to the Key Employees.

5.12Seller Release. Effective as of the Closing, Seller, on behalf of itself and its successors, assigns, representatives, members and agents (collectively, the “Seller Releasing Parties”) and their Affiliates, hereby unconditionally and irrevocably waives, releases, remises and forever discharges any and all rights, claims and Losses of any type that it or any of its Affiliates has had, now has or might now or hereafter have against Buyer and the Company, and each of their respective individual, joint or mutual, past, present and future representatives, Affiliates, stockholders, Subsidiaries, successors and assigns (each, a “Releasee”) in respect of, relating to or arising in connection with the Company contemporaneously with or prior to the Closing, except for rights, claims and Losses arising from and after the date hereof pursuant to the terms of this Agreement or any other Transaction Document. Seller, for itself and its Affiliates (i) acknowledges that it is aware that it or such Affiliate may hereafter discover facts different from or in addition to the facts which it or such Affiliate now knows or believes to be true with respect to the subject matter of this Agreement, but that it or such Affiliate intends that the general releases herein given shall be and remain in full force and effect, notwithstanding the discovery of any such different or additional facts and (ii) acknowledges that it has been informed of, and that it or such Affiliate is familiar with, Section 1542 of the Civil Code of the State of California, which provides as follows: “A GENERAL RELEASE DOES NOT

    -67-

EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.” Seller, for itself and its Affiliates, hereby waives and relinquishes (x) all rights and benefits such Person has or may have under Section 1542 of the Civil Code of the State of California, to the full extent that such Person may lawfully waive all such rights and benefits pertaining to the subject matters of this Agreement and (y) any similar or comparable protections afforded by any case law or statutes of similar import, whether such laws are in the United States or elsewhere in the world. Seller, for itself and its Affiliates, hereby irrevocably covenants to refrain from, directly or indirectly, asserting any claim or demand, or commencing, instituting or causing to be commenced or voluntarily aiding any proceeding of any kind against any Releasee, based upon any matter purported to be released hereby, including, without limitation, any Actions, executions, judgments, duties, debts, dues, accounts, bonds, Contracts and covenants (whether express or implied), and claims and demands whatsoever whether in law or in equity (whether based upon contract, tort or otherwise) which the Seller Releasing Parties may have against each of the Releasees, now or in the future, in each case solely in respect of any cause, matter or thing relating to the Company or any actions taken or failed to be taken by any of the Releasees in any capacity related to the Company occurring or arising prior to the Closing. The Parties acknowledge that this Section 5.12 is not an admission of liability or of the accuracy of any alleged fact or claim. The Parties expressly agree that this Section 5.12 shall not be construed as an admission in any proceeding as evidence of or an admission by any party of any violation or wrongdoing.

5.13Confidentiality.

(a)The terms of the Confidentiality Agreement are hereby incorporated by reference, mutatis mutandis, and, notwithstanding anything contained in the Confidentiality Agreement to the contrary, shall continue in full force and effect until the Closing, at which time such Confidentiality Agreement and all obligations thereunder shall terminate. Notwithstanding the termination of the Confidentiality Agreement at the Closing, Buyer shall, and shall cause its Affiliates and their respective Representatives to, keep confidential any information concerning Seller furnished in connection with the Transactions.

(b)From and following the Closing, Seller hereby agrees with Buyer that Seller will not, and that such Seller will cause its Affiliates, stockholders, partners, members, directors, managers, officers, agents and representatives not to, directly or indirectly, without the prior written consent of Buyer, disclose or use any Confidential Information; provided, that the provisions of this Section 5.13 will not prohibit any (i) retention of copies of records or (ii) disclosure or use of any Confidential Information (A) in accordance with the provisions of Section 2.4(m) or Section 5.10(b), (B) required by applicable Law so long as, to the extent practicable, reasonable prior notice is given of such disclosure and a reasonable opportunity is afforded to contest the same or (C) made in connection with the enforcement of any right or remedy relating to this Agreement. Seller agrees that it will be responsible for any breach or violation of the provisions of this Section 5.13 by any of its Affiliates, stockholders, partners, members, directors, managers, officers, agents or representatives.

    -68-

5.14Tax Matters.

(a)Transfer Taxes. Any transfer, excise, sales, use, value added, stamp, documentary, filing, recordation taxes and other similar Taxes, fees and charges (including real property transfer taxes) incurred in connection with this Agreement or the consummation of the Transactions, together with any inflation adjustment, interest, penalties or additions with respect thereto (“Transfer Taxes”), shall be borne equally by Buyer and Seller to the extent such Transfer Taxes, in the aggregate, do not exceed $100,000. Any Transfer Taxes in excess of $100,000, in the aggregate, shall be borne by Seller. The parties agree to cooperate in the filing of any returns with respect to Transfer Taxes, including by promptly supplying any information in its possession that is reasonably necessary to complete such returns. Transfer Taxes shall be timely paid, and all applicable filings, reports and returns shall be filed, as provided by applicable Law. If the Party that pays such Transfer Taxes is not the Party that is intended to bear such Transfer Taxes under this Section 5.14(a), then the paying Party shall be entitled to reimbursement from the Party that bears such Transfer Taxes.

(b)Tax Returns.

(i)Seller shall timely file (or cause to be timely filed) all Tax Returns of the Company that are required to be filed on or before the Closing Date (taking into account any available extensions). All such Tax Returns shall be prepared in a manner consistent with past practice, except as required by a change in applicable Law.

(ii)Seller shall prepare or cause to be prepared and file or cause to be filed all Tax Returns of the Company for Pre-Closing Tax Periods (other than any Straddle Period) that have not been filed as of the Closing Date, and all such Tax Returns shall be prepared in a manner consistent with past practice with respect to the Company unless otherwise required by applicable Law or this Agreement.  Seller shall provide drafts of each such Tax Return to Buyer for Buyer’s review and comment at least thirty (30) days prior to the due date for filing such Tax Return (or as soon as reasonably practicable if such Tax Return is due (taking into account all extensions properly obtained) within 30 days after the Closing Date).  Seller shall consider in good faith all reasonable comments made in writing by Buyer at least 15 days prior to the due date for filing such Tax Return (or as soon as reasonably practicable if such Tax Return is due (taking into account all extensions properly obtained) within 15 days after the Closing Date).

(iii) Buyer shall prepare or cause to be prepared and file or cause to be filed all Tax Returns of the Company for any Straddle Period.  Buyer shall provide drafts of each such Tax Return to Seller for Seller’s review and comment at least 30 days prior to the due date for filing such Tax Return (or as soon as reasonably practicable if such Tax Return is due (taking into account all extensions properly obtained) within 30 days after the Closing Date).  Buyer shall consider in good faith all reasonable comments made in writing by Seller at least 15 days prior to the due date for filing such Tax Return (or as soon as reasonably practicable if such Tax Return is due (taking into account all extensions properly obtained) within 15 days after the Closing Date).

    -69-

(c)Tax Sharing Arrangements. Effective as of the Closing Date, any and all Tax sharing agreements entered into by the Company shall be terminated and shall have no further effect, and thereafter the Company shall not be bound thereby or have any liability thereunder.

(d)Allocation of Transaction Consideration. Buyer shall prepare an allocation of the Transaction Consideration (as adjusted pursuant to this Agreement) and all other items required to be treated as consideration under the Code in accordance with Section 1060 of the Code.  Buyer shall deliver a schedule to Seller setting forth such allocation (the “Transaction Consideration Allocation”) within 30 days after the Closing Date. If Seller notifies Buyer within 30 days after receipt of the draft Transaction Consideration Allocation that Seller objects to one or more items reflected in such Transaction Consideration Allocation, Buyer shall incorporate in the Transaction Consideration Allocation any reasonable comments that form the basis of Seller’s objection(s) to the draft Transaction Consideration Allocation. If the Transaction Consideration is further adjusted pursuant to the terms of this Agreement, then any binding Transaction Consideration Allocation shall be adjusted as appropriate and Buyer and Seller shall cooperate in good faith in making such adjustments.

(e)Tax Contests. If a claim with respect to Taxes shall be made by any Governmental Entity, which, if successful, would reasonably be expected to result in any indemnity payment by Seller pursuant to Section 8.2 (a “Tax Claim”), then the Company shall promptly, and in any event no more than 30 days following the Company’s receipt of notice of a Tax Claim, give written notice to Seller of such claim; provided, that the failure of the Company to give such notice shall only relieve Seller from its indemnification obligations hereunder to the extent it is actually and materially prejudiced by such failure. With respect to any Tax Claim, Seller shall control all proceedings and may make all decisions in connection with such Tax Claim at its own expense; provided, that (i) Seller shall keep Buyer reasonably informed with respect to any such Tax Claim and shall provide copies of all material communications regarding such Tax Claim to Buyer, (ii) Seller shall consult with Buyer before taking any significant or material action in connection with such Tax Claim, (iii) the Company and Buyer shall be entitled to participate in any such Tax Claim at their own expense and (iv) to the extent the outcome of any such Tax Claim could reasonably be expected to affect the Taxes in respect of the Company for which Seller would not be liable for under this Agreement, no such Tax Claim can be settled without the written consent of Buyer, which consent shall not be unreasonably withheld, conditioned or delayed.

(f)Straddle Periods. In the case of Taxes that are payable with respect to a Straddle Period, the portion of any such Taxes that are allocable to the Pre-Closing Tax Period for purposes of this Agreement shall be (i) in the case of Taxes based upon, or related to, income, payroll, receipts or similar items, deemed equal to the amount which would be payable if the taxable year ended on the Closing Date, and (ii) in the case of other Taxes, deemed to be the amount of such Taxes for the entire period multiplied by a fraction the numerator of which is the number of days in the period ending on the Closing Date and the denominator of which is the number of days in the entire period.

5.15Non-Solicitation. Seller agrees that, for the period commencing on the Closing Date and expiring on the second anniversary of the Closing Date, neither it nor any of its Subsidiaries will, directly or indirectly, hire or solicit for employment or any similar arrangement

    -70-

any Continuing Employee; provided, however, that this Section 5.15 (a) shall not apply to Continuing Employees who have ceased to be employed by Buyer or any of its Affiliates for at least 90 days before the commencement of any activities otherwise prohibited by this Section 5.15, and (b) shall not prohibit general solicitations for employment through advertisements or other means not specifically directed toward employees of Buyer or its Affiliates.

5.16Non-Competition. Seller agrees that for the period commencing on the Closing Date and expiring on the fifth anniversary of the Closing Date, neither it nor any of its Subsidiaries shall, either directly or indirectly, alone or with others engage in, continue in, carry on, control, operate, manage or have any ownership or financial interest in any business that, directly or indirectly, competes with the Business, including, for the avoidance of doubt, any activities relating to the research, development or commercialization of neurological pharmaceutical products or compounds targeting the Kv7 channel or mutations of the KCNQ2 gene. Notwithstanding the foregoing, (a) nothing in this Agreement will prohibit Seller or its Subsidiaries from engaging in, continuing in, carrying on, controlling, operating, managing or having any ownership or financial interest in any business related to the Excluded Assets or Excluded Liabilities (including, for the avoidance of doubt, any business relating to dexpramipexole or pramipexole), regardless of whether such activities may be directly or indirectly competitive with the Business in any respect, and (b) each of Seller and its Subsidiaries may own, directly or indirectly, solely as an investment, securities of any Person traded on any national securities exchange if Seller or such Subsidiary, as applicable, is not a controlling Person of, or a member of a group which controls, such Person and does not, directly or indirectly, own two percent (2%) or more of any class of securities of such Person.

5.17Payments to and from Third Parties. Seller shall, or shall cause its applicable Affiliate to, (a) promptly pay or deliver to Buyer (or Buyer’s designated Affiliate) any monies or checks owed to the Company or the Business that have been delivered to Seller or any of its Affiliates after the Closing, but solely to the extent that such monies or checks are owed to the Company, and (b) promptly reimburse Buyer (or its designated Affiliates) for any amounts paid by Buyer (or its designated Affiliates) to third parties to the extent such payments are required to be paid by Buyer (or its designated Affiliates) in respect of any Excluded Asset or Excluded Liability (the “Excluded Payments”), provided that Buyer obtains Seller’s written consent with respect to any Excluded Payment prior to any payment being made with respect to such Excluded Payment.

5.18Wrong Pockets.

(a)If at any time within two years after the Closing, either Party discovers that any Program Asset is held by Seller or any of its Affiliates, Seller and its Affiliates shall promptly transfer such Program Asset to the Company or its designated Affiliate for no additional consideration and at Seller’s expense; provided, that none of Seller, Buyer, the Company or any of their respective Affiliates shall be required to commence any litigation or offer or pay any money or otherwise grant any accommodation (financial or otherwise) to any third party in consideration therewith.

(b)If at any time within two years after the Closing, any Party discovers that any Excluded Asset is held by Buyer or the Company or any of their respective Affiliates or that

    -71-

any Excluded Liability has been erroneously assumed by Buyer or the Company or any of their respective Affiliates, Seller, Buyer, the Company, and their respective Affiliates shall promptly transfer such Excluded Asset to Seller or its designated Affiliate or cause such Excluded Liability to be assumed by Seller or its designated Affiliate in each case for no additional consideration and at Buyer’s expense; provided, that none of Seller, Buyer, the Company or any of their respective Affiliates shall be required to commence any litigation or offer or pay any money or otherwise grant any accommodation (financial or otherwise) to any third party in consideration therewith.

5.19Insurance Policies.

(a)At the reasonable request of Buyer prior to the sixth anniversary of the Closing, and at Buyer’s sole cost and expense, Seller agrees to use commercially reasonable efforts to pursue any reasonable claims (the “Business Claims”) under any insurance policy providing coverage with respect to the Business and covering periods through the Closing Date provided by third-party insurers and maintained by Seller or any of its Affiliates (the “Business Insurance Policies”) with respect to any events, occurrences, omissions, Losses, injuries or illnesses that occurred on or prior to the Closing Date that remain insured losses thereunder, subject, in each case, to the deductibles, limits and terms of such policies. Seller shall notify Buyer prior to filing any claims related to the Business or the Program Assets under any Business Insurance Policy.

(b)Seller shall remit to Buyer a pro rata portion (based on the amount of Losses incurred, suffered or sustained by Seller and its Affiliates, on the one hand, and the Company and its Affiliates, on the other hand, with respect to the same facts, circumstances and events giving rise to such Business Claim) of any net recoveries with respect thereto under such Business Insurance Policies (which recovery shall be calculated net of any and all (i) unreimbursed reasonable and documented out-of-pocket costs and expenses incurred in pursuing and recovering such claims and (ii) contribution payments made in connection therewith, and taking into account any retention or deductible thereunder).

5.20Mail and Other Communications.

(a)Following the Closing, Seller and its Affiliates may receive mail, packages and other communications (including electronic communications) properly belonging to the Company. Accordingly, at all times following the Closing, (a) the Company authorizes Seller and its Affiliates to receive and open all mail, packages and other communications received by it and not clearly intended for the Company or its Affiliates or any of the Company’s or its Affiliates’ officers or directors, and to retain the same to the extent that they are not related to the Business or the Program Assets, and (b) to the extent such mail, packages and other communications are related to the Business or the Program Assets, Seller shall promptly after becoming aware thereof refer, forward or otherwise deliver such mail, packages or other communications to the Company (or, in case the same relate to both the Business or the Program Assets and any Excluded Assets or any Excluded Liabilities, copies thereof). The provisions of this Section 5.20(a) are not intended to, and shall not be deemed to, constitute an authorization by the Company or its Affiliates to permit Seller to accept service of process on its behalf, and Seller is not and shall not be deemed to be the agent of the Company for service of process purposes.

    -72-

(b)Following the Closing, Buyer and the Company and their respective Affiliates may receive mail, packages and other communications (including electronic communications) properly belonging to Seller. Accordingly, at all times following the Closing, (a) Seller authorizes Buyer and the Company and their respective Affiliates to receive and open all mail, packages and other communications received by it and not clearly intended for the Seller or its Affiliates or any of Seller’s or its Affiliates’ officers or directors, and to retain the same to the extent that they are related to the Business or the Program Assets, and (b) to the extent such mail, packages and other communications are not related to the Business or the Program Assets, Buyer and the Company and their respective Affiliates shall promptly after becoming aware thereof refer, forward or otherwise deliver such mail, packages or other communications to Seller (or, in case the same relate to both the Business or the Program Assets and any Excluded Assets or any Excluded Liabilities, copies thereof). The provisions of this Section 5.20(b) are not intended to, and shall not be deemed to, constitute an authorization by Seller or its Affiliates to permit Buyer or the Company or their respective Affiliates to accept service of process on its behalf, and Buyer and the Company and their respective Affiliates are not and shall not be deemed to be the agent of Seller for service of process purposes.

5.21Shared Contracts. Prior to the Closing and for a period of [**] after the Closing, Seller shall, and shall cause each of its Affiliates to, use its commercially reasonable efforts to assist Buyer, as Buyer reasonably requests in writing, either (a) to establish replacement contracts, contract rights or other agreements with respect to the Business with any third party which is a counterparty to a Shared Contract or (b) to assign the rights and obligations under such Shared Contract to the extent related to the Business to the Company; provided, that none of Seller, Buyer, the Company or any of their respective Affiliates shall be required to commence any litigation or offer or pay any money or otherwise grant any accommodation (financial or otherwise) to any third party in consideration therewith.

5.22Omitted Data. Following the Closing, (a) Buyer may notify Seller, in writing, that Buyer did not receive from Seller in connection with the Closing copies of certain data that were used in the Business prior to the Closing, or otherwise related to the Company Compounds, including [**], and (b) Seller may notify Buyer, in writing, that Buyer has not retained copies of certain data that were transferred to Buyer but were used in the retained business of Seller and its Subsidiaries prior to the Closing. Within 10 Business Days following receipt of such notice, the receiving Party (the “Responding Party”) shall confirm to the Party that provided the notice (the “Requesting Party”) as to whether the Responding Party has copies of the requested data. If the Responding Party so confirms, the Responding Party shall transfer, to the extent permitted by Law, within 10 Business Days of the confirmation, to the Requesting Party, without further payment or consideration, one copy of the data requested by the Requesting Party in the format in which it exists in the Responding Party’s databases, and the Parties shall reasonably and in good faith cooperate with respect to such transfer. The Requesting Party shall own all right, title and interest in and to such copy of the data transferred by the Responding Party, with full rights to use and exploit such copy of the data without the Responding Party’s consent.

5.23Registration Rights. So long as Parent’s existing Form S-3 registration statement under the Securities Act or a replacement thereto (the “Registration Statement”) remains in effect, Parent shall file (at Parent’s sole cost and expense) a prospectus supplement to register (a) the resale of Closing Consideration Shares that are Registrable Shares eligible for

    -73-

registration on the Registration Statement within 30 days following a written request by Seller (which may be provided by Seller as early as the 31st day following the Closing Date) at any time after the date that is 60 days following the Closing Date or (b) the resale of Earn-Out Shares that are Registrable Shares eligible for registration on the Registration Statement within 30 days following a written request by Seller (which may be provided by Seller as early as the date of the issuance of such Earn-Out Shares) at any time after the date that is 30 days following the date of the issuance of such Earn-Out Shares; provided,in each case, that if Seller determines in its reasonable good faith judgment that the filing of such prospectus supplement would (i) materially interfere with a significant acquisition, corporate organization, financing, securities offering or other similar transaction involving Parent or any of its Affiliates; (ii) require premature disclosure of material information that Parent has a bona fide business purpose for preserving as confidential; or (iii) render Parent unable to comply with requirements under the Securities Act or the Exchange Act,Buyer may delay the filing of such prospectus supplement until such time as the foregoing conditions no longer exist. Buyer shall use reasonable best efforts to maintain the effectiveness of such Registration Statement for a period ending on the date the Seller no longer holds more than 10,000 Registrable Shares.

5.24Stock Exchange Listing. Buyer shall use its best efforts (a) to cause the Closing Consideration Shares to be approved for listing on the NYSE, subject to official notice of issuance, prior to the Closing Date and (b) to cause the Earn-Out Shares to be approved for listing on the NYSE, subject to official notice of issuance, prior to the date of issuance.

5.25Restrictions on Dispositions. Seller shall not sell or agree to sell, directly or indirectly, through swap or hedging transactions or otherwise, any Parent Shares to any third party that either (a) has filed a Schedule 13D with respect to Parent or any of its Affiliates or (b) has run (or publicly announced an intention to run) a proxy contest, an unsolicited tender offer or consent solicitation with respect to any company in the prior three years.

5.26Further Assurances. The Parties shall execute and deliver, or shall cause to be executed and delivered, such documents and other instruments and shall take, or shall cause to be taken, such further actions as may be reasonably required to carry out the provisions of this Agreement and give effect to the Transactions.

5.27Shared Space & Services Agreement. The Parties shall negotiate in good faith to negotiate an agreement to be effective upon the Closing (a) pursuant to which Buyer and the Company shall grant Seller the right to occupy a portion of the Leased Real Property and (b) which will provide for certain Key Employees and Continuing Employees to provide services to Seller, in each case of the foregoing under commercially reasonable terms and conditions to be agreed and it being understood that the entry into any such agreement shall not be a condition to the consummation of the Transactions.

Article VI

CONDITIONS

6.1Conditions to Each Party’s Obligation to Consummate the Transactions. The obligation of each Party to consummate the Transactions is subject to the satisfaction or

    -74-

waiver in writing by Buyer and Seller at or prior to the Closing of each of the following conditions:

(a)Orders and Litigation. No court, arbitrator, mediator or other Governmental Entity of competent jurisdiction shall have enacted, enforced, entered, issued or promulgated any Order or Law (whether temporary, preliminary or permanent) that is in effect and has the effect of (i) making the Transactions illegal or otherwise restraining or prohibiting consummation of the Transactions or (ii) causing the Transactions to be rescinded following their consummation, and no Action brought by any Governmental Entity or any other Person (provided that such Person is not a Party or an Affiliate of a Party) challenging or seeking to restrain or prohibit the consummation of the Transactions shall be pending or threatened.

6.2Conditions to Obligation of Buyer. The obligations of Buyer to consummate the Transactions is also subject to the satisfaction or waiver in writing by Buyer at or prior to the Closing of the following conditions:

(a)Representations and Warranties of Seller and the Company.

(i)The Seller Fundamental Representations shall be true and correct in all respects as of the Execution Date and as of the Closing as though made on and as of such date and time (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date).

(ii)The other representations and warranties of Seller set forth in Article III and any certificates delivered pursuant to this Agreement shall be true and correct as of the Execution Date and as of the Closing as though made on and as of such date and time (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date), except where the failure of any such representations and warranties to be so true and correct would not, individually or in the aggregate, reasonably be expected to be material to the Company or the Business or prevent, materially delay or materially impair the consummation of the Transactions.

(b)Performance of Obligations of Seller and the Company. Seller and the Company shall have performed and complied in all material respects with all covenants required to be performed by it under this Agreement on or prior to the Closing Date, other than the obligations set forth in Section 5.1(b)(viii), which shall be performed and complied with in all respects.

(c)Closing Certificate. Buyer shall have received at the Closing a certificate signed on behalf of Seller and the Company by the a duly authorized officer of Seller and the Company (solely in his or her capacity as such and not in his or her personal capacity, and without personal liability), certifying that the conditions set forth in Section 6.2(a)(i) and Section 6.2(a)(ii) have been satisfied.

(d)Receipt of Approvals; Deliverables; No Post-Closing Restraints. If a premerger notification is required under the HSR Act and the regulations thereunder, the waiting

    -75-

period under the HSR Act shall have expired, been terminated or been obtained without the imposition of any term, condition or consequence the acceptance of which would require Buyer, the Company or any of their respective Affiliates to take any of the actions listed in Section 5.4(b)(i) or Section 5.4(b)(ii). Buyer shall have received all items required to be delivered to Buyer pursuant to Section 2.3(a) at or prior to the Closing. There shall not be threatened, instituted or pending any statute, rule, regulation, injunction, suit, action or proceeding in which a Governmental Entity of competent jurisdiction or any other competent adjudicating body, including, without limitation, any arbitral tribunal, is seeking (i) an Order or (ii) to (A) prohibit, limit, restrain or impair Buyer’s or any of its Affiliates’ ability to own or operate or to retain or change all or a portion of the assets, licenses, operations, rights, product lines, businesses or interest therein with respect to the Company from and after the Closing or any of the assets, licenses, operations, rights, product lines, businesses or interest therein of Buyer or its Affiliates (including by requiring any sale, divestiture, transfer, license, lease, disposition of or encumbrance or hold separate arrangement with respect to any such assets, licenses, operations, rights, product lines, businesses or interest therein) or (B) prohibit or limit Buyer’s ability to vote, transfer, receive dividends or otherwise exercise full ownership rights with respect to the Interests, and no Governmental Entity of competent jurisdiction or any other competent adjudicating body shall have enacted, issued, promulgated, enforced or entered any Law deemed applicable to the Transaction resulting in, or that would, individually or in the aggregate, reasonably be expected to result in any of the foregoing. A letter from the Federal Trade Commission stating that it has not been able to complete its investigation of the Transaction and that the parties proceed to close at their peril shall not constitute such an Order, action or proceeding.

(e)No Material Adverse Effect. Since the Execution Date, there shall not have occurred any change, effect, event, occurrence, circumstance or development that has had, or would, individually or in the aggregate, reasonably be expected to have, a Material Adverse Effect.

(f)Consents Under Agreements. Seller shall have obtained the consent or approval of each Person whose consent or approval shall be required under any of the Contracts set forth on Section 6.2(f) of the Company Disclosure Letter.

(g)Employment Agreements. Each of the Employment Agreements shall have been executed by the applicable Key Employee and be in full force and effect, and each Key Employee shall remain employed by Seller or one of its Subsidiaries.

(h)Pre-Closing Contribution. The Pre-Closing Contribution shall have been completed in a manner reasonably satisfactory to Buyer.

(i)Member Consent. Seller shall have obtained and delivered to Buyer the Member Consent.

6.3Conditions to Obligations of the Company and Seller. The obligation of the Company and Seller to consummate the Transactions is also subject to the satisfaction or waiver in writing by Seller at or prior to the Closing of the following conditions:

    -76-

(a)Representations and Warranties.

(i)The Buyer Fundamental Representations shall be true and correct in all respects as of the Execution Date and as of the Closing as though made on and as of such date and time (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date).

(ii)The other representations and warranties of Buyer contained in Article IV and any certificates delivered pursuant to this Agreement shall be true and correct as of the Execution Date and as of the Closing Date as though made on and as of such date and time (except to the extent that any such representation and warranty speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date), except where the failure of any such representation and warranty to be so true and correct would not, individually or in the aggregate, reasonably be expected to prevent, materially delay or materially impair the ability of Buyer to consummate the Transactions.

(b)Performance of Obligations of Buyer. Buyer shall have performed and complied with each of the covenants required to be performed by it under this Agreement on or prior to the Closing Date in all material respects.

(c)Closing Certificate. Seller and the Company shall have received at the Closing a certificate signed on behalf of Buyer by a duly authorized officer of Buyer (solely in his or her capacity as such and not in his or her personal capacity, and without personal liability), certifying that the conditions set forth in Section 6.3(a) and Section 6.3(b) have been satisfied.

Article VII

TERMINATION

7.1Termination. This Agreement may be terminated at any time prior to the Closing:

(a)by written agreement of Buyer and Seller;

(b)by either Buyer or Seller, by giving written notice of such termination to the other Party, if:

(i)the Closing shall not have occurred on or prior to the Outside Date; provided, that the right to terminate this Agreement pursuant to this Section 7.1(b)(i) shall not be available to any Party if such Party or any of its Subsidiaries has breached in any material respect its obligations under this Agreement in any manner that shall have proximately contributed to the failure of the Closing to have occurred on or prior to the Outside Date; or

(ii)any Order permanently restraining, enjoining or otherwise prohibiting the consummation of the Transactions shall become final and non-appealable;

    -77-

provided, that the right to terminate this Agreement pursuant to this Section 7.1(b)(ii) shall not be available to any Party if such Party or any of its Subsidiaries has breached in any material respect its obligations under this Agreement in any manner that proximately contributed to such Order becoming final and non-appealable;

(c)by Seller, if:

(i)Buyer shall have breached or failed to perform in any material respect any of its covenants or other agreements contained in this Agreement, or any of its representations and warranties shall have become untrue after the Execution Date, which breach or failure to perform or be true (A) would give rise to the failure of a condition set forth in Section 6.1 or Section 6.3 and (B) is not curable or, if curable, is not cured within the earlier of (A) 30 days after written notice thereof is given by Seller to Buyer and (C) the Outside Date; provided, that Seller shall not have the right to terminate this Agreement pursuant to this Section 7.1(c) if either Seller or the Company is then in material breach of any of its representations, warranties, covenants or other agreements hereunder such that it would give rise to the failure of a condition set forth in Section 6.1 or Section 6.2; or

(ii)at any time (A) Seller or the Company has received a Superior Proposal, (B) Seller and the Company have complied with their obligations under Section 5.10(b) in order to accept such Superior Proposal and (C) Seller and/or the Company accept or intend to accept such Superior Proposal (with such changes, if any, as may be negotiated with respect to such Superior Proposal);

(d)by Buyer, if:

(i)the Company or Seller shall have breached or failed to perform in any material respect any of its covenants or other agreements contained in this Agreement, or any of its representations and warranties shall have become untrue after the Execution Date, which breach or failure to perform or be true (i) would give rise to the failure of a condition set forth in Section 6.1 or Section 6.2, respectively and (ii) is not curable or, if curable, is not cured within the earlier of (A) 30 days after written notice thereof is given by Buyer to Seller and (B) the Outside Date; provided, that Buyer shall not have the right to terminate this Agreement pursuant to this Section 7.1(d) if Buyer is then in material breach of any of its representations, warranties, covenants or other agreements hereunder such that it would give rise to the failure of a condition set forth in Section 6.1 or Section 6.3; or

(ii)if the Member Consent has not been obtained, delivered to Buyer and certified by an executive officer of Seller prior to the end of the Member Consent Delivery Period.

7.2Effect of Termination and Abandonment.

(a)In the event of termination of this Agreement pursuant to this Article VII, this Agreement shall become void and of no effect with no liability to any Person on the part of any Party (or of any of its representatives or Affiliates); provided, however, that

    -78-

(i)no such termination shall relieve any Party of any liability or damages to any other Party resulting from Fraud; and

(ii)the provisions set forth in this Section 7.2, Article IX and the Confidentiality Agreement shall survive the termination of this Agreement.

(b)In the event this Agreement is terminated by Seller pursuant to Section 7.1(c)(ii) then Seller shall promptly, but in no event later than two days after the date of such termination, pay Buyer a termination fee of [**] and shall promptly, but in no event later than two days after being notified of such by Buyer, pay all of the documented out-of-pocket expenses incurred by Buyer or its Affiliates in connection with this Agreement and the Transactions, in each case payable by wire transfer of same day funds.

Article VIII

INDEMNIFICATION

8.1Survival.

(a)Each representation, warranty, covenant and other obligation contained in this Agreement shall survive the Closing, but only until the applicable survival date specified in this Section 8.1(a), whereupon it shall terminate; provided that if a claim with respect thereto shall be made prior to such survival date, then such survival date shall be extended, and such provision shall survive, but only with respect to such claim and only until the Final Determination thereof, whereupon such provision shall terminate. The parties acknowledge that the survival periods set forth below are contractual statute of limitations.

(i)The survival date applicable to the Fundamental Representations (other than the Business Fundamental Representations) shall be the 10th anniversary of the Closing Date.

(ii)The survival date applicable to the Business Fundamental Representations shall be the sixth anniversary of the Closing Date.

(iii)The representations and warranties set forth in Section 3.33 (No Other Representations or Warranties) and Section 4.13 (No Other Representations or Warranties) shall survive the Closing forever.

(iv)The survival date applicable to the other representations and warranties contained in this Agreement shall be the date that is 18 months after the Closing Date.

(v)The survival date applicable to the covenants and agreements contained in this Agreement shall be (i) with respect to covenants and agreements that require performance in full prior to the Closing, the date that is 18 months after the Closing Date, and (ii) with respect to covenants and agreements that by their terms are required to be performed, in whole or in part, after the Closing, the date on which such

    -79-

covenants and agreements have been fully performed or otherwise satisfied in accordance herewith.

(vi)The provisions contained in this Article VIII and in Article IX shall survive forever.

(b)No Party shall have any liability to any Person with respect to any provision of this Agreement or the subject matter thereof following the applicable survival date specified in Section 8.1(a), which supersedes any statute of limitations that would otherwise apply, and no Party shall thereafter assert any claim, cause of action, right or remedy, or any Action, with respect to such provision or the subject matter thereof. No provision of this Article VIII shall apply to or limit any claim that a Party committed Fraud in making any representation or warranty, which may be brought at any time until lapse of the applicable statute of limitations.

8.2Indemnification by Seller.

(a)Following the Closing and subject to the terms of this Agreement, Seller shall indemnify, defend, hold harmless and reimburse Buyer and its Affiliates and their respective successors and permitted assigns, in their capacity as such (collectively, the “Buyer Indemnified Parties”), for, from and against all Losses imposed on, incurred or suffered by or asserted against any Buyer Indemnified Party in connection with or arising out of:

(i)any inaccuracy in or breach of any Non-Fundamental Seller Representation; itbeingunderstood that for purposes of this Section 8.2(a)(i) any qualifications relating to materiality (such as the terms “material” and “Material Adverse Effect”) contained in such representation or warranty (other than the representation and warranty set forth in Section 3.6(b) (Absence of Certain Changes)) shall be disregarded for purposes of determining whether such representation or warranty was inaccurate or breached as well as for purposes of calculating the quantity of such Losses;

(ii)any inaccuracy in or breach of any Seller Fundamental Representation; itbeingunderstood that for purposes of this Section 8.2(a)(ii) any qualifications relating to materiality (such as the terms “material” and “Material Adverse Effect”) contained in such representation or warranty shall be disregarded for purposes of determining whether such representation or warranty was inaccurate or breached as well as for purposes of calculating the quantity of such Losses;

(iii)any breach of or failure of Seller or the Company to fully perform any covenant or obligation of Seller or the Company contained in this Agreement;

(iv)any Indemnified Taxes;

(v)any claim, cause of action, right or remedy, or any Action, asserted at any time by any actual or alleged member or securityholder of Seller, the Company or any of their respective Affiliates (other than any claims, cause of action, right or remedy or Action asserted by Seller in accordance with the terms of this Agreement) relating to Buyer’s obligations under this Agreement, including the obligation to pay any Contingent Payments or use Commercially Reasonable Efforts to develop, commercialize, market or

    -80-

sell the Kv7 Products, or the allocation or entitlement to a portion of the consideration paid or to be paid in connection with the Transactions, including any assertion of contractual, employment or other rights and any assertion of rights to own or acquire any security;

(vi)any Excluded Asset or Excluded Liability;

(vii)any inaccuracies in the Funds Flow Memorandum; or

(viii)any Seller Transaction Expenses that are not paid in full at or prior to the Closing.

(b)Seller shall not have any liability pursuant to this Article VIII in respect of any Losses of the type described in Section 8.2(a)(i) (i) to the extent that the aggregate amount of such Losses (excluding any Losses counted towards the Deductible described in clause (ii) below) exceeds [**] (the “Cap Amount”), (ii) unless and until the aggregate amount of such Losses (together with all losses of the type described in Section 8.2(a)(ii)) exceeds [**] (the “Deductible”), in which event Seller shall be liable for all such Losses in excess of the Deductible, and (iii) with respect to any individual item or series of related items where the Loss relating thereto is less than [**] (the “De Minimis Claim Threshold”).

(c)Seller shall not have any liability pursuant to this Article VIII in respect of any Losses of the type described in Section 8.2(a)(ii) arising in connection with any inaccuracy or breach of any of the Business Fundamental Representations (i) unless and until the aggregate amount of such Losses (together with all losses of the type described in Section 8.2(a)(i)) exceeds the Deductible, in which event Seller shall be liable for all such Losses in excess of the Deductible, (ii) with respect to any individual item or series of related items where the Loss relating thereto is less than the De Minimis Claim Threshold and (iii) to the extent that the aggregate amount of such Losses (excluding any Losses counted towards the Deductible) exceeds [**]; provided, that Seller’s sole liability for such Losses in excess of the Cap Amount shall be offsets pursuant to Section 2.4(h)(i) and effecting deposits into escrow in respect of Open Claim Amounts pursuant to Section 2.4(h)(ii), and collection thereof to the extent applicable.

(d)Seller shall not have any liability pursuant to this Article VIII in respect of any Losses of the type described in Section 8.2(a)(ii) to the extent that the aggregate amount of such Losses exceeds the Transaction Consideration actually paid by or on behalf of Buyer or that is or subsequently becomes payable pursuant to this Agreement.

(e)Notwithstanding anything to the contrary herein, Seller shall have no liability pursuant to this Article VIII for any punitive damages, except to the extent actually awarded to a third party in connection with a Third-Party Claim.

(f)Any Loss for which a Buyer Indemnified Party is determined pursuant to a Final Determination to be entitled to indemnification pursuant to this Section 8.2 shall be satisfied, at the election of Buyer:

    -81-

(i)effecting one or more offsets pursuant to Section 2.4(h)(i) and/or effecting one or more deposits into escrow in respect of Open Claim Amounts pursuant to Section 2.4(h)(ii);

(ii)by payment by wire transfer of immediately available funds from Seller to an account specified by the Buyer Indemnified Party no later than five Business Days following such Final Determination; or

(iii)any combination of the foregoing.

(g)For the avoidance of doubt, any amount that is being offset pursuant to Section 2.4(h) shall be subject to and taken into account in the computation of the Cap Amount and subject to the Deductible and De Minimis Claim Threshold.

8.3Indemnification by Buyer.

(a)Following the Closing and subject to the terms of this Agreement, Buyer shall indemnify, defend, hold harmless and reimburse Seller and each of Seller’s Affiliates (except to the extent acting in their capacity as a Representative of Buyer or any of its affiliates, if applicable) and their respective successors and permitted assigns, in their capacity as such (collectively, the “Seller Indemnified Parties”), for, from and against all Losses imposed on, incurred, suffered or asserted in connection with or arising out of:

(i)any inaccuracy in or breach of any Non-Fundamental Buyer Representation; it being understood that for purposes of this Section 8.3(a)(i) any qualifications relating to materiality (such as the terms “material”) contained in such representation or warranty shall be disregarded for purposes of determining whether such representation or warranty was inaccurate or breached as well as for purposes of calculating the quantity of such Losses;

(ii)any inaccuracy in or breach of any Buyer Fundamental Representation; it being understood that for purposes of this Section 8.3(a)(ii) any qualifications relating to materiality (such as the terms “material”) contained in such representation or warranty shall be disregarded for purposes of determining whether such representation or warranty was inaccurate or breached as well as for purposes of calculating the quantity of such Losses;

(iii)any breach of or failure of Buyer or the Company (following the Closing) to fully perform any covenant or obligation of Buyer or the Company (following the Closing) contained in this Agreement;

(iv)any of the Program Assets with respect to actions arising following the Closing; or

(v)the operation of the Company following the Closing.

(b)Buyer shall not have any liability pursuant to this Article VIII in respect of any Losses of the type described in Section 8.3(a)(i) to the extent that the aggregate amount of

    -82-

such Losses exceeds the Cap Amount, (ii) unless and until the aggregate amount of such Losses exceeds the Deductible, in which event Buyer shall be liable for all such Losses in excess of the Deductible, and (iii) with respect to any individual item where the Loss relating thereto is less than the De Minimis Claim Threshold.

(c)Buyer shall have no liability pursuant to this Article VIII for any punitive damages, except to the extent actually awarded to a third party in a Third Party Claim.

(d)Buyer shall not have any liability pursuant to this Article VIII in respect of any Losses of the type described in Section 8.3(a)(ii) to the extent that the aggregate amount of such Losses exceeds the Transaction Consideration payable by Buyer hereunder (as such amount may increase from time to time when Contingent Payments are earned).

(e)Any Loss for which a Seller Indemnified Party is determined pursuant to a Final Determination to be entitled to indemnification pursuant to this Section 8.3 shall be satisfied by payment by wire transfer of immediately available funds from Buyer to an account specified by the Seller Indemnified Party no later than five Business Days following such Final Determination.

8.4Claim Procedures.

(a)Except as set forth in Section 5.14 with respect to Tax Claims, in order for a Buyer Indemnified Party or a Seller Indemnified Party (any of them, an “Indemnified Party”) to duly make a valid claim under Section 8.2 or Section 8.3, the Indemnified Party must (promptly following the first date following the Closing Date on which such Indemnified Party has knowledge of facts, matters or circumstances from which it is reasonably apparent that such an occurrence is likely to have occurred) provide written notice to Seller (for claims made by Buyer Indemnified Parties) or to Buyer (for claims made by Seller Indemnified Parties) (the recipient of such notice, the “Indemnifying Party”), which notice shall set forth a description in reasonable detail of the occurrence(s) specified in Section 8.2 or Section 8.3 which the Indemnified Party alleges to have occurred, a description of the facts and circumstances giving rise to such occurrences, the estimated amount of Losses imposed, incurred, suffered or asserted in connection therewith or arising therefrom (to the extent then ascertainable), and a description of any other remedy sought in connection therewith, any relevant time constraints relating thereto and, to the extent practicable, any other material details pertaining thereto (a “Claim Notice”). The Indemnified Party shall cooperate with and provide to the Indemnifying Party such information under the Indemnified Party’s control as the Indemnifying Party may reasonably request for the purposes of determining the validity of the allegations made in the Claim Notice and shall keep the Indemnifying Party reasonably and promptly informed of factual and procedural developments (including additional information which may come under the Indemnified Party’s control) in connection therewith. The Indemnifying Party and the Indemnified Party shall use commercially reasonable efforts to avoid production of confidential information (consistent with applicable Law) to third parties and to cause all communications among employees, counsel and others representing any party to a Third-Party Claim to be made so as to preserve any applicable attorney-client or work product privileges.

(b)In the event the Claim Notice results from any Action asserted or threatened against the Indemnified Party by a third party (a “Third-Party Claim”):

    -83-

(i)The Indemnified Party shall provide the Claim Notice to the Indemnifying Party not later than the fifth calendar day following the Indemnified Party’s receipt of the Third-Party Claim, and in any event not later than the 10th Business Day preceding the date by which an appearance is required to be made before a court, arbitrator or other tribunal or an answer or similar pleading is required to be filed in a litigation or other proceeding; provided that the failure to timely provide a Claim Notice shall not relieve the Indemnifying Party of its obligations hereunder except to the extent that such failure has a material prejudicial effect on the defense or resolution of the Third-Party Claim.

(ii)During the period ending on the earlier of the 30th calendar day following the Indemnifying Party’s receipt of the Claim Notice and the 10th calendar day preceding the date on which an appearance is required to be made before a court, arbitrator or other tribunal or an answer or similar pleading is required to be filed in a litigation or other proceeding, the Indemnifying Party shall be entitled to notify the Indemnified Party of its election to assume and control the defense of the Third-Party Claim, unless the Claim Notice states that the Indemnified Party has determined in good faith that (A) the Third-Party Claim involves a criminal proceeding, Action, indictment, allegation or investigation; (B) the Third-Party Claim seeks an injunction or other equitable or non-monetary relief against the Indemnified Party or an Affiliate of the Indemnified Party; (C) the Losses sought in connection with such Third-Party Claim are claimed in good faith or are otherwise reasonably expected by Buyer to exceed the Cap Amount (or the unused portion thereof); (D) any insurer requires, as a condition to an Indemnified Party’s eligibility to recover insurance proceeds on account of such Third-Party Claim, that such insurer control the matter; (E) the Third-Party Claim involves any Significant Supplier which is also a current supplier of the Company at the time that such Third-Party Claim is asserted or threatened against the Indemnified Party; (F) a court of competent jurisdiction has ruled that the Indemnifying Party is not reasonably, diligently or in good faith conducting a defense of such Third-Party Claim; (G) the Third-Party Claim relates to Intellectual Property Rights held or used by the Indemnified Party; or (H) there is a reasonable probability that the Third-Party Claim may adversely affect the Indemnified Party or its Affiliates other than as a result of monetary damages.

(A)In the event that the Indemnifying Party is entitled to and duly and timely makes such election, such election shall constitute the Indemnifying Party’s conclusive acknowledgment that the Indemnified Party is entitled to be indemnified, defended, held harmless and reimbursed in accordance with this Article VIII for, from and against the Third-Party Claim, the Indemnifying Party shall defend the Indemnified Party by appropriate proceedings and shall have the sole power (as between the Indemnifying Party and the Indemnified Party and their respective Affiliates) to direct and control such defense and the settlement, arbitration, litigation and appellate strategy relating to the Third-Party Claim. The Indemnified Party shall be entitled but not obligated to participate in any such defense and to employ separate counsel of its choosing for such purpose; provided, that, if the Indemnified Party assumes the defense of a Third-Party Claim in accordance with the conditions and requirements of Section 8.4(b)(ii)(B) after the

    -84-

Indemnifying Party has failed diligently to pursue a Third-Party Claim it has assumed, as provided in the first sentence of this Section 8.4(b)(ii)(A), the Indemnifying Party shall bear the reasonable and documented out-of-pocket costs and expenses of one additional counsel (in addition to, but only to the extent necessary, one local counsel) which shall represent all Indemnified Parties arising out of the same or similar set of circumstances in connection with such defense. If the Indemnifying Party shall control the defense of any such claim, the Indemnifying Party shall be entitled to settle such claims; provided, that the Indemnifying Party shall not, without the prior written consent of the Indemnified Party, settle, compromise or offer to settle, compromise or cease to defend such Third-Party Claim if such settlement, compromise or cessation would result in: (I) any monetary liability of the Indemnified Party that will not be paid or reimbursed by the Indemnifying Party; (II) the imposition of a consent order, injunction or decree that would restrict the future activity or conduct of the Indemnified Party or any of its Affiliates; (III) a finding or admission of a violation of Law or violation of the rights of any Person by the Indemnified Party or any of its Affiliates; (IV) a finding or admission that would have an adverse effect on other claims made or threatened against the Indemnified Party or any of its Affiliates; (V) any change to Intellectual Property Rights held or used by the Indemnified Party; or (VI) any non-monetary condition or obligation being imposed on any Indemnified Party or any of its Affiliates.

(B)If the Indemnifying Party (I) is not entitled to or does not duly and timely make such election, or (II) after timely making such election, fails to take reasonable steps to defend diligently the Third-Party Claim within 10 Business Days after its receipt of written notice from the Indemnified Party to the effect that the Indemnifying Party has so failed, the Indemnified Party shall be entitled but not obligated to assume and control such defense from the Indemnifying Party upon provision of written notice informing the Indemnifying Party of such election, whereupon the Indemnified Party and not the Indemnifying Party shall have the powers described in the first sentence of Section 8.4(b)(ii)(A); provided that the Indemnified Party’s right to be indemnified, defended, held harmless and reimbursed in respect of the Third-Party Claim shall not otherwise be affected by such election. Notwithstanding anything in the foregoing to the contrary, the Indemnifying Party shall have no liability with respect to a Third-Party Claim settled without its prior written consent (which shall not unreasonably be withheld, conditioned or delayed).

(iii)The Indemnified Party and the Indemnifying Party shall cooperate in order to ensure the proper and adequate investigation and defense of all Third-Party Claims, including by providing reasonable access to each other’s relevant business records, documents and employees, for purposes of investigation, document production, testimony and otherwise. The Indemnified Party and the Indemnifying Party shall keep each other fully and promptly informed with respect to the status of all Third-Party

    -85-

Claims and shall deliver to each other copies of all material written notices and documents (including court papers) received by the other that relate to any Third-Party Claims. The Person controlling the defense of a Third-Party Claim shall in good faith allow the Indemnifying Party or Indemnified Party, as the case may be, to make comments to the materials filed or submitted in such defense, and shall consider such comments in good faith.

8.5Knowledge and Investigation. The right of any Indemnified Party to indemnification pursuant to this Article VIII shall not be affected by any investigation conducted or knowledge acquired (or capable of being acquired) at any time, whether before or after the Execution Date or the Closing, with respect to the accuracy of any representations or warranty, or performance of or compliance with any covenant or agreement hereunder. The waiver of any condition contained in this Agreement or in any other Transaction Document based on the breach of any such representation or warranty, or on the performance of or compliance with any such covenant or agreement, shall not affect the right of any Indemnified Party to indemnification pursuant to this Article VIII based on such representation, warranty, covenant or agreement.

8.6No Subrogation. Seller shall not make any claim for indemnification against the Company based on the fact that Seller was a controlling person, director, employee or agent of the Company (whether such claim is for Losses of any kind or otherwise and whether such claim is pursuant to Law, an Organizational Document, a Contract or otherwise) with respect to any claim for indemnification duly brought by a Buyer Indemnified Party under this Article VIII. Solely with respect to any claim for indemnification brought by a Buyer Indemnified Party under this Article VIII, Seller expressly waives any right of subrogation, contribution, advancement, indemnification or other claim against the Company with respect to such indemnification obligation to which Seller may become subject under or in connection with this Agreement.

8.7Fraud and Related Claims. Notwithstanding any provision of this Agreement to the contrary, nothing contained in this Agreement shall in any way limit, any Indemnified Party’s remedies with respect to, nor shall any of the limitations set forth in this Article VIII apply with respect to, claims of Fraud or intentional breach.

8.8Mitigation. Each Indemnified Party shall use commercially reasonable efforts to mitigate any Loss upon becoming aware of any event which would reasonably be expected to, or does, give rise thereto, including incurring costs only to the minimum extent necessary to remedy the breach which gives rise to the Loss.

8.9No Double Recovery. No Indemnified Party shall be entitled to recover more than once in respect of the same Loss (notwithstanding that such Loss may result from more than one of the occurrences specified in Section 8.2 or Section 8.3, as the case may be).

8.10Effect of Waiver of Condition. No Party’s right to indemnification pursuant to this Article VIII shall be adversely affected by its waiver of a condition to the Closing set forth in Article VI unless such Party makes clear by the terms of its waiver that it is foreclosing its right to indemnification with respect to all Losses in connection with or arising out of the facts and circumstances that are the subject of the waiver.

    -86-

8.11Third Party Recovery, Insurance Recovery and Tax Benefits. Any calculation of Losses hereunder (i) shall be reduced by any amounts recovered by the Indemnified Party as a result of indemnification by third parties, and any insurance proceeds made available or actually received regarding such Losses, and (ii) shall be reduced by an amount equal to any Tax benefit to the Indemnified Party actually realized in the taxable year of the Loss as a result of such Loss, less reasonable expenses incurred to obtain such benefit. The Indemnified Party shall use commercially reasonable efforts to (y) seek recovery under all insurance policies and third-party payments covering any Losses (including seeking recovery to the same extent as it would if such Losses were not subject to indemnification hereunder). Subject to the preceding sentence, in the event that an insurance or other recovery is made or a Tax benefit is realized by any Indemnified Party with respect to any Loss for which such Indemnified Party has been already indemnified hereunder, then the Indemnified Party shall refund promptly to the Indemnifying Party the aggregate amount of the recovery or Tax benefit for which indemnification was previously paid (less reasonable expenses incurred to obtain such benefit).

8.12Characterization of Payments. All payments made by an Indemnifying Party to an Indemnified Party in respect of any claim pursuant to Section 8.2 or Section 8.3 shall be treated as adjustments to the consideration paid pursuant to the Transactions for Tax purposes.

8.13Remedies Cumulative. Subject to the limitations contained in this Article VIII and without limiting Section 8.14, the rights of each Indemnified Party under this Article VIII are cumulative, and each Indemnified Party shall have the right in any particular circumstance, in its sole discretion, to enforce any provision of this Article VIII without regard to the availability of a remedy under any other provision of this Article VIII.

8.14Exclusive Remedies and No Rights Against Nonparties.

(a)Following the Closing, no Party shall assert against any other Party any claim, cause of action, right or remedy, or any Action, relating to this Agreement, the Transactions or any document or instrument delivered in connection herewith or therewith, other than  as set forth in Section 2.4(f),  claims pursuant to this Article VIII,  claims that a Party committed Fraud in making any representation or warranty contained in Article III or Article IV, claims pursuant to Section 9.4(d) and  claims pursuant to the terms of any Transaction Document (other than this Agreement). Following the Closing, the claims and remedies specified in clauses (i) through (v) of the previous sentence shall constitute the Parties’ sole and exclusive rights and remedies available to the Indemnified Parties for any and all Losses or other claims relating to or arising out of this Agreement, the Transactions and any document or instrument delivered in connection herewith or therewith, and shall supersede all other rights and remedies available at law or in equity (including any right of rescission). Accordingly, effective as of the Closing, each Party hereby irrevocably waives and discharges, and releases each other Party, to the fullest extent permitted under applicable Law, from, all other claims, causes of action and Actions relating thereto. The obligations of the Parties set forth in Section 8.2 and Section 8.3 shall be conditioned upon the Closing having occurred.

(b)In addition to Section 8.14(a), this Agreement may only be enforced against, and any Action, right or remedy that may be based upon, arise out of or relate to this Agreement, any other Transaction Document or the Transactions, or the negotiation, execution or

    -87-

performance of this Agreement, may only be made against the Persons that are expressly identified as Parties in their capacities as parties to this Agreement, and no Party shall at any time assert against any Person (other than a Party) which is a director, officer, employee, shareholder, general or limited partner, member, manager, agent or Affiliate or Representative of another Party (each, a “Nonparty”), any claim, cause of action, right or remedy, or any Action, relating to this Agreement, any other Transaction Document, the Transactions or any document or instrument delivered in connection herewith or therewith. Each Party hereby waives and discharges any such claim, cause of action, right, remedy and Action, and releases (and agrees to execute and deliver any instrument necessary to effectuate the release of) each Nonparty therefrom. The provisions of this Section 8.14(b) are for the benefit of and shall be enforceable by each Nonparty, which is an intended third-party beneficiary of this Section 8.14(b) and Section 5.26 (Further Assurances) in connection herewith.

Article IX

MISCELLANEOUS AND GENERAL

9.1Amendment; Waiver. Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by Buyer, Seller and the Company, or in the case of a waiver, by the Party granting the waiver. No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Law except as provided in Article VIII.

9.2Expenses. Except as otherwise provided in this Agreement and the Transaction Documents and whether or not the transactions contemplated by this Agreement and the Transaction Documents are consummated, all costs and expenses (including fees and expenses of counsel and financial advisors, if any) incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such costs and expenses. For the avoidance of doubt, any Seller Transaction Expenses not included in the Funds Flow Memorandum shall remain the obligations of Seller after the Closing and shall constitute Excluded Liabilities.

9.3Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement. Counterparts may be delivered via electronic mail, including Portable Document Format (PDF) or any electronic signature complying with the U.S. Federal ESIGN Act of 2000, and any counterpart so delivered shall be deemed to be original signatures, shall be valid and binding upon the Parties, and, upon delivery, shall constitute due execution of this Agreement.

9.4GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL; SPECIFIC PERFORMANCE.

(a)This Agreement, and all Actions (whether in contract, tort or statute) that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or

    -88-

performance of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement), shall be governed by, and enforced in accordance with, the Laws of the State of Delaware, including its statutes of limitations, without giving effect to applicable principles of conflicts of law to the extent that the application of the laws of another jurisdiction (whether of the State of Delaware or any other jurisdiction) would be required thereby.

(b)Each Party (i) agrees that it shall bring any Action in respect of any claim based upon, arising out of or relating to this Agreement or any Transaction Document or the transactions contemplated by this Agreement or any Transaction Document exclusively in the United Stated District Court for the District of Delaware or in the Chancery Court (the “Chosen Courts”) and solely in connection with claims arising under or relating to this Agreement or any of the Transaction Documents, (ii) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (iii) waives any objection to the laying of venue in any such Action in the Chosen Courts, (iv) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any Party hereto and (v) agrees that mailing of process or other papers in connection with any such Action in any manner as may be permitted by Law shall be valid and sufficient service thereof.

(c)EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HEREBY ACKNOWLEDGES AND CERTIFIES THAT(I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) IT MAKES THIS WAIVER VOLUNTARILY AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTION DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 9.4(C).

(d)Irreparable damage would occur in the event that any covenant herein were not to be performed in accordance with its terms. Accordingly, each Party shall be entitled to seek one or more injunctions to prevent any breach of covenant and to enforce specifically this Agreement in the Chosen Courts, in addition to any other remedy to which such Party may be entitled at law or in equity.

9.5Notices. All notices and other communications to be given or made hereunder shall be in writing and shall be deemed to have been duly given or made on the date of delivery to the recipient thereof if received prior to 5:00 p.m. in the place of delivery and such day is a Business Day (or otherwise on the next succeeding Business Day) if (a) served by personal delivery or by an internationally recognized overnight courier to the Person or entity for whom it is intended, (b) delivered by registered or certified mail, return receipt requested, or

    -89-

(c) sent by email, as provided in this Section 9.5; provided that the email is confirmed orally or in writing by the recipient thereof (excluding out-of-office replies or other automatically generated responses) or is followed up within one Business Day after email by dispatch pursuant to one of the other methods described herein:

To Parent, Buyer or, after the Closing, the Company:

Biohaven Therapeutics Ltd.
215 Church Street
New Haven, CT  06510
Attention:    Warren Volles
Email:    warren.volles@biohavenpharma.com

With a copy to:

Sullivan & Cromwell LLP
1125 Broad Street
New York, NY  10004
Attention:    Scott B. Crofton
Email:    croftons@sullcrom.com

To Seller or, prior to the Closing, the Company:

Knopp Biosciences LLC
2100 Wharton Street, Suite 615
Pittsburgh, PA  15203
Attention:    Michael Bozik
Email:    michael.bozik@knoppbio.com

With a copy to:

K&L Gates LLP
210 Sixth Avenue
Pittsburgh, PA  15222
Attention:    David Lehman
    Oded Green
Email:    david.lehman@klgates.com
    oded.green@klgates.com

or to such other Person or addressees as may be designated in writing by the Party to receive such notice as provided above; provided, however, that copies shall be provided to outside counsel for convenience only, such copies shall not, in and of themselves, constitute notice and the failure to provide any such copy shall not alter the effectiveness of any notice or other communication otherwise duly made or given.

9.6Entire Agreement. This Agreement (including any exhibits or schedules hereto), the Transaction Documents and the Confidentiality Agreement constitute the entire agreement and supersede all other prior agreements, understandings, representations and

    -90-

warranties both written and oral, among the Parties, with respect to the subject matter hereof; provided, however, that each Party acknowledges and agrees that the Confidentiality Agreement shall automatically terminate and be of no further force or effect at and as of the Closing and this Agreement supersedes any provision to the contrary in the Confidentiality Agreement.

9.7No Third-Party Beneficiaries. Except as provided in Section 5.12 (Seller Release), Section 8.14 (Exclusive Remedies and No Rights Against Nonparties), and Section 9.13 (Conflicts; Privilege) only, there shall be no third-party beneficiaries of this Agreement, any Transaction Document or any exhibit, annex or schedule hereto or thereto, and none of them shall confer on any Person other than the parties hereto and thereto any claim, cause of action, right or remedy. For the avoidance of doubt, no member or securityholder of Seller shall have the right to enforce any obligations of Seller under this Agreement.

9.8Obligations of Buyer and the Company. Whenever this Agreement requires a Subsidiary of Buyer to take any action, such requirement shall be deemed to include an undertaking on the part of Buyer to cause such Subsidiary to take such action. Whenever this Agreement requires a Subsidiary of Seller to take any action, such requirement shall be deemed to include an undertaking on the part of Seller to cause such Subsidiary to take such action.

9.9Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority of competent jurisdiction to be invalid, void or unenforceable, or the application of such provision, covenant or restriction to any Person or any circumstance is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision, covenant or restriction to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application of such provision, in any other jurisdiction and the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

9.10Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, legal representatives and permitted assigns. No Party to this Agreement may assign or transfer any of its rights or obligations under this Agreement, by operation of Law or otherwise, without the prior written consent of the other Party, except that (a) Seller may transfer its rights to receive Net Sales Payments pursuant to Section 2.4(g)(ii) and (b) Buyer may assign any and all of its rights or obligations under this Agreement (i) in connection with a Qualified Transaction; (ii) to one or more wholly-owned Subsidiaries of Buyer; or (iii) by way of collateral assignment, its rights, benefits and remedies under this Agreement and the other Transaction Documents to any of its or its Affiliates’ senior creditors and/or other financing sources; provided, that in the case of clauses (ii) and (iii), no such assignment shall relieve Buyer of any of its obligations hereunder. Any permitted successor or assignee of rights or obligations hereunder (other than an assignee of Buyer pursuant to clause (b)(iii) above) shall, in a writing to the other Party, expressly assume such rights or obligations.

    -91-

Any permitted assignment shall be binding on the successors of the assigning Party. Any purported assignment in violation of this Agreement is void.

9.11Fulfillment of Obligations. Any obligation of any Party to any other Party under this Agreement, or any Party under any of the Transaction Documents, which obligation is performed, satisfied or fulfilled completely by an Affiliate of such Party, shall be deemed to have been performed, satisfied or fulfilled by such Party.

9.12Company Disclosure Letter. Any item disclosed in any particular part of the Company Disclosure Letter will be subject to the following terms and conditions: (a) no disclosure of any matter will create an implication that such matter meets any standard of materiality and (b) headings and introductory language have been inserted on the sections of the Company Disclosure Letter for convenience of reference only and will to no extent have the effect of amending or changing the express description of the sections as set forth in this Agreement. No modifications, qualifications, or exceptions to any representations or warranties disclosed on one section of the Company Disclosure Letter shall constitute a modification, qualification or exception to any other representations or warranties made in this Agreement unless it is reasonably apparent on its face or based on the facts of such disclosure that the disclosures on such section of the Company Disclosure Letter apply to such other representations and warranties. For convenience of reference, a section of the Company Disclosure Letter may include a cross reference to other sections of the Company Disclosure Letter, but such cross reference does not mean that where a cross reference is not included, such deemed disclosure is inapplicable, as long as such disclosure would, on its face, be reasonably applicable to such other sections. All exhibits attached to the Company Disclosure Letter shall be incorporated by reference. Any terms in this Agreement shall have the same meaning when used in the Company Disclosure Letter as when used in this Agreement, unless the context otherwise requires.

9.13Conflicts; Privilege. It is acknowledged by all of the Parties (including the Buyer) that the Seller and Company have retained K&L Gates LLP, DLA Piper, and Morgan, Lewis & Bockius LLP to act as their counsel in connection with the Transactions and that K&L Gates LLP, DLA Piper, and Morgan, Lewis & Bockius LLP have not acted as counsel for any other Person in connection with the Transactions and that no other party or Person has the status of a client of K&L Gates LLP, DLA Piper, and Morgan, Lewis & Bockius LLP for conflict of interest or any other purposes as a result thereof. The Buyer (on behalf of itself, as well as its Affiliates) hereby agrees that, in the event that a dispute arises between the Buyer or any of its Affiliates (including the Company after the Closing) and the Seller, or any of its respective Affiliates, DLA Piper and Morgan, Lewis & Bockius LLP may represent Seller or any such Affiliate in such dispute even though the interests of the Seller or such Affiliate may be directly adverse to the Buyer, the Company (after the Closing) or any of their respective Affiliates and even though DLA Piper and Morgan, Lewis & Bockius LLP may have represented the Seller and the Company in a matter substantially related to such dispute, and the Buyer hereby waives, on behalf of itself and each of its Affiliates (including the Company following the Closing), any conflict of interest in connection with such representation by DLA Piper and Morgan, Lewis & Bockius LLP. The Buyer (on behalf of itself and the Company (following the Closing)) agrees that, as to all communications, whether written or electronic, among K&L Gates LLP, DLA Piper, and Morgan, Lewis & Bockius LLP and the Seller or the Company, and all files, attorney notes, drafts or other documents, that relate in any way to the Transactions, this Agreement or the Transaction Documents, and that predate the Closing, the attorney-client privilege, the

    -92-

expectation of client confidence and all other rights to any evidentiary privilege belong to the Seller and may be controlled by the Seller and shall not pass to or be claimed by the Buyer or the Company following the Closing. The Buyer agrees to take, and to cause its Affiliates (including the Company following the Closing), successors and assigns to take, all steps necessary to implement the intent of this Section 9.13.

9.14Parent Guaranty.

(a)Parent is a legal entity duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization. Parent has all requisite corporate power and authority and has taken all corporate or similar action necessary in order to execute, deliver and perform its obligations under this Agreement. This Agreement has been duly executed and delivered by Parent, and, when executed and delivered by Seller, the Company and the other parties hereto, will constitute a valid and binding agreement of Parent enforceable against Parent in accordance with its terms, subject to the Bankruptcy and Equity Exception.

(b)Parent hereby absolutely and unconditionally guarantees to the Seller and the Seller Indemnified Parties, as and to the extent due, the payment and performance of all obligations of Buyer to deliver the Transaction Consideration (including by issuing the Closing Consideration Shares and the Earn-Out Shares, if applicable) under this Agreement and the performance of the obligations set forth in Section 2.4(i)(iii) (collectively, the “Buyer Obligations”); provided, that this guarantee shall terminate automatically without any further action by any Person and be of no further force and effect upon the first to occur of (i) the closing of such Qualified Transaction, (ii) the consummation of a spin-off transaction by Parent or a sale of Buyer where such spun-off entity or Buyer, as applicable is a Qualified Purchaser (or the purchaser of Buyer is a Qualified Purchaser, subject such purchaser delivering a guarantee replacing the guarantee set forth in this Section 9.14(b)), or (iii) in the event of a Sale Transaction that does not constitute a Qualified Transaction or a transaction described in clause (ii) not involving a Qualified Purchaser, such time as the spun-off entity or transferee becomes a “Qualified Purchaser.”

(c)None of the Seller or any of the Seller Indemnified Parties shall be obligated to file any claim relating to the Buyer Obligations in the event that Buyer becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Seller or any of the Seller Indemnified Parties to so file shall not affect Parent’s obligations hereunder. In the event that any payment by or on behalf of Buyer to the Seller or any of the Seller Indemnified Parties in respect of any Buyer Obligations is rescinded or must otherwise be returned for any reason whatsoever, Parent shall remain liable hereunder with respect to such Buyer Obligations as if such payment had not been made. With respect to payment-related Buyer Obligations, this is an absolute, unconditional, present, primary and continuing guarantee of payment as and when due and not only of collectability. In accordance with this Section 9.14, one or more Actions may be brought and prosecuted by the Seller or any of the Seller Indemnified Parties in its sole discretion against Parent to enforce the provisions of this Section 9.14 for the full payment and/or performance of the Buyer Obligations, irrespective of whether any Action is brought against Buyer or any other Person or whether Buyer or any other Person is joined in any such Action.

(d)Notwithstanding anything to the contrary herein, in the event Parent or any of its successors or assigns (i) consolidates with or merges with any other Person and is not the

    -93-

continuing or surviving entity of such consolidation or merger, or (ii) transfers or conveys all or substantially all of its assets to any Person, then, and in each such case, the Seller or any of the Seller Indemnified Parties may seek recourse, whether by the enforcement of any judgment or assessment by any legal or equitable proceeding or by virtue of any statute, regulation or other applicable Law, against such surviving entity or such Person (in either case, a “Parent Successor Entity”), as the case may be, but only to the extent of the unpaid or unperformed obligation or liability hereunder. As used herein, unless otherwise specified, the term “Parent” shall include Parent’s Parent Successor Entity.

(e)Parent agrees to perform the obligations of Parent set forth in Section 2.3(b), 2.4(e)(iii), 2.4(i)(iii) and 5.23.

[Signature Page Follows]

    -94-

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date first written above.

BIOHAVEN THERAPEUTICS LTD.
By:	/s/ Vlad Coric
	Name: Vlad Coric
	Title: President & CEO
BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD., solely for the purpose of Section 9.14
By:	/s/ Vlad Coric
	Name: Vlad Coric
	Title: President & CEO
KNOPP BIOSCIENCES LLC
By:	/s/ Michael Bozik
	Name: Michael Bozik
	Title: President and CEO
CHANNEL BIOSCIENCES, LLC
By:	Knopp Biosciences LLC, its sole member
By:	/s/ Michael Bozik
	Name: Michael Bozik
	Title: President and CEO

[Signature Page to Membership Interest Purchase Agreement]

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, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2022 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: May 10, 2022

/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, Matthew Buten, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2022 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: May 10, 2022

/s/ MATTHEW BUTEN

Matthew Buten

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 Matthew Buten, 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 March 31, 2022, 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 10 day of May 2022.

/s/ VLAD CORIC, M.D.	/s/ MATTHEW BUTEN
Vlad Coric, M.D.	Matthew Buten
President and Chief Executive Officer	Chief Financial Officer
(principal executive 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

COVER - shares	3 Months Ended
	Mar. 31, 2022	May 06, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	001-38080
Entity Registrant Name	Biohaven Pharmaceutical Holding Company Ltd.
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
Title of 12(b) Security	Common Shares, no par value
Trading Symbol	BHVN
Security Exchange Name	NYSE
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
Entity Common Stock, Shares Outstanding		71,043,181
Entity Central Index Key	0001689813
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 169,065	$ 171,945
Marketable securities	433,410	192,648
Trade receivable, net	328,342	308,269
Inventory	91,281	80,608
Prepaid expenses	104,891	88,838
Other current assets	44,096	33,946
Total current assets	1,171,085	876,254
Property and equipment, net	14,534	14,690
Intangible assets, net	55,910	56,438
Other assets	130,188	129,830
Total assets	1,371,717	1,077,212
Current liabilities:
Accounts payable	56,202	51,683
Accrued expenses and other current liabilities	457,412	420,019
Current portion of mandatorily redeemable preferred shares	62,500	62,500
Total current liabilities	576,114	534,202
Long-term debt	634,106	626,720
Liability related to sale of future royalties, net	377,998	367,645
Mandatorily redeemable preferred shares, net	162,994	155,737
Derivative liability	9,120	13,110
Obligation to perform R&D services	36,016	50,571
Other long-term liabilities	41,782	12,236
Total liabilities	1,838,130	1,760,221
Commitments and contingencies
Contingently redeemable non-controlling interests	0	60,000
Shareholders’ deficit:
Common shares, no par value; 200,000,000 shares authorized as of March 31, 2022 and December 31, 2021; 70,540,802 and 66,933,531 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively	2,112,686	1,676,792
Additional paid-in capital	129,580	169,656
Accumulated other comprehensive loss	(2,398)	(73)
Accumulated deficit	(2,702,154)	(2,585,755)
Total shareholders’ deficit attributable to Biohaven Pharmaceutical Holding Company Ltd.	(462,286)	(739,380)
Non-controlling interests in consolidated subsidiaries	(4,127)	(3,629)
Total shareholders' deficit	(466,413)	(743,009)
Total liabilities and shareholders’ deficit	$ 1,371,717	$ 1,077,212

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
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)	70,540,802	66,933,531
Common shares, outstanding (shares)	70,540,802	66,933,531

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenues:
Total revenues	$ 318,852	$ 43,823
Operating expenses:
Cost of sales	26,342	12,862
Research and development expense	119,099	107,111
Selling, general and administrative	227,243	159,523
Total operating expenses	372,684	279,496
Loss from operations	(53,832)	(235,673)
Other income (expense):
Interest expense	(17,216)	(7,731)
Interest expense on mandatorily redeemable preferred shares	(7,917)	(7,943)
Interest expense on liability related to sale of future royalties	(17,314)	(13,508)
Change in fair value of derivatives	3,604	(210)
Gain from equity method investment	0	5,261
Other income (expense), net	81	(1,700)
Total other expense, net	(38,762)	(25,831)
Loss before provision for income taxes	(92,594)	(261,504)
Provision for income taxes	24,303	3,824
Net loss	(116,897)	(265,328)
Net loss attributable to non-controlling interests	498	360
Deemed dividend upon repurchase of preferred shares in consolidated subsidiary	(92,673)	0
Net loss attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd.	$ (209,072)	$ (264,968)
Net loss per share attributable to Biohaven Pharmaceutical Holding Company Ltd - basic (in dollars per share)	$ (2.97)	$ (4.27)
Net loss per share attributable to Biohaven Pharmaceutical Holding Company Ltd - diluted (in dollars per share)	$ (2.97)	$ (4.27)
Weighted average common shares outstanding - basic (shares)	70,332,274	62,040,715
Weighted average common shares outstanding - diluted (shares)	70,332,274	62,040,715
Comprehensive loss:
Net loss	$ (116,897)	$ (265,328)
Other comprehensive (loss) income, net of tax	(2,325)	95
Comprehensive loss	(119,222)	(265,233)
Less: comprehensive loss attributable to non-controlling interests	498	360
Comprehensive loss attributable to Biohaven Pharmaceutical Holding Company Ltd.	(118,724)	(264,873)
Product revenue, net
Revenues:
Total revenues	123,590	43,823
Collaboration and other revenue
Revenues:
Total revenues	$ 195,262	$ 0

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities:
Net loss	$ (116,897)	$ (265,328)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash share-based compensation expense	81,828	48,726
Interest expense on mandatorily redeemable preferred shares	7,917	7,943
Interest expense on liability related to sale of future royalties	17,314	13,508
Deferred interest paid-in-kind on long-term debt	6,450	2,795
Issuance of common shares as payment for license agreement	1,779	4,243
Change in fair value of derivatives	(3,604)	210
Gain from equity method investment	0	(5,261)
Depreciation and amortization	4,402	5,054
Change in obligation to perform R&D services	(6,942)	0
Other non-cash items	(646)	461
Changes in operating assets and liabilities:
Trade receivable, net	(20,073)	(36,658)
Inventory	(23,397)	(17,566)
Prepaid expenses, other current assets, and other assets	(24,954)	(25,619)
Accounts payable	4,518	13,903
Accrued expenses, other current liabilities, and other liabilities	48,661	47,915
Net cash used in operating activities	(23,644)	(205,674)
Cash flows from investing activities:
Purchases of marketable securities	(246,816)	0
Sales of marketable securities	0	113,441
Maturities of marketable securities	3,058	7,515
Purchases of property and equipment	(512)	(1,187)
Net cash (used in) provided by investing activities	(244,270)	119,769
Cash flows from financing activities:
Proceeds from issuance of common shares	252,000	308,743
Proceeds from obligation to perform R&D services	0	100,000
Proceeds from the issuance of series B preferred shares	14,579	17,585
Proceeds from exercise of share options	2,803	1,382
Payments for term loan, finance leases, and other	(1,391)	(6,695)
Net cash provided by financing activities	267,991	421,015
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(46)	14
Net increase in cash, cash equivalents and restricted cash	31	335,124
Cash, cash equivalents and restricted cash at beginning of period	174,343	134,231
Cash, cash equivalents and restricted cash at end of period	$ 174,374	$ 469,355

XML

Nature of the Business and Basis of Presentation

3 Months Ended

Mar. 31, 2022

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," "our," "Biohaven" or the “Company”) was incorporated in Tortola, British Virgin Islands in September 2013. We are a biopharmaceutical company with a portfolio of innovative product candidates targeting neurological diseases, including rare disorders. The Company's lead product, NURTEC® ODT (rimegepant), was approved by the U.S. Food and Drug Administration ("FDA") in February 2020, for the acute treatment of migraine and was approved for the preventive treatment of migraine in May 2021. NURTEC ODT is the first and only calcitonin gene-related peptide ("CGRP") receptor antagonist available in a quick-dissolve orally dissolving tablet ("ODT") formulation that is approved by the FDA for both the acute and preventive treatment of migraine in adults. Our Neuroinnovation portfolio includes product candidates based on multiple mechanisms — CGRP receptor antagonists, glutamate modulators, myeloperoxidase inhibition, Kv7 ion channel activators ("Kv7"), and Myostatin 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.

On November 9, 2021, the Company entered into a strategic commercialization arrangement with Pfizer Inc. ("Pfizer"), including a collaboration and license agreement and a related sublicense agreement (the "Pfizer Collaboration"), pursuant to which Pfizer would commercialize product candidates containing the Company's proprietary compounds rimegepant (BHV-3000) and gains rights to zavegepant (BHV-3500) (the "Licensed Products") in all countries worldwide outside of the United States (the "Territory"). The Pfizer Collaboration became effective on January 4, 2022. Refer to Note 13, "Collaboration, License and Other Agreements" for further details.

The Company is subject to risks and uncertainties common to companies in the biopharmaceutical industry, including, but not limited to, the risks associated with developing product candidates at each stage of non-clinical and clinical development; the challenges associated with gaining regulatory approval of such product candidates; the risks associated with commercializing pharmaceutical products for marketing and sale; the potential for development by third parties of new technological innovations that may compete with the Company’s products; the dependence on key

personnel; the challenges of protecting proprietary technology; the need to comply with government regulations; the high costs of drug development; and the uncertainty of being able to secure additional capital when needed to fund operations.

The Company has incurred recurring losses since its inception, had an accumulated deficit as of March 31, 2022, and expects to continue to generate operating losses during the continued global commercial launch of rimegepant. Prior to the commercial launch of rimegepant the Company has primarily raised funds through sales of equity in private placements and public offerings, sale of revenue participation rights related to potential future royalties, and debt financings.

As of May 10, 2022, the issuance date of our condensed consolidated financial statements, the Company expects that its cash, cash equivalents and marketable securities as of March 31, 2022, our future operating cash flows from sales of NURTEC ODT, the funds available from the Sixth Street Financing Agreement, Series B Preferred Shares receipts, product sales and other proceeds from our Pfizer Collaboration will be sufficient to fund its current forecast for operating expenses, including commercialization of NURTEC ODT, financial commitments and other cash requirements for more than one year. The Company may need to raise additional capital to execute its business plans and growth strategy until it is profitable. If no additional capital is raised through either public or private equity financings, debt financings, strategic relationships, alliances and licensing agreements, or a combination thereof, the Company may delay, limit or reduce discretionary spending in areas related to research and development activities and other general and administrative expenses in order to fund its operating costs and working capital needs.

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Our significant accounting policies are described in Note 2 of the notes to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 (the "2021 Form 10-K"). Updates to our accounting policies, including impacts from the adoption of new accounting standards, are discussed below in this Note 2.

Basis of Presentation

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 controlled 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.

The financial statements of our subsidiaries with functional currencies other than the U.S. dollar are translated into U.S. dollars using period-end exchange rates for assets and liabilities, historical exchange rates for shareholders' equity (deficit) and weighted average exchange rates for operating results. Translation gains and losses are included in accumulated other comprehensive income, net of tax, in shareholders' deficit. Foreign currency transaction gains and losses are included in other income (expense) in the condensed consolidated statements of operations and comprehensive loss.

Reclassifications

Certain items in the prior period’s condensed consolidated financial statements have been reclassified to conform to the current presentation.

Use of Estimates

The preparation of condensed 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 condensed consolidated financial statements and the reported amounts of income and expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, revenue recognition, interest expense on liability related to sale of future royalties, valuation of Series B preferred shares forward contracts and income taxes. 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.

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 March 31, 2022 and the results of its operations for the three months ended March 31, 2022 and 2021 and its cash flows for the three months ended March 31, 2022 and 2021. The results for the three months ended March 31, 2022 are not necessarily indicative of results to be expected for the year ending December 31, 2022, 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, 2021.

Revenue Recognition - Collaboration and Other Revenue

The Company analyzes its collaboration arrangements to assess whether they are within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities. This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and those that are more reflective of a vendor-customer relationship and, therefore, within the scope of ASC 606, Revenue from Contracts with Customers

("ASC 606"). For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently, generally by analogy to ASC 606. The accounting treatment pursuant to ASC 606 is outlined below.

The terms of licensing and collaboration agreements entered into typically include payment of one or more of the following: non-refundable, up-front license fees; development, regulatory and commercial milestone payments; payments for manufacturing supply and research and development services and royalties on net sales of licensed products. Each of these payments results in collaboration and other revenue, except for revenues related to manufacturing supply services, which are classified as product revenue. The core principle of ASC 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received in exchange for those goods or services.

In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

Amounts received prior to recognizing revenue are recorded as contract liabilities in the Company’s condensed consolidated balance sheets.

At contract inception, the Company assesses the goods or services promised in a contract with a customer and identifies those distinct goods and services that represent a performance obligation. A promised good or service may not be identified as a performance obligation if it is immaterial in the context of the contract with the customer, if it is not separately identifiable from other promises in the contract (either because it is not capable of being separated or because it is not separable in the context of the contract), or if the promised good or service does not provide the customer with a material right.

The Company considers the terms of the contract to determine the transaction price. The transaction price

is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration will only be included in the transaction price when it is not considered constrained, which is when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur.

If it is determined that multiple performance obligations exist, the transaction price is allocated at the inception of the agreement to all identified performance obligations based on the relative standalone selling prices ("SSP"). The relative SSP for each deliverable is estimated using external sourced evidence if it is available. If external sourced evidence is not available, the Company uses its best estimate of the SSP for the deliverable.

Revenue is recognized when, or as, the Company satisfies a performance obligation by transferring a promised good or service to a customer. An asset is transferred when, or as, the customer obtains control of that asset, which for a service is considered to be as the services are received and used. The Company recognizes revenue over time by measuring the progress toward complete satisfaction of the relevant performance obligation using an appropriate input or output method based on the nature of the service promised to the customer.

After contract inception, the transaction price is reassessed at every period end and updated for changes such as resolution of uncertain events. Any change in the transaction price is allocated to the performance obligations on the same basis as at contract inception, or to a single performance obligation as applicable.

Management may be required to exercise considerable judgment in estimating revenue to be recognized. Judgment is required in identifying performance obligations, estimating the transaction price, estimating the SSP of identified performance obligations, which may include forecasted revenue, development timelines, estimated future costs, discount rates and probabilities of technical and regulatory success, and estimating the progress towards satisfaction of performance obligations.

Recently Adopted Accounting Pronouncements

Effective January 1, 2022 the Company adopted ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—

Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The update addresses issues identified as a result of the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. The adoption of ASU 2020-06 did not have a material effect on the Company's consolidated financial statements.

Effective January 1, 2022 the Company adopted ASU No. 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force), which provides guidance on modifications or exchanges of a freestanding equity-classified written call option that is not within the scope of another topic. An entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument, and provides further guidance on measuring the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity

classified after modification or exchange. ASU 2021-04 also provides guidance on the recognition of the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange on the basis of the substance of the transaction, in the same manner as if cash had been paid as consideration. The guidance has been applied prospectively and did not have a material effect on the consolidated financial statements of the Company.

Future Adoption of New Accounting Pronouncements

In January 2021 the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, providing temporary guidance to ease the burden in accounting for reference rate reform primarily resulting from the discontinuation of LIBOR, which is currently expected to occur in mid-2023 for legacy contracts. The amendments in ASU 2021-01 are elective immediately and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued. The Company does not expect that the adoption of ASU 2021-01 will have a material effect on its consolidated financial statements.

XML

Marketable Securities

3 Months Ended

Mar. 31, 2022

Investments, Debt and Equity Securities [Abstract]

Marketable Securities

Marketable Securities

The amortized cost, gross unrealized holding gains, gross unrealized holding losses and fair value of debt securities available-for-sale by type of security at March 31, 2022 and December 31, 2021 was as follows:

	Amortized Cost		Allowance for Credit Losses		Net Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
March 31, 2022
Corporate bonds
U.S.	$	290,201	$	—	$	290,201	$	2	$	(1,969)	$	288,234
Foreign	47,106		—		47,106		—		(426)		46,680
Government related obligations
U.S.	98,707		—		98,707		1		(212)		98,496
Total	$	436,014	$	—	$	436,014	$	3	$	(2,607)	$	433,410
December 31, 2021
Corporate bonds
U.S.	$	130,388	$	—	$	130,388	$	1	$	(234)	$	130,155
Foreign	20,643		—		20,643		—		(82)		20,561
Government related obligations
U.S.	41,939		—		41,939		—		(8)		41,931
Total	$	192,971	$	—	$	192,971	$	1	$	(324)	$	192,648

The Company had 99 and 53 available-for-sale debt securities in an unrealized loss position, with an aggregate fair value of $412,366 and $185,296, as of March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022, the Company did not intend to sell these securities, and did not believe it was more likely than not that it would be required to sell these securities prior to the anticipated recovery of their amortized cost basis. We did not have any investments in a continuous unrealized loss position for more than twelve months as of March 31, 2022 and December 31, 2021.

The net amortized cost and fair value of debt securities available-for-sale at March 31, 2022 and December 31, 2021 are shown below by contractual maturity. Actual maturities may differ from contractual maturities because securities may be restructured, called or prepaid, or the Company intends to sell a security prior to maturity. The fair values of available for sale debt securities are classified as marketable securities in the condensed consolidated balance sheets at March 31, 2022 and December 31, 2021.

	March 31, 2022				December 31, 2021
	Net Amortized Cost		Fair Value		Net Amortized Cost		Fair Value
Due to mature:
Less than one year	$	342,502	$	341,069	$	155,359	$	155,226
One year through five years	93,512		92,341		37,612		37,422
Total	$	436,014	$	433,410	$	192,971	$	192,648

Net Investment Income

Sources of net investment income included in other income (expense) in the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022 and 2021 were as follows:

	Three Months Ended March 31,
	2022		2021
Gross investment income from debt securities available-for-sale	$	140	$	72
Investment expenses	(18)		(52)
Net investment income (excluding net realized capital gains or losses)	122		20
Net realized capital (losses) gains	(3)		19
Net investment income	$	119	$	39

We utilize the specific identification method in computing realized gains and losses. The proceeds from the sale of available-for-sale debt securities and the related gross realized capital gains and losses for the three months ended March 31, 2022 and 2021 were the following:

	Three Months Ended March 31,
	2022		2021
Proceeds from sales	$	—	$	113,441
Gross realized capital gains	—		19
Gross realized capital losses	$	—	—

XML

Fair Value of Financial Assets and Liabilities

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value of Financial Assets and Liabilities

Fair Value of Financial Assets and Liabilities

The preparation of the Company’s condensed consolidated financial statements in accordance with GAAP requires certain assets and liabilities to be reflected at their fair value and others to be reflected on another basis, such as an adjusted historical cost basis. In this note, the Company provides details on the fair value of financial assets and liabilities and how it determines those fair values.

Financial Instruments Measured at Fair Value on the Condensed Consolidated Balance Sheets

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.

For a description of the methods and assumptions that are used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument, see (Note 4) “Fair Value of Financial Assets and Liabilities” in the 2021 Form 10-K. Financial assets and liabilities measured at fair value on a recurring basis on the condensed consolidated balance sheets at March 31, 2022 and December 31, 2021 were as follows:

		Fair Value Measurement Using:
Balance Sheet Classification	Type of Instrument	Level 1		Level 2		Level 3		Total
March 31, 2022
Assets:
Cash equivalents	Money market funds	$	45,999	$	—	$	—	$	45,999
Cash equivalents	U.S. treasury bills	—		8,497		—		8,497
Marketable securities	U.S. treasury bills	5,992		92,504		—		98,496
Marketable securities	U.S. corporate bonds	—		288,234		—		288,234
Marketable securities	Foreign corporate bonds	—		46,680		—		46,680
Total assets		$	51,991	$	435,915	$	—	$	487,906
Liabilities:
Series B preferred shares forward contracts		$	—	$	—	$	9,120	$	9,120
Total liabilities		$	—	$	—	$	9,120	$	9,120
December 31, 2021
Assets:
Cash equivalents	Money market funds	$	32,420	$	—	$	—	$	32,420
Marketable securities	U.S. treasury bills	5,994		35,937		—		41,931
Marketable securities	U.S. corporate bonds	—		130,155		—		130,155
Marketable securities	Foreign corporate bonds	—		20,561		—		20,561
Total assets		$	38,414	$	186,653	$	—	$	225,067
Liabilities:
Series B preferred shares forward contracts		$	—	$	—	$	13,110	$	13,110
Total liabilities		$	—	$	—	$	13,110	$	13,110

There were no securities transferred between Level 1, 2 and 3 during the three months ended March 31, 2022 or 2021.

Series B Preferred Shares Forward Contracts

The following tables provide roll forwards of the aggregate fair value of the Company's Series B Preferred Shares Forward Contracts for which fair value is determined by Level 3 inputs for the three months ended March 31, 2022 and 2021:

	Carrying Value
Balance at December 31, 2021	$	13,110
Change in fair value of derivative liability	(3,604)
Partial settlement of derivative liability	(386)
Balance at March 31, 2022	$	9,120
Balance at December 31, 2020	$	14,190
Change in fair value of derivative liability	835
Partial settlement of derivative liability	(625)
Balance at March 31, 2021	$	14,400

Contingent Value Right Liability

On January 4, 2021, the Company acquired Kleo Pharmaceuticals, Inc. (“Kleo”) (see Note 6). Included in the purchase consideration transferred was a contingent value right to receive one dollar in cash for each Kleo share if certain specified Kleo biopharmaceutical products or product candidates receive the approval of the FDA prior to the expiration of 30 months following the effective time of the transaction. The maximum amount payable pursuant to the contingent value right is approximately $17,300, and the fair value of the contingent value right was $1,457 as of the acquisition date. The Company recorded the contingent value right in other long-term liabilities on the condensed consolidated balance sheets.

The fair value of the contingent value right was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The Company used a discounted cash flow approach to value the contingent value right liability. As inputs into the valuation, the Company considered the probability of FDA approval within the 30 month period, which we estimated at approximately 10%, the amount of the payment, and a discount rate of approximately 7% determined using an implied credit spread adjusted based on companies with similar credit risk.

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

XML

Balance Sheet Components

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Components

Balance Sheet Components

Restricted Cash

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

Restricted cash included in other assets in the condensed consolidated balance sheets represents collateral held by a bank for a letter of credit ("LOC") issued in connection with the leased office space in Yardley, Pennsylvania. The following represents a reconciliation of cash and cash equivalents in the condensed consolidated balance sheets to total cash, cash equivalents and restricted cash as of March 31, 2022 and December 31, 2021, respectively, in the condensed consolidated statements of cash flows:

	March 31, 2022		December 31, 2021
Cash and cash equivalents	$	169,065	$	171,945
Restricted cash (included in other current assets)	4,559		1,648
Restricted cash (included in other assets)	750		750
Cash, cash equivalents and restricted cash in the statements of cash flows	$	174,374	$	174,343

Trade Receivable, Net

The Company’s trade accounts receivable consists of amounts due primarily from pharmacy wholesalers in the U.S. (collectively, its "Customers") related to sales of NURTEC ODT and have standard payment terms. For certain Customers, the trade accounts receivable for the Customer is net of distribution service fees, prompt pay discounts and other adjustments. The Company monitors the financial performance and creditworthiness of its Customers so that it can properly assess and respond to changes in their credit profile. The Company reserves against trade accounts receivable for estimated losses that may arise from a Customer’s inability to pay and any amounts determined to be uncollectible are written off against the reserve when it is probable that the receivable will not be collected. The allowance for doubtful accounts,

including reserve amounts for estimated credit losses, was immaterial as of March 31, 2022 and December 31, 2021.

Inventory

Inventory consisted of the following:

	As of March 31, 2022		As of December 31, 2021
Work-in-process	169,390		159,075
Finished goods	13,731		9,269
Total inventories	$	183,121	$	168,344
Less noncurrent inventories(1)	91,840		87,736
Total inventories classified as current	$	91,281	$	80,608

(1) Included in other assets on the condensed consolidated balance sheets. There are no recoverability issues for these amounts.

Prepaid Expenses

Prepaid expenses consisted of the following:

	As of March 31, 2022		As of December 31, 2021
Prepaid clinical trial costs	$	58,562	$	42,578
Prepaid manufacturing	8,856		17,448
Prepaid commercial costs	33,248		15,732
Other prepaid expenses	4,225		13,080
Prepaid expenses	$	104,891	$	88,838

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

	As of March 31, 2022		As of December 31, 2021
Accrued development milestones	$	5,000	$	5,000
Accrued employee compensation and benefits	35,362		40,109
Accrued clinical trial costs	36,051		37,477
Accrued commercialization and other professional fees	22,744		19,994
Accrued sales discounts and allowances	233,096		203,760
Current obligation to perform R&D services	29,642		22,030
Other accrued expenses and other current liabilities	95,517		91,649
Accrued expenses and other current liabilities	$	457,412	$	420,019

XML

Business Acquisition

3 Months Ended

Mar. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Business Acquisition

Business Acquisition

On January 4, 2021, the Company acquired Kleo Pharmaceuticals, Inc. (“Kleo”). Kleo is a development-stage biopharmaceutical company focused on advancing the field of immunotherapy by developing small molecules that emulate biologics. The transaction was accounted for as the acquisition of a business using the acquisition method of accounting.

The total fair value of the consideration transferred was $20,043 which primarily consisted of the issuance of a total of 115,836 common shares of the Company to Kleo stockholders and contingent consideration in the form of a contingent value right to receive one dollar in cash for each Kleo share if certain specified Kleo biopharmaceutical products or product candidates receive the approval of the FDA prior to the expiration of 30 months following the effective time of the transaction. The maximum amount payable pursuant to the contingent value right was approximately $17,300. At December 31, 2021, the Company determined the value of the contingent value right to be immaterial and recognized a gain of $1,457 related to the contingent value right in other income (expense) during the fourth quarter of 2021. The value of the contingent value right continues to be immaterial with no value included on the condensed consolidated balance sheet as of March 31, 2022.

Prior to the consummation of the transaction, the Company owned approximately 41.9% of the outstanding shares of Kleo and accounted for it as an equity method investment. As part of the transaction, the Company acquired the remainder of the shares of Kleo, and post-transaction the Company owns 100% of the outstanding shares of Kleo. The carrying value of the Company’s investment in Kleo was $1,176 immediately prior to the acquisition date. The Company determined the fair value of the existing interest was $6,437, and recognized a gain from our equity method investment during the first quarter of 2021 of $5,261 on the condensed consolidated statements of operations and comprehensive loss as a result of remeasuring to fair value the existing equity interest in Kleo.

In connection with the transaction, we recorded: net working capital of $573; property, plant and equipment of $1,257; intangible assets consisting of in progress research and development assets of $18,400 which include an oncology therapeutic candidate entering Phase I clinical trials and a COVID-19 therapeutic candidate in the planning stage for clinical development; debt assumed of $1,577; and goodwill of $1,390.

Kleo’s employees, other than its President and Chief Financial Officer, were retained as part of the transaction. In connection with the transaction agreement, the Company filed a registration statement permitting Kleo stockholders to offer and sell the common shares of the Company issued in the transaction.

XML

Liability Related to Sale of Future Royalties, net

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Liability Related to Sale of Future Royalties, net

Liability Related to Sale of Future Royalties, net

2018 RPI Funding Agreement

In June 2018, the Company entered into a funding agreement (the "2018 RPI Funding Agreement") to sell tiered, sales-based royalty rights on global net sales of pharmaceutical products containing the compounds rimegepant or zavegepant (previously known as BHV-3500 and vazegepant) 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 2018 RPI Funding Agreement, in exchange for $100,000 in cash. Specifically, the participation rate commences at 2.1% on annual global net sales of up to and equal to $1,500,000, declining to 1.5% on annual global net sales exceeding $1,500,000. Pursuant to the Pfizer Collaboration, Pfizer will compensate Biohaven for the

related royalties on net sales outside of the U.S. owed to RPI under the 2018 RPI Funding Agreement

Concurrent with the 2018 RPI 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 account 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 2018 RPI Funding Agreement and $50,000 from the Purchase Agreement among the two units of account 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 share 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 account. The effective interest rate under the 2018 RPI Funding Agreement, including transaction costs, is approximately 27% as of March 31, 2022.

2020 RPI Funding Agreement

In August 2020, the Company entered into a funding agreement with RPI 2019 Intermediate Finance Trust (“RPI 2019 IFT”) providing for up to $250,000 of funding in exchange for rights to participation payments based on global net sales of products containing zavegepant and rimegepant and certain payments based on success-based milestones relating to zavegepant (the "2020 RPI Funding Agreement"). Under the 2020 RPI Funding Agreement, RPI 2019 IFT will be entitled to receive tiered, sales based participation rights up to 3.0% of future global net sales of products containing zavegepant, 0.4% of future global net sales of products containing rimegepant, and payments tied to success-based milestones as described below. Pursuant to the Pfizer Collaboration, Pfizer will compensate Biohaven for the related royalties on net sales outside of the U.S. owed to RPI under the 2020 RPI Funding Agreement. The Company received $150,000 in cash at closing in 2020 and $100,000 in cash upon achievement of the commencement of the oral zavegepant Phase 3 program in March 2021.

The success-based milestone payments range from 0.6x to 2.95x of the funded amount depending on the number of regulatory approvals achieved for

zavegepant (including 1.9x for the first zavegepant migraine regulatory approval) and would be paid over a 10-year period. If the Company consummates a Change of Control, RPI 2019 IFT has the option to accelerate each unpaid milestone payment which has or thereafter occurs.

The Company concluded that there were two units of account for the $150,000 in initial consideration received, which comprised of a liability related to sale of future royalties for products containing rimegepant and a research and development arrangement with RPI 2019 IFT for zavegepant. The Company allocated the $150,000 from the 2020 RPI Funding Agreement among the two units of account based on the present value of probability adjusted net sales at the time of the transaction. The Company allocated $147,876 in transaction consideration to the liability related to sale of future royalties and $2,124 to the obligation to perform R&D services liability in the condensed consolidated balance sheets. The transaction costs of $400 were allocated to the liability related to sale of future royalties. The effective interest rate under the 2020 RPI Funding Agreement, including transaction costs, is approximately 8% as of March 31, 2022.

In March 2021, the Company received $100,000 from RPI 2019 IFT, pursuant to the 2020 RPI Funding Agreement, for the commencement of the oral zavegepant Phase 3 clinical program. The Company allocated the proceeds to obligation to perform R&D services liability in the condensed consolidated balance sheets.

Since there is a substantive and genuine transfer of risk to RPI 2019 IFT for the development of zavegepant, the $102,124 of consideration allocated to the development of zavegepant is being recognized by the Company as an obligation to perform contractual services and therefore is a reduction of research and development expenses as incurred.

The following table shows the activity within the obligation to perform R&D services account for the three months ended March 31, 2022 and 2021, related to the 2020 RPI Funding Agreement.

	Three Months Ended March 31,
	2022		2021
Reduction to research and development expenses	$	6,943	190

The following table shows the activity within the liability related to sales of future royalties account for

the three months ended March 31, 2022 and 2021, related to the 2018 and 2020 RPI Funding Agreements.

	Three Months Ended March 31,
	2022		2021
Liability related to sale of future royalties - beginning balance	$	384,283	$	335,282
Royalty revenues paid and payable to RPI	(3,090)		(1,096)
Interest expense on liability related to sale of future royalties	17,314		13,508
Liability related to sale of future royalties - ending balance	$	398,507	$	347,694

XML

Mandatorily Redeemable Preferred Shares, net

3 Months Ended

Mar. 31, 2022

Other Liabilities Disclosure [Abstract]

Mandatorily Redeemable Preferred Shares, net

Mandatorily Redeemable Preferred Shares, net

RPI Series A Preferred Shares

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.

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 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.

The Company may redeem the Series A Preferred Shares at its 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.

The Company is required to redeem the Series A Preferred Shares for two times (2x) the original purchase price, payable beginning March 31, 2021 in equal quarterly installments through 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 20% as of March 31, 2022. The Company recognized $6,463 and $7,943 in interest expense for the three months ended March 31, 2022 and 2021, respectively. The Company had 1,715 and 1,871 Series A preferred shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively.

The following table shows the activity within the Series A preferred share liability for the three months ended March 31, 2022 and 2021, respectively:

	Carrying Value
Gross balance at December 31, 2021	$	141,740
Interest expense recognized, excluding transaction cost amortization	6,452
Redemption of Series A preferred shares	(15,625)
Gross balance at March 31, 2022	$	132,567
Less: unamortized transaction costs	(120)
Net balance at March 31, 2022	$	132,447
Gross balance at December 31, 2020	$	174,264
Interest expense recognized, including transaction cost amortization	7,932
Redemption of Series A preferred shares	(15,625)
Gross balance at March 31, 2021	$	166,571
Less: unamortized transaction costs	(162)
Net balance at March 31, 2021	$	166,409

RPI Series B Preferred Shares

On August 7, 2020, the Company entered into the RPI Series B Preferred Share Agreement, pursuant to which RPI agreed to invest in the Company through the purchase of up to 3,992 Series B Preferred Shares at a price of $50,100 per share. The shares will be issued in quarterly increments from March 31, 2021 to December 31, 2024. Upon issuance of the Series B Preferred Shares, they qualify as mandatorily redeemable instruments and are classified as a mandatorily redeemable preferred shares liability on the condensed consolidated balance sheet. The Company measures the liability at fair value, and subsequently accretes the carrying value to the redemption value through interest expense using the effective interest rate method. The effective interest rate under the Series B Preferred Share Agreement was determined to be approximately 8.7% as of March 31, 2022. The Company recognized $1,454 in interest expense for the three months ended March 31, 2022 and no interest expense for the three months ended March 31, 2021. The Company had 1,697 and 1,406 Series B preferred shares issued and outstanding, as of March 31, 2022 and December 31, 2021, respectively.

The following table shows the activity within the Series B preferred share liability for the three months ended March 31, 2022 and 2021, respectively:

	Carrying Value
Balance at December 31, 2021	$	76,627
Interest expense recognized	1,454
Issuance of Series B preferred shares at fair value	14,966
Balance at March 31, 2022	$	93,047
Balance at December 31, 2020	$	—
Issuance of Series B preferred shares at fair value	18,210
Balance at March 31, 2021	$	18,210

XML

Shareholders' Deficit

3 Months Ended

Mar. 31, 2022

Stockholders' Equity Note [Abstract]

Shareholders' Equity (Deficit)

Shareholders' Deficit

Changes in shareholders’ deficit for the three months ended March 31, 2022 were as follows:

	Common Shares
	Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Biohaven Shareholders' Equity (Deficit)		Non-controlling Interests		Total Shareholders' Equity (Deficit)
Balances as of December 31, 2021	66,933,531	$	1,676,792	$	169,656	$	(2,585,755)	$	(73)	$	(739,380)	$	(3,629)	$	(743,009)
Repurchase of preferred shares in consolidated subsidiary	1,232,629	152,673		(92,673)						60,000				60,000
Issuance of common shares as payment for agreements	2,037,921	253,779								253,779				253,779
Issuance of common shares under equity incentive plan	336,721	29,442		(30,193)						(751)				(751)
Non-cash share-based compensation expense				82,790						82,790				82,790
Net loss						(116,399)				(116,399)		(498)		(116,897)
Other comprehensive loss								(2,325)		(2,325)				(2,325)
Balances as of March 31, 2022	70,540,802	$	2,112,686	$	129,580	$	(2,702,154)	$	(2,398)	$	(462,286)	$	(4,127)	$	(466,413)

Changes in shareholders’ equity (deficit) for the three months ended March 31, 2021 were as follows:

	Common Shares
	Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Biohaven Shareholders' Equity (Deficit)		Non-controlling Interests		Total Shareholders' Equity (Deficit)
Balance as of December 31, 2020	60,436,876	$	1,249,547	$	98,938	$	(1,739,169)	$	314	$	(390,370)	$	(1,819)	$	(392,189)
Issuance of common shares, net of offering costs	4,037,204	308,243		—		—		—		308,243		—		308,243
Issuance of common shares as part of acquisition	115,836	10,673		—		—		—		10,673		—		10,673
Issuance of common shares as payment for license agreements	110,998	10,243		—		—		—		10,243		—		10,243
Issuance of common shares under equity incentive plan	365,554	25,315		(23,933)		—		—		1,382		—		1,382
Non-cash share-based compensation expense	—	—		48,726		—		—		48,726		—		48,726
Net loss	—	—		—		(264,968)		—		(264,968)		(360)		(265,328)
Other comprehensive income	—	—		—		—		95		95		—		95
Balance as of March 31, 2021	65,066,468	$	1,604,021	$	123,731	$	(2,004,137)	$	409	$	(275,976)	$	(2,179)	$	(278,155)

Issuance of Common Shares for Pfizer Collaboration Agreement

In November 2021, the Company and Pfizer Inc. entered into a Subscription Agreement (the “Subscription Agreement”). In January 2022, upon expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the Company closed the sale of 2,022,581

of its common shares to Pfizer Inc. for $350,000 (the “Share Purchase”), pursuant to the terms of the Subscription Agreement. The estimated fair market value of the shares issued to Pfizer was approximately $252,000, adjusted by a discount for lack of marketability due to certain holding period restrictions, which was valued using an option pricing model (see Note 13).

Issuance of Common Shares for KU Leuven Agreement

In January 2022, Biohaven and Katholieke Universiteit Leuven ("KU Leuven") entered into an Exclusive License and Research Collaboration Agreement (the "KU Leuven Agreement") to develop and commercialize first-in-class TRPM3 antagonists to address the growing proportion of people worldwide living with chronic pain disorders. As consideration, KU Leuven received an upfront cash payment of $3,000 and 15,340 shares valued at $1,779 which were both recorded as research and development expense on the Company’s condensed consolidated statements of operations.

Issuance of Common Shares for the March 2021 Offering

In March 2021, the Company issued and sold 2,686,409 common shares at a public offering price of $76.00 per share for net proceeds of approximately $199,500 after deducting underwriting discounts and commissions of approximately $4,167 and other offering expenses of approximately $500. In addition, in March 2021, the underwriter of the March follow-on offering exercised its option to purchase additional shares, and the Company issued and sold 402,961 common shares for net proceeds of approximately $30,000 after deducting underwriting discounts and commissions of approximately $625. 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 $229,500.

Issuance of Common Shares for Acquisition of Kleo Pharmaceuticals, Inc.

On January 4, 2021, the Company acquired Kleo Pharmaceuticals, Inc. In the merger, each share of Kleo common stock issued and outstanding immediately prior to the effective time of the merger was converted into the right to receive approximately 0.007 of a common share of the Company, rounded up to the nearest whole share. Prior to the consummation of the merger, the Company owned approximately 41.9% of the outstanding shares of Kleo through its subsidiary Therapeutics, resulting in 115,836 common shares of the Company being issued to Kleo stockholders in the merger.

Issuance of Common Shares for Yale MoDE Agreement

On January 1, 2021, the Company entered into a worldwide, exclusive license agreement for the

development and commercialization of a novel Molecular Degrader of Extracellular Protein (MoDEs) platform based on ground-breaking research conducted in the laboratory of Professor David Spiegel at Yale University. Under the agreement, the Company paid Yale University an upfront cash payment of $1,000 and 11,668 shares valued at $1,000, both of which were included in research and development expense in the condensed consolidated statements of operations and comprehensive loss.

Issuance of Common Shares for Consulting Agreement with Moda Pharmaceuticals LLC

On January 1, 2021, the Company entered into a consulting services agreement with Moda Pharmaceuticals LLC to further the scientific and commercial advancement of technology, drug discovery platforms, product candidates and related intellectual property owned or controlled by the Company (Note 13). Under the agreement, the Company paid Moda Pharmaceuticals LLC an upfront cash payment of $2,700 and 37,836 shares valued at $3,243, both of which were included in research and development expense in the condensed consolidated statements of operations and comprehensive loss.

Issuance of Common Shares for Equity Distribution Agreement

In December 2020, the Company entered into the Equity Distribution Agreement. In accordance with the terms of the Equity Distribution Agreement, we may offer and sell common shares having an aggregate offering price of up to $400,000 from time to time through or to the sales agents, acting as our agents or principals. Sales of our common shares, if any, will be made in sales deemed to be “at the market offerings” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, or the Securities Act, in ordinary brokers’ transactions, to or through a market maker, on or through the New York Stock Exchange or any other market venue where the securities may be traded, in the over-the-counter market, in privately negotiated transactions, or through a combination of any such methods of sale. The sales agents may also sell our common shares by any other method permitted by law. The sales agents are not required to sell any specific amount of securities but will act as our sales agents using commercially reasonable efforts consistent with their normal trading and sales practices, on mutually agreed terms between the sales agents and us. The Company issued and sold no shares in the three months ended March 31, 2022, and 939,328 common

shares for net proceeds of approximately $78,743 during the three months ended March 31, 2021.

Issuance of Series A Preferred Shares and Employee Share Options by Consolidated Subsidiary

In September 2020, the Company's Asia-Pacific Subsidiary, BioShin Limited, authorized, issued and sold 15,384,613 BioShin Series A Preferred Shares at a price of $3.90 per share for a total of $60,000 to a group of investors led by OrbiMed, with participation from Cormorant Asset Management LLC, HBM Healthcare Investments Ltd, Surveyor Capital (a Citadel Company), and Suvretta Capital Management, LLC (the "BioShin Investors"). The BioShin Series A Preferred Shares contained both a call option by the Company and a put option held by the BioShin Investors. Due to the contingently redeemable features, the Company had classified the BioShin Series A Preferred Shares in mezzanine equity since the redemption was out of the Company's control.

In connection with the BioShin Series A Preferred Shares issuance, BioShin Limited executed the 2020 Equity Incentive Plan ("BioShin 2020 Equity Incentive Plan") and granted options under the BioShin 2020 Equity Incentive Plan to certain employees. The compensation expense is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period of the award (generally three years) using the straight-line method. The Company is accounting for the expense being recognized over the requisite service period as non-controlling interest in shareholder's equity. The Company recognized $498 and $360 in non-controlling interest relating to the options for the three months ended March 31, 2022 and 2021, respectively.

In November 2021, the Company, Biohaven Therapeutics Ltd. Atlas Merger Sub ("Merger Sub") and BioShin entered into an Agreement and Plan of Merger (the "Bioshin Merger Agreement"). The Bioshin Merger Agreement provided for the merger of the Merger Sub with and into BioShin, with BioShin surviving the merger as a wholly owned indirect subsidiary of the Company, in accordance with Section 233 of the Cayman Islands Companies Act. As a result of the satisfaction of the closing conditions described in the Biohsin Merger Agreement, on January 6, 2022, each Series A convertible preferred share of BioShin, no par value, other than Excluded Shares (as defined in the Bioshin Merger Agreement) was converted into the right to receive 0.080121 of a common share of the Company and was removed from mezzanine equity. The

convertible Series A preferred shares of BioShin converted into 1,232,629 shares of the Company.

XML

Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

Shareholders’ deficit included the following activity in accumulated other comprehensive income for the three months ended March 31, 2022:

	Three Months Ended March 31, 2022
Net unrealized investment gains (losses):
Beginning of period balance	$	(323)
Other comprehensive loss(1)	(2,279)
End of period balance	(2,602)
Foreign currency translation adjustments:
Beginning of period balance	250
Other comprehensive loss(1)	(46)
End of period balance	204
Total beginning of period accumulated other comprehensive loss	(73)
Total other comprehensive loss	(2,325)
Total end of period accumulated other comprehensive loss	$	(2,398)

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

Shareholders’ deficit included the following activity in accumulated other comprehensive income for the three months ended March 31, 2021:

	Three Months Ended March 31, 2021
Net unrealized investment gains (losses):
Beginning of period balance	$	(125)
Other comprehensive income(1)	63
Amounts reclassified from accumulated other comprehensive income(1)	19
Other comprehensive income	82
End of period balance	(43)
Foreign currency translation adjustments:
Beginning of period balance	439
Other comprehensive income(1)	13
End of period balance	452
Total beginning of period accumulated other comprehensive income	314
Total other comprehensive income	95
Total end of period accumulated other comprehensive income	$	409

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

XML

Share-Based Compensation

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Share-Based Compensation

Share-Based Compensation

Non-Cash Share-Based Compensation Expense

Non-cash share-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period of the award (generally three to four years) using the straight-line method. Non-cash share-based compensation expense, consisting of expense for stock options, Restricted Share Units ("RSUs"), Performance Share Units ("PSU"), and Employee Share Purchase Plan ("ESPP"), was classified in the condensed

consolidated statements of operations and comprehensive loss as follows:

	Three months ended March 31,
	2022		2021
Research and development expenses	$	33,953	$	20,058
Selling, general and administrative expenses	47,875		28,668
Total non-cash share-based compensation expense	$	81,828	$	48,726
Less: Share-based compensation expense attributable to non-controlling interests	498		360
Share-based compensation expense attributable to Biohaven Pharmaceutical Holding Company Ltd.	$	81,330	$	48,366

Share-based compensation expense capitalized to inventory during the three months ended March 31, 2022 and 2021 was $962 and $0, respectively.

Stock Options

All stock option grants are awarded at fair value on the date of grant. The fair value of stock options is estimated using the Black-Scholes option pricing model and stock-based compensation is recognized on a straight-line basis over the requisite service period. Stock options granted generally become exercisable over a three-year or four-year period from the grant date. Stock options generally expire 10 years after the grant date.

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company's common shares for those stock options that had exercise prices lower than the fair value of the Company's common shares at March 31, 2022.

As of March 31, 2022, the Company's unrecognized compensation expense related to unvested stock options totaled $105,422, which the Company expects to be recognized over a weighted-average period of 2.23 years. The Company expects approximately 2,592,919 of the unvested stock options to vest over the requisite service period.

The following table is a summary of the Company's stock option activity for the three months ended March 31, 2022:

	Number of Shares	Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2021	7,089,727	$40.15
Granted	1,243,000	$128.09
Exercised	(46,665)	$60.06
Forfeited	(3,750)	$63.01
Outstanding as of March 31, 2022	8,282,312	$53.22	7.01	$	553,426
Options exercisable as of March 31, 2022	5,689,393	$38.82	6.31	$	456,699
Vested and expected to vest as of March 31, 2022	8,282,312	$53.22	7.01	$	553,426

Restricted Share Units and Performance Share Units

The Company’s RSUs are considered nonvested share awards and require no payment from the employee. For each RSU, employees receive one common share at the end of the vesting period. The employee can elect to receive the one common share net of taxes or pay for taxes separately and receive the entire share. Compensation cost is recorded based on the market price of the Company’s common shares on the grant date and is recognized on a straight-line basis over the requisite service period.

The Company’s PSUs contain performance vesting conditions in addition to a service vesting condition. Vesting of the Company’s PSUs is dependent upon the degree to which the Company achieves its performance goals, which are generally set for a three-year performance period and are approved at the time of grant by the Compensation Committee. The fair value of PSUs granted with service and performance vesting conditions is based on the market price of the Company's common stock on the grant date. Compensation expense is recognized on a straight-line basis over the vesting period, beginning when the accomplishment of the performance vesting conditions become probable. Certain of the PSUs also contain a market vesting condition based on the performance of the Company's common shares relative to a comparator group. The fair value of these PSUs is determined using a Monte Carlo simulation as of the grant date and is recognized over the vesting period.

As of March 31, 2022, there was $159,189 of total unrecognized compensation cost related to Company RSUs and PSUs that are expected to vest. These costs are expected to be recognized over a weighted-average period of 2.43 years. The total fair value of RSUs vested

during the three months ended March 31, 2022 was $52,844.

The following table is a summary of the RSU and PSU activity for the three months ended March 31, 2022:

	Number of Shares	Weighted Average Grant Date Fair Value
Unvested as of December 31, 2021	1,218,070	$78.98
Granted	1,064,917	$127.95
Forfeited	(14,085)	$97.19
Vested	(561,296)	$94.12
Unvested as of March 31, 2022	1,707,606	$104.39

XML

Net Loss Per Share

3 Months Ended

Mar. 31, 2022

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 March 31,
	2022		2021
Numerator:
Net loss	$	(116,897)	$	(265,328)
Net loss attributable to non-controlling interests	498		360
Deemed dividend upon repurchase of preferred shares in consolidated subsidiary (1)	(92,673)		—
Net loss attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd.	$	(209,072)	$	(264,968)
Denominator:
Weighted average common shares outstanding—basic and diluted	70,332,274		62,040,715
Net loss per share attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd.—basic and diluted	$	(2.97)	$	(4.27)

(1) As part of the BioShin Merger Agreement, the Company repurchased the 15,384,613 BioShin Series A Preferred Shares previously classified as mezzanine equity on the condensed consolidated balance sheet in exchange for 1,232,629 shares of the Company with a fair value of $152,673 (see Note 9 for further detail).

The Company’s potential dilutive securities, which include stock options, restricted share units, performance share units, 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 March 31,
	2022	2021
Options to purchase common shares	8,282,312	8,549,583
Warrants to purchase common shares	100,000	106,751
Restricted share units and performance share units	1,707,606	1,045,519
Total	10,089,918	9,701,853

XML

Collaboration, License and Other Agreements

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Collaboration, License and Other Agreements

Collaboration, License and Other Agreements

Commercial and Late-stage Agreements

Pfizer Collaboration

In November 2021, the Company and Pfizer entered into a collaboration and license agreement and a related sublicense agreement (the "Pfizer Collaboration"), pursuant to which Pfizer was granted the exclusive right to commercialize product candidates containing Biohaven's proprietary compound rimegepant (BHV-3000) and may elect to commercialize zavegepant (BHV-3500) (the "Zavegepant Option"), in each case, in all countries worldwide outside of the United States. In January 2022, following the expiration or termination of applicable waiting periods under all applicable antitrust laws and the completion of the Share Purchase (as defined below), the Pfizer Collaboration became effective. In consideration therefor, Pfizer made an upfront cash payment to the Company of $150,000 and a $350,000 equity investment in the Company (as further discussed below).

In November 2021, in connection with the Pfizer Collaboration, the Company and Pfizer Inc. entered into the Subscription Agreement. In January 2022, upon expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the Company closed the sale of 2,022,581 of its common shares to Pfizer Inc. for $350,000 (the “Share Purchase”), pursuant to the terms of the Subscription Agreement. The estimated fair market value of the shares issued to Pfizer was approximately $252,000, adjusted by a discount for lack of marketability due to certain holding period restrictions, which was valued using an option pricing model. The issuance resulted in a $98,000 premium paid to the Company above the estimated fair value of the Company's common stock (the "Share Purchase Premium"), which forms part of the transaction price for the Collaboration Agreement as discussed below.

Under the terms of the arrangement, the Company will be eligible to receive an aggregate additional $740,000 in contingent payments based on specified commercial and sales-based milestones for the Licensed Products.

The Company is also entitled to tiered, escalating royalties from the upper teens to twenty percent of net sales of Licensed Products in the Territory. In general, Pfizer’s obligation to pay royalties continues on a product-by-product and country-by-country basis until the latest of ten years after the first commercial sale of such product in such country, the expiration of the patent rights covering such product in such country or the expiration of the period of exclusivity applicable to such product in such country. In addition to the upfront payments, contingent payments and royalties described above, Pfizer will also compensate Biohaven for a pro-rata share of certain of its sales-based milestone obligations owed to BMS under the BMS License, and related net sales royalties owed to BMS and RPI that result from Pfizer’s commercialization and sale, respectively, of the Licensed Products in the Territory.

Upon closing, the Company identified the following as material distinct performance obligations associated with the Pfizer Collaboration under ASC 606: (i) delivery of the license and sublicense to commercialize Rimegepant outside the U.S.; (ii) a material right for the delivery of the license and sublicense for Zavegepant in conjunction with the Zavegepant Option; (iii) certain future development activities to be performed by the Company, which include clinical development activities, regulatory affairs and the transfer of information required for manufacturing (the "initial development plan"); and (iv) a material right for the Company's obligation to provide product to Pfizer under the Supply Agreement.

The Company believes that the Pfizer Collaboration is a collaboration arrangement as defined in ASC 808, Collaborative Agreements. The Company also believes that Pfizer meets the definition of a customer as defined in ASC 606, Revenue From Contracts With Customers for all of the performance obligations identified at inception except for the initial development plan. As ASC 808 does not address recognition and measurement, the Company has accounted for the initial development plan performance obligation by analogy to ASC 606.

The transaction price at inception included fixed consideration consisting of the upfront cash payment of $150,000 and the $98,000 Share Purchase Premium. Potential development, regulatory, and sales-based

milestones, and royalties, will be accounted for as variable transaction price related to the Licensed Products under ASC 606. Given the uncertain nature of these payments, we determined they were fully constrained as of March 31, 2022 and not included in the transaction price for the collaboration arrangement. We will re-evaluate the transaction price at each reporting period as uncertain events are resolved or other changes in circumstances occur. From inception of the collaboration arrangement through March 31, 2022, there was no change to the transaction price.

The respective standalone value for each of the performance obligations was determined by applying the SSP method and the transaction price was allocated based on the relative SSP method with revenue recognition timing to be determined either by the provision of services or execution or expiration of an option.

The Company used an income approach to estimate the SSP for the Rimegepant license and sublicense, Zavegepant Option, and the Supply Agreement, and a cost approach for estimating the SSP of the initial development plan. The Rimegepant license and sublicense was delivered on the closing date of the collaboration arrangement and revenue allocated to this performance obligation of $194,389 was recorded as collaboration and other revenue on the condensed consolidated statements of operations and comprehensive loss during the three months ended March 31, 2022. Revenue allocated to the Zavegepant Option is deferred as a contract liability until execution or expiration of the option occurs. The initial development plan activities are expected to be delivered over time as the services are performed, with the allocated revenue being recognized over time based on costs incurred to perform the services, since the level of costs incurred over time is thought to best reflect the transfer of services to Pfizer. Revenue allocated to the Supply Agreement is deferred, and will be recognized as product revenue on the condensed consolidated statement of operations over the estimated period of the services.

In January 2022, upon the effectiveness of the agreements, a total contract liability of $53,611 was recorded relating to the remaining performance obligations under the Pfizer Collaboration. Approximately $873 of the initial contract liability was recognized as collaboration and other revenue on the condensed consolidated statements of operations and comprehensive loss during the three months ended March 31, 2022. As of March 31, 2022, the total contract liability relating to the Pfizer Collaboration, which is

primarily related to our obligations under the initial development plan was $52,738, of which $21,763 was classified as current and recorded to accrued expenses and other current liabilities on the condensed consolidated balance sheet. The remaining $30,975 was recorded to other long-term liabilities on the condensed consolidated balance sheet as of March 31, 2022, and expected to be recognized over several years.

In assessing the Pfizer Collaboration, management exercised considerable judgment in estimating revenue to be recognized, specifically related to estimating the discount for lack of marketability associated with the stock issuance, determining the separate performance obligations under the Collaboration Agreement, and estimating the standalone selling price of those performance obligations.

As of March 31, 2022 the Company had not achieved any milestones under the Pfizer Collaboration.

Yale University Agreement

In September 2013, the Company entered into an exclusive license agreement (the "Yale Agreement") with Yale University 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, 2019.

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.

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

BMS Agreement

In July 2016, the Company entered into an exclusive, worldwide license agreement with BMS (the "BMS Agreement") for the development and commercialization rights to rimegepant and zavegepant, as well as other CGRP-related intellectual property. In exchange for these rights, the Company agreed to pay BMS initial payments, milestone payments and royalties on net sales of licensed products under the agreement.

The Company is obligated to make milestone payments to BMS upon the achievement of specified development and commercialization milestones. The development milestone payments due under the BMS Agreement depend on the licensed product being developed. With respect to rimegepant, the Company is obligated to pay up to $127,500 in the aggregate upon the achievement of the development milestones. For any product other than rimegepant, the Company is obligated to pay up to $74,500 in the aggregate upon the achievement of the development milestones. In addition, the Company is obligated to pay up to $150,000 for each licensed product upon the achievement of commercial milestones. If the Company receives revenue from sublicensing any of its rights under the BMS Agreement, it is also obligated to pay a portion of that revenue to BMS. The Company is also obligated to make tiered royalty payments to BMS based on annual worldwide net sales, with percentages in the low to mid-teens.

Under the BMS Agreement, the Company is obligated to use commercially reasonable efforts to develop licensed products and to commercialize at least one licensed product using the patent rights licensed from BMS and is solely responsible for all development, regulatory and commercial activities and costs. The Company is also required to reimburse BMS for any fees that BMS incurs related to the filing, prosecution, defending, and maintenance of patent rights licensed under the BMS Agreement. Under the BMS Agreement, BMS transferred to the Company manufactured licensed products, including certain materials that will be used by the Company to conduct clinical trials. The Company's right to sublicense its rights under the BMS agreement, other than to an affiliate or to certain third-party manufacturers, is subject to BMS's prior written

consent, which cannot be unreasonably withheld or delayed.

The BMS Agreement will terminate on a licensed product-by-licensed product and country-by-country basis upon the expiration of the royalty term with respect to each licensed product in each country and can also be terminated if certain events occur, e.g., material breach or insolvency.

In March 2018, the Company entered into an amendment to the BMS Agreement (the “2018 BMS Amendment”). Under the 2018 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 zavegepant, which was recorded in research and development expense in the condensed consolidated statements of operations and comprehensive loss.

The 2018 BMS Amendment also removes 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 with rimegepant, and clarifies that antibodies targeting CGRP are not prohibited as competitive compounds under the non-competition clause of the Original License Agreement.

In August 2020, the Company entered into a further amendment of the BMS Agreement (the “August 2020 BMS Amendment”). Under the August 2020 BMS Amendment, the Company paid BMS an upfront payment of $5,000 in return for a reduction in the royalties payable on net sales of rimegepant and zavegepant in China, with percentages in the low to mid-single digits. In addition, the Company is obligated to pay up to $22,500 for each licensed product upon the achievement of commercial milestones in China. The August 2020 BMS Amendment also amended the BMS Agreement to remove sales in China from the commercial milestone payment obligations.

In November 2020, the Company entered into a further amendment of the BMS Agreement (the “November 2020 BMS Amendment”). Under the November 2020 BMS Amendment, certain exclusivity provisions under the BMS Agreement are waived which permits the Company to develop certain CGRP compounds licensed by the Company from Heptares Therapeutics Limited (“Heptares”). Under the November 2020 Amendment, if the Company initiates clinical development of a Heptares compound prior to July 8, 2023, the Company is obligated to pay BMS certain fees based on net sales of the Heptares

compounds from low single percentage to 10% and pay up to $17,500 for each Heptares compound upon the achievement of certain development milestones and up to $150,000 for each Heptares compound upon the achievement of certain commercial milestones. As of March 31, 2022 the Company has not achieved any of the development or commercial milestones for the Heptares compounds. No fees or milestones are due by the Company to BMS for Heptares compounds that begin clinical trials after July 8, 2023.

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

In connection with the BMS Agreement, upon FDA approval of NURTEC ODT on February 27, 2020, the Company became obligated to pay BMS $40,000 in milestone payments. The Company recorded the $40,000 in milestone payments as an intangible asset on its condensed consolidated balance sheet in the first quarter of 2020, and is amortizing the expense to cost of sales on its condensed consolidated statements of operations and comprehensive loss over the patent life. The Company paid the $40,000 in milestone payments to BMS during the year ended December 31, 2020.

In connection with the BMS Agreement, the Company was required to pay $2,000 to BMS on commencement of a Phase 1 clinical trial, $4,000 on commencement of a Phase 2 clinical trial, and $6,000 on commencement of a Phase 3 clinical trial, for certain milestones relating to the development of zavegepant. Accordingly, the Company recognized these liabilities in accrued expenses within the condensed consolidated balance sheets in the fourth quarter of 2018, first quarter of 2019, and fourth quarter of 2019, respectively. Per the BMS Agreement, the $2,000 and $4,000 payment obligations under the agreement were deferred until the earlier of FDA approval of rimegepant or the discontinuation of the rimegepant development program. Upon FDA approval of NURTEC ODT on February 27, 2020, the Company became obligated to pay BMS the $2,000 and $4,000 milestone payments for the commencement of the Phase 1 and Phase 2 clinical trials of zavegepant, respectively, and made the milestone payments in the second quarter of 2020. The Company paid the $6,000 milestone payment following the commencement of the Phase 3 clinical trial of zavegepant in the fourth quarter of 2020. In the first quarter of 2021, the Company accrued a $5,000

development milestone expense following the regulatory filing for rimegepant in Europe, which was paid in the second quarter of 2021. In the fourth quarter of 2021, the Company accrued a $5,000 development milestone expense for the planned submission of a New Drug Application to the FDA for intranasal zavegepant in the first half of 2022.

The Company did not record research and development expense related to the BMS Agreement during the three months ended March 31, 2022 and 2021. In addition, for the three months ended March 31, 2022 and 2021, the Company recorded $12,355 and $4,384, respectively, in royalty expense in cost of sales on the condensed consolidated statements of operations and comprehensive loss under the BMS agreement.

RPI Agreements

In June 2018, pursuant to the 2018 RPI Funding Agreement entered into by the Company and RPI (Note 7), the Company granted 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 2018 RPI Funding Agreement, in exchange for $100,000 in cash. Specifically, the participation rate commences at 2.1 percent on annual global net sales of up to and equal to $1,500,000, declining to 1.5 percent on annual global net sales exceeding $1,500,000.

In connection with the 2018 RPI Funding Agreement, the Company recorded, $14,096 in interest expense on its liability related to sale of future royalties for the three months ended March 31, 2022 and $11,419 in interest expense on its liability related to sale of future royalties for the three months ended March 31, 2021, respectively, The Company paid $4,025 and $736 under the 2018 RPI Funding Agreement during the three months ended March 31, 2022 and March 31, 2021, respectively.

In August 2020, pursuant to the 2020 RPI Funding Agreement, the Company sold sales-based participation rights on global net sales of products containing zavegepant and rimegepant to RPI 2019 IFT for aggregate funding of $250,000, payable in two tranches. For further details on the transaction see Note 7 “Liability Related to Sale of Future Royalties, net.”

In connection with the 2020 RPI Funding Agreement, the Company recorded $3,218 and $2,089 in interest expense for the three months ended March 31, 2022 and March 31, 2021, respectively. The Company recorded payments of $767 during the three months

ended March 31, 2022, and payments of $140 under the 2020 RPI Funding Agreement during the three months ended March 31, 2021.

AstraZeneca License Agreement

In September 2018, the Company entered into an exclusive license agreement (the "2018 AstraZeneca Agreement") with AstraZeneca, pursuant to which AstraZeneca granted the Company a license to certain patent rights for the commercial development, manufacture, distribution and use of any products or processes resulting from development of those patent rights, including BHV-3241. Under the 2018 AstraZeneca Agreement, the Company paid AstraZeneca an upfront cash payment of $3,000 and 109,523 shares valued at $4,080 on the date of settlement, both of which were included in research and development expense, and is obligated to pay milestone payments to AstraZeneca totaling up to $55,000 upon the achievement of specified regulatory and commercial milestones and up to $50,000 upon the achievement of specified sales-based milestones. In addition, we will pay AstraZeneca tiered royalties ranging from high single-digit to low double-digits based on net sales of specified approved products, subject to specified reductions.

The Company plans to conduct a Phase 3 clinical trial of this product candidate, which is now referred to as verdiperstat, for the treatment of multiple system atrophy (“MSA”), a rare, rapidly progressive and fatal neurodegenerative disease with no cure or effective treatments. The Company is solely responsible, and has agreed to use commercially reasonable efforts, for all development, regulatory and commercial activities related to verdiperstat. The Company may sublicense its rights under the agreement and, if it does so, will be obligated to pay a portion of any milestone payments received from the sublicense to AstraZeneca in addition to any milestone payments it would otherwise be obligated to pay.

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

For the three months ended March 31, 2022 and 2021, the Company did not record any material expense or make any milestone or royalty payments under the 2018 AstraZeneca Agreement.

Taldefgrobep Alfa License Agreement

In February 2022, following the transfer of intellectual property, the Company announced that we entered into a worldwide license agreement with BMS for the development and commercialization rights to taldefgrobep alfa (also known as BMS-986089), a novel, Phase 3-ready anti-myostatin adnectin (the "Taldefgrobep Alfa License Agreement"). Under the terms of the Taldefgrobep Alfa License Agreement, the Company will receive worldwide rights to taldefgrobep alfa and BMS will be eligible for regulatory approval milestone payments of up to $200,000, as well as tiered, sales-based royalty percentages from the high teens to the low twenties. There were no upfront or contingent payments to BMS related to the Taldefgrobep Alfa License Agreement.

Other Agreements

In addition to the agreements discussed above, the Company has entered into various other collaborations, including licensing and development programs, for assets which the Company considers to be early-stage (have not yet entered phase 3 clinical trials). The agreements generally include upfront fees, milestone payments which become payable upon achievement of certain clinical, development, regulatory and sales milestones, as well as royalties calculated as a percentage of product revenue, with rates that vary by agreement.

The Company records milestones and other payments, including funding for research arrangements, which become due under its early-stage agreements to research and development expense in the condensed consolidated statements of operations and comprehensive loss. Amounts recorded for the period were as follows:

	Three months ended March 31,
	2022		2021
Milestone payments	$	—	$	962
Other payments	4,445		1,579

For the three months ended March 31, 2022 the Company made upfront payments consisting of $3,000 cash and 15,340 shares valued at $1,779 in connection with new agreements. For the three months ended March 31, 2021 the Company made upfront payments consisting of $3,700 cash and 49,504 shares valued at $4,243 in connection with new agreements.

As of March 31, 2022, under these agreements the Company has potential future developmental,

regulatory, and commercial milestone payments of up to approximately $216,966, $279,325 and $573,121, respectively. Payments under these agreements generally become due and payable upon achievement of a specified milestone. Because the achievement of these milestones have not been considered probable as of March 31, 2022, such contingencies have not been recorded in our financial statements. Amounts related to contingent milestone payments are not considered contractual obligations as they are contingent on the successful achievement of certain development, regulatory or commercial milestones.

XML

Commitments and Contingencies

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Summarized below are the matters previously described in Note 17 of the Notes to the Consolidated Financial Statements in the Company's Form 10-K for the year ended December 31, 2021, updated as applicable.

Commercial Commitments

The Company's commercial commitments primarily relate to manufacturing preparation services that are enforceable and legally binding on us and that specify all significant terms, including applicable milestone payments and target completion dates, and its commercial car fleet.

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 March 31, 2022 or December 31, 2021.

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

XML

Income Taxes

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The following table provides a comparative summary of the Company's income tax provision and effective income tax rate for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
	2022			2021
Income tax provision	$	24,303		$	3,824
Effective income tax rate	26.2		%	1.5		%

The Company recorded an income tax provision of $24,303 for the three months ended March 31, 2022 compared to a provision for income taxes of $3,824 for the three months ended March 31, 2021. The increase in income tax expense of $20,479 was primarily attributable the mandatory capitalization of R&D expenses effective January 1, 2022 under the Tax Cuts and Jobs Act, offset by an increased benefit to the Company's foreign derived intangible income deduction.

XML

Subsequent Events

3 Months Ended

Mar. 31, 2022

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Kv7 Platform Acquisition

On April 1, 2022, the Company closed the previously announced acquisition from Knopp Biosciences LLC (“Knopp”) of Channel Biosciences, LLC (“Channel”), a wholly owned subsidiary of Knopp owning the assets of Knopp’s Kv7 channel targeting platform (the “Transaction”), pursuant to a Membership Interest Purchase Agreement (the “Purchase Agreement”), dated February 24, 2022.

In consideration for the Transaction, on April 4, 2022, Biohaven made an upfront payment comprised of $35,000 in cash and 493,254 common shares of the Company, valued at approximately $65,000, (“Biohaven Shares”) issued through a private placement. Biohaven has also agreed to pay additional success-based payments comprised of (i) up to $325,000 based on developmental and regulatory milestones through approvals in the United States, EMEA and Japan for the lead asset, BHV-7000 (formerly known as KB-3061), (ii) up to an additional $250,000 based on developmental and regulatory milestones for the Kv7 pipeline development in other indications and additional country approvals, and (iii) up to $562,500 for commercial sales-based milestones of BHV-7000. These contingent milestone payments may be paid in cash or Biohaven Shares at the election of Biohaven, but if Biohaven elects to pay in Biohaven Shares, such amounts are subject to increases of a mid-single-digit percentage increase (or in one case, a ten-percent increase). Additionally, Biohaven has agreed to make scaled royalty payments in cash for BHV-7000 and the pipeline programs, starting at high single digits and peaking at low teens for BHV-7000 and starting at mid-single digits and peaking at low double digits for the pipeline programs.

The Company has also given Knopp the option to request a one-time cash true-up payment from the Company in December 2022 in the event that Knopp continues to hold Biohaven Shares issued as a component of the upfront payment and the value of such shares has declined, subject to certain conditions.

Pfizer Acquisition

On May 9, 2022, the Company, Pfizer and Bulldog (BVI) Ltd., a wholly owned subsidiary of Pfizer (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Pfizer Merger Agreement”), pursuant to which, on the terms and subject to the conditions set forth in the Pfizer Merger Agreement, Pfizer will acquire all outstanding shares of Biohaven for $148.50 per share in cash and Merger Sub will merge with and into the Company (the “Pfizer Merger”), with the Company surviving the Pfizer Merger as a wholly owned subsidiary of Pfizer.

In connection with and as a condition to the Pfizer Merger, the Company and Biohaven Research Ltd. (“New Biohaven”) entered into a Separation and Distribution Agreement, dated as of May 9, 2022 (the “Separation Agreement”), pursuant to which, on the terms and subject to the conditions set forth in the Separation Agreement, immediately prior to the effective time of the Pfizer Merger: (i) the Company will

effect a pre-closing reorganization, which will result in (x) New Biohaven owning, assuming or retaining certain assets and liabilities of the Company and its subsidiaries related to the Company’s pipeline assets and businesses, and (y) the Company owning, assuming or retaining all other assets and liabilities, including those associated with the Company’s platform for the research, development, manufacture and commercialization of calcitonin gene-related peptide receptor antagonists, including rimegepant, zavegepant and the Heptares Therapeutics Limited pre-clinical CGRP portfolio; and (ii) thereafter, the Company will distribute to its shareholders as of the record date all of the issued and outstanding common shares of New Biohaven, no par value, on a pro rata basis (the “Spin-Off”), at a ratio of one New Biohaven Common Share for every two common shares of the Company. Following the Spin-Off, New Biohaven will be a separate public company and the Company will have no continuing common share ownership interest in New Biohaven.

The boards of directors of both Biohaven and Pfizer have unanimously approved the Spin-Off and the Pfizer Merger. Pfizer will pay transaction consideration totaling approximately $11.6 billion in cash. Pfizer will also make payments at the closing of the Pfizer Merger to settle Biohaven’s third party debt and for the redemption of all outstanding shares of Biohaven’s redeemable preferred stock. Following the closing of the Pfizer Merger, New Biohaven will continue to operate under the Biohaven name. New Biohaven will be led by Vlad Coric, MD, as Chairman and CEO, and include other members of the current management team of Biohaven. New Biohaven will be capitalized with $275 million of cash. New Biohaven will also have the right to receive tiered royalties from Pfizer on any annual net sales of rimegepant and zavegepant in the United States in excess of $5.25 billion. Pfizer expects to finance the transaction with existing cash on hand. Pfizer’s acquisition of Biohaven is subject to the completion of the New Biohaven spin-off transaction and other customary closing conditions, including receipt of regulatory approvals and approval by Biohaven’s shareholders. The companies expect the transaction to close by early 2023.

Additional information about the Pfizer Merger Agreement and the Pfizer Merger will be set forth in the Company’s Definitive Proxy Statement on Schedule 14A that will be filed with the SEC.

XML

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

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 controlled 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.

The financial statements of our subsidiaries with functional currencies other than the U.S. dollar are translated into U.S. dollars using period-end exchange rates for assets and liabilities, historical exchange rates for shareholders' equity (deficit) and weighted average exchange rates for operating results. Translation gains and losses are included in accumulated other comprehensive income, net of tax, in shareholders' deficit. Foreign currency transaction gains and losses are included in other income (expense) in the condensed consolidated statements of operations and comprehensive loss.

Reclassifications

Reclassifications

Certain items in the prior period’s condensed consolidated financial statements have been reclassified to conform to the current presentation.

Use of Estimates

Use of Estimates

The preparation of condensed 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 condensed consolidated financial statements and the reported amounts of income and expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, revenue recognition, interest expense on liability related to sale of future royalties, valuation of Series B preferred shares forward contracts and income taxes. 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.

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 March 31, 2022 and the results of its operations for the three months ended March 31, 2022 and 2021 and its cash flows for the three months ended March 31, 2022 and 2021. The results for the three months ended March 31, 2022 are not necessarily indicative of results to be expected for the year ending December 31, 2022, 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, 2021.

Revenue Recognition

Revenue Recognition - Collaboration and Other Revenue

The Company analyzes its collaboration arrangements to assess whether they are within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities. This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and those that are more reflective of a vendor-customer relationship and, therefore, within the scope of ASC 606, Revenue from Contracts with Customers

("ASC 606"). For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently, generally by analogy to ASC 606. The accounting treatment pursuant to ASC 606 is outlined below.

The terms of licensing and collaboration agreements entered into typically include payment of one or more of the following: non-refundable, up-front license fees; development, regulatory and commercial milestone payments; payments for manufacturing supply and research and development services and royalties on net sales of licensed products. Each of these payments results in collaboration and other revenue, except for revenues related to manufacturing supply services, which are classified as product revenue. The core principle of ASC 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received in exchange for those goods or services.

In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

Amounts received prior to recognizing revenue are recorded as contract liabilities in the Company’s condensed consolidated balance sheets.

At contract inception, the Company assesses the goods or services promised in a contract with a customer and identifies those distinct goods and services that represent a performance obligation. A promised good or service may not be identified as a performance obligation if it is immaterial in the context of the contract with the customer, if it is not separately identifiable from other promises in the contract (either because it is not capable of being separated or because it is not separable in the context of the contract), or if the promised good or service does not provide the customer with a material right.

The Company considers the terms of the contract to determine the transaction price. The transaction price

is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration will only be included in the transaction price when it is not considered constrained, which is when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur.

If it is determined that multiple performance obligations exist, the transaction price is allocated at the inception of the agreement to all identified performance obligations based on the relative standalone selling prices ("SSP"). The relative SSP for each deliverable is estimated using external sourced evidence if it is available. If external sourced evidence is not available, the Company uses its best estimate of the SSP for the deliverable.

Revenue is recognized when, or as, the Company satisfies a performance obligation by transferring a promised good or service to a customer. An asset is transferred when, or as, the customer obtains control of that asset, which for a service is considered to be as the services are received and used. The Company recognizes revenue over time by measuring the progress toward complete satisfaction of the relevant performance obligation using an appropriate input or output method based on the nature of the service promised to the customer.

After contract inception, the transaction price is reassessed at every period end and updated for changes such as resolution of uncertain events. Any change in the transaction price is allocated to the performance obligations on the same basis as at contract inception, or to a single performance obligation as applicable.

Management may be required to exercise considerable judgment in estimating revenue to be recognized. Judgment is required in identifying performance obligations, estimating the transaction price, estimating the SSP of identified performance obligations, which may include forecasted revenue, development timelines, estimated future costs, discount rates and probabilities of technical and regulatory success, and estimating the progress towards satisfaction of performance obligations.

Recently Adopted and Future Adoption of New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Effective January 1, 2022 the Company adopted ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—

Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The update addresses issues identified as a result of the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. The adoption of ASU 2020-06 did not have a material effect on the Company's consolidated financial statements.

Effective January 1, 2022 the Company adopted ASU No. 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force), which provides guidance on modifications or exchanges of a freestanding equity-classified written call option that is not within the scope of another topic. An entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument, and provides further guidance on measuring the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity

classified after modification or exchange. ASU 2021-04 also provides guidance on the recognition of the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange on the basis of the substance of the transaction, in the same manner as if cash had been paid as consideration. The guidance has been applied prospectively and did not have a material effect on the consolidated financial statements of the Company.

Future Adoption of New Accounting Pronouncements

In January 2021 the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, providing temporary guidance to ease the burden in accounting for reference rate reform primarily resulting from the discontinuation of LIBOR, which is currently expected to occur in mid-2023 for legacy contracts. The amendments in ASU 2021-01 are elective immediately and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued. The Company does not expect that the adoption of ASU 2021-01 will have a material effect on its consolidated financial statements.

XML

Marketable Securities (Tables)

3 Months Ended

Mar. 31, 2022

Investments, Debt and Equity Securities [Abstract]

Schedule of reconciliation of available-for-sale debt securities from amortized cost to fair value

The amortized cost, gross unrealized holding gains, gross unrealized holding losses and fair value of debt securities available-for-sale by type of security at March 31, 2022 and December 31, 2021 was as follows:

	Amortized Cost		Allowance for Credit Losses		Net Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
March 31, 2022
Corporate bonds
U.S.	$	290,201	$	—	$	290,201	$	2	$	(1,969)	$	288,234
Foreign	47,106		—		47,106		—		(426)		46,680
Government related obligations
U.S.	98,707		—		98,707		1		(212)		98,496
Total	$	436,014	$	—	$	436,014	$	3	$	(2,607)	$	433,410
December 31, 2021
Corporate bonds
U.S.	$	130,388	$	—	$	130,388	$	1	$	(234)	$	130,155
Foreign	20,643		—		20,643		—		(82)		20,561
Government related obligations
U.S.	41,939		—		41,939		—		(8)		41,931
Total	$	192,971	$	—	$	192,971	$	1	$	(324)	$	192,648

Schedule of available-for-sale debt securities by contractual maturity

The net amortized cost and fair value of debt securities available-for-sale at March 31, 2022 and December 31, 2021 are shown below by contractual maturity. Actual maturities may differ from contractual maturities because securities may be restructured, called or prepaid, or the Company intends to sell a security prior to maturity. The fair values of available for sale debt securities are classified as marketable securities in the condensed consolidated balance sheets at March 31, 2022 and December 31, 2021.

	March 31, 2022				December 31, 2021
	Net Amortized Cost		Fair Value		Net Amortized Cost		Fair Value
Due to mature:
Less than one year	$	342,502	$	341,069	$	155,359	$	155,226
One year through five years	93,512		92,341		37,612		37,422
Total	$	436,014	$	433,410	$	192,971	$	192,648

Schedule of net investment income

Sources of net investment income included in other income (expense) in the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022 and 2021 were as follows:

	Three Months Ended March 31,
	2022		2021
Gross investment income from debt securities available-for-sale	$	140	$	72
Investment expenses	(18)		(52)
Net investment income (excluding net realized capital gains or losses)	122		20
Net realized capital (losses) gains	(3)		19
Net investment income	$	119	$	39

Schedule of proceeds from sale of available-for-sale debt securities and related gross realized capital gains and losses

The proceeds from the sale of available-for-sale debt securities and the related gross realized capital gains and losses for the three months ended March 31, 2022 and 2021 were the following:

	Three Months Ended March 31,
	2022		2021
Proceeds from sales	$	—	$	113,441
Gross realized capital gains	—		19
Gross realized capital losses	$	—	—

XML

Fair Value of Financial Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Schedule of financial assets and liabilities measured at fair value on a recurring basis

Financial assets and liabilities measured at fair value on a recurring basis on the condensed consolidated balance sheets at March 31, 2022 and December 31, 2021 were as follows:

		Fair Value Measurement Using:
Balance Sheet Classification	Type of Instrument	Level 1		Level 2		Level 3		Total
March 31, 2022
Assets:
Cash equivalents	Money market funds	$	45,999	$	—	$	—	$	45,999
Cash equivalents	U.S. treasury bills	—		8,497		—		8,497
Marketable securities	U.S. treasury bills	5,992		92,504		—		98,496
Marketable securities	U.S. corporate bonds	—		288,234		—		288,234
Marketable securities	Foreign corporate bonds	—		46,680		—		46,680
Total assets		$	51,991	$	435,915	$	—	$	487,906
Liabilities:
Series B preferred shares forward contracts		$	—	$	—	$	9,120	$	9,120
Total liabilities		$	—	$	—	$	9,120	$	9,120
December 31, 2021
Assets:
Cash equivalents	Money market funds	$	32,420	$	—	$	—	$	32,420
Marketable securities	U.S. treasury bills	5,994		35,937		—		41,931
Marketable securities	U.S. corporate bonds	—		130,155		—		130,155
Marketable securities	Foreign corporate bonds	—		20,561		—		20,561
Total assets		$	38,414	$	186,653	$	—	$	225,067
Liabilities:
Series B preferred shares forward contracts		$	—	$	—	$	13,110	$	13,110
Total liabilities		$	—	$	—	$	13,110	$	13,110

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

The following tables provide roll forwards of the aggregate fair value of the Company's Series B Preferred Shares Forward Contracts for which fair value is determined by Level 3 inputs for the three months ended March 31, 2022 and 2021:

	Carrying Value
Balance at December 31, 2021	$	13,110
Change in fair value of derivative liability	(3,604)
Partial settlement of derivative liability	(386)
Balance at March 31, 2022	$	9,120
Balance at December 31, 2020	$	14,190
Change in fair value of derivative liability	835
Partial settlement of derivative liability	(625)
Balance at March 31, 2021	$	14,400

XML

Balance Sheet Components (Tables)

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of reconciliation of total cash, cash equivalents and restricted cash

The following represents a reconciliation of cash and cash equivalents in the condensed consolidated balance sheets to total cash, cash equivalents and restricted cash as of March 31, 2022 and December 31, 2021, respectively, in the condensed consolidated statements of cash flows:

	March 31, 2022		December 31, 2021
Cash and cash equivalents	$	169,065	$	171,945
Restricted cash (included in other current assets)	4,559		1,648
Restricted cash (included in other assets)	750		750
Cash, cash equivalents and restricted cash in the statements of cash flows	$	174,374	$	174,343

Schedule of inventories

Inventory consisted of the following:

	As of March 31, 2022		As of December 31, 2021
Work-in-process	169,390		159,075
Finished goods	13,731		9,269
Total inventories	$	183,121	$	168,344
Less noncurrent inventories(1)	91,840		87,736
Total inventories classified as current	$	91,281	$	80,608

(1) Included in other assets on the condensed consolidated balance sheets. There are no recoverability issues for these amounts.

Schedule of prepaid expenses

Prepaid expenses consisted of the following:

	As of March 31, 2022		As of December 31, 2021
Prepaid clinical trial costs	$	58,562	$	42,578
Prepaid manufacturing	8,856		17,448
Prepaid commercial costs	33,248		15,732
Other prepaid expenses	4,225		13,080
Prepaid expenses	$	104,891	$	88,838

Schedule of accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following:

	As of March 31, 2022		As of December 31, 2021
Accrued development milestones	$	5,000	$	5,000
Accrued employee compensation and benefits	35,362		40,109
Accrued clinical trial costs	36,051		37,477
Accrued commercialization and other professional fees	22,744		19,994
Accrued sales discounts and allowances	233,096		203,760
Current obligation to perform R&D services	29,642		22,030
Other accrued expenses and other current liabilities	95,517		91,649
Accrued expenses and other current liabilities	$	457,412	$	420,019

XML

Liability Related to Sale of Future Royalties (Tables)

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Schedule of reduction to research and development expense

The following table shows the activity within the obligation to perform R&D services account for the three months ended March 31, 2022 and 2021, related to the 2020 RPI Funding Agreement.

	Three Months Ended March 31,
	2022		2021
Reduction to research and development expenses	$	6,943	190

Schedule of liability for sale of future royalties

The following table shows the activity within the liability related to sales of future royalties account for

the three months ended March 31, 2022 and 2021, related to the 2018 and 2020 RPI Funding Agreements.

	Three Months Ended March 31,
	2022		2021
Liability related to sale of future royalties - beginning balance	$	384,283	$	335,282
Royalty revenues paid and payable to RPI	(3,090)		(1,096)
Interest expense on liability related to sale of future royalties	17,314		13,508
Liability related to sale of future royalties - ending balance	$	398,507	$	347,694

XML

Mandatorily Redeemable Preferred Shares, net (Tables)

3 Months Ended

Mar. 31, 2022

Series A preferred shares

Mandatorily Redeemable Preferred Shares

Schedule of activity within the preferred share liability

The following table shows the activity within the Series A preferred share liability for the three months ended March 31, 2022 and 2021, respectively:

	Carrying Value
Gross balance at December 31, 2021	$	141,740
Interest expense recognized, excluding transaction cost amortization	6,452
Redemption of Series A preferred shares	(15,625)
Gross balance at March 31, 2022	$	132,567
Less: unamortized transaction costs	(120)
Net balance at March 31, 2022	$	132,447
Gross balance at December 31, 2020	$	174,264
Interest expense recognized, including transaction cost amortization	7,932
Redemption of Series A preferred shares	(15,625)
Gross balance at March 31, 2021	$	166,571
Less: unamortized transaction costs	(162)
Net balance at March 31, 2021	$	166,409

Series B preferred shares

Mandatorily Redeemable Preferred Shares

Schedule of activity within the preferred share liability

The following table shows the activity within the Series B preferred share liability for the three months ended March 31, 2022 and 2021, respectively:

	Carrying Value
Balance at December 31, 2021	$	76,627
Interest expense recognized	1,454
Issuance of Series B preferred shares at fair value	14,966
Balance at March 31, 2022	$	93,047
Balance at December 31, 2020	$	—
Issuance of Series B preferred shares at fair value	18,210
Balance at March 31, 2021	$	18,210

XML

Shareholders' Deficit (Tables)

3 Months Ended

Mar. 31, 2022

Stockholders' Equity Note [Abstract]

Schedule of changes in shareholders' equity (deficit)

Changes in shareholders’ deficit for the three months ended March 31, 2022 were as follows:

	Common Shares
	Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Biohaven Shareholders' Equity (Deficit)		Non-controlling Interests		Total Shareholders' Equity (Deficit)
Balances as of December 31, 2021	66,933,531	$	1,676,792	$	169,656	$	(2,585,755)	$	(73)	$	(739,380)	$	(3,629)	$	(743,009)
Repurchase of preferred shares in consolidated subsidiary	1,232,629	152,673		(92,673)						60,000				60,000
Issuance of common shares as payment for agreements	2,037,921	253,779								253,779				253,779
Issuance of common shares under equity incentive plan	336,721	29,442		(30,193)						(751)				(751)
Non-cash share-based compensation expense				82,790						82,790				82,790
Net loss						(116,399)				(116,399)		(498)		(116,897)
Other comprehensive loss								(2,325)		(2,325)				(2,325)
Balances as of March 31, 2022	70,540,802	$	2,112,686	$	129,580	$	(2,702,154)	$	(2,398)	$	(462,286)	$	(4,127)	$	(466,413)

Changes in shareholders’ equity (deficit) for the three months ended March 31, 2021 were as follows:

	Common Shares
	Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Biohaven Shareholders' Equity (Deficit)		Non-controlling Interests		Total Shareholders' Equity (Deficit)
Balance as of December 31, 2020	60,436,876	$	1,249,547	$	98,938	$	(1,739,169)	$	314	$	(390,370)	$	(1,819)	$	(392,189)
Issuance of common shares, net of offering costs	4,037,204	308,243		—		—		—		308,243		—		308,243
Issuance of common shares as part of acquisition	115,836	10,673		—		—		—		10,673		—		10,673
Issuance of common shares as payment for license agreements	110,998	10,243		—		—		—		10,243		—		10,243
Issuance of common shares under equity incentive plan	365,554	25,315		(23,933)		—		—		1,382		—		1,382
Non-cash share-based compensation expense	—	—		48,726		—		—		48,726		—		48,726
Net loss	—	—		—		(264,968)		—		(264,968)		(360)		(265,328)
Other comprehensive income	—	—		—		—		95		95		—		95
Balance as of March 31, 2021	65,066,468	$	1,604,021	$	123,731	$	(2,004,137)	$	409	$	(275,976)	$	(2,179)	$	(278,155)

XML

Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Schedule of activity in accumulated other comprehensive income (loss)

Shareholders’ deficit included the following activity in accumulated other comprehensive income for the three months ended March 31, 2022:

	Three Months Ended March 31, 2022
Net unrealized investment gains (losses):
Beginning of period balance	$	(323)
Other comprehensive loss(1)	(2,279)
End of period balance	(2,602)
Foreign currency translation adjustments:
Beginning of period balance	250
Other comprehensive loss(1)	(46)
End of period balance	204
Total beginning of period accumulated other comprehensive loss	(73)
Total other comprehensive loss	(2,325)
Total end of period accumulated other comprehensive loss	$	(2,398)

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

Shareholders’ deficit included the following activity in accumulated other comprehensive income for the three months ended March 31, 2021:

	Three Months Ended March 31, 2021
Net unrealized investment gains (losses):
Beginning of period balance	$	(125)
Other comprehensive income(1)	63
Amounts reclassified from accumulated other comprehensive income(1)	19
Other comprehensive income	82
End of period balance	(43)
Foreign currency translation adjustments:
Beginning of period balance	439
Other comprehensive income(1)	13
End of period balance	452
Total beginning of period accumulated other comprehensive income	314
Total other comprehensive income	95
Total end of period accumulated other comprehensive income	$	409

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

XML

Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Schedule of non-cash share-based compensation expense

Non-cash share-based compensation expense, consisting of expense for stock options, Restricted Share Units ("RSUs"), Performance Share Units ("PSU"), and Employee Share Purchase Plan ("ESPP"), was classified in the condensed

consolidated statements of operations and comprehensive loss as follows:

	Three months ended March 31,
	2022		2021
Research and development expenses	$	33,953	$	20,058
Selling, general and administrative expenses	47,875		28,668
Total non-cash share-based compensation expense	$	81,828	$	48,726
Less: Share-based compensation expense attributable to non-controlling interests	498		360
Share-based compensation expense attributable to Biohaven Pharmaceutical Holding Company Ltd.	$	81,330	$	48,366

Schedule of stock option activity

The following table is a summary of the Company's stock option activity for the three months ended March 31, 2022:

	Number of Shares	Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2021	7,089,727	$40.15
Granted	1,243,000	$128.09
Exercised	(46,665)	$60.06
Forfeited	(3,750)	$63.01
Outstanding as of March 31, 2022	8,282,312	$53.22	7.01	$	553,426
Options exercisable as of March 31, 2022	5,689,393	$38.82	6.31	$	456,699
Vested and expected to vest as of March 31, 2022	8,282,312	$53.22	7.01	$	553,426

Schedule of RSU activity

The following table is a summary of the RSU and PSU activity for the three months ended March 31, 2022:

	Number of Shares	Weighted Average Grant Date Fair Value
Unvested as of December 31, 2021	1,218,070	$78.98
Granted	1,064,917	$127.95
Forfeited	(14,085)	$97.19
Vested	(561,296)	$94.12
Unvested as of March 31, 2022	1,707,606	$104.39

XML

Net Loss Per Share (Tables)

3 Months Ended

Mar. 31, 2022

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 March 31,
	2022		2021
Numerator:
Net loss	$	(116,897)	$	(265,328)
Net loss attributable to non-controlling interests	498		360
Deemed dividend upon repurchase of preferred shares in consolidated subsidiary (1)	(92,673)		—
Net loss attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd.	$	(209,072)	$	(264,968)
Denominator:
Weighted average common shares outstanding—basic and diluted	70,332,274		62,040,715
Net loss per share attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd.—basic and diluted	$	(2.97)	$	(4.27)

(1) As part of the BioShin Merger Agreement, the Company repurchased the 15,384,613 BioShin Series A Preferred Shares previously classified as mezzanine equity on the condensed consolidated balance sheet in exchange for 1,232,629 shares of the Company with a fair value of $152,673 (see Note 9 for further detail).

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 March 31,
	2022	2021
Options to purchase common shares	8,282,312	8,549,583
Warrants to purchase common shares	100,000	106,751
Restricted share units and performance share units	1,707,606	1,045,519
Total	10,089,918	9,701,853

XML

Collaboration, License and Other Agreements (Tables)

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of milestone payments for other agreements

The Company records milestones and other payments, including funding for research arrangements, which become due under its early-stage agreements to research and development expense in the condensed consolidated statements of operations and comprehensive loss. Amounts recorded for the period were as follows:

	Three months ended March 31,
	2022		2021
Milestone payments	$	—	$	962
Other payments	4,445		1,579

XML

Income Taxes (Tables)

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of income tax provision and effective tax rate

The following table provides a comparative summary of the Company's income tax provision and effective income tax rate for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
	2022			2021
Income tax provision	$	24,303		$	3,824
Effective income tax rate	26.2		%	1.5		%

XML

Marketable Securities - Amortized Cost and Fair Value of Debt Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Fair Value to Amortized Cost
Amortized Cost	$ 436,014	$ 192,971
Allowance for Credit Losses	0	0
Net Amortized Cost	436,014	192,971
Gross Unrealized Gains	3	1
Gross Unrealized Losses	(2,607)	(324)
Fair Value	433,410	192,648
Corporate bonds - U.S.
Fair Value to Amortized Cost
Amortized Cost	290,201	130,388
Allowance for Credit Losses	0	0
Net Amortized Cost	290,201	130,388
Gross Unrealized Gains	2	1
Gross Unrealized Losses	(1,969)	(234)
Fair Value	288,234	130,155
Corporate bonds - Foreign
Fair Value to Amortized Cost
Amortized Cost	47,106	20,643
Allowance for Credit Losses	0	0
Net Amortized Cost	47,106	20,643
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(426)	(82)
Fair Value	46,680	20,561
Government related obligations - U.S.
Fair Value to Amortized Cost
Amortized Cost	98,707	41,939
Allowance for Credit Losses	0	0
Net Amortized Cost	98,707	41,939
Gross Unrealized Gains	1	0
Gross Unrealized Losses	(212)	(8)
Fair Value	$ 98,496	$ 41,931

XML

Marketable Securities - Narrative (Details) $ in Thousands	Mar. 31, 2022 USD ($) investment	Dec. 31, 2021 USD ($) investment
Investments, Debt and Equity Securities [Abstract]
Number of available-for-sale debt securities in an unrealized loss position	99	53
Aggregate fair value of available-for-sale debt securities in an unrealized loss position | $	$ 412,366	$ 185,296
Investments in continuous unrealized loss position for more than twelve months	0	0

XML

Marketable Securities - Contractual Maturities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Net Amortized Cost
Less than one year	$ 342,502	$ 155,359
One year through five years	93,512	37,612
Amortized Cost	436,014	192,971
Fair Value
Less than one year	341,069	155,226
One year through five years	92,341	37,422
Fair Value	$ 433,410	$ 192,648

XML

Marketable Securities - Net Investment Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Net investment income
Gross investment income from debt securities available-for-sale	$ 140	$ 72
Investment expenses	(18)	(52)
Net investment income (excluding net realized capital gains or losses)	122	20
Net realized capital (losses) gains	(3)	19
Net investment income	$ 119	$ 39

XML

Marketable Securities - Proceeds and Realized Gains and Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Investments, Debt and Equity Securities [Abstract]
Proceeds from sales	$ 0	$ 113,441
Gross realized capital gains	0	19
Gross realized capital losses	$ 0	$ 0

XML

Fair Value of Financial Assets and Liabilities - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Recurring - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Assets:
Total assets	$ 487,906	$ 225,067
Liabilities:
Total liabilities	9,120	13,110
Series B preferred shares forward contracts
Liabilities:
Derivative contracts	9,120	13,110
Money market funds
Assets:
Cash equivalents	45,999	32,420
U.S. treasury bills
Assets:
Cash equivalents	8,497
Marketable securities	98,496	41,931
U.S. corporate bonds
Assets:
Marketable securities	288,234	130,155
Foreign corporate bonds
Assets:
Marketable securities	46,680	20,561
Level 1
Assets:
Total assets	51,991	38,414
Liabilities:
Total liabilities	0	0
Level 1 | Series B preferred shares forward contracts
Liabilities:
Derivative contracts	0	0
Level 1 | Money market funds
Assets:
Cash equivalents	45,999	32,420
Level 1 | U.S. treasury bills
Assets:
Cash equivalents	0
Marketable securities	5,992	5,994
Level 1 | U.S. corporate bonds
Assets:
Marketable securities	0	0
Level 1 | Foreign corporate bonds
Assets:
Marketable securities	0	0
Level 2
Assets:
Total assets	435,915	186,653
Liabilities:
Total liabilities	0	0
Level 2 | Series B preferred shares forward contracts
Liabilities:
Derivative contracts	0	0
Level 2 | Money market funds
Assets:
Cash equivalents	0	0
Level 2 | U.S. treasury bills
Assets:
Cash equivalents	8,497
Marketable securities	92,504	35,937
Level 2 | U.S. corporate bonds
Assets:
Marketable securities	288,234	130,155
Level 2 | Foreign corporate bonds
Assets:
Marketable securities	46,680	20,561
Level 3
Assets:
Total assets	0	0
Liabilities:
Total liabilities	9,120	13,110
Level 3 | Series B preferred shares forward contracts
Liabilities:
Derivative contracts	9,120	13,110
Level 3 | Money market funds
Assets:
Cash equivalents	0	0
Level 3 | U.S. treasury bills
Assets:
Cash equivalents	0
Marketable securities	0	0
Level 3 | U.S. corporate bonds
Assets:
Marketable securities	0	0
Level 3 | Foreign corporate bonds
Assets:
Marketable securities	$ 0	$ 0

XML

Fair Value of Financial Assets and Liabilities - Roll Forward of Aggregate Fair Value Determined by Level 3 Inputs (Details) - Series B preferred shares forward contracts - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Roll forward of aggregate fair value determined by Level 3 inputs
Balance at beginning of period	$ 13,110	$ 14,190
Change in fair value of derivative liability	(3,604)	835
Partial settlement of derivative liability	(386)	(625)
Balance at end of period	$ 9,120	$ 14,400

XML

Fair Value of Financial Assets and Liabilities - Narrative (Details)		3 Months Ended
	Jan. 04, 2021 USD ($)	Dec. 31, 2021 USD ($)
Level 3
Fair Value, Assets and Liabilities
FDA approval time frame for valuation	30 months
Level 3 | Measurement input, FDA approval
Fair Value, Assets and Liabilities
Contingent value right liability measurement input	0.10
Level 3 | Measurement input, discount rate
Fair Value, Assets and Liabilities
Contingent value right liability measurement input	0.07
Kleo
Fair Value, Assets and Liabilities
Amount received per contingent value right upon regulatory approval	$ 1
Contingent value right term period	30 months
Maximum amount payable for contingent value rights	$ 17,300,000
Fair value of contingent value right	$ 1,457,000
Recognized gain on contingent value right		$ 1,457,000

XML

Balance Sheet Components - Cash and Restricted Cash (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
Cash and Restricted Cash
Cash and cash equivalents	$ 169,065	$ 171,945
Restricted cash (included in other current assets)	4,559	1,648
Restricted cash (included in other assets)	750	750
Cash, cash equivalents and restricted cash in the statements of cash flows	$ 174,374	$ 174,343	$ 469,355	$ 134,231

XML

Balance Sheet Components - Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Inventories
Work-in-process	$ 169,390	$ 159,075
Finished goods	13,731	9,269
Total inventories	183,121	168,344
Less noncurrent inventories	91,840	87,736
Total inventories classified as current	$ 91,281	$ 80,608

XML

Balance Sheet Components - Prepaid Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Prepaid Expenses
Prepaid clinical trial costs	$ 58,562	$ 42,578
Prepaid manufacturing	8,856	17,448
Prepaid commercial costs	33,248	15,732
Other prepaid expenses	4,225	13,080
Prepaid expenses	$ 104,891	$ 88,838

XML

Balance Sheet Components - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Accrued Expense and Other Current Liabilities
Accrued development milestones	$ 5,000	$ 5,000
Accrued employee compensation and benefits	35,362	40,109
Accrued clinical trial costs	36,051	37,477
Accrued commercialization and other professional fees	22,744	19,994
Accrued sales discounts and allowances	233,096	203,760
Current obligation to perform R&D services	29,642	22,030
Other accrued expenses and other current liabilities	95,517	91,649
Accrued expenses and other current liabilities	$ 457,412	$ 420,019

XML

Business Acquisition (Details) - USD ($)		3 Months Ended
	Jan. 04, 2021	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
Kleo
Business Acquisition [Line Items]
Fair value of consideration transferred	$ 20,043,000
Issuance of shares	115,836
Amount received per contingent value right upon regulatory approval	$ 1
Contingent value right term period	30 months
Maximum amount payable for contingent value rights	$ 17,300,000
Recognized gain on contingent value right		$ 1,457,000
Post-transaction ownership percentage	100.00%
Fair value of existing interest	$ 6,437,000
Gain resulting from remeasurement of fair value of existing interest			$ 5,261,000
Amounts recorded:
Net working capital	573,000
Property, plant and equipment, net	1,257,000
Intangible assets, in progress research and development	18,400,000
Debt assumed	1,577,000
Goodwill	$ 1,390,000
Kleo
Business Acquisition [Line Items]
Ownership percentage				41.90%
Equity method investment				$ 1,176,000

XML

Liability Related to Sale of Future Royalties, net - Narrative (Details) $ / shares in Units, $ in Thousands	1 Months Ended			3 Months Ended		8 Months Ended
	Mar. 31, 2021 USD ($)	Aug. 31, 2020 USD ($) unit_of_accounting	Jun. 30, 2018 USD ($) unit_of_accounting $ / shares shares	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	Mar. 31, 2021 USD ($)
Liability For Sale of Future Royalties [Line Items]
Proceeds from sale of common stock	$ 229,500			$ 252,000	$ 308,743
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
2018 RPI Funding Agreement
Liability For Sale of Future Royalties [Line Items]
Proceeds from royalty agreement			100,000
Annual global net sales threshold for revenue participation right			$ 1,500
Effective interest rate (percent)				27.00%
2018 RPI Funding Agreement | Revenue Participation Right, tranche one
Liability For Sale of Future Royalties [Line Items]
Participation rate for revenue participation right (percent)			2.10%
2018 RPI Funding Agreement | Revenue Participation Right, tranche two
Liability For Sale of Future Royalties [Line Items]
Participation rate for revenue participation right (percent)			1.50%
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
2020 RPI Funding 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		$ 147,876
Transaction costs		400
Effective interest rate (percent)				8.00%
Sales-based participation rights sold, value		$ 250,000
Percentage of global net sales of products containing zavegepant for basis of participation rights		0.03%
Percentage of global net sales of products containing rimegepant for basis of participation rights		0.004%
Proceeds from sale of sales-based participation rights	$ 100,000	$ 150,000
Success-based milestone payments based on first zavegepant regulatory approval, relative to funded amount		1.9
Time period for success-based milestone payments		10 years
Proceeds allocated to obligation to perform contractual services		$ 2,124				$ 102,124
2020 RPI Funding Agreement | Minimum
Liability For Sale of Future Royalties [Line Items]
Success-based milestone payments based on regulatory approval, relative to funded amount		0.6
2020 RPI Funding Agreement | Maximum
Liability For Sale of Future Royalties [Line Items]
Success-based milestone payments based on regulatory approval, relative to funded amount		2.95

XML

Liability Related to Sale of Future Royalties, net - Reduction to Research and Development Expenses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
2020 RPI Funding Agreement
Liability For Sale of Future Royalties [Line Items]
Reduction in research and development expenses	$ 6,943	$ 190

XML

Liability Related to Sale of Future Royalties, net - Activity within Liability Account (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Liability related to sales of future royalties
Interest expense on liability related to sale of future royalties	$ 17,314	$ 13,508
2018 and 2020 RPI Funding Agreements
Liability related to sales of future royalties
Liability related to sale of future royalties - beginning balance	384,283	335,282
Royalty revenues paid and payable to RPI	(3,090)	(1,096)
Interest expense on liability related to sale of future royalties	17,314	13,508
Liability related to sale of future royalties - ending balance	$ 398,507	$ 347,694

XML

Mandatorily Redeemable Preferred Shares, net - Narrative (Details) $ / shares in Units, $ in Thousands		1 Months Ended	3 Months Ended
	Aug. 07, 2020 $ / shares shares	Apr. 30, 2019 USD ($) $ / shares shares	Mar. 31, 2022 USD ($) shares	Mar. 31, 2021 USD ($)	Dec. 31, 2021 shares
Mandatorily Redeemable Preferred Shares
Interest expense | $			$ 7,917	$ 7,943
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
Payment for priority review voucher | $		$ 105,000
Redemption relative to original purchase price upon optional redemption		2
Annual interest rate upon default of redemption (percent)		18.00%
Redemption relative to original purchase price upon required redemption			2
Effective interest rate (percent)			20.00%
Interest expense | $			$ 6,463	7,943
Mandatorily redeemable shares outstanding (in shares) | shares			1,715		1,871
Series A preferred shares | Change of control
Mandatorily Redeemable Preferred Shares
Redemption relative to original purchase price upon required redemption		2
Series B preferred shares
Mandatorily Redeemable Preferred Shares
Number of shares sold in transaction (in shares) | shares	3,992
Issuance price per share (in dollars per share) | $ / shares	$ 50,100
Effective interest rate (percent)			8.70%
Interest expense | $			$ 1,454	$ 0
Mandatorily redeemable shares issued (in shares) | shares			1,697		1,406
Mandatorily redeemable shares outstanding (in shares) | shares			1,697		1,406

XML

Mandatorily Redeemable Preferred Shares, net - Activity Within the Preferred Share Liability (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021	Dec. 31, 2020
Mandatorily Redeemable Preferred Shares [Roll Forward]
Interest expense on mandatorily redeemable preferred shares	$ 7,917	$ 7,943
Net balance at period end	162,994		$ 155,737
Series A preferred shares
Mandatorily Redeemable Preferred Shares [Roll Forward]
Interest expense recognized, net of transaction cost amortization	6,452	7,932
Interest expense on mandatorily redeemable preferred shares	6,463	7,943
Redemption of Series A preferred shares	(15,625)	(15,625)
Gross balance, ending	132,567	166,571
Less: unamortized transaction costs	(120)	(162)
Net balance at period end	132,447	166,409	$ 141,740	$ 174,264
Series B preferred shares
Mandatorily Redeemable Preferred Shares [Roll Forward]
Gross balance, beginning	76,627	0
Interest expense on mandatorily redeemable preferred shares	1,454	0
Issuance of Series B preferred shares at fair value	14,966	18,210
Gross balance, ending	$ 93,047	$ 18,210

XML

Shareholders' Deficit - Changes in Shareholders' Deficit (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	$ (743,009)	$ (392,189)
Repurchase of preferred shares in consolidated subsidiary	60,000
Issuance of common shares, net of offering costs		308,243
Issuance of common shares as part of acquisition		10,673
Issuance of common shares as payment for assets	253,779	10,243
Issuance of common shares under equity incentive plan	(751)	1,382
Non-cash share-based compensation expense	82,790	48,726
Net loss	(116,897)	(265,328)
Other comprehensive income (loss)	(2,325)	95
Ending balance	(466,413)	(278,155)
Biohaven Shareholders' Equity (Deficit)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	(739,380)	(390,370)
Repurchase of preferred shares in consolidated subsidiary	60,000
Issuance of common shares, net of offering costs		308,243
Issuance of common shares as part of acquisition		10,673
Issuance of common shares as payment for assets	253,779	10,243
Issuance of common shares under equity incentive plan	(751)	1,382
Non-cash share-based compensation expense	82,790	48,726
Net loss	(116,399)	(264,968)
Other comprehensive income (loss)	(2,325)	95
Ending balance	(462,286)	(275,976)
Common Shares
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	$ 1,676,792	$ 1,249,547
Beginning balance (in shares)	66,933,531	60,436,876
Repurchase of preferred shares in consolidated subsidiary	$ 152,673
Repurchase of preferred shares in consolidated subsidiary (in shares)	1,232,629
Issuance of common shares, net of offering costs		$ 308,243
Issuance of common shares, net of offering costs (in shares)		4,037,204
Issuance of common shares as part of acquisition		$ 10,673
Issuance of common shares as part of acquisition (in shares)		115,836
Issuance of common shares as payment for assets	$ 253,779	$ 10,243
Issuance of common shares as payment for assets (in shares)	2,037,921	110,998
Issuance of common shares under equity incentive plan	$ 29,442	$ 25,315
Issuance of common shares under equity incentive plan (shares)	336,721	365,554
Ending balance	$ 2,112,686	$ 1,604,021
Ending balance (in shares)	70,540,802	65,066,468
Additional Paid-in Capital
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	$ 169,656	$ 98,938
Repurchase of preferred shares in consolidated subsidiary	(92,673)
Issuance of common shares under equity incentive plan	(30,193)	(23,933)
Non-cash share-based compensation expense	82,790	48,726
Ending balance	129,580	123,731
Accumulated Deficit
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	(2,585,755)	(1,739,169)
Net loss	(116,399)	(264,968)
Ending balance	(2,702,154)	(2,004,137)
Accumulated Other Comprehensive Income
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	(73)	314
Other comprehensive income (loss)	(2,325)	95
Ending balance	(2,398)	409
Non-controlling Interests
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	(3,629)	(1,819)
Net loss	(498)	(360)
Ending balance	$ (4,127)	$ (2,179)

XML

Shareholders' Deficit - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands				1 Months Ended				3 Months Ended
	Jan. 06, 2022	Jan. 04, 2021	Jan. 01, 2021	Jan. 31, 2022	Mar. 31, 2021	Jan. 31, 2021	Sep. 30, 2020	Mar. 31, 2022	Mar. 31, 2021	Sep. 30, 2021	Dec. 31, 2020
Sale of Stock [Line Items]
Issuance of common shares as payment for assets								$ 253,779	$ 10,243
Proceeds from sale of common stock					$ 229,500			252,000	308,743
Equity Distribution Agreement aggregate amount											$ 400,000
Net loss attributable to non-controlling interests								$ (498)	$ (360)
Kleo
Sale of Stock [Line Items]
Ownership percentage											41.90%
Pfizer
Sale of Stock [Line Items]
Number of shares sold in transaction (in shares)				2,022,581
Proceeds from sale of stock				$ 350,000
Estimated fair value of shares issued				252,000
KU Leuven | License agreement | KU Leuven Agreement
Sale of Stock [Line Items]
Payment for license agreement				$ 3,000
Issuance of common shares as payment for assets (in shares)				15,340
Issuance of common shares as payment for assets				$ 1,779
Yale University | License agreement | Yale MoDE Agreement
Sale of Stock [Line Items]
Payment for license agreement						$ 1,000
Issuance of common shares as payment for assets (in shares)						11,668
Issuance of common shares as payment for assets						$ 1,000
Moda Pharmaceuticals LLC | License agreement | Moda Agreement
Sale of Stock [Line Items]
Payment for license agreement			$ 2,700
Issuance of common shares as payment for assets (in shares)			37,836
Issuance of common shares as payment for assets			$ 3,243
BioShin Limited
Sale of Stock [Line Items]
Conversion rate of preferred stock to common stock per agreement (in shares)	0.080121
Repurchase of preferred shares in consolidated subsidiary (in shares)	1,232,629
Common Shares
Sale of Stock [Line Items]
Issuance of common shares as payment for assets (in shares)								2,037,921	110,998
Issuance of common shares as payment for assets								$ 253,779	$ 10,243
Common stock issued (shares)									4,037,204
Issuance of common shares as part of acquisition (in shares)									115,836
Repurchase of preferred shares in consolidated subsidiary (in shares)								1,232,629
Kleo
Sale of Stock [Line Items]
Shares of common stock exchanged for each share of acquiree		0.007
Issuance of common shares as part of acquisition (in shares)		115,836
BioShin 2020 Equity Incentive Plan
Sale of Stock [Line Items]
Requisite service period of award (in years)							3 years
Public offering
Sale of Stock [Line Items]
Common stock issued (shares)					2,686,409
Issuance price per share (in dollars per share)										$ 76.00
Proceeds from sale of common stock					$ 199,500
Underwriting discounts and commissions					4,167
Other offering expenses					$ 500
Over-allotment option
Sale of Stock [Line Items]
Common stock issued (shares)					402,961
Proceeds from sale of common stock					$ 30,000
Underwriting discounts and commissions					$ 625
Equity Distribution Agreement
Sale of Stock [Line Items]
Common stock issued (shares)								0	939,328
Proceeds from sale of common stock									$ 78,743
BioShin Preferred Shares | Series A preferred shares
Sale of Stock [Line Items]
Preferred stock issued and sold (in shares)							15,384,613
Shares issued price per share							$ 3.90
Proceeds from shares issued							$ 60,000

XML

Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
AOCI [Roll Forward]
Beginning of period balance	$ (739,380)
End of period balance	(462,286)
Accumulated other comprehensive income
AOCI [Roll Forward]
Beginning of period balance	(73)	$ 314
Other comprehensive income (loss)	(2,325)	95
End of period balance	(2,398)	409
Tax on other comprehensive income (loss)	0	0
Net unrealized investment gains (losses)
AOCI [Roll Forward]
Beginning of period balance	(323)	(125)
Other comprehensive income (loss)	(2,279)	63
Amounts reclassified from accumulated other comprehensive income		19
Other comprehensive income (loss)		82
End of period balance	(2,602)	(43)
Foreign currency translation adjustments
AOCI [Roll Forward]
Beginning of period balance	250	439
Other comprehensive income (loss)	(46)	13
End of period balance	$ 204	$ 452

XML

Share-Based Compensation - Non-Cash Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Share-Based Compensation
Total non-cash share-based compensation expense	$ 81,828	$ 48,726
Less: Share-based compensation expense attributable to non-controlling interests	498	360
Share-based compensation expense attributable to Biohaven Pharmaceutical Holding Company Ltd.	81,330	48,366
Share-based compensation expense capitalized	$ 962	0
Minimum
Share-Based Compensation
Requisite service period of award (in years)	3 years
Maximum
Share-Based Compensation
Requisite service period of award (in years)	4 years
Research and development expenses
Share-Based Compensation
Total non-cash share-based compensation expense	$ 33,953	20,058
Selling, general and administrative expenses
Share-Based Compensation
Total non-cash share-based compensation expense	$ 47,875	$ 28,668

XML

Share-Based Compensation - Stock Options (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) $ / shares shares
Number of shares
Outstanding at beginning of period (in shares)	7,089,727
Granted (in shares)	1,243,000
Exercised (in shares)	(46,665)
Forfeited (in shares)	(3,750)
Outstanding at end of period (in shares)	8,282,312
Options exercisable (in shares)	5,689,393
Options vested and expected to vest (in shares)	8,282,312
Weighted Average Exercise Price
Outstanding at beginning of period (in dollars per share) | $ / shares	$ 40.15
Granted (in dollars per share) | $ / shares	128.09
Exercised (in dollars per share) | $ / shares	60.06
Forfeited (in dollars per share) | $ / shares	63.01
Outstanding at end of period (in dollars per share) | $ / shares	53.22
Options exercisable (in dollars per share) | $ / shares	38.82
Options vested and expected to vest (in dollars per share) | $ / shares	$ 53.22
Weighted Average Contractual Term and Aggregate Intrinsic Value
Weighted average remaining contractual term of options outstanding (in years)	7 years 3 days
Weighted average remaining contractual term of options exercisable (in years)	6 years 3 months 21 days
Weighted average remaining contractual term of options vested and expected to vest (in years)	7 years 3 days
Aggregate intrinsic value of options outstanding | $	$ 553,426
Aggregate intrinsic value of options exercisable | $	456,699
Aggregate intrinsic value of options vested and expected to vest | $	$ 553,426
Additional Disclosures
Unvested options expected to vest (in shares)	2,592,919
Stock options
Additional Disclosures
Share-based award term (in years)	10 years
Total unrecognized compensation cost | $	$ 105,422
Weighted average period for recognition of compensation cost	2 years 2 months 23 days
Stock options | Minimum
Additional Disclosures
Share-based award vesting period (in years)	3 years
Stock options | Maximum
Additional Disclosures
Share-based award vesting period (in years)	4 years

XML

Share-Based Compensation - Restricted Share Units and Performance Share Units (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) $ / shares shares
Additional Disclosures
Number of common shares received per vested RSU	1
RSUs and PSUs
Number of shares
Unvested, beginning (in shares)	1,218,070
Granted (in shares)	1,064,917
Forfeited (in shares)	(14,085)
Vested (in shares)	(561,296)
Unvested, ending (in shares)	1,707,606
Weighted Average Grant Date Fair Value
Unvested, beginning (in dollars per share) | $ / shares	$ 78.98
Granted (in dollars per share) | $ / shares	127.95
Forfeited (in dollars per share) | $ / shares	97.19
Vested (in dollars per share) | $ / shares	94.12
Unvested, ending (in dollars per share) | $ / shares	$ 104.39
Additional Disclosures
Total unrecognized compensation cost | $	$ 159,189
Weighted average period for recognition of compensation cost	2 years 5 months 4 days
RSUs
Additional Disclosures
Fair value of RSUs vested | $	$ 52,844

XML

Net Loss Per Share - Calculation of Basic and Diluted Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended	3 Months Ended
	Jan. 06, 2022	Sep. 30, 2020	Mar. 31, 2022	Mar. 31, 2021
Numerator:
Net loss			$ (116,897)	$ (265,328)
Net loss attributable to non-controlling interests			498	360
Deemed dividend upon repurchase of preferred shares in consolidated subsidiary			(92,673)	0
Net loss attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd., basic			(209,072)	(264,968)
Net loss attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd., diluted			$ (209,072)	$ (264,968)
Denominator:
Weighted average common shares outstanding - basic (shares)			70,332,274	62,040,715
Weighted average common shares outstanding - diluted (shares)			70,332,274	62,040,715
Net loss per share attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd. - basic (in dollars per share)			$ (2.97)	$ (4.27)
Net loss per share attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd. - diluted (in dollars per share)			$ (2.97)	$ (4.27)
Other
Repurchase of preferred shares in consolidated subsidiary			$ 60,000
BioShin Limited
Other
Repurchase of preferred shares in consolidated subsidiary (in shares)	1,232,629
Repurchase of preferred shares in consolidated subsidiary	$ 152,673
Series A preferred shares | BioShin Preferred Shares
Other
Preferred stock issued and sold (in shares)		15,384,613

XML

Net Loss Per Share - Antidilutive Securities Excluded from Computation of Net Loss per Share (Details) - shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Securities excluded from computation of diluted net loss per share
Anti-dilutive securities excluded from calculation of diluted net loss per share	10,089,918	9,701,853
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	8,282,312	8,549,583
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	100,000	106,751
Restricted share units and performance share units
Securities excluded from computation of diluted net loss per share
Anti-dilutive securities excluded from calculation of diluted net loss per share	1,707,606	1,045,519

XML

Collaboration, License and Other Agreements - Pfizer Collaboration (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Jan. 31, 2022	Mar. 31, 2022	Mar. 31, 2021
License and other agreements
Revenue		$ 318,852	$ 43,823
Collaboration and other revenue
License and other agreements
Revenue		195,262	$ 0
Pfizer
License and other agreements
Number of shares sold in transaction (in shares)	2,022,581
Proceeds from sale of stock	$ 350,000
Estimated fair value of shares issued	252,000
Share purchase premium received	98,000
Pfizer | Collaborative arrangement
License and other agreements
Upfront payment received	150,000
Share purchase premium received	98,000
Eligible contingent payments receivable per agreement for sales-based milestones	740,000
Contract liability	$ 53,611	52,738
Contract liability, current		21,763
Contract liability, noncurrent		30,975
Pfizer | Collaborative arrangement | Maximum
License and other agreements
Agreement term after first commercial sale	10 years
Pfizer | Collaborative arrangement | Collaboration and other revenue
License and other agreements
Revenue		194,389
Revenue recognized that was previously in contract liability		$ 873

XML

Collaboration, License and Other Agreements - Yale University Agreement (Details) - Yale University - Yale Arrangement - USD ($) $ in Thousands	1 Months Ended
	May 31, 2019	Sep. 30, 2013
License and other agreements
Issuance of common shares, net of offering costs (in shares)		250,000
Right to purchase securities in specified future equity offering (as a percent)		10.00%
Milestone payment to be paid upon regulatory achievement	$ 2,000
Minimum annual royalty payment to be paid upon sale of product	$ 1,000

XML

Collaboration, License and Other Agreements - BMS Agreement and Amendment (Details) $ in Thousands		1 Months Ended				3 Months Ended			12 Months Ended
	Feb. 27, 2020 USD ($)	Nov. 30, 2020 USD ($)	Aug. 31, 2020 USD ($)	Mar. 31, 2018 USD ($)	Jul. 31, 2016 USD ($) product	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
License and other agreements
Research and development expense						$ 119,099	$ 107,111
BMS Agreement
License and other agreements
Upfront payment under the BMS Amendment			$ 5,000	$ 50,000
Maximum obligated payment for each licensed product to achieve commercial milestone			$ 22,500
BMS Agreement | Collaborative arrangement
License and other agreements
Payment required due to achievement of milestone	$ 40,000
Required milestone payments capitalized to intangible asset	40,000
Milestone payments							5,000	$ 6,000	$ 40,000
Accrued expense for payment due upon commencement of Phase 1 clinical trial													$ 2,000
Accrued expense for payment due upon commencement of Phase 2 clinical trial												$ 4,000
Accrued expense for payment due upon commencement of Phase 3 clinical trial											$ 6,000
Payment required due to commencement of Phase 1 clinical trial	2,000
Payment required due to commencement of Phase 2 clinical trial	$ 4,000
Accrued expense for payment due following regulatory approval							5,000			$ 5,000
Research and development expense						0	0
Royalty expense						$ 12,355	$ 4,384
BMS Agreement | Collaborative arrangement | Maximum
License and other agreements
Milestone payment to be paid upon regulatory achievement					$ 127,500
Milestone payment to be paid for any product other than rimegepant					74,500
Commercial milestone payment to be paid					$ 150,000
BMS Agreement | Collaborative arrangement | Minimum
License and other agreements
Number of licensed products | product					1
November 2020 BMS Amendment | Collaborative arrangement
License and other agreements
Commercial milestone payment to be paid		$ 150,000
Net sales threshold for milestone (percent)		10.00%
Development milestone payment to be paid		$ 17,500

XML

Collaboration, License and Other Agreements - RPI Agreements (Details) - USD ($)	1 Months Ended	3 Months Ended
	Jun. 30, 2018	Mar. 31, 2022	Mar. 31, 2021	Aug. 31, 2020
License and other agreements
Interest expense on liability related to sale of future royalties		$ 17,314,000	$ 13,508,000
2018 RPI Funding Agreement
License and other agreements
Proceeds from royalty agreement	$ 100,000,000
Interest expense on liability related to sale of future royalties		14,096,000	11,419,000
Payments under funding agreement		4,025,000	736,000
2020 RPI Funding Agreement
License and other agreements
Interest expense on liability related to sale of future royalties		3,218,000	2,089,000
Payments under funding agreement		$ 767,000	$ 140,000
Sales-based participation rights sold, value				$ 250,000,000
Revenue Participation Right, tranche one | 2018 RPI Funding Agreement
License and other agreements
Participation rate for revenue participation right (percent)	2.10%
Revenue Participation Right, tranche one | 2018 RPI Funding Agreement | Maximum
License and other agreements
Annual global net sales threshold for revenue participation right	$ 1,500,000,000
Revenue Participation Right, tranche two | 2018 RPI Funding Agreement
License and other agreements
Participation rate for revenue participation right (percent)	1.50%

XML

Collaboration, License and Other Agreements - AstraZeneca License Agreement (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Sep. 30, 2018	Mar. 31, 2022	Mar. 31, 2021
License and other agreements
Issuance of common shares as payment for assets		$ 253,779	$ 10,243
AstraZeneca | License agreement
License and other agreements
Payment for license agreement	$ 3,000
Issuance of common shares as payment for assets (in shares)	109,523
Issuance of common shares as payment for assets	$ 4,080
Milestone payment due upon achievement of specified regulatory and commercial milestones	55,000
Milestone payment due upon achievement of specified sales-based milestones	$ 50,000

XML

Collaboration, License and Other Agreements - Taldefgrobep Alfa License Agreement (Details) $ in Thousands	Feb. 28, 2022 USD ($)
Taldefgrobep Alfa License Agreement | BMS
License and other agreements
Eligible milestone payment per agreement upon specified performance and regulatory milestones	$ 200,000

XML

Collaboration, License and Other Agreements - Other Agreements (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
License and other agreements
Issuance of common shares as payment for assets	$ 253,779	$ 10,243
Other Agreements
License and other agreements
Milestone payments	0	962
Other payments	4,445	1,579
Potential developmental milestone payments, maximum	216,966
Potential regulatory milestone payments, maximum	279,325
Potential commercial milestone payments, maximum	573,121
Other Agreements | License agreement
License and other agreements
Payment for license agreement	$ 3,000	$ 3,700
Issuance of common shares as payment for assets (in shares)	15,340	49,504
Issuance of common shares as payment for assets	$ 1,779	$ 4,243

XML

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 24,303	$ 3,824
Effective income tax rate (percent)	26.20%	1.50%
Increase in income tax expense	$ 20,479

XML

Subsequent Events (Details) - Subsequent event $ / shares in Units, $ in Millions	May 09, 2022 USD ($) $ / shares	Apr. 04, 2022 USD ($) shares
Channel
Subsequent Events
Upfront cash payment		$ 35.0
Stock issued in acquisition, number of shares | shares		493,254
Stock issued in acquisition		$ 65.0
Potential developmental and regulatory milestones on BHV-7000		325.0
Potential developmental and regulatory milestones on Kv7 pipeline development		250.0
Potential commercial sales based milestones of BHV-7000		$ 562.5
Pfizer | Biohaven
Subsequent Events
Transaction cash consideration	$ 11,600.0
Price per share to be acquired (in dollars per share) | $ / shares	$ 148.50
Share ratio of new publicly traded company per two shares to existing shareholders	1
New Biohaven
Subsequent Events
Post merger capitalization	$ 275.0
Net sales threshold for tiered royalty rights	$ 5,250.0