BIOHAVEN PHARMACEUTICAL : Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

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, 2020 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, and the development of the industry in which we operate
may differ materially from the forward-looking statements contained in this
Quarterly Report on Form 10-Q. Statements made herein are as of the date of the
filing of this Form 10-Q with the SEC and should not be relied upon as of any
subsequent date. Even if our results of operations, financial condition and
liquidity, and the development of the industry in which we operate are
consistent with the forward-looking statements contained in this Quarterly
Report on Form 10-Q, they may not be predictive of results or developments in
future periods. We disclaim any obligation, except as specifically required by
law and the rules of the SEC, to publicly update or revise any such statements
to reflect any change in our expectations or in events, conditions or
circumstances on which any such statements may be based, or that may affect the
likelihood that actual results will differ from those set forth in the
forward-looking statements.
We caution readers not to place undue reliance on any forward-looking statements
made by us, which speak only as of the date they are made.

Overview

We are a commercial-stage biopharmaceutical company with a marketed product,
NURTEC® ODT (rimegepant), for the acute and preventive treatment of migraine and
a portfolio of innovative product candidates targeting neurological diseases,
including rare disorders. NURTEC ODT, was approved by the U.S. Food and Drug
Administration ("FDA") for the acute treatment of migraine on February 27, 2020,
which became available by prescription in U.S. pharmacies on March 12, 2020, and
for the preventive treatment of migraine on May 27, 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 other late-stage product candidates are based on multiple
mechanisms -CGRP receptor antagonists, glutamate modulators and myeloperoxidase
inhibition-which we believe have the potential to significantly alter existing
treatment approaches across a diverse set of neurological indications with high
unmet need in both large and orphan indications.
Our late-stage programs include the following:
      Product          Platform            Indication                             Development Stage
NURTEC ODT          CGRP           Acute treatment of migraine •Approved 

by the FDA on February 27, 2020 and

commercialization began in March 2020.

                                                               •Phase 3 trial for China and Korea ongoing.
NURTEC ODT          CGRP           Prevention of migraine      Approved by the FDA on May 27, 2021.
Rimegepant          CGRP           Pediatric acute treatment   Phase 3 trial ongoing.
                                   of migraine
Zavegepant          CGRP           Acute treatment of migraine Intranasal

Phase 3 trial ongoing. Results expected in

                                                               the second half of 2021.
Zavegepant          CGRP           Prevention of migraine      Oral Phase 3 trial ongoing.
Troriluzole         Glutamate      Ataxias                     Phase 2/3

randomization phase in spinocerebellar ataxia

                                                               ("SCA") 

complete and multi-year extension trial

                                                               ongoing. 

Global registrational Phase 3 trial completed

                                                               enrollment 

and ongoing in the U.S. and China. Results

                                                               expected in 

the first half of 2022. Troriluzole Glutamate Obsessive Compulsive Two Phase 3 trials ongoing. Results expected in the

                                   Disorder ("OCD")            second half of 2022.
Verdiperstat        MPO            Multiple System Atrophy     Phase 3 

trial completed enrollment and ongoing. Results

                                   ("MSA")                     expected in third quarter of 2021.
Verdiperstat        MPO            Amyotrophic Lateral         Phase 3 

HEALEY ALS Platform Trial ongoing. Enrollment

                                   Sclerosis                   expected to 

complete in fourth quarter of 2021.

                                   ("ALS")


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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. The most advanced of these is BHV-3100,
previously known as HTL0022562.
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 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 migraine on May 27, 2021.
Due to the early success and life-cycle benefits for NURTEC ODT, we determined
that there were no significant added benefits to patients for the tablet
formulation and that it was in the Company's best interests not to expend the
resources to commercialize the tablet formulation of rimegepant for the acute
treatment of migraine. In May 2020, we withdrew the rimegepant tablet NDA that
was pending with the FDA.
The Company remains focused on investing in the long-term success of the launch
by driving new-to-brand prescriptions , and ultimately market share, in this
rapidly growing oral CGRP market and is 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
therapy market opportunity. It is important to note that the injectable
anti-CGRP prevention market has not been negatively impacted by the oral
anti-CGRP (or gepant) class growth, which signifies two distinct and sizable
migraine market segments. The Company continues to expand commercial payer
coverage, with NURTEC ODT now covered by insurance providers reflecting 89% 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 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 symptoms ("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 a
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.
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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, Biohaven 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 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 Biohaven's 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.
International Health Authority Interactions
Scientific advice for rimegepant for acute and preventive migraine treatment was
received from the Committee for Medicinal Products for Human Use, a committee of
the European Medicines Agency, in June and December 2018, respectively. In the
first quarter of 2021, we submitted the Marketing Authorization Application
("MAA") for rimegepant dual activity, inclusive of acute and prevention of
migraine. The submission has been validated by the European Medicines Agency and
the European Commission procedure is ongoing. If approved, Vydura will be the
commercial name for rimegepant in the EU. Filings in Israel and the Middle East
began in 2020. In March 2021, we received approval for rimegepant in Israel and
the UAE, and we anticipate further approvals in 2021 and 2022. In the second
quarter of 2020, we entered into agreements with Genpharm Services and Medison
Pharma to distribute NURTEC ODT in the Middle East & Gulf Countries and Israel,
respectively. With respect to Japan, we are engaging the Pharmaceuticals and
Medical Devices Agency ("PMDA") on a path forward, and initiation of Phase 2/3
bridging studies are anticipated to begin in the fourth quarter of 2021.
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 Investigational New Drug ("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 which
is being used to build out BioShin in China and advance the Biohaven 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 Korea.
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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.
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 believe that
intranasal zavegepant may 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. 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. A second Phase 3 trial was initiated
in fourth quarter of 2020 with results expected in the second half of 2021.
In April 2020, Biohaven announced its 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.
In September 2020, the Company announced that the FDA authorized the initiation
of clinical trials for oral zavegepant and that the Company has 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 3 clinical program to assess the efficacy of oral zavegepant in
the preventive treatment of migraine began enrollment. Additionally, we expect
to begin trials in other nonmigraine areas later this year.
BHV-3100
BHV-3100, previously known as HTL0022562, is the most advanced clinical
candidate 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 was developed successfully through preclinical trials by Sosei Heptares
and demonstrated promising and differentiated properties in target CGRP-mediated
disorders. In June 2021, Sosei Heptares announced that BHV-3100 had entered a
Phase 1 study with the dosing of a first healthy subject. Future studies are
being planned to target common and rare diseases.

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 sublingual
riluzole (BHV-0223) and BHV-5500, an antagonist of the glutamate
N-methyl-D-aspartate ("NMDA") receptor.
Troriluzole
Ataxias
We are developing troriluzole for the treatment of ataxias; our initial focus
has been spinocerebellar ataxia ("SCA"). We have received both orphan drug
designation and fast track designation from the FDA for troriluzole for the
treatment of SCA. A Phase 2/3 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 first half 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) but was
significant 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
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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 results expected 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 the fourth quarter of 2019, we
completed enrollment in the study and announced that the study passed the
interim futility analysis. In order to pass the interim futility analysis,
troriluzole had to demonstrate numerically greater benefit over placebo on at
least one of the two pre-specified criteria at 26 weeks: either (i) cognitive
function as measured by the Alzheimer's Disease Assessment Scale-Cognitive
Subscale ("ADAS-cog") or (ii) hippocampal volume as assessed by magnetic
resonance imaging. 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 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. Full
study results, including additional secondary and exploratory outcomes,
biomarker, and subgroup analyses, are expected in the coming months and will be
presented at an upcoming scientific meeting. 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. Biohaven has amended the ongoing long-term
extension study of troriluzole in AD for mild AD patients to be able to continue
treatment in order to gather additional clinical and biomarker data.
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 Phase 3 trial of troriluzole
in SCA. BioShin completed enrollment for the 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, for the
treatment of neuropsychiatric diseases. One potential target indication includes
Complex Regional Pain Syndrome ("CRPS"). CRPS is a rare, chronic pain condition
typically affecting limbs and triggered by traumatic injury. Accompanying
symptoms also include chronic inflammation and reduced mobility in the affected
areas. Other disorders of interest include 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.

MPO Platform
Verdiperstat
We are developing verdiperstat (previously BHV-3241), an oral myeloperoxidase
inhibitor for the treatment of neurodegenerative diseases. One target indication
is MSA, a rare, rapidly progressive and fatal neurodegenerative disease with no
cure or effective treatments. Verdiperstat has received orphan drug designation
for the treatment of MSA from both the FDA and the European Medicines Agency. In
addition, Fast Track status was granted by the FDA in March 2020 for
verdiperstat for the treatment for MSA. A Phase 3 trial began enrollment in July
2019 to evaluate the efficacy of verdiperstat in MSA. The trial completed
enrollment in July 2020. Results are expected in the third quarter of 2021.
Another 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 and is ongoing. Enrollment is expected to complete in
the fourth quarter of 2021.
Verdiperstat was progressed through Phase 2 clinical trials by AstraZeneca.
Seven clinical studies were completed by AstraZeneca, including four Phase 1
studies in healthy subjects, two Phase 2a studies in subjects with Parkinson's
disease, and
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one Phase 2b study in subjects with MSA. We have entered into an exclusive license agreement with AstraZeneca for the product candidate.

Preclinical

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 (See Note 13).
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. The portfolio includes the lead candidate HTL0022562 now called
BHV-3100, which has advanced through preclinical development demonstrating
promising and differentiated properties for further investigation in human
trials (See Note 13).
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 (See Note 13).
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 with the Bill
and Melinda Gates Foundation for the development of a SARS-CoV-2 neutralizing
therapy for COVID-19 and 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. The
Company intends 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 indicate that
BHV-1200 may activate important immune system components including
antibody-dependent cellular phagocytosis and antibody dependent cellular
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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.
BHV-1100
In the third quarter of 2021, Biohaven expects to initiate 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).

Recent Developments
NURTEC ODT (Rimegepant) Patent Issuance
The United States Patent and Trademark Office has awarded a patent to the
Company (US Pat. No. 11,083,724, to be issued on August 10, 2021) that is
directed to our drug product, NURTEC ODT (rimegepant), as well as other CGRP
inhibitors in an ODT form. The patent has a statutory expiration date of March
25, 2039, not including patent term adjustment or any potential patent term
extension. The patent is also pending in major market countries throughout the
world including Europe, Japan and China. Patent term extensions, or
supplementary protection certificates, of up to five years can be obtained in
the UK, all member states of the EU as well as Switzerland, Norway, Iceland,
Japan, Korea and certain other countries.

Issuance of Common Shares for the March 2021 Offering
In March 2021, we 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 we 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 from the follow-on
offering, after deducting underwriting discounts and commissions and other
offering costs, were approximately $229,500.
First Amendment to Sixth Street Financing Agreement
In August 2020, we and Biohaven Pharmaceuticals, Inc., our wholly-owned
subsidiary (together with us, the "Borrowers"), entered into a financing
agreement (the "Sixth Street Financing Agreement") with Sixth Street Specialty
Lending, Inc. as administrative agent, various lenders (the "Lenders") and
certain of our subsidiaries, as guarantors. Pursuant to the Sixth Street
Financing Agreement, the Lenders agreed to extend a senior secured credit
facility to the Borrowers providing for term loans in an aggregate principal
amount up to $500.0 million plus any capitalized interest paid in kind. The
credit facility consists of an initial term loan of $275.0 million, which the
Borrowers borrowed at closing, and delayed draw term loans in an aggregate
principal amount not exceeding $225.0 million, available until August 31, 2021,
with $100.0 million of the delayed draw term loans currently available at the
Borrowers' option. The remaining $125.0 million in delayed draw term loans
becomes available if net sales from NURTEC ODT during the first quarter of 2021
or second quarter of 2021 equal at least $45.0 million. The facility terminates
in August 2025.
On March 1, 2021, the Borrowers, and certain other of our subsidiaries entered
into the First Sixth Street Financing Amendment, with Sixth Street Specialty
Lending, Inc., as administrative agent, and the lenders party thereto. Pursuant
to the First Sixth Street Financing Amendment, the parties agreed to, among
other things remove the $45.0 million delayed draw sales milestone tied to the
availability of the $125.0 million tranche of delayed draw term loans. As of
June 30, 2021, the full $225 million aggregate principal amount of delayed draw
term loans is available to draw at the Borrowers' option through August 31,
2021.
Acquisition of Kleo Pharmaceuticals, Inc.
On January 1, 2021, we and our subsidiaries Biohaven Therapeutics Ltd.
("Therapeutics") and Kleo Acquisition, Inc. ("Merger Sub") entered into an
Agreement and Plan of Merger (the "Merger Agreement") with Kleo Pharmaceuticals,
Inc. ("Kleo") and Shareholder Representative Services LLC, which contemplates
Merger Sub, subject to the terms and conditions set forth in the Merger
Agreement, merging with and into Kleo, with Kleo surviving the merger as a
wholly-owned subsidiary of the Company. The merger closed on January 4, 2021.
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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 (i) approximately 0.007 of one of our common shares, rounded up
to the nearest whole share, (ii) one contingent value right, as further
described below, and (iii) certain other amounts to extent released from escrows
established to provide for indemnification claims.
The merger values Kleo at approximately $20.0 million, exclusive of the value of
the contingent value rights, and the Merger Agreement provides for approximately
$1.0 million of holdbacks to provide for indemnification claims. Prior to the
consummation of the merger, we owned approximately 41.9% of the outstanding
shares of Kleo through our subsidiary Therapeutics, resulting in 115,836 of our
common shares being issued to Kleo stockholders in the merger.
In the merger, each share of Kleo common stock received one contingent value
right, representing the right to receive one dollar in cash 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
merger. The maximum amount payable pursuant to the contingent value rights is
approximately $17.3 million.
The Merger Agreement contains various representations and warranties, covenants,
indemnification obligations and other provisions customary for transactions of
this nature. Kleo's employees, other than its President and Chief Financial
Officer, were retained as part of the merger.
Pursuant to the Merger Agreement, in March 2021 we filed a registration
statement permitting Kleo stockholders to offer and sell the common shares of
ours issued in the merger.
Yale MoDE Agreement
On January 1, 2021, we 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 license agreement, we acquired exclusive, worldwide rights to Yale's
intellectual property directed to its MoDEs platform.
Under the agreement, we paid Yale University an upfront cash payment of $1.0
million and 11,668 shares valued at $1.0 million. In addition, Yale University
will be eligible to receive additional development milestone payments of up to
$0.8 million and commercial milestone payments of up to $3.0 million.
Consulting Agreement with Moda Pharmaceuticals LLC
On January 1, 2021, we entered into a consulting services agreement with Moda
Pharmaceuticals LLC to further the scientific and commercial advancement our
technology, drug discovery platforms, product candidates and related
intellectual property.
Under the agreement, we paid Moda an upfront cash payment of $2.7 million and
37,836 shares valued at $3.2 million. In addition, Moda Pharmaceutical will be
eligible to receive additional development milestone payments of up to $81.6
million and commercial milestone payments of up to $30.2 million.

COVID-19 Update
We continue to closely monitor the impact of the COVID-19 pandemic on all
aspects of our business.
We have taken numerous steps, and expect to continue to take further actions, in
our approach to addressing the COVID-19 pandemic. For example, we implemented
internal controls to effect a remote work environment and instructed most of our
employees to work from home, and our incident management teams responded to
changes in our work environment quickly and effectively. In April 2020, we
announced a collaboration with Cove in order to facilitate telemedicine
evaluation for migraine sufferers while patients are increasingly looking to
remote evaluations during this time of unprecedented decreased access to routine
office visits. We continue to monitor COVID-19 developments and regulatory and
government actions.
To date, the effects of the COVID-19 pandemic have not had a material impact on
our long-term activity. However, future developments remain uncertain and the
extent to which the COVID-19 pandemic ultimately impacts our business, financial
condition or results of operations will depend on a number of factors, including
the magnitude and duration of the pandemic, the distribution, acceptance and
effectiveness of COVID-19 vaccines and treatments, the duration of government
measures to mitigate the pandemic and how quickly and to what extent normal
economic and operating conditions can resume, all of which remain uncertain and
difficult to predict. There remains risk that COVID-19 could have material
adverse impacts on future revenue growth as well as overall profitability.

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Components of Our Results of Operations
Product Revenues, 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.
Cost of Goods Sold
Cost of goods sold includes direct and indirect costs related to the
manufacturing and distribution of NURTEC ODT, including third-party
manufacturing costs, packaging services, freight-in, third-party royalties
payable on our net product revenues and amortization of intangible assets
associated with NURTEC ODT.
Operating Expenses
Research and Development Expenses
Research and development expenses consist primarily of costs incurred in
connection with the development of our product candidates. We expense research
and development costs as incurred. These expenses include:
•expenses incurred under agreements with contract research organizations
("CROs") or contract manufacturing organizations ("CMOs"), as well as
investigative sites and consultants that conduct our clinical trials,
preclinical studies and other scientific development services;
•manufacturing scale-up expenses and the cost of acquiring and manufacturing
preclinical and clinical trial materials and commercial materials, including
manufacturing validation batches;
•employee-related expenses, including salaries, benefits, travel and non-cash
share-based compensation expense for employees engaged in research and
development functions;
•costs related to compliance with regulatory requirements;
•development milestone payments incurred prior to regulatory approval of the
product candidate; and
•payments made in cash, equity securities or other forms of consideration under
third-party licensing agreements.
We recognize external development costs based on an evaluation of the progress
to completion of specific tasks using estimates of our clinical personnel or
information provided to us by our service providers.
Our external direct research and development expenses are tracked on a
program-by-program basis for our product candidates and consist primarily of
external costs, such as fees paid to outside consultants, CROs, contract
manufacturing organizations, and central laboratories in connection with our
preclinical development, process development, manufacturing and clinical
development activities. Our direct research and development expenses by program
also include fees 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
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;
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•establishment of an appropriate safety profile with IND-enabling studies;
•successful patient enrollment in, and the initiation and completion of,
clinical trials;
•the timing, receipt and terms of any marketing approvals from applicable
regulatory authorities;
•establishment of commercial manufacturing capabilities or making arrangements
with third-party manufacturers;
•development and timely delivery of commercial-grade drug formulations that can
be used in our clinical trials and for commercial launch;
•acquisition, maintenance, defense and enforcement of patent claims and other
intellectual property rights;
•significant and changing government regulation;
•initiation of commercial sales of our product candidates, if and when approved,
whether alone or in collaboration with others; and
•maintenance of a continued acceptable safety profile of the product candidates
following approval.
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, commercial, 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 two times (2x) the
original purchase price in equal quarterly installments by December 31, 2024 and
the series B preferred shares for one point seventy seven times (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 initial
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
contingent payments under the Series A Preferred Share Agreement is determined
using the with-and-without valuation method. As inputs into the valuation, we
considered the type and probability of occurrence of certain events, the amount
of the payments, the expected timing of certain events, and a risk-adjusted
discount rate. In accordance with ASC 815, Derivatives and Hedging, the fair
value of the derivative is recorded on the condensed consolidated balance sheet
as a Series A preferred derivative liability with changes in fair value recorded
in other income (expense) in the condensed consolidated statements of operations
and comprehensive loss.
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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 sheet 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 the
Company's 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, the Company assesses the
estimated timing and amount of future expected royalty payments over the
estimated terms. If there is a change to one of the estimates, the Company
recognizes the impact to the liability's amortization schedule and the related
interest expense prospectively. The Company's 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 compounds not yet approved for sale.
Additionally, the transaction costs associated with 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 (Loss) 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 statement
of operations and comprehensive loss and results in a corresponding adjustment
to the carrying value of the equity method investment on our condensed
consolidated balance sheet.
On January 4, 2021, the Company acquired the rest 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 of
$5,261 on the condensed consolidated statement of operations and comprehensive
loss as a result of remeasuring to fair value the existing equity interest in
Kleo during the three months ended March 31,2021.
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, and certain of our subsidiaries, have
historically outsourced the research and development for our programs and
commercial activities of NURTEC ODT under master services agreements with our
wholly owned subsidiary, Biohaven Pharmaceuticals, Inc., a Delaware corporation
("BPI"). As a result of providing services under these agreements and profit
from US commercial sales of NURTEC ODT, BPI was profitable during the six months
ended June 30, 2021 and 2020, 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 June 30, 2021. 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 within the next 12 months 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
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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 and six months ended June
30, 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.

Results of Operations
Comparison of the Three Months Ended June 30, 2021 and 2020
The following tables summarize our results of operations for the three months
ended June 30, 2021 and 2020:
                                                                      Three Months Ended June 30,
                                                                        2021                  2020               Change
 In thousands
Product revenue, net                                             $        92,933          $    9,698          $  83,235
Cost of goods sold                                                        17,339               3,058             14,281
Gross profit                                                              75,594               6,640             68,954
Operating expenses:
Research and development                                                  77,428              42,425             35,003
Selling, general and administrative                                      170,057             124,802             45,255
Total operating expenses                                                 247,485             167,227             80,258
Loss from operations                                                    (171,891)           (160,587)           (11,304)
Other income (expense):
Interest expense                                                          (7,836)               (172)            (7,664)

Interest expense on mandatorily redeemable preferred shares

                                                                    (8,042)             (6,993)            (1,049)

Interest expense on liability related to sale of future royalties

                                                                (14,499)            (11,570)            (2,929)

Change in fair value of derivatives                                       (1,490)                650             (2,140)

Gain (loss) from equity method investment                                      -              (1,485)             1,485
Other expense, net                                                        (3,051)               (119)            (2,932)
Total other income (expense), net                                        (34,918)            (19,689)           (15,229)
Loss before provision for income taxes                                  (206,809)           (180,276)           (26,533)
Provision for income taxes                                                 4,350                 658              3,692
Net loss                                                                (211,159)           (180,934)           (30,225)
Less: Net loss attributable to non-controlling interests                    (540)                  -               (540)
Net loss attributable to Biohaven Pharmaceutical Holding
Company Ltd.                                                     $      (210,619)         $ (180,934)         $ (29,685)



Product revenue, net
Net product revenue was $92.9 million for the three months ended June 30, 2021,
compared to $9.7 million for the three months ended June 30, 2020. The increase
of $83.2 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 June 30, 2021, compared to the three
months ended June 30, 2020. The Company began selling NURTEC ODT in March 2020.
Sales allowances and accruals mostly consisted of patient affordability
programs, distribution fees and rebates.
Cost of Goods Sold
Cost of goods sold was $17.3 million for the three months ended June 30, 2021,
compared to $3.1 million for the three months ended June 30, 2020. Our cost of
goods sold is related to royalties on net sales payable to BMS under a license
agreement (see Note 15 "Commitments and Contingencies" to our condensed
consolidated financial statements), manufacturing costs for NURTEC ODT, certain
distribution costs and amortization of intangible assets related to milestone
payments to BMS
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and Catalent, Inc. ("Catalent"). See Note 13 "License and Other Agreements" to
our condensed consolidated financial statements for more information on the BMS
and Catalent agreements. The increase of 14.3 million in costs of goods sold was
primarily due to increased NURTEC ODT sales during the three months ended June
30, 2021, compared to the three months ended June 30, 2020, which had no
material manufacturing costs included as all of the costs were incurred prior to
FDA approval, and accordingly expensed.
Research and Development Expenses
                                                                   Three Months Ended June 30,
                                                                     2021                  2020              Change
In thousands
Direct research and development expenses by program:
Rimegepant                                                     $       13,976          $   8,090          $   5,886
Troriluzole                                                            13,068              8,293              4,775
Zavegepant                                                             11,470              6,094              5,376
Verdiperstat                                                            8,613              5,087              3,526
BHV-5000                                                                   38                 98                (60)

Unallocated research and development costs:
Personnel related (including non-cash share-based
compensation)                                                          19,919             12,868              7,051

Preclinical research programs                                           4,706                194              4,512
Other                                                                   5,638              1,701              3,937
Total research and development expenses                        $       

77,428 $ 42,425 $ 35,003

R&D expenses, including non-cash share-based compensation costs, were $77.4
million for the three months ended June 30, 2021, compared to $42.4 million for
the three months ended June 30, 2020. The increase of $35.0 million was
primarily due to increase in program expenses of $5.9 million, $4.8 million,
$4.5 million, $3.5 million, and $15.4 million for rimegepant, troriluzole,
preclinical research programs, verdiperstat, and zavegepant, respectively, and
an increase of $7.1 million in personnel costs. The increase in program expenses
was partially offset by a reduction in our obligation to perform R&D services of
$10.0 million for zavegepant. Non-cash share-based compensation expense was $9.3
million for the three months ended June 30, 2021, an increase of $2.8 million as
compared to the same period in 2020.

Selling, General and Administrative Expenses
SG&A expenses, including non-cash share-based compensation costs, were $170.1
million for the three months ended June 30, 2021, compared to $124.8 million for
the three months ended June 30, 2020. The increase of $45.3 million was
primarily due to increases in spending to support increased commercial sales of
NURTEC ODT for the three months ended June 30, 2021, compared to the three
months ended June 30, 2020. 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 $16.3
million for the three months ended June 30, 2021, an increase of $11.0 million
as compared to the same period in 2020. The increase in non-cash share-based
compensation expense was primarily due to the amortization of the Company's
annual equity incentive awards that were granted in the first quarter of 2021.
Other Income (Expense), Net
Other income (expense), net was a net expense of $34.9 million for the three
months ended June 30, 2021, compared to net expense of $19.7 million for the
three months ended June 30, 2020. The increase of $15.2 million in net expense
was primarily due to the interest expense on our term loan with Sixth Street,
drawn in the third quarter of 2020, and an increase in the interest expense
recognized on our liability related to sale of future royalties in the three
months ended June 30, 2021.
Provision for Income Taxes
We recorded a provision for income taxes of $4.4 million for the three months
ended June 30, 2021, compared to a provision for income taxes of $0.7 million
for the three months ended June 30, 2020. The increase was primarily
attributable to the Company's profitable operations in the United States in
2021.
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Comparison of the Six Months Ended June 30, 2021 and 2020 The following tables summarize our results of operations for the six months ended June 30, 2021 and 2020:

                                                                  Six Months Ended June 30,
                                                                  2021                    2020               Change
In thousands
Product revenue, net                                      $      136,756              $   10,849          $  125,907
Cost of goods sold                                                30,201                   3,482              26,719
Gross profit                                                     106,555                   7,367              99,188
Operating expenses:
Research and development                                         184,539                  98,495              86,044
Selling, general and administrative                              329,580                 220,403             109,177
Total operating expenses                                         514,119                 318,898             195,221
Loss from operations                                            (407,564)               (311,531)            (96,033)
Other income (expense):
Interest expense                                                 (15,567)                   (227)            (15,340)
Interest expense on mandatorily redeemable
preferred shares                                                 (15,985)                (12,554)             (3,431)
Interest expense on liability related to sale of
future royalties                                                 (28,007)                (19,995)             (8,012)

Change in fair value of derivatives                               (1,700)                 (5,131)              3,431
Gain (loss) from equity method investment                          5,261                  (2,865)              8,126
Other                                                             (4,751)                   (216)             (4,535)
Total other income (expense), net                                (60,749)                (40,988)            (19,761)
Loss before provision for income taxes                          (468,313)               (352,519)           (115,794)
Provision for income taxes                                         8,174                   1,352               6,822
Net loss                                                        (476,487)               (353,871)           (122,616)
Less: Net loss attributable to non-controlling
interests                                                           (900)                      -                (900)
Net loss attributable to Biohaven Pharmaceutical
Holding Company Ltd.                                      $     (475,587)             $ (353,871)         $ (121,716)



Product revenue, net
We began recording product revenues in the first quarter of 2020 following the
approval of NURTEC ODT by the FDA on February 27, 2020 and its subsequent
commercial launch in the U.S. in March 2020. Net product revenue was $136.8
million for the six months ended June 30, 2021, compared to $10.8 million for
the six months ended June 30, 2020. The increase of $125.9 million in net
product revenues was due to both increased NURTEC ODT sales volume and
improvements in net price realization due to decreases in sales allowances in
2021, compared to 2020, and a full period of NURTEC ODT sales during the six
months ended June 30, 2021 compared to a partial period of NURTEC ODT sales
during the six months ended June 30, 2020. Sales allowances and accruals mostly
consisted of patient affordability programs, distribution fees and rebates.
Cost of Goods Sold
Cost of goods sold of $30.2 million for the six months ended June 30, 2021 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"). The increase of $26.7 million in cost of goods sold was primarily
due to increased NURTEC ODT sales during the six months ended June 30, 2021,
compared to the six months ended June 30, 2020, which had no material
manufacturing costs included as all of the costs were incurred prior to FDA
approval and accordingly expensed.
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Research and Development Expenses

                                                               Six Months Ended June 30,
                                                                2021                  2020              Change
In thousands
Direct research and development expenses by
program:
Rimegepant                                                $       30,968          $  26,110          $   4,858
Troriluzole                                                       29,682             22,277              7,405
Zavegepant                                                        34,218             11,352             22,866
Verdiperstat                                                      15,401             10,670              4,731
BHV-5000                                                              42                207               (165)

Unallocated research and development costs:
Personnel related (including non-cash share-based
compensation)                                                     50,596             24,505             26,091

Preclinical research programs                                     15,188                559             14,629
Other                                                              8,444              2,815              5,629
Total research and development expenses                   $      184,539

$ 98,495 $ 86,044

R&D expenses, including non-cash share-based compensation costs, were $184.5
million for the six months ended June 30, 2021, compared to $98.5 million for
the six months ended June 30, 2020. The increase of $86.0 million was primarily
due to an increase in preclinical research costs of $14.6 million related to
one-time upfront payments of $2.0 million to Yale University in connection with
a license agreement, and $5.9 million to Moda Pharmaceuticals LLC in connection
with a consulting agreement. The increase was also due to increased expenses
from later stage trials in our zavegepant programs of $22.9 million and an
increase of $26.1 million in personnel costs largely due to an increase in
non-cash share-based compensation expense. The increase in program expenses was
partially offset by a reduction in our obligation to perform R&D services of
$10.2 million for zavegepant. Non-cash share-based compensation expense was
$29.3 million for the six months ended June 30, 2021, an increase of $16.7
million as compared to the same period in 2020. The increase in non-cash
share-based compensation expense was primarily due to the Company's annual
equity incentive awards that were granted in the first quarter of 2021.
Selling, General and Administrative Expenses
SG&A expenses, including non-cash share-based compensation costs, were $329.6
million for the six months ended June 30, 2021, compared to $220.4 million for
the six months ended June 30, 2020. The increase of $109.2 million was primarily
due to increases in spending to support the commercial launch of NURTEC ODT.
Less than half of the SG&A expense, or approximately $117.1 million, was for
commercial organization personnel costs, excluding non-cash share-based
compensation expense. Non-cash share-based compensation expense was $45.0
million for the six months ended June 30, 2021, an increase of $29.0 million as
compared to the same period in 2020.The increase in non-cash share-based
compensation expense was primarily due to the Company's annual equity incentive
awards that were granted in the first quarter of 2021.
Other Income (Expense), Net
Other income (expense), net was a net expense of $60.7 million for the six
months ended June 30, 2021, compared to net expense of $41.0 million for the six
months ended June 30, 2020. The increase of 19.8 million in net expense was
primarily due to the interest expense on our liability related to the
mandatorily redeemable preferred shares resulting from the sale of Series A
Preferred Shares to RPI in April 2019, an increase in the interest expense
recognized on our liability related to the sale of future royalties, and a
change in gain/(loss) on equity investment of $8.1 million.
Provision for Income Taxes
We recorded a provision for income taxes of $8.2 million for the six months
ended June 30, 2021, compared to a provision for income taxes of $1.4 million
for the six months ended June 30, 2020. We recorded a tax provision for the six
months ended June 30, 2021, primarily attributable to the Company's profitable
operations in the United States during that period.

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 equity, revenue participation rights related to future
royalties, debt issuance, and sales of mandatorily redeemable preferred shares.
We began to generate net product revenue in the first quarter of 2020 in
conjunction with the launch of our first product, NURTEC ODT.
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As of June 30, 2021, we had cash and cash equivalents of $306.3 million,
excluding restricted cash of $1.9 million. Cash in excess of immediate
requirements is invested in marketable securities with a view to liquidity and
capital preservation. As of June 30, 2021, we had marketable securities of $59.8
million. The Company continuously assesses its working capital needs, capital
expenditure requirements, and future investments or acquisitions. As of
August 9, 2021, the Company believes that its cash, cash equivalents and
marketable securities, operating cash flows from the sale of NURTEC ODT,
available borrowings under its credit facility, and proceeds from the settlement
of its Series B preferred shares forward contracts will be sufficient to meet
its cash needs for more than one year.
Cash Flows
The following table summarizes our cash flows for each of the periods presented:
                                                                         Six Months Ended June 30,
                                                                         2021                    2020               Change
In thousands
Net cash used in operating activities                            $     (432,716)             $ (326,535)         $ (106,181)
Net cash provided by (used in) investing activities                     160,636                 (24,481)            185,117
Net cash provided by financing activities                               446,187                 297,151             149,036
Effect of exchange rate changes on cash and cash
equivalents and restricted cash                                            (189)                      -                (189)

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

$      173,918              $  (53,865)         $  227,783


Operating Activities
During the six months ended June 30, 2021, operating activities used $432.7
million of cash, an increase of $106.2 million as compared to the six months
ended June 30, 2020. The increase in cash usage was primarily due to an increase
in selling, general and administrative expenses due to increased costs,
including advertising, to support the commercial launch of NURTEC ODT. The
increase was also due to $31.3 million in payments to RPI for the mandatory
redemption of 702 Series A preferred shares, which was accounted for as a
payment of accrued interest on the mandatorily redeemable preferred shares
liability.
Investing Activities
During the six months ended June 30, 2021, net cash provided by investing
activities was $160.6 million, an increase of $185.1 million as compared to the
six months ended June 30, 2020. The increase was primarily due to $162.3 million
of sales and maturities of marketable securities during the six months ended
June 30, 2021 and a $20.0 million milestone payment to BMS relating to the FDA
approval of NURTEC ODT during the six months ended June 30, 2020.
Financing Activities
During the six months ended June 30, 2021, net cash provided by financing
activities was $446.2 million, an increase of $149.0 million compared to the six
months ended June 30, 2020.  The increase was primarily due to $308.7 million in
proceeds from the issuance of common shares, $100.0 million in proceeds from the
2020 RPI Funding Agreement, and $35.2 million in proceeds from the issuance of
Series B preferred shares during the six months ended June 30, 2021, partially
offset by $283.3 million in proceeds from the issuance of common shares during
the six months ended June 30, 2020.
Credit Facility
In August 2020, the Company entered into the Sixth Street Financing Agreement,
as amended in February 2021, 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. The facility consists of an initial term loan of $275.0 million,
which the Company borrowed at closing, and delayed draw term loans in an
aggregate principal amount not exceeding $225.0 million, available to draw at
the Borrowers' option until August 31, 2021. The facility terminates and the
term loans become due and payable in August 2025.
The $275.0 million term loan outstanding under the credit facility accrues
interest at a variable rate, with interest paid on a quarterly basis. The
interest rate on the outstanding term loan as of June 30, 2021 was 10.0%. The
Company has the option to pay-in-kind up to 4.0% interest per annum for the
first two years and has elected to pay-in-kind the maximum amount for all
interest payments as of June 30, 2021. The net proceeds of the term loan are
being used for general corporate purposes.
Equity Distribution Agreement
In December 2020, the Company 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
                                       46
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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 June 30, 2021, the Company had issued and sold 939,328 common shares for
net proceeds of approximately $78.7 million under the Equity Distribution
Agreement.
Series B Preferred Shares Forward Contracts
In August 2020, the Company 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. The Company is 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 June 30, 2021, the Company had issued 702 Series B preferred shares to RPI
for net proceeds of $35.2 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 our commercial activities related to NURTEC ODT for the acute and
preventive 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 replicative clinical trial of zavegepant and related
support activities, and continue clinical trials of oral zavegepant;
•conduct our planned Phase 3 clinical trial of verdiperstat in MSA;
•continue to initiate and progress other supporting studies required for
regulatory approval of our product candidates, including long-term safety
studies, drug-drug interaction studies, preclinical toxicology and
carcinogenicity studies;
•make required milestone and royalty payments under the license agreements by
which we acquired some of the rights to our product candidates;
•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 as both domestic and
international operations continue to grow.
                                       47
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As of August 9, 2021, the issuance date of our condensed consolidated financial
statements, we expect that our cash, cash equivalents, and marketable securities
as of June 30, 2021, and the funds available from the Sixth Street Financing
Agreement and RPI Series B Preferred Shares 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,
depending on where we choose to commercialize or whether we commercialize
jointly or on our own.
Because of the numerous risks and uncertainties associated with research,
development and commercialization of pharmaceutical product candidates, we are
unable to estimate the exact amount of our working capital requirements. Our
future funding requirements will depend on and could increase significantly as a
result of many factors, including:
•the scope, progress, results and costs of researching and developing our
product candidates, and conducting preclinical studies and clinical trials;
•the costs, timing and outcome of regulatory review of our product candidates;
•the 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, 2020. See Note 15 to our
condensed consolidated financial statements
                                       48

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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 could therefore differ materially from these estimates
under different assumptions or conditions.
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 March 1, 2021.

Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any
off-balance sheet arrangements, as defined in the rules and regulations of the
SEC.
Recently Issued Accounting Pronouncements
A description of recently issued accounting pronouncements that may potentially
impact our financial position and results of operations, if applicable, is
disclosed in Note 2 to our condensed consolidated financial statements appearing
at the beginning of this Quarterly Report on Form 10-Q.

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