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Debt
 6 Months Ended
Jun. 30, 2022
Debt Disclosure [Abstract]  
Debt DebtIn August 2020, the Company and Biohaven Pharmaceuticals, Inc., the Company's wholly-owned subsidiary (together with the Company, the "Borrowers"), entered into a financing agreement, as amended, with Sixth Street Specialty Lending, Inc., as administrative agent, and the lenders party thereto (the "Lenders") pursuant to which the Lenders agreed to extend a senior secured credit facility to the Company providing for term loans in an aggregate principal amount up to $500,000, plus any capitalized interest paid in kind. The Borrowers drew an initial term loan of $275,000 at closing in August 2020 (the "Initial Term
Loan") and had $100,000 of immediately available delayed draw term loan commitments and $125,000 of delayed draw term loan commitments available upon achievement of the Delay Draw Sales Milestone (as defined in the Sixth Street Financing Agreement).
In March 2021, the Borrowers and certain other of the Company’s subsidiaries 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 $125,000 tranche of delayed draw term loans. In August 2021, the Borrowers drew the $125,000 tranche of delayed draw term loans (the "DDTL-2).
In September 2021, the Borrowers, and certain other of the Company’s subsidiaries 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 $250,000 for a total facility size of $750,000 plus any capitalized interest paid in kind. At the closing of the Second Amendment, the Borrowers drew an initial term loan of $125,000 (the "2021 Term Loan") and $100,000 (the "DDTL-1"). The remaining $125,000 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, the Company 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 the Company’s entry into the Collaboration Agreement with Pfizer.
In December 2021, the Company 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. In June 2022, the Company drew the remaining $125,000 term loan available under the 2021 DDTL Commitment (the "DDTL-3").
The Company has the right to elect to pay up to 4.00% per annum of the interest on the term loans comprising such borrowing in the form of payment in kind for the first eight fiscal quarters after the date of
such borrowing. For the loans drawn under the 2021 DDTL Commitment, the payment-in-kind election cannot exceed seven fiscal quarters after the Delayed Draw Term Loan Commitment Termination Date. Interest on amounts borrowed under the facility will be payable quarterly.
The Company will have the right to prepay borrowings under the facility in whole or in part at any time, subject to a customary prepayment fee on the principal amount prepaid, which declines over time. The Company paid customary fees with respect to amounts drawn on each credit date. The Company also agreed to pay customary fees on the funding of any delayed draw term loans.
The Sixth Street Financing Agreement contains mandatory prepayments, restrictions and covenants applicable to the Company and its subsidiaries that are customary for financings of this type. Among other requirements, the Borrowers are required to maintain a minimum unrestricted cash balance of $80,000. At the Borrowers' request, the minimum unrestricted cash balance will be waived for any fiscal quarter in which the Borrowers achieve $400,000 of net sales of the Company’s products in the four consecutive quarterly periods prior to such fiscal quarter. The Sixth Street Financing Agreement also includes representations, warranties, indemnities and events of default that are customary for financings of this type, including an event of default relating to a change of control of the Company. Upon or after an event of default, the administrative agent and the lenders may declare all or a portion of our obligations under the Sixth Street Financing Agreement to be immediately due and payable and exercise other rights and remedies provided for under the Sixth Street Financing Agreement.
The obligations under the Sixth Street Financing Agreement are and will be guaranteed by each of the Company's existing and future direct and indirect subsidiaries, subject to certain exceptions. The obligations of the Company and its subsidiaries under the Sixth Street Financing Agreement are secured, subject to customary permitted liens and other agreed upon exceptions, by a security interest in certain existing and after-acquired assets of the Company and its subsidiaries.
2020 Loans
In August 2020, the Company borrowed the Initial Term Loan for total proceeds of $262,200, net of discounts and issuance costs. In August 2021, the Company borrowed the DDTL-2 for total proceeds of $123,750, net of discounts and issuance costs. The
DDTL-2 contained 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 bear floating interest on the unpaid principal amount at a rate per annum equal to the three-month LIBOR rate, adjusted for applicable reserve requirements, and subject to a floor of 1.00%, plus 9.00%. The contractual interest rate as of June 30, 2022 for the August 2020 Loans was 11.25%, and the effective interest rate is approximately 13.04% and 12.25% for Initial Term Loan and DDTL-2, respectively. The interest expense on the August 2020 Loans, including amortization of loan discounts and issuance costs, for the three and six months ended June 30, 2022 was $11,261 and $22,262, respectively. For the August 2020 Loans, the Company elected to pay in kind the maximum amount for its interest payments made through June 30, 2022.
2021 Loans
In September 2021, the Company borrowed the 2021 Term Loan and DDTL-1, and in June 2022, the Company borrowed the DDTL-3 (collectively, the "September 2021 Loans") and received proceeds of $119,722, $97,778, and $123,307, respectively, net of discounts and issuance costs. The September 2021 Loans are due and payable in September 2026. The September 2021 Loans will bear floating interest on the unpaid principal amount at a rate per annum equal to the three-month LIBOR rate, adjusted for applicable reserve requirements, and subject to a floor of 1.00%, plus 8.25%. The contractual interest rate as of June 30, 2022 for the September 2021 Loans was 10.50% and the effective interest rate is approximately 12.19%, 11.63%, and 11.51% for 2021 Term Loan, DDTL-1, and DDTL-3, respectively.
The interest expense on the September 2021 Loans, including amortization of loan discounts and issuance costs, was $5,648 and $11,168 for the three and six months ended June 30, 2022, respectively. For the September 2021 Loans, the Company elected to pay in kind the maximum amount for its interest payments made through June 30, 2022.
The following table is a summary of the Company’s borrowing as of June 30, 2022:
June 30, 2022December 31, 2021
Long-term debt
Floating rate loans due August 2025 (11.25% at June 30, 2022)(1)
$426,127 $417,685 
Floating rate loans due September 2026 (10.50% at June 30, 2022)(2)
356,894 227,300 
Total debt principal783,021 644,985 
Unamortized debt discount and issuance costs(18,038)(18,265)
Long-term debt$764,983 $626,720 
(1) As of June 30, 2022 and December 31, 2021, paid in kind interest of $26,127 and $17,685, respectively, are included in the principal balance.
(2) As of June 30, 2022 and December 31, 2021, paid in kind interest of $6,894 and $2,300, respectively, are included in the principal balance.
The following is a summary of the Company's required repayments of debt principal due during each of the next five years, as of June 30, 2022:
2022$— 
202310,587 
202439,958 
2025411,272 
2026321,204 
$783,021 
Pfizer Merger Agreement
On May 9, 2022, the Company, Pfizer and Merger Sub, entered into the Merger Agreement, see Note 1 for
details. Pursuant to the terms set forth in the Merger Agreement, the Company will terminate the Sixth Street Financing Agreement at the Closing (as defined in the Merger Agreement), and will obtain at the Closing customary payoff letters from the lenders under the Sixth Street Financing Agreement, including, subject to the payment of any applicable payoff amount, the release of all Liens granted in connection with the Sixth Street Financing Agreement. Pfizer shall irrevocably pay off or cause to be paid off at Closing the applicable payoff amount on behalf of the Company.