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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
ý      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2019
OR
o         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 001-38080
Biohaven Pharmaceutical Holding Company Ltd.
(Exact Name of Registrant as Specified in its Charter)
British Virgin Islands
 
Not applicable
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
c/o Biohaven Pharmaceuticals, Inc.
215 Church Street, New Haven, Connecticut
 
06510
(Address of principal executive offices)
 
(Zip Code)
(203) 404-0410
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer  x
 
Accelerated filer  o
 
 
 
Non-accelerated filer  o
 
Small reporting company  o
 
 
 
 
 
Emerging growth company  o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. o 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Shares, no par value
BHVN
New York Stock Exchange
As of May 6, 2019, the registrant had 44,395,494 common shares, without par value per share, outstanding.

 
 
 



Table of Contents
 
 
 
Page
 
 
3
 
3
 
4
 
5
 
6
16
28
29
 
 
30
30
32
33
 
34



Table of Contents



PART I - FINANCIAL INFORMATION
 
Item 1. Unaudited Condensed Consolidated Financial Statements
 
BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share amounts)
 
 
 
March 31, 2019
 
December 31, 2018
 
 
(Unaudited)
 
 
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash
 
$
217,407

 
$
264,249

Prepaid expenses and other current assets (Note 4)
 
9,966

 
8,090

Total current assets
 
227,373

 
272,339

Property and equipment, net
 
7,157

 
6,248

Equity method investment (Note 5)
 
10,514

 
11,414

Other assets
 
36

 
11

Total assets
 
$
245,080

 
$
290,012

Liabilities and Shareholders’ Equity
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
8,210

 
$
10,752

Accrued expenses (Note 6)
 
15,483

 
8,782

Total current liabilities
 
23,693

 
19,534

Liability related to sale of future royalties (Note 7)
 
124,332

 
117,515

Other long-term liabilities
 
44

 
2,043

Total liabilities
 
$
148,069

 
$
139,092

Commitments and contingencies (Note 12)
 


 


Shareholders’ equity:
 
 
 
 
Common shares, no par value; 200,000,000 shares authorized as of March 31, 2019 and December 31, 2018; 44,282,994 and 44,197,549 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively
 
556,345

 
554,384

Additional paid-in capital
 
46,538

 
40,104

Accumulated deficit
 
(505,872
)
 
(443,568
)
Total shareholders’ equity
 
$
97,011

 
$
150,920

Total liabilities and shareholders’ equity
 
$
245,080

 
$
290,012

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


3

Table of Contents



BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Amounts in thousands, except share and per share amounts)
(Unaudited)
 
 
 
Three Months Ended March 31,
 
 
2019
 
2018
Operating expenses:
 
 
 
 
Research and development
 
$
41,003

 
$
75,579

General and administrative
 
13,462

 
7,857

Total operating expenses
 
54,465

 
83,436

Loss from operations
 
(54,465
)
 
(83,436
)
Other income (expense):
 
 
 
 
Non-cash interest expense on liability related to sale of future royalties
 
(6,813
)
 

Change in fair value of warrant liability
 

 
(1,182
)
Loss from equity method investment
 
(900
)
 
(728
)
Other
 
(17
)
 
(29
)
Total other expense, net
 
(7,730
)
 
(1,939
)
Loss before provision for income taxes
 
$
(62,195
)
 
$
(85,375
)
Provision for income taxes
 
109

 
87

Net loss and comprehensive loss
 
$
(62,304
)
 
$
(85,462
)
Net loss per share — basic and diluted
 
$
(1.41
)
 
$
(2.32
)
Weighted average common shares outstanding—basic and diluted
 
44,242,070

 
36,793,090

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

4

Table of Contents



BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands, except share and per share amounts)
(Unaudited)
 
 
Three Months Ended March 31,
 
 
2019
 
2018
Cash flows from operating activities:
 
 
 
 
Net loss
 
$
(62,304
)
 
$
(85,462
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
 
Non-cash share-based compensation expense
 
7,330

 
3,088

Non-cash interest expense on liability related to sale of future royalties
 
6,813

 

Change in fair value of warrant liability
 

 
1,182

Loss from equity method investment
 
900

 
728

Other non-cash items
 
133

 
17

Changes in operating assets and liabilities:
 
 
 
 
Prepaid expenses and other current assets
 
(1,876
)
 
(5,270
)
Other assets
 
(25
)
 

Accounts payable
 
(2,542
)
 
4,224

Accrued expenses
 
6,701

 
(27
)
Other long-term liabilities
 
(1,999
)
 
(13
)
Net cash used in operating activities
 
$
(46,869
)
 
$
(81,533
)
Cash flows from investing activities:
 
 
 
 
Purchases of property and equipment
 
(1,038
)
 
(357
)
Purchase of equity method investment
 

 
(1,375
)
Net cash used in investing activities
 
$
(1,038
)
 
$
(1,732
)
Cash flows from financing activities:
 
 
 
 
Proceeds from issuance of common shares
 

 
55,000

Proceeds from exercise of stock options
 
1,065

 
1,003

Net cash provided by financing activities
 
$
1,065

 
$
56,003

Net increase in cash
 
(46,842
)
 
(27,262
)
Cash at beginning of period
 
264,249

 
131,468

Cash at end of period
 
$
217,407

 
$
104,206

Supplemental disclosure of cash flow information:
 
 
 
 
Cash paid for interest
 
$

 
$

Cash paid for income taxes
 
$
408

 
$
80

Supplemental disclosure of non-cash investing and financing activities:
 
 
 
 
Offering costs included in accounts payable and accrued expenses
 
$

 
$
2,987

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

5

Table of Contents
BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share amounts)
(Unaudited)



1.   Nature of the Business and Basis of Presentation
Biohaven Pharmaceutical Holding Company Ltd. (“we,” “us” or the “Company”) was incorporated in Tortola, British Virgin Islands in September 2013. We are a clinical-stage biopharmaceutical company with a portfolio of innovative, late-stage product candidates targeting neurological diseases, including rare disorders. Our product candidates are based on multiple mechanisms —calcitonin gene-related peptide (“CGRP”) receptor antagonists, glutamate modulators and myeloperoxidase inhibition—which we believe have the potential to significantly alter existing treatment approaches across a diverse set of neurological indications with high unmet need in both large and orphan indications. The most advanced product candidate from the Company’s CGRP receptor antagonist platform is rimegepant, which the Company is developing for the acute and preventive treatment of migraine and for which it has completed three Phase 3 clinical trials in acute treatment of migraine.
The Company is subject to risks and uncertainties common to clinical-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts may require additional capital, additional personnel and infrastructure, and further regulatory and other capabilities. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize revenue from product sales.
Through March 31, 2019, the Company has funded its operations primarily with proceeds from sales of equity and other financing transactions. Subsequent to its May 2017 initial public offering, the Company has primarily raised funds through sales of equity in private placements, as well as through the sale of a revenue participation right related to potential future royalties. The Company has incurred recurring losses since its inception, had an accumulated deficit as of March 31, 2019 , and expects to continue to generate operating losses for the foreseeable future. To execute its business plans, the Company will continue to require additional funding to support its continuing operations and pursue its growth strategy.
The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its subsidiaries after elimination of all significant intercompany accounts and transactions. Investments in companies in which the Company owns less than a 50% equity interest and where it exercises significant influence over the operating and financial policies of the investee are accounted for using the equity method of accounting.

2.   Summary of Significant Accounting Policies
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual for research and development expenses and the valuation of common shares, stock options, warrants, derivative instruments, contingent equity instruments, and non-cash interest expense on liability related to sale of future royalties. In addition, management’s assessment of the Company’s ability to continue as a going concern involves the estimation of the amount and timing of future cash inflows and outflows. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.
Unaudited Interim Condensed Consolidated Financial Information
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. The accompanying unaudited condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. The accompanying year-end consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial

6

Table of Contents
BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share amounts)
(Unaudited)
2.   Summary of Significant Accounting Policies (Continued)



statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of March 31, 2019 and the results of its operations for the three months ended March 31, 2019 and 2018 and its cash flows for the three months ended March 31, 2019 and 2018. The results for the three months ended March 31, 2019 are not necessarily indicative of results to be expected for the year ending December 31, 2019, any other interim periods or any future year or period.  The financial information included herein should be read in conjunction with the financial statements and notes in the Company's Annual Report on Form 10-K for the year ended December 31, 2018.
Recently Adopted Accounting Pronouncements
Effective January 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. In July of 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases (“ASU 2018-10”), and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), both of which clarified and enhanced the certain amendments made in ASU 2016-02 and were adopted by the Company in conjunction with ASU 2016-02. The adoption requires a modified retrospective transition approach, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company has elected to adopt the standard using the effective date, January 1, 2019, as its date of initial application. Consequently, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. Given that the Company had no material outstanding leases as of the date of the adoption, the adoption of ASU 2016-02 did not have a material impact on the Company's financial position or results of operations.

3.   Fair Value of Financial Assets and Liabilities
The Company held no financial assets or liabilities measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018.
Valuation of Warrant Liability
The warrant liability in the following roll-forward is comprised of the fair value of warrants to purchase common shares that the Company issued to two of its directors in connection with a guarantee of its obligations under a credit agreement (see Note 8). On January 26, 2018, the anti-dilution price protection provisions contained within the warrants expired. Due to the expiration of these provisions, the Company discontinued classification of these warrants as a liability and has accordingly reclassified them to additional paid-in capital within shareholders' equity. On expiration, the fair value of the warrant liability was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.
The Company utilized the Black-Scholes option pricing model to value the warrant liability. The Black-Scholes option pricing model incorporated assumptions and estimates to value the warrant liability. Estimates and assumptions impacting the fair value measurement included the number of shares for which the warrants will be exercisable, the fair value per share of the underlying common shares issuable upon exercise of the warrants, the remaining contractual term of the warrants, the risk-free interest rate, the expected dividend yield, and the expected volatility of the price of the underlying common shares. The fair value per share of the Company’s common shares was based on the closing trading price of the shares on January 26, 2018, the day of expiration, and the increase in the fair value of the common shares during the time period from December 31, 2017 to expiration is the primary reason for the increase in the fair value of the warrant liability during the same period. The Company was a private company prior to its initial public offering in May 2017 and therefore lacks company-specific historical and implied volatility information of its shares. Therefore, the Company estimated expected share volatility based on the historical volatility of publicly traded peer companies for a term equal to the remaining contractual term of the warrants. The risk-free

7

Table of Contents
BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share amounts)
(Unaudited)
3.   Fair Value of Financial Assets and Liabilities (Continued)

interest rate was determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining contractual term of the warrants. The Company estimated a 0% expected dividend yield based on the fact that the Company has never paid or declared dividends and does not intend to do so in the foreseeable future.
The following table provides a roll-forward of the aggregate fair values of the Company’s warrant liability, derivative liability and contingent equity liability, for which fair value is determined by Level 3 inputs:
 
 
Warrant
Liability
Balance at December 31, 2017
 
$
4,021

Change in fair value
 
$
1,182

Reclassification to equity
 
(5,203
)
Balance at March 31, 2018
 
$


As described in Note 7, the Company entered into a funding agreement with RPI Finance Trust ("RPI"), accounted for as a liability financing. As of March 31, 2019, the fair value of the liability related to sale of future royalties, used in determining the effective interest rate of the liability, is based on the Company's current estimates of future royalties expected to be paid to RPI over the life of the arrangement, which is considered Level 3.
During the three months ended March 31, 2019 and 2018 there were no transfers between Level 1, Level 2 and Level 3.

4.   Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
 
 
As of March 31, 2019
 
As of December 31, 2018
Prepaid clinical trial costs
 
$
9,212

 
$
7,210

Prepaid insurance
 
83

 
393

Other
 
671

 
487

 
 
$
9,966

 
$
8,090



5.   Equity Method Investment
On August 29, 2016, the Company executed a stock purchase agreement with Kleo Pharmaceuticals, Inc. (“Kleo”), a privately held Delaware corporation, to purchase 3,000,000 shares of Kleo’s common stock at an initial closing, with a commitment to purchase an aggregate of 5,500,000 additional shares of common stock, in each case at a share price of $1.00 per share. Kleo is a development-stage biopharmaceutical company focused on advancing the field of immunotherapy by developing small molecules that emulate biologics. The Company purchased 3,000,000 shares upon the initial closing on August 31, 2016, and the remaining 5,500,000 shares were purchased in four equal tranches of 1,375,000 shares beginning six months from the initial closing and then every three months thereafter. In connection with the initial investment, the Company received the right to designate two of the members of Kleo’s board of directors. The Company completed all four of the remaining tranche purchases in March, June and October 2017 and January 2018, with each tranche purchase consisting of 1,375,000 shares for cash consideration of $1,375.
In March 2017, the Company purchased 500,000 shares of Kleo common stock directly from a co-founder of Kleo for consideration of $250 in cash and 32,500 common shares of the Company.
In addition to these purchases, in October 2017, the Company purchased an additional aggregate of 2,049,543 shares for cash consideration of $2,253 which allowed the Company to maintain its relative ownership interest in Kleo.

8

Table of Contents
BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share amounts)
(Unaudited)
5.   Equity Method Investment (Continued)



In November 2018, the Company participated in Kleo's Series B financing. The Company purchased 1,420,818 shares for cash consideration of $5,000. As of the close of the Series B financing, the Company's ownership interest in the outstanding stock of Kleo was 41.9%.
The Company has a variable interest in Kleo through its equity investment. Kleo is a variable interest entity due to the equity investment at risk being insufficient to finance its activities. An assessment of whether or not the Company has the power to direct activities that most significantly impact Kleo’s economic performance and to identify the party that obtains the majority of the benefits of the investment was performed as of March 31, 2019 and December 31, 2018, and will be performed as of each subsequent reporting date. After each of these assessments, the Company concluded that the activities that most significantly impact Kleo’s economic performance are the ability to direct the research activities, the ability to select vendors to perform the research, the ability to maintain research staff and the ability to raise additional funds, each of which are directed by Kleo. Based on the outcome of these assessments, the Company concluded that the investment should be accounted for under the equity method.
The Company has recorded its investments in Kleo to date based on the costs of those investments, as adjusted for the Company’s proportional share of Kleo’s net income or loss in each period. The difference between the cost of the Company’s investments in Kleo and its proportionate share of the net assets of Kleo was allocated to goodwill and indefinite-lived intangible assets. The Company records future adjustments to the carrying value of its investment at each reporting date equal to its proportionate share of Kleo’s net loss for the corresponding period. The Company recorded other expense and a corresponding reduction in the carrying value of its investment in Kleo of $900 and $728 for its proportionate share of Kleo’s net loss for the three months ended March 31, 2019 and 2018, respectively.
The carrying value of the Company’s investment in Kleo was $10,514 and $11,414 as of March 31, 2019 and December 31, 2018, respectively, and is reported as equity method investment on the condensed consolidated balance sheet. The carrying value of the investment represents the Company’s maximum loss exposure as of the balance sheet date. The following table provides a roll-forward of the carrying value of the Company’s equity method investment:
 
Carrying Value
Balance at December 31, 2018
$
11,414

Loss recognized in connection with equity method investment
(900
)
Balance at March 31, 2019
$
10,514

 
 
Balance at December 31, 2017
$
7,847

Purchases of Kleo common stock
1,375

Loss recognized in connection with equity method investment
(728
)
Balance at March 31, 2018
$
8,494



6.   Accrued Expenses
Accrued expenses consisted of the following:
 
 
As of March 31, 2019
 
As of December 31, 2018
Accrued development milestones payable (Note 12)
 
$
6,000

 
$

Accrued employee compensation and benefits
 
1,046

 
108

Accrued clinical trial costs
 
3,939

 
6,753

Accrued professional fees
 
3,758

 
1,636

Other
 
740

 
285

 
 
$
15,483

 
$
8,782



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BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share amounts)
(Unaudited)


 

7.   Liability Related to Sale of Future Royalties
In June 2018, the Company entered into a funding agreement (the "Funding Agreement") to sell tiered, sales-based royalty rights on global net sales of pharmaceutical products containing the compounds rimegepant or BHV-3500 and certain derivative compounds thereof ("Products") to RPI, a Delaware statutory trust. The Company issued to RPI the right to receive certain revenue participation payments, subject to certain reductions, based on the future global net sales of the Products for each calendar quarter during the royalty term contemplated by the Funding Agreement ("Revenue Participation Right"), in exchange for $100,000 in cash.
Concurrent with the Funding Agreement, the Company entered into a common stock purchase agreement (the "Purchase Agreement") with RPI. Pursuant to the Purchase Agreement, the Company sold 1,111,111 common shares of the Company to RPI at a price of $45.00 per share, for gross proceeds of $50,000.
The Company concluded that there were two units of accounting for the consideration received comprised of the liability related to sale of future royalties and the common shares. The Company allocated the $100,000 from the Funding Agreement and $50,000 from the Purchase Agreement among the two units of accounting on a relative fair value basis at the time of the transaction. The Company allocated $106,047 in transaction consideration to the liability, and $43,953 to the common shares. The Company determined the fair value of the common shares based on the closing stock price on the transaction date, adjusted for the trading restrictions. The transaction costs of $377 were allocated in proportion to the allocation of total consideration to the two units of accounting. The effective interest rate under the Funding Agreement, including transaction costs, is approximately 22%.
The Company recognized $6,813 in non-cash interest expense for the three months ended March 31, 2019.

8.   Warrants
On August 30, 2016, the Company entered into a one-year credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association. In connection with entering into the Credit Agreement, the Company issued warrants to purchase common shares to two of the Company’s directors in connection with a guarantee of its obligations under the agreement. The Company previously classified the warrants as a liability on its condensed consolidated balance sheet because each warrant represented a freestanding financial instrument that was not indexed to the Company’s own shares. The warrant liability was initially recorded at fair value upon entering into the Credit Agreement and was subsequently remeasured to fair value at each reporting date.
On January 26, 2018, the anti-dilution price protection provisions contained within the warrants issued to each of the guarantor and co-guarantor of the Credit Agreement expired.
Changes in the fair value of the warrant liability, until expiration of the anti-dilution price protection provisions, are recognized as a component of other income (expense), net, in the Company’s condensed consolidated statement of operations and comprehensive loss.  Upon expiration of the provision, the Company discontinued classification of these warrants as a liability and has accordingly reclassified the fair value of $5,203 to additional paid-in capital within shareholders’ equity.
The fair value of the warrant liability was $4,021 at December 31, 2017. The Company recorded expense of $1,182 related to the warrant liability within other income (expense), net in the condensed consolidated statements of operations for the three months ended March 31, 2018. Both warrants were exercised in March 2019. The issuance of the common shares did not occur prior to March 31, 2019, and therefore, the Company recorded a $1,968 liability in accounts payable on its condensed consolidated balance sheets equal to the cash received for exercise until the shares are settled.

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BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share amounts)
(Unaudited)



9.   Shareholders' Equity
Changes in shareholders’ equity for the three months ended March 31, 2019 was as follows:
 
 
Common Shares
 
 
 
 
 
 
 
 
Shares
 
Amount
 
Additional Paid-in Capital
 
Accumulated Deficit
 
Total Shareholders' Equity (Deficit)
Balances as of December 31, 2018
 
44,197,549
 
$
554,384

 
$
40,104

 
$
(443,568
)
 
$
150,920

Exercise of stock options
 
85,445
 
1,961

 
(896
)
 

 
1,065

Non-cash share-based compensation expense
 
0
 

 
7,330

 

 
7,330

Net loss
 
0
 

 

 
(62,304
)
 
(62,304
)
Balances as of March 31, 2019
 
44,282,994
 
556,345

 
46,538

 
(505,872
)
 
97,011


Changes in shareholders’ equity for the three months ended March 31, 2018 was as follows:
 
 
Common Shares
 
 
 
 
 
 
 
 
Shares
 
Amount
 
Additional Paid-in Capital
 
Accumulated Deficit
 
Total Shareholders' Equity (Deficit)
Balances as of December 31, 2017
 
36,057,748
 
$
311,061

 
$
23,556

 
$
(202,646
)
 
$
131,971

Issuance of common shares upon completion of private placement equity offering, net of offering costs
 
2,000,000
 
52,013

 

 

 
52,013

Exercise of ALS Biopharma warrants, net settlement of shares
 
228,219
 

 

 

 

Reclassification of warrant liability to equity
 
0
 

 
5,203

 

 
5,203

Exercise of stock options
 
321,050
 
4,656

 
(3,653
)
 

 
1,003

Non-cash share-based compensation expense
 
0
 

 
3,088

 

 
3,088

Net loss
 
0
 

 

 
(85,462
)
 
(85,462
)
Balances as of March 31, 2018
 
38,607,017
 
$
367,730

 
$
28,194

 
$
(288,108
)
 
$
107,816



Private Placement
In March 2018, the Company sold an aggregate of 2,000,000 common shares in a private placement at a price of $27.50 per share, for net proceeds of $52,013 after deducting underwriting discounts and commissions of $2,800 and other offering expenses of $187. Subsequent to the closing of the private placement, the Company paid Bristol-Myers Squibb Company ("BMS") the $50,000 upfront payment under an amendment (the "BMS Amendment") to the Company's July 2016 license agreement with BMS (the "BMS Agreement"). See Note 11.
ALS Biopharma, LLC Warrant Exercise
In January 2018, ALS Biopharma, LLC exercised a warrant for the purchase of 275,000 common shares through a net share settlement, resulting in an issuance of 228,219 common shares.
In April 2018, ALS Biopharma exercised a warrant for the purchase of 325,000 common shares through a net share settlement, resulting in an issuance of 261,140 common shares.

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BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share amounts)
(Unaudited)



10.   Net Loss per Share
Basic and diluted net loss per share attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd. was calculated as follows:
 
 
Three Months Ended March 31,
 
 
2019
 
2018
Numerator:
 
 

 
 

Net loss
 
$
(62,304
)
 
$
(85,462
)
Denominator:
 
 
 
 
Weighted average common shares outstanding—basic and diluted
 
44,242,070

 
36,793,090

Net loss per share attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd.—basic and diluted
 
$
(1.41
)
 
$
(2.32
)

The Company’s potential dilutive securities, which include stock options and warrants to purchase common shares, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common shareholders of the Company is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common shareholders for the periods indicated because including them would have had an anti-dilutive effect:
 
 
Three Months Ended March 31,
 
 
2019
 
2018
Options to purchase common shares
 
7,923,334

 
5,979,093

Warrants to purchase common shares
 
221,751

 
546,751

 
 
8,145,085

 
6,525,844



11License and Other Agreements
Catalent Agreements for Rimegepant
In January 2018, the Company entered into an exclusive world-wide license and development agreement with Catalent U.K. Swindon Zydis Limited, a subsidiary of Catalent, Inc. ("Catalent") pursuant to which the Company obtained certain license rights to the Zydis ODT technology for use with rimegepant. If the Company obtains regulatory approval or launches a rimegepant product that utilizes the Zydis ODT technology, the Company is obligated to pay Catalent up to $1,500 upon the achievement of specified regulatory and commercial milestones. If the Company commercializes a rimegepant product that utilizes the Zydis ODT technology, the agreement permits the Company to purchase the commercial product from Catalent at a fixed price, inclusive of a royalty. Under the agreement, Catalent will not develop or manufacture a formulation of any oral CGRP compound using Zydis ODT technology for itself or a third party until 2031, subject to certain minimum commercial revenues.
Under this agreement, the Company is responsible for conducting clinical trials and preparing and filing regulatory submissions. The Company has the right to sublicense its rights under the agreement subject to Catalent’s prior written consent. Catalent has the right to enforce the patents covering the Zydis technology and to defend any allegation that a formulation using Zydis technology, such as rimegepant, infringes a third party’s patent.
This agreement terminates on a country-by-country basis upon the later of (i) 10 years after the launch of the most recently launched product in such country and (ii) the expiration of the last valid claim covering each product in such country, unless earlier voluntarily terminated by the Company or by Catalent. This agreement automatically extends for one-year terms unless either party gives advance notice of intent to terminate. In addition, Catalent may terminate the agreement either in its entirety

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BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share amounts)
(Unaudited)
11.  License and Other Agreements (Continued)

or terminate the exclusive nature of the agreement on a country-by-country basis if, among other things, the Company fails to meet specified development timelines, which the Company may extend in certain circumstances.
Amendment to License Agreement with BMS
In March 2018, the Company entered into the BMS Amendment. Under the BMS Amendment, the Company paid BMS an upfront payment of $50,000 in return for a low single-digit reduction in the royalties payable on net sales of rimegepant and a mid single-digit reduction in the royalties payable on net sales of BHV-3500, recorded in research and development expense in the condensed consolidated statements of operations and comprehensive loss. Under the original license agreement, the Company had been obligated to make tiered royalty payments based on annual worldwide net sales of licensed products upon their approval and commercialization, with percentages in the low- to mid-teens.
The BMS Amendment also removed BMS’s right of first negotiation to regain its intellectual property rights or enter into a license agreement with the Company following the Company’s receipt of topline data from its Phase 3 clinical trials of rimegepant, and clarified that antibodies targeting CGRP are not prohibited as competitive compounds under the non-competition clause of the BMS Agreement.
The BMS Agreement continues to provide the Company with exclusive global development and commercialization rights to rimegepant, BHV-3500 and related CGRP molecules, as well as related know-how and intellectual property. The Company’s obligations to make development and commercial milestone payments to BMS under the original license agreement remain unchanged.
Biotech Value Advisors Agreement
In March 2019, the Company entered into a master services agreement with Biotech Value Advisors, LLC related to the commercial preparation for several of the Company's late-stage product candidates. In addition to fixed quarterly consulting expenses under the agreement, the Company agreed to pay up to $2,000 upon achievement of specified commercial milestones.

12.  Commitments and Contingencies
Summarized below are the matters previously described in Note 16 of the Notes to the Consolidated Financial Statements in the Company's Form 10-K for the year ended December 31, 2018, updated as applicable.
Lease Agreements
In August 2017, the Company entered into a lease agreement for office space and the related property for its new headquarters in New Haven, Connecticut which it began occupying during the fourth quarter of 2018. The lease commenced on January 1, 2018 and had a term of 85 months, with the ability to extend to 120 months. The Company had the option to purchase the property for $2,700 and executed that option in December 2018 and therefore has no remaining lease obligation related to the building.
During the three months ended March 31, 2018 the Company capitalized $565 in construction costs and recorded $32 in rent expense during the construction period.
License Agreements
The Company has entered into license agreements with various parties under which it is obligated to make contingent and non-contingent payments.  License agreements generally require the Company to pay annual maintenance fees and future payments upon the attainment of agreed upon development and/or commercial milestones.  These agreements may also require minimum royalty payments based on sales of products developed from the applicable technologies, if any.
Administration of intranasal BHV-3500 in a Phase 1 clinical trial was initiated in October 2018 and has achieved targeted therapeutic exposures. The compound advanced into a Phase 2/3 trial to evaluate efficacy for the acute treatment of migraine in the first quarter of 2019. Pursuant to the BMS Agreement, the Company is required to pay $2,000 to BMS on commencement of a Phase 1 clinical trial, and $4,000 on commencement of a Phase 2 clinical trial, and accordingly, the Company has recognized these liabilities as of December 31, 2018 and March 31, 2019, respectively, in accrued expenses within the condensed consolidated balance sheets. The payment obligations under the agreement are deferred until the earlier of the first approval, or the discontinuation, of the development of rimegepant.

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BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share amounts)
(Unaudited)
12.  Commitments and Contingencies (Continued)




Research Commitments
The Company has entered into agreements with several contract research organizations to provide services in connection with its preclinical studies and clinical trials. The Company commits to minimum payments under these arrangements.
Indemnification Agreements
In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with certain executive officers and members of its board of directors that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. The Company’s amended and restated memorandum and articles of association also provide for indemnification of directors and officers in specified circumstances. To date, the Company has not incurred any material costs as a result of such indemnification provisions. The Company does not believe that the outcome of any claims under indemnification arrangements will have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its condensed consolidated financial statements as of March 31, 2019 or December 31, 2018.
Legal Proceedings
From time to time, in the ordinary course of business, the Company is subject to litigation and regulatory examinations as well as information gathering requests, inquiries and investigations. As of March 31, 2019, there were no matters which would have a material impact on the Company’s financial results.

13.   Related Party Transactions
Guarantor and Co-Guarantor Warrants
The guarantor and co-guarantor of the Credit Agreement with Wells Fargo are each shareholders and members of the board of directors of the Company. The Company issued warrants to the guarantor and co-guarantor in exchange for their respective guarantees (see Note 8). On January 26, 2017, each of these two directors received a warrant to purchase 107,500 common shares at an exercise price of $9.2911 per share. Both warrants were exercised in March 2019. The issuance of the common shares did not occur prior to March 31, 2019, and therefore, the Company recorded a liability equal to the cash received for exercise until the shares are settled.

14.   Subsequent Events
In April 2019, the Company sold 2,495 Series A preferred shares (the "Series A Preferred Shares") to RPI at a price of $50,100 per preferred share pursuant to a Series A preferred share purchase agreement (the "Preferred Share Agreement"). The gross proceeds from the transaction with RPI were $125,000, with $105,000 of the proceeds used to purchase a priority review voucher issued by the United States Secretary of Health and Human Services to potentially expedite the regulatory review of the new drug application ("NDA") for the ODT formulation of rimegepant and the remainder of the proceeds to be used for other general corporate purposes. Pursuant to the Preferred Share Agreement, we may issue additional Series A Preferred Shares to RPI in up to three additional closings for an aggregate amount of $75,000 subject to the acceptance by the United States Food and Drug Administration ("FDA") of both NDAs with respect to the tablet formulation of rimegepant and the NDA with respect to the ODT formulation of rimegepant. As a condition for the issuance of additional Series A Preferred Shares, one NDA must be accepted under the priority review designation pathway. The issuance of additional Series A Preferred Shares is also subject to customary closing conditions. Subject to the satisfaction of the applicable conditions under the Preferred Share Agreement, the issuance of additional Series A Preferred Shares is entirely at the Company’s option, and the Company is not obligated to issue any additional Series A Preferred Shares.
The holders of our outstanding Series A Preferred Shares, will have the right to require us to redeem their shares in certain circumstances. If a Change of Control (as defined in our memorandum and article of association) is announced on or before

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BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share amounts)
(Unaudited)
14.   Subsequent Events (Continued)

October 5, 2019, we will have the option to redeem the Series A Preferred Shares for one point five times (1.5x) the original purchase price of the Series A Preferred Shares upon the closing of the Change of Control.  If we do not elect to redeem the Series A Preferred Shares for 1.5x the original purchase price at the closing of such Change of Control, then we would be required to redeem the Series A Preferred Shares for two times (2x) the original purchase price, payable in equal quarterly installments following closing of the Change of Control through December 31, 2024.
If a Change of Control is announced after October 5, 2019 and the Series A Preferred Shares have not previously been redeemed, we must redeem the Series A Preferred Shares for two times (2x) the original purchase price of the Series A Preferred Shares payable in a lump sum at the closing of the Change of Control or in equal quarterly installments following the closing of the Change of Control through December 31, 2024.
If an NDA for rimegepant is not approved by December 31, 2021, the holder of the Series A Preferred Shares has the option at any time thereafter to require us to redeem the Series A Preferred Shares for one point two times (1.2x) the original purchase price of the Series A Preferred Shares.
If no Change of Control has been announced, the Series A Preferred Shares have not previously been redeemed and (i) rimegepant is approved on or before December 31, 2024, following approval and starting one-year after approval, we must redeem the Series A Preferred Shares for two times (2x) the original purchase price, payable in a lump sum or in equal quarterly installments through December 31, 2024 (provided that if rimegepant is approved in 2024, the entire redemption amount must be paid by December 31, 2024) or (ii)  rimegepant is not approved by December 31, 2024, we must redeem the Series A Preferred Shares for two times (2x) the original purchase price on December 31, 2024.
We may redeem the Series A Preferred Shares at our option at any time for two times (2x) the original purchase price, which redemption price may be paid in a lump sum or in equal quarterly installments through December 31, 2024.
In the event that we default on any obligation to redeem Series A Preferred Shares when required, the redemption amount shall accrue interest at the rate of eighteen percent (18%) per annum. If any such default continues for at least one year, the holders of such shares shall be entitled to convert, subject to certain limitations, such Series A Preferred Shares into common shares, with no waiver of their redemption rights.
Under all circumstances, the Series A Preferred Shares are required to be redeemed by December 31, 2024. Accordingly, the Company has concluded the Series A Preferred Shares are a mandatorily redeemable instrument and classified them as a liability. The Company will initially measure the liability at fair value and subsequently accrete the carrying value to the redemption value through interest expense using the effective interest rate method.
As the Company intends to use the priority review voucher to potentially expedite the regulatory review of the NDA for a current product candidate, rimegepant, the payment will be recorded in research and development expense in the condensed consolidated statements of operations and comprehensive loss, and as an operating cash outflow in the condensed consolidated statements of cash flows for the three months ended June 30, 2019.


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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission (“SEC”). Some of the statements contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, constitute forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We have based these forward-looking statements on our current expectations and projections about future events. The following information and any forward-looking statements should be considered in light of factors discussed elsewhere in this Quarterly Report on Form 10-Q, particularly including those risks identified in Part II-Item 1A “Risk Factors” and our other filings with the SEC.
Our actual results and timing of certain events may differ materially from the results discussed, projected, anticipated, or indicated in any forward-looking statements. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this Quarterly Report on Form 10-Q. Statements made herein are as of the date of the filing of this Form 10-Q with the SEC and should not be relied upon as of any subsequent date. Even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, they may not be predictive of results or developments in future periods. We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.
We caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date they are made.

Overview
We are a clinical-stage biopharmaceutical company with a portfolio of innovative, late-stage product candidates targeting neurological diseases, including rare disorders. Our product candidates are based on multiple mechanisms - calcitonin gene-related peptide ("CGRP") receptor antagonists, glutamate modulators and myeloperoxidase ("MPO") inhibition - which we believe have the potential to significantly alter existing treatment approaches across a diverse set of neurological indications with high unmet need in both large and orphan indications. Our programs include the following:
Product
 
Platform
 
Indication
 
Development Stage
Rimegepant
 
CGRP
 
Acute treatment and prevention of migraine
 
Three pivotal Phase 3 trials for acute treatment complete; long-term safety study ongoing. Phase 3 trial for prevention initiated in the fourth quarter of 2018. Advancing Zydis ODT and tablet formulation development programs towards potential commercialization for the acute treatment of migraine.
Rimegepant
 
CGRP
 
Trigeminal Neuralgia
 
Phase 2 proof of concept trial planned for 2019.
BHV-3500
 
CGRP
 
Acute treatment and prevention of migraine
 
Phase 2/3 trial ongoing.
Troriluzole
 
Glutamate
 
Ataxias
 
Phase 2/3 randomization phase in SCA complete; extension trial ongoing. Phase 3 trial ongoing.
Troriluzole
 
Glutamate
 
Obsessive Compulsive Disorder ("OCD")
 
Phase 2/3 ongoing.
Troriluzole
 
Glutamate
 
Alzheimer’s disease
 
Phase 2/3 ongoing.
Troriluzole
 
Glutamate
 
Generalized Anxiety Disorder ("GAD")
 
Phase 2/3 ongoing.
Nurtec
 
Glutamate
 
Amyotrophic Lateral Sclerosis ("ALS")
 
NDA filed with FDA in fourth quarter of 2018. Prescription Drug User Fee Act ("PDUFA") date of July 21, 2019.
BHV-5000
 
Glutamate
 
Neuropsychiatric disorders
 
Phase 1 trial completed 2018; additional nonclinical studies anticipated in 2019.
Verdiperstat
 
MPO
 
Neuroinflammation
 
Phase 3 trial for the treatment of multiple system atrophy ("MSA") expected to begin in third quarter of 2019.

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CGRP Platform
In July 2016, we acquired exclusive, worldwide rights to our CGRP receptor antagonist platform, including rimegepant and BHV-3500, through a license agreement with Bristol-Myers Squibb Company ("BMS").
Rimegepant
Study 301/Study 302
The most advanced product candidate from our CGRP receptor antagonist platform is rimegepant, an orally available, potent and selective small molecule human CGRP receptor antagonist that we are developing for the acute and preventive treatment of migraine. In March 2018, we announced positive topline data from our first two pivotal Phase 3 trials ("Study 301 and Study 302") for the acute treatment of migraine.  In each trial, treatment with a single 75 mg dose of rimegepant met the co-primary efficacy endpoints of the trial, which were superior to placebo, at two hours post-dose, on measures of pain freedom and freedom from the patient’s most bothersome symptom.  In addition to achieving both co-primary endpoints in each of the trials, rimegepant also was observed to be both safe and well-tolerated in the trials, with a safety profile similar to placebo.  The efficacy and safety profile of rimegepant has now been observed across three randomized controlled trials to date.  The co-primary endpoints achieved in the Phase 3 trials are consistent with regulatory guidance from the U.S. Food and Drug Administration ("FDA") and provide the basis for the submission of a new drug application ("NDA") to the FDA.
Study 303
A third Phase 3 clinical trial for the acute treatment of migraine with a bioequivalent orally dissolving tablet ("ODT") formulation of rimegepant was commenced in February 2018. On December 3, 2018, we announced positive topline data from a randomized, controlled Phase 3 clinical trial ("BHV3000-303" or "Study 303") evaluating the efficacy and safety of our Zydis ODT formulation of rimegepant for the acute treatment of migraine. Rimegepant differentiated from placebo on the two co-primary endpoints using a single dose, pain freedom and freedom from most bothersome symptom at 2 hours, as well as the first 21 consecutive primary and secondary outcome measures that were prespecified. 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 was observed through 48 hours after a single dose of rimegepant on freedom from pain, pain relief, freedom from the most bothersome symptom, and freedom from functional disability. The safety and tolerability observations of rimegepant in Study 303 were consistent with our previous observations. The overall rates of adverse events were similar to placebo. The co-primary endpoints achieved in the Phase 3 trials are consistent with regulatory guidance from the FDA. We continue to advance the rimegepant Zydis ODT and tablet formulation development programs towards potential commercialization for the acute treatment of migraine.
Study 305
We initiated a double-blind, placebo-controlled Phase 3 clinical trial examining regularly scheduled dosing of rimegepant 75mg to evaluate its efficacy and safety as a preventive therapy for migraine ("BHV3000-305" or "Study 305") in November 2018. We anticipate topline results in the fourth quarter of 2019.
Long-term Safety Study
In August 2017, we commenced a long-term safety study of rimegepant in patients with migraine. On December 10, 2018, we announced the results of an interim analysis from our ongoing long-term safety study ("BHV3000-201" or "Study 201").
On May 8, 2019, we announced updated interim positive results from the long-term safety study. As of February 20, 2019 (the database cutoff date of the interim assessment), over 105,000 doses of rimegepant 75mg had been administered across 1,780 patients with migraine. As of February 20, 2019, approximately 527 patients have received near daily dosing (14 or more doses in 4 weeks) of rimegepant 75mg to date for a duration ranging between 4 and 52 weeks.  Interim hepatic data were reviewed by an external independent panel of liver experts who concluded that there was no liver safety signal and compared to placebo arms of other migraine treatments, there was a very low incidence of overall elevations of liver laboratory abnormalities (1% incidence of serum ALT or AST > 3x the upper limit of normal (ULN) through the data analysis cut-off date). Based on this interim analysis, it appears that rimegepant may be safe and well tolerated with long-term dosing in patients with migraine.
On May 8, 2019, we also reported the safety and preliminary efficacy data from the scheduled dosing cohort in the study. In this cohort of patients with a history of 4 to 14 moderate to severe migraine attacks per month, patients were treated with rimegepant 75 mg every other day for up to 12 consecutive weeks. Patients in this cohort could also supplement their scheduled rimegepant dosing with additional as-needed dosing on nonscheduled dosing days. In this cohort, 286 patients received a total of 11,296 doses of rimegepant 75 mg tablets at least every other day, with a median number of 14.2 tablets per 4 week period. During the on-treatment period, no rimegepant-treated patients (n=281) experienced ALT or AST levels >3x the ULN. There were also no rimegepant-treated patients who experienced alkaline phosphatase or bilirubin >2x the ULN. With regard to efficacy

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, 48.4% of subjects in the scheduled dosing cohort experienced a ≥50% reduction in the frequency of monthly migraine days with moderate-to-severe pain intensity during the third month of treatment. This preliminary exploratory open-label efficacy data from Study 201 suggest that rimegepant may be associated with a reduction in migraine days per month (30 days) compared to the observational lead-in period, suggesting a potential preventive effect that warrants further study.
Subjects will continue to participate in Study 201 with additional data analyses submitted to the FDA in connection with the NDA submissions, including the required 120-day safety update. Additionally, this program for the acute treatment of migraine will be supported by results of 20 Phase 1/2 trials.
Pediatric Study Plan
In November 2017, the FDA agreed to our initial acute treatment pediatric study plan.
Trigeminal Neuralgia
We plan to initiate a Phase 2 proof of concept trial in 2019 to evaluate the safety and efficacy of rimegepant in patients with treatment refractory trigeminal neuralgia. Trigeminal neuralgia is a chronic facial pain syndrome characterized by paroxysmal, severe, 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 twelve cranial nerves and provides sensory innervation to the head and neck, as well as motor innervation to the muscles of mastication. These episodic bouts of severe facial pain can last seconds to minutes, occur several times per day, and often result in significant disability. Over the long-term course of the disease, symptoms often become refractory to medical therapy and current treatment options remain suboptimal.
International Health Authority Interactions
In February 2018, a request for scientific advice for rimegepant was submitted to the Committee for Medicinal Products for Human Use ("CHMP"), a committee of the European Medicines Agency ("EMA"), and feedback was received in June 2018. Based on this feedback, we believe we have several potential pathways to approval.
In January 2019, we and our wholly-owned subsidiary, BioShin, jointly announced that the National Medical Products Administration ("NMPA," formerly, the China FDA) has accepted the investigation new drug ("IND") application for rimegepant for the treatment of migraine. As previously announced BioShin was established to develop and potentially commercialize our late-stage migraine and neurology portfolio in China and other Asia-Pacific markets. Following the results of Study 303, we also plan to submit a second IND to the NMPA for the Zydis ODT formulation of rimegepant for the acute treatment of migraine. We expect to submit this IND in mid-2019.
BHV-3500
Administration of intranasal BHV-3500 in a Phase 1 clinical trial was initiated in October 2018 and has achieved targeted therapeutic exposures. We advanced BHV-3500 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 BHV-3500 may provide an ultra-rapid onset of action that could be used in a complimentary fashion with other migraine treatment when the speed of onset is critical to a patient. We anticipate reporting topline results from this trial in the fourth quarter of 2019.
Glutamate Platform
We are developing three product candidates that modulate the body’s glutamate system. Two of these product candidates, troriluzole (previously referred to as trigriluzole and BHV-4157) and Nurtec (previously BHV-0223), act as glutamate transporter modulators, while our product candidate BHV-5000 is an antagonist of the glutamate N-methyl-D-aspartate ("NMDA") receptor.
Troriluzole
Ataxias
We are developing troriluzole for the treatment of ataxias; our initial focus has been spinocerebellar ataxia ("SCA"). We have received both orphan drug designation and fast track designation from the FDA for troriluzole for the treatment of SCA. A Phase 3 trial began enrollment in March 2019 to further evaluate the efficacy of troriluzole in SCA. The clinical observations from our first Phase 2/3 trial and open-label extension phase in SCA support our decision to advance troriluzole into a Phase 3 trial that could provide the data needed to serve as the basis for an NDA. We expect to complete enrollment in the Phase 3 trial of troriluzole in SCA in the first quarter of 2020.
Other Indications
A Phase 2/3 double-blind, randomized, controlled trial to assess the efficacy of troriluzole in Obsessive Compulsive Disorder ("OCD") commenced in December 2017. We expect to complete the randomization of this trial by the end of 2019. In addition, a Phase 2/3 double-blind, randomized, controlled trial of troriluzole in the treatment of mild-to-moderate Alzheimer’s

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disease has advanced with the Alzheimer’s Disease Cooperative Study, a consortium of sites funded by the National Institutes of Health. In July 2018, we received authorization to proceed from the FDA and subsequently commenced the trial. We expect to complete enrollment and announce interim futility results for this trial in the fourth quarter of 2019. We began enrollment in a Phase 2/3 clinical trial of troriluzole in Generalized Anxiety Disorder ("GAD") in February 2019 and expect to complete enrollment of this trial by the end of 2019.
Nurtec
We are developing Nurtec for the treatment of Amyotrophic Lateral Sclerosis ("ALS"). In January 2018, we announced positive results of a bioequivalence study with Nurtec and marketed riluzole, thus providing pivotal data that we believe are sufficient for the filing of an NDA with the FDA, allowing us to pursue the regulatory approval of Nurtec for ALS under Section 505(b)(2) of the U.S. Federal Food, Drug, and Cosmetic Act. We submitted an NDA in September 2018 and the PDUFA data is in July 2019.
BHV-5000
We are also developing BHV-5000, an orally available, low-trapping NMDA receptor antagonist, for the treatment of neuropsychiatric diseases. One potential target indication includes Complex Regional Pain Syndrome ("CRPS"). CRPS is a rare, chronic pain condition typically affecting limbs and triggered by traumatic injury. Accompanying symptoms also include chronic inflammation and reduced mobility in the affected areas. Other disorders of interest include treatment-resistant major depressive disorder and Rett syndrome. Rett syndrome is a rare and severe genetic neurodevelopmental disorder for which no approved treatments are currently available. We acquired worldwide rights to BHV-5000 under an exclusive license agreement with AstraZeneca AB in October 2016. We selected a lead formulation at the end of 2017 and completed single dosing in a Phase 1 clinical trial of BHV-5000 in January 2018 to evaluate its pharmacokinetic properties. Nonclinical studies are ongoing to support future trials.
MPO Platform
Verdiperstat
We are developing verdiperstat (previously BHV-3241), an oral myeloperoxidase inhibitor for the treatment of MSA, a rare, rapidly progressive and fatal neurodegenerative disease with no cure or effective treatments. Verdiperstat was progressed through Phase 2 clinical trials by AstraZeneca AB. We have entered into an exclusive license agreement with AstraZeneca AB for the product candidate and, after reactivating the IND, plan to initiate a Phase 3 clinical trial of verdiperstat for the treatment of MSA in the third quarter 2019. In February 2019, verdiperstat received orphan drug designation from the FDA for the treatment of MSA. Verdiperstat has also received orphan drug designation for the treatment of MSA from the European Commission upon recommendation from the EMA's Committee for Orphan Medicinal Products.

Recent Developments
Priority Review Voucher Purchase and Series A Preferred Share Financing
In April 2019, we sold 2,495 Series A preferred shares (the "Series A Preferred Shares") to RPI at a price of $50,100 per preferred share pursuant to a Series A preferred share purchase agreement (the "Preferred Share Agreement"). The financing closed in April 2019. The gross proceeds from the transaction with RPI were $125 million, with $105 million of the proceeds used to purchase a priority review voucher issued by the United States Secretary of Health and Human Services to potentially expedite the regulatory review of the NDA for the ODT formulation of rimegepant and the remainder of the proceeds to be used for other general corporate purposes. Pursuant to the Preferred Share Agreement, we may issue additional Series A Preferred Shares to RPI in up to three additional closings for an aggregate amount of $75 million subject to the acceptance by the FDA of both NDAs with respect to the tablet formulation of rimegepant and the ODT formulation of rimegepant. As a condition of future issuance of Series A Preferred Shares, one NDA must be accepted under the priority review designation pathway. The issuance of additional Series A Preferred Shares is also subject to customary closing conditions. Subject to the satisfaction of the applicable conditions under the Preferred Share Agreement, the issuance of additional Series A Preferred Shares is entirely at our option, and we are not obligated to issue any additional Series A Preferred Shares.

Capital Requirements
Since our inception, we have incurred significant operating losses. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our current product candidates and programs. Our net loss was $62.3 million and $85.5 million for the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019, we had an accumulated deficit of $505.9 million. We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for our product candidates. We expect to continue to incur significant expenses for at least the next several years as we

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advance our product candidates from discovery through preclinical development and clinical trials and seek regulatory approval and pursue commercialization of any approved product candidate. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. In addition, we may incur expenses in connection with the in-license or acquisition of additional product candidates.
As a result, we will need additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the public or private sale of equity, debt financings or other capital sources, including collaborations with other companies or other strategic transactions. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our product candidates or delay our pursuit of potential in-licenses or acquisitions.
Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.
As of March 31, 2019, we had cash of $217.4 million. As described above, subsequent to March 31, 2019, we issued Series A Preferred Shares raising aggregate gross proceeds of $125 million, of which $105 million was used to fund the purchase of the priority review voucher. We believe that our cash as of March 31, 2019 will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. We have based these estimates on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “—Liquidity and Capital Resources.” Our future viability beyond that point is dependent on our ability to raise additional capital to finance our operations.

Components of Our Results of Operations
Revenue
To date, we have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products in the near future. If our development efforts for our product candidates are successful and result in regulatory approval or additional license agreements with third parties, we may generate revenue in the future from product sales.
Operating Expenses
Research and Development Expenses
Research and development expenses consist primarily of costs incurred in connection with the development of our product candidates. We expense research and development costs as incurred. These expenses include:
expenses incurred under agreements with contract research organizations (“CROs”) or contract manufacturing organizations (“CMOs”), as well as investigative sites and consultants that conduct our clinical trials, preclinical studies and other scientific development services;
manufacturing scale-up expenses and the cost of acquiring and manufacturing preclinical and clinical trial materials and commercial materials, including manufacturing validation batches;
employee-related expenses, including salaries, benefits, travel and non-cash share-based compensation expense for employees engaged in research and development functions;
costs related to compliance with regulatory requirements;
payments made in cash, equity securities or other forms of consideration under third-party licensing agreements.
We recognize external development costs based on an evaluation of the progress to completion of specific tasks using estimates of our clinical personnel or information provided to us by our service providers.
Our external direct research and development expenses are tracked on a program-by-program basis for our product candidates and consist primarily of external costs, such as fees paid to outside consultants, CROs, contract manufacturing organizations, and central laboratories in connection with our preclinical development, process development, manufacturing and clinical development activities. Our direct research and development expenses by program also include fees incurred under license agreements. We do not allocate employee costs or other indirect costs, to specific programs because these costs are

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deployed across multiple programs and, as such, are not separately classified. We use internal resources primarily to oversee the research and development as well as for managing our preclinical development, process development, manufacturing and clinical development activities. Many employees work across multiple programs, and we do not track personnel costs by program.
Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. As a result, we expect that our research and development expenses will increase over the next several years as we increase personnel costs conduct clinical trials and prepare regulatory filings for our product candidates. We also expect to incur additional expenses related to milestone and royalty payments payable to third parties with whom we have entered into license agreements to acquire the rights to our product candidates.
The successful development and commercialization of our product candidates is highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical and clinical development of any of our product candidates or when, if ever, material net cash inflows may commence from any of our product candidates. This uncertainty is due to the numerous risks and uncertainties associated with product development and commercialization, including the uncertainty of:
the scope, progress, outcome and costs of our preclinical development activities, clinical trials and other research and development activities;
establishment of an appropriate safety profile with IND-enabling studies;
successful patient enrollment in, and the initiation and completion of, clinical trials;
the timing, receipt and terms of any marketing approvals from applicable regulatory authorities;
establishment of commercial manufacturing capabilities or making arrangements with third-party manufacturers;
development and timely delivery of commercial-grade drug formulations that can be used in our clinical trials and for commercial launch;
acquisition, maintenance, defense and enforcement of patent claims and other intellectual property rights;
significant and changing government regulation;
initiation of commercial sales of our product candidates, if and when approved, whether alone or in collaboration with others; and
maintenance of a continued acceptable safety profile of the product candidates following approval.
General and Administrative Expenses
General and administrative expenses include salaries, benefits, travel expense and non-cash share-based compensation expense for personnel in executive, finance and administrative functions. General and administrative expenses also include professional fees for legal, patent, consulting, accounting and audit services.
We anticipate that our general and administrative expenses will increase in the future as we increase our general and administrative headcount to support our continued research and development activities of our product candidates. We also continue to incur accounting, audit, legal, regulatory, compliance, public relations, director and insurance costs associated with being a public company. Additionally, if and when we believe a regulatory approval of a product candidate appears likely, we expect an increase in payroll and related expenses as a result of our preparation for commercial operations, especially as it relates to the sales and marketing of our product candidate.
Other Income (Expense)
Non-Cash Interest Expense on Liability Related to Sale of Future Royalties
We have accounted for our funding agreement with RPI (the "Funding Agreement") as a liability financing. The debt is amortized under the effective interest rate method and, accordingly, we are recording non-cash interest expense over the estimated term of the Funding Agreement. The liability related to sale of future royalties, and the debt amortization, are based on our current estimate of future royalties expected to be paid over the term of the Funding Agreement. We will periodically assess the expected royalty payments and, if materially different than our previous estimate, will prospectively adjust and recognize the related non-cash interest expense. The transaction costs associated with the liability will be amortized to non-cash interest expense over the estimated term of the Funding Agreement.

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Loss from Equity Method Investment
From August 2016 through November 2018, we purchased shares of common stock in Kleo Pharmaceuticals, Inc., a privately held Delaware corporation (“Kleo”). As of March 31, 2019 and December 31, 2018, we owned approximately 41.9% of the outstanding shares of Kleo’s common stock. We account for our investment in Kleo under the equity method of accounting. As a result, our proportionate share of Kleo’s net income or loss each reporting period is included in other income (expense), net, in our condensed consolidated statement of operations and comprehensive loss and results in a corresponding adjustment to the carrying value of the equity method investment on our condensed consolidated balance sheet.
Change in Fair Value of Warrant Liability
In connection with entering into a credit agreement, we issued warrants to purchase common shares to two of our directors in connection with a guarantee of our obligations under the agreement. We previously classified the warrants as a liability on our consolidated balance sheet because each warrant represented a freestanding financial instrument that was not indexed to our shares. The warrant liability was initially recorded at fair value upon entering into the credit agreement and was subsequently remeasured to fair value at each reporting date. Changes in the fair value of the warrant liability was recognized as a component of other income (expense), net in the condensed consolidated statement of operations and comprehensive loss. On January 26, 2018, the anti-dilution price protection provisions contained within the warrants expired. Due to the expiration of these provisions, we discontinued classification of these warrants as a liability, and have accordingly reclassified them to additional paid-in capital within shareholders' equity.
Provision for Income Taxes
As a company incorporated in the British Virgin Islands (“BVI”), we are principally subject to taxation in the BVI. Under the current laws of the BVI, tax on a company’s income is assessed at a zero percent tax rate. As a result, we have not recorded any income tax benefits from losses incurred in the BVI during each reporting period, and no net operating loss carryforwards will be available to us for those losses. We have historically outsourced all of the research and clinical development for our programs under a master services agreement with our wholly owned subsidiary, Biohaven Pharmaceuticals, Inc., a Delaware corporation (“BPI”). As a result of providing services under this agreement, BPI was profitable during the three months ended March 31, 2019 and 2018, and BPI is subject to taxation in the United States. Our provision for income taxes has historically been comprised of the state income taxes of BPI’s profitable operations in the United States and federal income taxes due to general business credit limitations.
As of March 31, 2019, we evaluated our deferred tax assets and determined that a full valuation allowance on these assets was appropriate due to excess research and development (“R&D”) credits.

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Results of Operations
Comparison of the Three Months Ended March 31, 2019 and 2018
The following table summarizes our results of operations for the three months ended March 31, 2019 and 2018:
 
 
Three Months Ended March 31,
 
 
 
 
2019
 
2018
 
Change
 
 
(in thousands)
Operating expenses:
 
 

 
 

 
 

Research and development
 
$
41,003

 
$
75,579

 
$
(34,576
)
General and administrative
 
13,462

 
7,857

 
5,605

Total operating expenses
 
54,465

 
83,436

 
(28,971
)
Loss from operations
 
(54,465
)
 
(83,436
)
 
28,971

Other income (expense):
 
 
 
 
 
 

Non-cash interest expense on liability related to sale of future royalties
 
(6,813
)
 

 
(6,813
)
Change in fair value of warrant liability
 

 
(1,182
)
 
1,182

Loss from equity method investment
 
(900
)
 
(728
)
 
(172
)
Other
 
(17
)
 
(29
)
 
12

Total other income (expense), net
 
(7,730
)
 
(1,939
)
 
(5,791
)
Loss before provision for income taxes
 
(62,195
)
 
(85,375
)
 
23,180

Provision for income taxes
 
109

 
87

 
22

Net loss and comprehensive loss
 
$
(62,304
)
 
$
(85,462
)
 
$
23,158

Research and Development Expenses
 
 
Three Months Ended March 31,
 
 
 
 
2019
 
2018
 
Change
 
 
(in thousands)
Direct research and development expenses by program:
 
 

 
 

 
 

Nurtec
 
$
527

 
$
1,309

 
$
(782
)
Troriluzole
 
6,234

 
2,794

 
3,440

Rimegepant
 
17,347

 
15,341

 
2,006

BHV-3500
 
7,777

 
1,446

 
6,331

BHV-5000
 
358

 
498

 
(140
)
Verdiperstat
 
1,048

 

 
1,048

Unallocated research and development costs:
 
 
 
 
 
 
Personnel related (including non-cash share-based compensation)
 
7,064

 
3,692

 
3,372

BMS Amendment upfront license payment
 

 
50,000

 
(50,000
)
Other
 
648

 
499

 
149

Total research and development expenses
 
$
41,003

 
$
75,579

 
$
(34,576
)
Research and development expenses were $41.0 million for the three months ended March 31, 2019, compared to $75.6 million for the three months ended March 31, 2018. The decrease of $34.6 million was primarily due to the upfront payment to BMS in the three months ended March 31, 2018 of $50.0 million, partially offset by increases in direct costs of $6.3 million for our BHV-3500 program, $3.4 million in personnel costs, including non-cash share-based compensation, and $3.4 million in direct costs for our troriluzole program.
The increases in direct costs for our BHV-3500 and troriluzole programs were primarily due to an increase in the number of clinical trials for the three months ended March 31, 2019 as compared to the same period in 2018, and the increased costs of operating later-stage trials.

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The increase in personnel related costs, including non-cash share-based compensation, was a result of hiring additional research and development personnel. Our headcount in research and development increased to 43 as of March 31, 2019, compared to 29 as of March 31, 2018. Non-cash share-based compensation expense, included in personnel related costs, was $3.7 million for the three months ended March 31, 2019, an increase of $2.3 million as compared to the same period in 2018.
General and Administrative Expenses
General and administrative expenses were $13.5 million for the three months ended March 31, 2019, compared to $7.9 million for the three months ended March 31, 2018. The increase of $5.6 million was primarily due to increases in personnel-related costs, including non-cash share-based compensation, due to the hiring of additional personnel in our general and administrative functions, preparation for commercialization activities, professional fees supporting ongoing business operations, and additional fees to comply with the requirements of being a public company. Our headcount, outside of research and development, increased to 30 as of March 31, 2019, compared to 20 as of March 31, 2018.  Non-cash share-based compensation expense, included in personnel-related costs, was $3.6 million for the three months ended March 31, 2019, an increase of $2.0 million as compared to the same period in 2018.
Other Income (Expense), Net
Other income (expense), net was a net expense of $7.7 million for the three months ended March 31, 2019, compared to net expense of $1.9 million for the three months ended March 31, 2018. The increase of $5.8 million in net expense was primarily due to the non-cash interest expense on our liability related to the sale of future royalties. The increase in expense was partially offset by the expense related to the change in fair value of the warrant liability in the three months ended March 31, 2018, which did not recur in the same period of 2019.
Provision for Income Taxes
We recorded a provision for income taxes of $0.1 million for the three months ended March 31, 2019, compared to a provision for income taxes of $0.1 million for the three months ended March 31, 2018. We recorded a tax provision for the three months ended March 31, 2019 primarily for the state income taxes of BPI’s profitable operations in the United States during that period.

Liquidity and Capital Resources
Since our inception, we have not generated any revenue and have incurred significant operating losses and negative cash flows from our operations. We have funded our operations primarily with proceeds from sales of equity, and other financing transactions. Subsequent to our initial public offering ("IPO"), we have raised funds through sales of our equity in public and private offerings, as well as through the sale of a revenue participation right related to future royalties.
In May 2017, our registration statement on Form S-1 relating to our IPO was declared effective by the SEC. The IPO closed on May 9, 2017 and we issued and sold 9,900,000 common shares at a public offering price of $17.00 per share, resulting in net proceeds of $152.7 million after deducting underwriting discounts and commissions and other offering expenses. In addition, on May 9, 2017, the underwriters of our IPO fully exercised their option to purchase additional shares, and on May 11, 2017, we issued and sold an additional 1,485,000 common shares, resulting in additional net proceeds to us of $23.5 million, after deducting underwriting discounts and commissions and other offering expenses. The aggregate net proceeds we received from the IPO, after deducting underwriting discounts and commissions and offering expenses, were $176.1 million.
In March 2018, we sold an aggregate of 2,000,000 common shares in a private placement at a price of $27.50 per share, for net proceeds of $52.0 million after deducting underwriting discounts and commissions of $2.8 million and other offering expenses of $0.2 million. Subsequent to the closing of the private placement, we paid BMS the $50 million upfront payment under the amendment to our license agreement with BMS (the "BMS Amendment").
In June 2018, we entered into a funding agreement to sell tiered, sales-based royalty rights on global net sales of pharmaceutical products containing the compounds rimegepant or BHV-3500 to RPI. We issued to RPI the right to receive certain revenue participation payments, subject to certain reductions, based on the future global net sales of the products, for each calendar quarter during the royalty term contemplated by the Funding Agreement, in exchange for $100 million in cash. Specifically, the participation rate commences at 2.10 percent on annual global net sales of up to and equal to $1.5 billion, declining to 1.50 percent on annual global net sales exceeding $1.5 billion.
Concurrently, we entered into a common stock purchase agreement with RPI, pursuant to which we issued and sold 1,111,111 common shares to RPI. RPI paid $45.00 per share, resulting in net proceeds of $49.9 million after deducting offering expenses of $0.1 million.

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In December 2018, we closed on an underwritten public offering of 3,859,060 common shares, including the full exercise of the underwriters' option to purchase additional shares, at a price to the public of $37.25 per share. The aggregate net proceeds to us from the offering, after deducting the underwriting discounts and commissions and offering expenses payable, were approximately $134.5 million.
As of March 31, 2019, we had cash of $217.4 million.  Cash in excess of immediate requirements is invested in non-interest-bearing accounts with a view to liquidity and capital preservation.
In April 2019, we closed the sale of 2,495 Series A Preferred Shares to RPI at a price of $50,100 per preferred share, resulting in gross proceeds of $125 million, before offering expenses. As described above, we used $105 million of these proceeds to fund the purchase of the priority review voucher.
Cash Flows
The following table summarizes our cash flows for each of the periods presented:
 
 
Three Months Ended March 31,
 
 
2019
 
2018
 
 
(in thousands)
Net cash used in operating activities
 
$
(46,869
)
 
$
(81,533
)
Net cash used in investing activities
 
(1,038
)
 
(1,732
)
Net cash provided by financing activities
 
1,065

 
56,003

Net increase in cash
 
$
(46,842
)
 
$
(27,262
)
Operating Activities
During the three months ended March 31, 2019, operating activities used $46.9 million of cash, a decrease of $34.7 million as compared to the three months ended March 31, 2018.  The decrease in cash usage was primarily due to the $50 million upfront payment under the BMS Amendment, and increases in cash paid for clinical trials, including increases in upfront payments to CROs related to our rimegepant clinical trials, personnel, professional fees and other infrastructure costs.
Investing Activities
During the three months ended March 31, 2019, we used $1.0 million of cash in investing activities, a decrease of $0.7 million as compared to the three months ended March 31, 2018.  The decrease was primarily due to a reduction in the amount invested in Kleo during the three months ended March 31, 2019, as compared to the same period in 2018, partially offset by an increase in building improvements related to our new headquarters during the three months ended March 31, 2019, as compared to leasehold improvements in the same period in 2018.
Financing Activities
During the three months ended March 31, 2019, net cash provided by financing activities was $1.1 million, a decrease of $54.9 million compared to the three months ended March 31, 2018.  The decrease was primarily due to proceeds from the issuance of common shares in the three months ended March 31, 2018, which was not received during the same period in 2019.
Funding Requirements
We expect our expenses to increase in connection with our ongoing activities, particularly as we advance the preclinical activities, clinical trials and potential commercialization of our product candidates. Our costs will also increase as we:
Continue to advance the rimegepant development programs towards commercialization for the acute treatment of migraine;
complete our ongoing Phase 3 clinical trial to evaluate rimegepant as a preventive therapy for migraine;
complete the ongoing extension phase of the Phase 2/3 clinical trial of troriluzole in SCA and our ongoing Phase 2/3 trials of troriluzole in OCD, Alzheimer’s disease and GAD and, complete our ongoing Phase 3 randomized controlled trial to assess the efficacy of troriluzole in SCA;
conduct support activities for future clinical trials of BHV-5000;
complete the ongoing Phase 2/3 clinical trial of BHV-3500 and related support activities;
conduct our planned Phase 3 clinical trial of verdiperstat in MSA;

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continue to initiate and progress other supporting studies required for regulatory approval of our product candidates, including long-term safety studies, drug-drug interaction studies, preclinical toxicology and carcinogenicity studies;
make required milestone and royalty payments under the license agreements by which we acquired some of the rights to our product candidates;
make required royalty payments to RPI under the Funding Agreement;
initiate preclinical studies and clinical trials for any additional indications for our current product candidates and any future product candidates that we may pursue;
continue to build our portfolio of product candidates through the acquisition or in-license of additional product candidates or technologies;
continue to develop, maintain, expand and protect our intellectual property portfolio;
pursue regulatory approvals for our current and future product candidates that successfully complete clinical trials, including rimegepant and Nurtec;
ultimately establish a sales, marketing and distribution infrastructure to commercialize any product candidate for which we may obtain marketing approval;
hire additional clinical, medical, commercial, and development personnel; and
incur additional legal, accounting and other expenses in operating as a public company.
Additionally, pursuant to the terms of our Series A Preferred Shares, we will be required to redeem our Series A preferred shares upon various circumstances, as described in greater detail below (see "-Contractual Obligations and Commitments") and in any event no later than December 31, 2024.
Without additional external funding, we expect that our existing cash will be sufficient to fund our planned operating expenses, financial commitments and other cash requirements for at least the next 12 months, without giving effect to any additional sources of capital such as the issuance of any additional Series A Preferred Shares under the Preferred Share Agreement. The assumption for cash usage through this date assumes that planned programs and expenditures continue and that we do not reduce, stop or curtail programs or other spending. Beyond that point, we will need to raise additional capital to finance our operations, which could include the issuance of additional Series A Preferred Shares if the conditions for such issuance are satisfied, or through other means, which cannot be assured.
We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. We expect that we will require additional capital to commercialize rimegepant, if we receive regulatory approval, and to pursue in-licenses or acquisitions of other product candidates. If we receive regulatory approval for rimegepant, troriluzole, Nurtec, or our other product candidates, we expect to incur commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize or whether we commercialize jointly or on our own.
Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical product candidates, we are unable to estimate the exact amount of our working capital requirements. Our future funding requirements will depend on and could increase significantly as a result of many factors, including:
the scope, progress, results and costs of researching and developing our product candidates, and conducting preclinical studies and clinical trials;
the costs, timing and outcome of regulatory review of our product candidates;
the costs of future activities, including product sales, medical affairs, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval;
the revenue, if any, received from commercial sale of our products, should any of our product candidates receive marketing approval;
the costs and timing of hiring new employees to support our continued growth;
the costs of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;
the extent to which we acquire or in-license other product candidates and technologies;
the costs of manufacturing commercial-grade product and necessary inventory to support commercial launch;

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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
In addition to the following discussion of our commitment to RPI under the Funding Agreement, the disclosure of our contractual obligations and commitments is set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations and Commitments” in our Annual Report on Form 10-K for the year ended December 31, 2018. See Note 12 to our condensed consolidated financial statements included in Item 1, “Unaudited Condensed Consolidated Financial Statements,” of this Quarterly Report on Form 10-Q for further discussion of commitments and contingencies.
Pursuant to our Funding Agreement with RPI entered in June 2018, we have a commitment for repayments under the Revenue Participation Right due for sales of Products. A liability of $106.0 million represents the carrying value established on the date of the transaction. Actual payments to RPI may be significantly different than the carrying value based on future royalties that may become payable from the sale of Products.
Subsequent to March 31, 2019, we issued the Series A Preferred Shares for the aggregate original purchase price of $125 million. The Series A Preferred Shares are redeemable from time to time, as described below.
If a Change of Control (as defined in our amended and restated memorandum and articles of association) is announced on or before October 5, 2019, we shall have the option to redeem the Series A Preferred Shares for one point five times (1.5x) the original purchase price of the Series A Preferred Shares upon the closing of the Change of Control. If we do not elect to redeem the Series A Preferred Shares for 1.5x the original purchase price at the closing of such Change of Control, then we would be required to redeem the Series A Preferred Shares for two times (2x) the original purchase price, payable in equal quarterly installments following closing of the Change of Control through December 31, 2024.
If a Change of Control is announced after October 5, 2019 and the Series A Preferred Shares have not previously been redeemed, we must redeem the Series A Preferred Shares for two times (2x) the original purchase price of the Series A Preferred Shares payable in a lump sum at the closing of the Change of Control or in equal quarterly installments following the closing of the Change of Control through December 31, 2024.
If an NDA for rimegepant is not approved by December 31, 2021, RPI has the option at any time thereafter to require us to redeem the Series A Preferred Shares for one point two times (1.2x) the original purchase price of the Series A Preferred Shares.
If no Change of Control has been announced, the Series A Preferred Shares have not previously been redeemed and (i) rimegepant is approved on or before December 31, 2024, following approval and starting one-year after approval, we must redeem the Series A Preferred Shares for two times (2x) the original purchase price, payable in a lump sum or in equal quarterly installments through December 31, 2024 (provided that if rimegepant is approved in 2024, the entire redemption amount must be paid by December 31, 2024) or (ii) rimegepant is not approved by December 31, 2024, we must redeem the Series A Preferred Shares for two times (2x) the original purchase price on December 31, 2024.
We may redeem the Series A Preferred Shares at our option at any time for two times (2x) the original purchase price, which redemption price may be paid in a lump sum or in equal quarterly installments through December 31, 2024.

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Critical Accounting Policies and Significant Judgments and Estimates
Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis.
The critical accounting policies noted below are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations— Critical Accounting Policies and Significant Judgments and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2018.  All of the critical accounting policies noted below are described in the notes to the condensed consolidated financial statements included in Item 1, “Unaudited Condensed Consolidated Financial Statements,” of this Quarterly Report on Form 10-Q. We believe that the following accounting policies involve the most judgment and complexity:
accrued research and development expenses;
Non-cash share-based compensation;
equity method investment, including related impairment;
non-cash interest expense on liability related to sale of future royalties; and
valuation of warrant liability.
Accordingly, we believe the policies set forth above are critical to fully understanding and evaluating our financial condition and results of operations. If actual results or events differ materially from the estimates, judgments and assumptions used by us in applying these policies, our reported financial condition and results of operations could be materially affected.

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

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

Item 3. Quantitative and Qualitative Disclosures about Market Risks
Interest Rate Risk
The market risk inherent in our financial instruments and in our financial position has historically been the potential loss arising from adverse changes in interest rates. As of March 31, 2019 and December 31, 2018, we had cash of $217.4 million and $264.2 million, respectively. As of March 31, 2019, we held our cash in non-interest-bearing bank accounts and accordingly, the value of these accounts is not subject to fluctuation in interest rates.
We have adopted an investment policy, pursuant to which we hold such net proceeds in non-interest bearing accounts, with the goal of capital preservation and liquidity so that such funds are readily available to fund our operations. We have no exposure to interest rate risk related to indebtedness as of March 31, 2019.
We do not engage in any hedging activities against changes in interest rates. We do not have any foreign currency or other derivative financial instruments.

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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to a company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
In designing and evaluating our disclosure controls and procedures, management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and not be detected.
Based on the evaluation of our disclosure controls and procedures as of March 31, 2019, our Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2019, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Controls over Financial Reporting
There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended March 31, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION
Item 1. Legal Proceedings 
From time to time, we may be subject to litigation and claims arising in the ordinary course of business. We are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened legal proceeding against us that we believe could have a material adverse effect on our business, operating results, cash flows or financial condition.
Item 1A.  Risk Factors
Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities. Except for the updated risk factors set forth immediately below, our risk factors have not changed materially from those described in "Part I, Item 1A. Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the Securities and Exchange Commission on February 28, 2019.
We may be required to redeem our outstanding Series A Preferred Shares.
The holders of our outstanding Series A Preferred Shares (consisting of 2,495 shares as of the filing of this report), will have the right to require us to redeem their shares in certain circumstances. If a Change of Control (as defined in our memorandum and article of association) is announced on or before October 5, 2019, we will have the option to redeem the Series A Preferred Shares for one point five times (1.5x) the original purchase price of the Series A Preferred Shares upon the closing of the Change of Control.  If we do not elect to redeem the Series A Preferred Shares for 1.5x the original purchase price at the closing of such Change of Control, then we would be required to redeem the Series A Preferred Shares for two times (2x) the original purchase price, payable in equal quarterly installments following closing of the Change of Control through December 31, 2024.
If a Change of Control is announced after October 5, 2019 and the Series A Preferred Shares have not previously been redeemed, we must redeem the Series A Preferred Shares for two times (2x) the original purchase price of the Series A Preferred Shares payable in a lump sum at the closing of the Change of Control or in equal quarterly installments following the closing of the Change of Control through December 31, 2024.
If an NDA for rimegepant is not approved by December 31, 2021, the holder of the Series A Preferred Shares has the option at any time thereafter to require us to redeem the Series A Preferred Shares for one point two times (1.2x) the original purchase price of the Series A Preferred Shares.
If no Change of Control has been announced, the Series A Preferred Shares have not previously been redeemed and (i) rimegepant is approved on or before December 31, 2024, following approval and starting one-year after approval, we must redeem the Series A Preferred Shares for two times (2x) the original purchase price, payable in a lump sum or in equal quarterly installments through December 31, 2024 (provided that if rimegepant is approved in 2024, the entire redemption amount must be paid by December 31, 2024) or (ii)  rimegepant is not approved by December 31, 2024, we must redeem the Series A Preferred Shares for two times (2x) the original purchase price on December 31, 2024.
We may redeem the Series A Preferred Shares at our option at any time for two times (2x) the original purchase price, which redemption price may be paid in a lump sum or in equal quarterly installments through December 31, 2024.
In the event that we default on any obligation to redeem Series A Preferred Shares when required, the redemption amount shall accrue interest at the rate of eighteen percent (18%) per annum. If any such default continues for at least one year, the holders of such shares shall be entitled to convert, subject to certain limitations, such Series A Preferred Shares into common shares, with no waiver of their redemption rights.
Our obligation to redeem the Series A Preferred Shares would require a substantial amount of cash, the expenditure of which would likely have a material adverse effect on our liquidity, capital resources and business prospects. The purchase agreement by which the Series A Preferred Shares were issued provides for the potential sale of up to 1,497 additional Series A Preferred Shares under specified circumstances. The terms of our Series A Preferred Shares or any new preferred shares we may issue could also have the effect of delaying, deterring or preventing a change in control.
Our Series A Preferred Shares have rights, preferences and privileges that are not held by, and are preferential to, the rights of our common shareholders, which could result in the interests of the holders of our Series A Preferred Shares differing from those of our common shareholders.
In addition to the redemption rights discussed above, the holders of our Series A Preferred Shares have the right to receive a liquidation preference, equal to two times (2x) the original purchase price of such shares, entitling them to be paid out of our assets available for distribution to shareholders before any payment may be made to holders of any common shares. The existence of a liquidation preference may reduce the value of our common shares, make it harder for us to sell common shares in offerings in the future, or prevent or delay a change of control. Additionally, each Series A Preferred Share is entitled to vote with the common shares on the basis of 1,000 votes per share. Our memorandum and articles of association grant the Series A

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Preferred Shares customary protective provisions which provide that, without the approval of holders of a majority of the Series A Preferred Shares, we may not adversely affect the rights of the Series A Preferred Shares or create, authorize or issue any class or series of equity securities senior to, or pari passu with, the Series A Preferred Shares.
The preferential rights of the Series A Preferred Shares could result in divergent interests between the holders of the Series A Preferred Shares and holders of our common shares.
The regulatory approval process of the FDA and comparable foreign jurisdictions is lengthy, time-consuming and unpredictable.
Our future success is dependent upon our ability to successfully develop, obtain regulatory approval for and then successfully commercialize one or more of our product candidates. The time required to obtain approval by the FDA is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities. In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval is generally uncertain, may change during the course of a product candidate’s clinical development and may vary among jurisdictions. Moreover, the redemption of a rare pediatric disease priority review voucher, or PRV, for one of our future regulatory submissions to the FDA, such as the PRV that we recently purchased, may not result in faster review or approval compared to products considered for approval under conventional FDA procedures and, in any event, does not assure ultimate approval by FDA. We have not obtained regulatory approval for any product candidate and it is possible that none of our existing product candidates or any product candidates we may seek to develop in the future will ever obtain regulatory approval. Neither we nor any future collaborator is permitted to market any of our product candidates in the United States or abroad until we receive regulatory approval of an NDA from the FDA or approval from the EMA, National Medical Products Administration or other applicable foreign regulatory agency.
Prior to obtaining approval to commercialize a product candidate in any jurisdiction, we must demonstrate to the satisfaction of the FDA, EMA, National Medical Products Administration or any comparable foreign regulatory agency, that such product candidates are safe and effective for their intended uses. Results from preclinical studies and clinical trials can be interpreted in different ways. The FDA, EMA, National Medical Products Administration or any comparable foreign regulatory agency can delay, limit or deny approval of our product candidates or require us to conduct additional preclinical or clinical testing or abandon a program for many reasons, including:
the FDA, EMA, National Medical Products Administration or the applicable foreign regulatory agency’s disagreement with the number, design, conduct or implementation of our preclinical studies and clinical trials;
negative or ambiguous results from our clinical trials or results that may not meet the level of statistical significance required by the FDA, EMA, National Medical Products Administration or any comparable foreign regulatory agency for approval;
serious and unexpected drug-related side effects experienced by participants in our clinical trials or by individuals using drugs similar to our product candidates;
our inability to demonstrate to the satisfaction of the FDA, EMA, National Medical Products Administration or the applicable foreign regulatory agency that our product candidates are safe and effective for their proposed indications;
the FDA’s, EMA’s, National Medical Products Administration's or the applicable foreign regulatory agency’s disagreement with the interpretation of data from preclinical studies or clinical trials;
actions by the CROs that we retain to conduct our preclinical studies and clinical trials, which are outside of our control and that materially adversely impact our preclinical studies and clinical trials;
the FDA’s, EMA’s, National Medical Products Administration's or other applicable foreign regulatory agencies’ disagreement with the interpretation of data from preclinical studies or clinical trials;
our inability to demonstrate the clinical and other benefits of our product candidates outweigh any safety or other perceived risks;
the FDA’s, EMA’s, National Medical Products Administration's or the applicable foreign regulatory agency’s requirement for additional preclinical studies or clinical trials;
the FDA’s, EMA’s, National Medical Products Administration's or the applicable foreign regulatory agency’s disagreement regarding the formulation, labeling or the specifications of our product candidates;
the FDA’s, EMA’s, National Medical Products Administration's or the applicable foreign regulatory agency’s failure to approve the manufacturing processes or facilities of third-party manufacturers with which we contract; or

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the potential for approval policies or regulations of the FDA, EMA, National Medical Products Administration or the applicable foreign regulatory agencies to significantly change in a manner rendering our clinical data insufficient for approval.
For example, with respect to our second planned randomized, controlled clinical trial of troriluzole for the treatment of SCA, we undertook discussions with the FDA regarding the acceptability of the primary endpoint and necessary secondary endpoints, including our proposal to use a modified SARA scale. In our Phase 2/3 clinical trial, the FDA stated that while certain items measured by the SARA scale appeared capable of reflecting a clinically meaningful benefit for patients depending on how the scoring of those items is defined, the use of the SARA scale was not appropriate as a primary endpoint in the trial. Based on our post-hoc analyses of data from the open-label extension phase of the trial, we proposed modifications to the SARA scale that we believe may address some of these shortcomings. Based on feedback received from the FDA, we are incorporating trial design modifications that include utilization of a modified SARA scale, However, notwithstanding the feedback that we have received from the FDA, there remains substantial risk that even if we receive favorable results from this second trial, the FDA or any foreign regulatory agency may nevertheless conclude that results obtained using the modified SARA scale would not be an adequate basis for approval.
Nurtec 40mg met bioequivalent criteria (AUC and Cmax) with generic riluzole 50mg tablets. Since the currently approved riluzole is associated with a negative food effect (lower AUC and Cmax when administered with high fat meals), a food assessment was performed within the Nurtec Phase 1 trial. Topline results from the food effect assessment, demonstrated bioequivalent AUC exposure for Nurtec 40 mg under both fed and fasting states. However, Cmax concentrations were lowered by more than 20% under the fed state. We believe that Nurtec’s property of maintaining therapeutic AUC exposures regardless of feeding state is clinically important for patients. Ultimately, the FDA will determine the labeling of Nurtec with regard to the effect of feeding, which may impact our marketing of Nurtec if it is approved.
Any of our current or future product candidates could take a significantly longer time to gain regulatory approval than expected or may never gain regulatory approval. This could delay or eliminate any potential product revenue by delaying or terminating the potential commercialization of our product candidates.
Of the large number of drugs in development, only a small percentage successfully complete the FDA or foreign regulatory approval processes and are commercialized. The lengthy approval process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval to market our product candidates, which would significantly harm our business, financial condition, results of operations and prospects.
FDA guidance regarding the approval of drugs for the acute treatment of migraine has recently changed. No drug has been approved under the new guidance, and it is not certain how such guidance will be interpreted and applied by the FDA. We intend to seek advice and guidance from the FDA which may include requesting a pre-NDA meeting with the FDA prior to the submission of an NDA for any of our product candidates. If the feedback we receive is different from what we currently anticipate, this could delay the development and regulatory approval process for these product candidates. We generally plan to seek regulatory approval to commercialize our product candidates in the United States, the European Union and other key global markets. To obtain regulatory approval in other countries, we must comply with numerous and varying regulatory requirements of such other countries regarding safety, efficacy, chemistry, manufacturing and controls, clinical trials, commercial sales, pricing and distribution of our product candidates. Even if we are successful in obtaining approval in one jurisdiction, we cannot ensure that we will obtain approval in any other jurisdiction. Failure to obtain approval in one jurisdiction may negatively impact our ability to obtain approval elsewhere. Failure to obtain marketing authorization for our product candidates will result in our being unable to market and sell such products. If we fail to obtain approval in any jurisdiction, the geographic market for our product candidates could be limited. Similarly, regulatory agencies may not approve the labeling claims that are necessary or desirable for the successful commercialization of our product candidates or may grant approvals for more limited patient populations than requested.
Even if we eventually complete clinical testing and receive approval of an NDA or foreign marketing application for our product candidates, the FDA or the applicable foreign regulatory agency may grant approval contingent on the performance of costly additional clinical trials, including Phase 4 clinical trials or the implementation of a Risk Evaluation and Mitigation Strategy ("REMS") which may be required to ensure safe use of the drug after approval. Any delay in obtaining, or inability to obtain, applicable regulatory approval would delay or prevent commercialization of that product candidate and would adversely impact our business and prospects.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.

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Item 6. Exhibits
Exhibit No.*
 
Description
2.1(1)
 
 
 
 
3.1(2)
 
 
 
 
10.1
 
 
 
 
31.1
 
 
 
 
31.2
 
 
 
 
32.1‡
 
 
 
 
101.SCH
 
XBRL Taxonomy Extension Schema Document
 
 
 
101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase Document
 
 
 
101.DEF
 
XBRL Taxonomy Extension Definition Linkbase Document
 
 
 
101.LAB
 
XBRL Taxonomy Extension Label Linkbase Document
 
 
 
101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase Document
___________________________________________________
(1)
Incorporated by reference to the exhibit to the Registrant’s Current Report on Form 8-K, Commission file number 001-38080, filed on March 18, 2019. The number given in parentheses indicated the corresponding exhibit number in such Form 8-K.

(2)
Incorporated by reference to the exhibit to the Registrant’s Current Report on Form 8-K, Commission file number 001-38080, filed on April 8, 2019. The number given in parentheses indicated the corresponding exhibit number in such Form 8-K.

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

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


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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
Dated: May 8, 2019
 
 
By:
/s/ Vlad Coric, M.D.
 
 
Vlad Coric, M.D.
 
 
Chief Executive Officer
 
 
(On behalf of the Registrant and as the Principal Executive Officer)
 
 
 
 
By:
/s/ Jim Engelhart
 
 
Jim Engelhart
 
 
Chief Financial Officer
 
 
(Principal Financial Officer)


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Exhibit 10.1

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
SERIES A PREFERRED SHARE PURCHASE AGREEMENT
THIS SERIES A PREFERRED SHARE PURCHASE AGREEMENT (the “Agreement”) is made as of March 18, 2019 (the “Execution Date”) by and between Biohaven Pharmaceutical Holding Company Ltd., a BVI business company organized under the laws of the British Virgin Islands (the “Company”), and RPI Finance Trust, a Delaware statutory trust (the “Investor”).
RECITALS
WHEREAS, pursuant to terms set forth in this Agreement, the Company desires to sell to the Investor, and the Investor desires to purchase Series A Preferred Shares, of no par value per share, from the Company (the “Preferred Shares”);
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1

Purchase and Sale of Shares
1.1    Sale of Shares. Subject to the terms and conditions hereof, the Company will issue and sell to the Investor, and the Investor will purchase from the Company, at the Initial Closing (as defined below), 2,495 Preferred Shares (the “Initial Closing Shares” and together with the Additional Closing Shares, as defined below, the “Shares”) at a price per share of $50,100 (the “Per Share Purchase Price”).
1.2    Closing. The purchase and sale of the Initial Closing Shares shall take place remotely via the exchange of documents and signatures on the first business day following the satisfaction or waiver of the conditions set forth in Section 4 and Section 5 (other than those conditions that by their nature are to be satisfied at or immediately prior to the Closing, but subject to the satisfaction or waiver of those conditions) or at such other date, time and place as the Company and the Investor may agree in writing (which time is designated as the “Initial Closing”). In the event there is more than one closing, the term “Closing” shall apply to each such closing unless otherwise specified. At the Initial Closing, the Company will deliver or cause to be delivered to the Investor a copy of the irrevocable instructions to the Company’s transfer agent instructing such transfer agent to issue the Shares into book entry to the Investor and, concurrently, the Investor shall pay to the Company a cash amount equal to $124,999,500.00, by wire transfer of immediately available funds in accordance with the Company’s instructions.

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1.3    Additional Closings.
(a)    (i) Commencing upon the date on which the U.S. Food and Drug Administration, or any successor agency thereto (the “FDA”) has accepted both of (x) the New Drug Application (“NDA”) with respect to the tablet version of rimegepant and (y) NDA with respect to the oral dissolving version of rimegepant (the later of such dates, the “Second NDA Acceptance Date”), one of which NDAs shall have been accepted under the FDA’s Priority Review Designation pathway in accordance with Section 519(a)(1) of the Federal Food, Drug, and Cosmetic Act, 21 USC 301, et seq. as amended, and including any rules, regulations and requirements promulgated thereunder, and (ii) ending upon the first anniversary of the Second NDA Acceptance Date (the “Outside Date”), the Company may issue and sell to the Investor, and the Investor will purchase from the Company, in up to three additional Closings (each, an “Additional Closing”), up to Seventy-Five Million Dollars ($75,000,000) in the aggregate (and no less than Twenty-Five Million Dollars ($25,000,000) at each Additional Closing) of additional Preferred Shares (the “Additional Shares” and the consideration paid by the Investor at each Additional Closing, the “Additional Closing Purchase Price”). At each Additional Closing, the Company will issue and sell to the Investor, and the Investor will purchase from the Company, such number of Additional Shares as is equal to (x) the applicable Additional Closing Purchase Price divided by (y) the Per Share Purchase Price. For purposes of this Agreement, “rimegepant” means any pharmaceutical product containing the compound identified as BHV-3000, and any metabolites or prodrugs thereof, and any pharmaceutical hydrates, solvates, salts, esters, isomers, enantiomers, diastereomers or polymorphs of any of the foregoing (in each case, alone or with other active ingredients controlled by the Company), in all forms, presentations, formulations and dosage forms.
(b)    The Company shall provide forty-five (45) business days’ advance written notice to the Investor of any Additional Closing (the “Additional Closing Notice”). Upon the receipt by the Company of any Additional Closing Notice, each of the Company and the Investor shall consult to determine whether any filing or notification is necessary or advisable under any applicable Antitrust Law with respect to the Investor’s acquisition of the Additional Shares to be issued and sold at such Additional Closing. If the Investor determines that a filing or notification under any applicable Antitrust Law is necessary or advisable, then (i) the Investor shall provide written notice of its determination to the Company within five (5) business days of issuance of the Additional Closing Notice and (ii) such Additional Closing shall be delayed by thirty-five business days.
(c)    Each of the Investor and the Company shall make an appropriate filing or notification under any applicable Antitrust Law within five (5) business days following the date of any notice provided by the Investor pursuant to Section 1.3(b). Each of the Investor and the Company shall be responsible for its own costs and expenses associated with such notifications and filing and shall use its commercially reasonable efforts to obtain the expiration or termination of the applicable waiting period under the HSR Act, and to obtain the termination or expiration of any other applicable waiting periods or any necessary approvals or consents under any other applicable Antitrust Law, at the earliest possible date after the date of filing.
(d)    Each of the Investor and the Company shall: (i) reasonably cooperate with each other in connection with any investigation or other inquiry relating to the transactions contemplated

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by an Additional Closing Notice; (ii) reasonably keep the other party informed of any communication received by such party from, or given by such party to, the U.S. Federal Trade Commission (the “FTC”), the U.S. Department of Justice (the “DOJ”) or any other Merger Control Authority and of any communication received or given in connection with any proceeding by a private party, in each case regarding the transactions contemplated by an Additional Closing Notice; (iii) promptly respond to any inquiries or requests received from the FTC, the DOJ or any other Merger Control Authorities for additional information or documentation; (iv) reasonably consult with each other in advance of any meeting or conference with the FTC, the DOJ or any other Merger Control Authority, and to the extent permitted by the FTC, the DOJ or such other Merger Control Authority and reasonably determined by such party to be appropriate under the circumstances, give the other Parties or their counsel the opportunity to attend and participate in such meetings and conferences; and (v) permit the other party or their counsel to the extent reasonably practicable to review in advance, and in good faith consider the views of the other party or their counsel concerning, any submission, filing or communication (and documents submitted therewith) intended to be given by it to the FTC, the DOJ or any other Merger Control Authority; provided, however, such party shall be under no obligation to reschedule any meetings or conferences with the FTC, the DOJ or any other Merger Control Authority to enable the other party to attend.
(e)    Notwithstanding anything to the contrary in this Section 1.3, the term “commercially reasonable efforts” as used in this Section 1.3 does not require that either party (i) offer, negotiate, commit to or effect, by consent decree, hold separate order, trust or otherwise, the sale, divestiture, license or other disposition of any capital stock, assets, rights, products or businesses of either party or their respective Affiliates, (ii) agree to any restrictions on the activities of either party or their respective Affiliates, or (iii) pay any material amount or take any other action to prevent, effect the dissolution of, vacate, or lift any decree, order, judgment, injunction, temporary restraining order, or other order in any suit or proceeding that would otherwise have the effect of preventing or delaying any of the transactions contemplated by an Additional Closing Notice.
(f)    Each Additional Closing shall take place remotely via the exchange of documents and signatures on the first business day following the satisfaction or waiver of the conditions set forth in Section 4 and Section 5 (other than those conditions that by their nature are to be satisfied at or immediately prior to the applicable Additional Closing, but subject to the satisfaction or waiver of those conditions) or at such other date, time and place as the Company and the Investor may agree in writing. At each Additional Closing, the Company will deliver or cause to be delivered to the Investor a copy of the irrevocable instructions to the Company’s transfer agent instructing such transfer agent to issue the Shares into book entry to the Investor and, concurrently, the Investor shall pay to the Company the Additional Closing Purchase Price for such Additional Closing, by wire transfer of immediately available funds in accordance with the Company’s instructions.
(g)    If the Company does not issue and sell to the Investor the entire amount of Additional Shares prior to the Outside Date, then the Company shall pay to the Investor an amount equal to (i) Three Million Dollars ($3,000,000) multiplied by (ii) 1.00 minus the quotient obtained by dividing the total Additional Closing Purchase Price actually paid by the Investor to the Company by Seventy-Five Million Dollars ($75,000,000). Any amount payable by the Company pursuant to this Section 1.3(g) shall be paid by wire transfer of immediately available funds in accordance with the

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Investor’s instructions as promptly as practicable and in any event within five (5) business days following the Outside Date.
1.4    Use of Proceeds; Use of Priority Review Voucher. The Company will use One Hundred and Five Million Dollars ($105,000,000) of the proceeds from the sale of the Initial Closing Shares for the purchase the priority review voucher issued by the United States Secretary of Health and Human Services and assigned tracking number PRV NDA 210365 (the “Priority Review Voucher”), that entitles the holder of such voucher to Priority Review, with the remainder of such proceeds to be used for other general corporate purposes. The Company will submit the Priority Review Voucher with the first NDA that it files with respect to rimegepant.
SECTION 2    

Representations and Warranties of the Company
Except as set forth on the Schedule of Exceptions attached hereto as Exhibit A, the Company hereby makes the following representations and warranties to the Investor. The Schedule of Exceptions shall be updated as necessary for each Additional Closing, and such updated Schedule of Exceptions shall be applicable to such Additional Closing, subject to the prior written consent of the Investor, which consent shall not be unreasonably withheld or delayed.
2.1    Organization and Good Standing and Qualifications. The Company is a BVI business company duly organized, validly existing and in good standing under the laws of the British Virgin Islands and has all requisite power and authority to own, lease, operate and occupy its properties and to carry on its business as now being conducted. Except as set forth on the Schedule of Exceptions, the Company does not own more than 50% of the outstanding capital stock of or control any other business entity. The Company is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted or property owned or leased by it makes such qualification necessary, other than those in which the failure so to qualify or be in good standing would not have a Material Adverse Effect. For purposes of this Agreement, “Material Adverse Effect” shall mean any event or condition that would reasonably be likely to have a material adverse effect on the business, operations, properties, or financial condition of the Company and its consolidated subsidiaries, taken as a whole, or adversely affect in any material respect the ability of the Company to perform its obligations, or Investor’s rights, under this Agreement; provided, that none of the following shall constitute a “Material Adverse Effect”: the effects of conditions or events that are generally applicable to the capital, financial, banking or currency markets and the biotechnology industry, and changes in the market price of the Company’s common shares, no par value per share (the “Common Shares”), except to the extent that such event, change or development disproportionately affects the Company, relative to other similarly situated companies in the biotechnology industry.
2.2    Authorization. (i) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement; (ii) the execution and delivery of this Agreement by the Company, the consummation by the Company of the transactions contemplated hereby and thereby and the issuance, sale and delivery of the Shares have been duly authorized by all necessary corporate action, and no further consent or authorization of the Company, its Board of

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Directors or its shareholders is required; and (iii)  the Agreement has been duly executed and delivered and constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, securities, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies, or indemnification or by other equitable principles of general application.
2.3    Valid Issuance of Shares. The issuance of the Shares has been duly authorized by all requisite corporate action. When the Shares are issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, the Shares will be duly and validly issued and outstanding, fully paid, and nonassessable, and will be free of all liens and restrictions on transfer other than restrictions on transfer under applicable state and federal securities laws. The Company has reserved a sufficient number of Preferred Shares for issuance to the Investor in accordance with the Company’s obligations under this Agreement. The Common Shares potentially issuable upon conversion of any Unredeemed Shares (as defined in the Terms to Update the Articles of Association) have been duly authorized and reserved for issuance by all requisite corporation action and, upon issuance in accordance with the Articles of Association, will be duly and validly issued, fully paid, and nonassessable, and will be free of all liens and restrictions on transfer other than restrictions on transfer under applicable state and federal securities laws.
2.4    No Conflict. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) contravene or conflict with the Memorandum and Articles of Association of the Company, as in effect as of the applicable Closing, (ii) contravene or conflict with or violate any federal, state, local or foreign statute, rule, regulation, judgment, order, writ or decree binding upon or applicable to the Company, (iii) contravene or conflict with or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material contract or other material agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation binding upon or applicable to the Company, or (iv) create or impose a lien, charge or encumbrance on any property of the Company under any agreement or other commitment to which the Company is a party or by which the Company is bound, in the case of each of clauses (iii) and (iv), which would have a Material Adverse Effect.
2.5    Consents. Except for the consents that have been obtained on or prior to the Closing or filings required to be made by the Company with federal or state securities commissions or the New York Stock Exchange (“NYSE”), no consent, approval, license, order, authorization, registration, declaration or filing with or of any governmental entity or other person is required to be done or obtained by the Company in connection with (i) the execution and delivery by the Company of this Agreement, (ii) the performance by the Company of its obligations under this Agreement, (iii) the consummation by the Company of any of the transactions contemplated by this Agreement, including the issuance and sale of the Shares in accordance with the terms hereof.
2.6    Compliance. The Company is not, and the execution and delivery of this Agreement and the consummation of the transactions contemplated herewith will not cause the Company to be (i) in violation or default of any provision of any instrument, mortgage, deed of trust, loan, contract,

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commitment filed with the Commission Documents (as defined below), (ii) in violation of any provision of any judgment, decree, order or obligation to which it is a party or by which it or any of its properties or assets are bound, or (iii) in violation of any federal, state or, to its knowledge, local statute, rule or governmental regulation, in the case of each of clauses (i), (ii) and (iii), which would have a Material Adverse Effect.
2.7    Capitalization. As of February 26, 2019 (the “Reference Date”), no Preferred Shares were issued and outstanding and a total of 44,262,658 Common Shares were issued and outstanding, increased thereafter solely as set forth in the next sentence. Other than in the ordinary course of business, the Company has not issued any shares since the Reference Date other than Common Shares issued pursuant to (i) employee benefit plans disclosed in the Commission Documents, and (ii) the exercise or conversion of outstanding warrants, options or other securities disclosed in the Commission Documents. The issued and outstanding shares of the Company have been duly and validly issued and are fully paid and nonassessable, were not issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities, and, for those shares issued until the Closing, have been issued in compliance with all federal and state securities laws, in each case except as would not reasonably be expected to have a Material Adverse Effect. Except as set forth in the Commission Documents, there are no outstanding rights (including, without limitation, preemptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any unissued shares or other equity interest in the Company, or any contract, commitment, agreement, understanding or arrangement of any kind to which the Company is a party and relating to the issuance or sale of any capital stock of the Company, any such convertible or exchangeable securities or any such rights, warrants or options. Without limiting the foregoing, no preemptive right, co-sale right, right of first refusal, registration right, or other similar right exists with respect to the Shares or the issuance and sale thereof. There are no shareholder agreements, voting agreements or other similar agreements with respect to the voting of the Shares to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s shareholders.
2.8    Commission Documents, Financial Statements. The Company’s Common Shares are registered pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and since January 1, 2018, the Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the Commission pursuant to the reporting requirements of the Exchange Act, including material filed pursuant to Section 13(a) or 15(d) of the Exchange Act (all of the foregoing, including filings incorporated by reference therein, being referred to herein as the “Commission Documents”). The Company’s Common Shares are currently listed or quoted on the NYSE. The Company is not in violation of the listing requirements of the NYSE and has no knowledge of any facts that would reasonably lead to delisting or suspension of its common shares from the NYSE in the foreseeable future. The Company is an “Early Stage Company” as defined in Section 312.03 of the NYSE Listing Company Manual as of the date hereof. As of its date, each Commission Document filed since January 1, 2018, complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder applicable to such document, and, as of its date, after giving effect to the information disclosed and incorporated by reference therein, no such Commission Document since January 1, 2018, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they

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were made, not misleading. As of their respective dates, the financial statements of the Company included in the Commission Documents filed with the Commission since January 1, 2018, complied as to form and substance in all material respects with applicable accounting requirements and the published rules and regulations of the Commission or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements), and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).
2.9    Internal Controls and Procedures. The Company maintains disclosure controls and procedures as such terms are defined in, and required by, Rule 13a-15 and Rule 15d-15 under the Exchange Act. Except as disclosed in the Commission Documents, such disclosure controls and procedures are effective as of the latest date of management’s evaluation of such disclosure controls and procedures as set forth in the Commission Documents to ensure that all material information required to be disclosed by the Company in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Commission. Except as disclosed in the Commission Documents, the Company maintains a system of internal controls over financial reporting sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; and (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP.
2.10    Material Adverse Change. Except as disclosed in the Commission Documents, since December 31, 2018, no event or series of events has or have occurred that would, individually or in the aggregate, have a Material Adverse Effect.
2.11    No Undisclosed Liabilities. To the Company’s knowledge, the Company and its consolidated subsidiaries, taken as a whole, do not have any liabilities, obligations, claims or losses (whether liquidated or unliquidated, secured or unsecured, absolute, accrued, contingent or otherwise) that would be required to be disclosed on a balance sheet of the Company and its consolidated subsidiaries (including the notes thereto) in conformity with GAAP and are not disclosed in the Commission Documents, other than those incurred in the ordinary course of the Company’s or its subsidiaries’ respective businesses since December 31, 2018.
2.12    No Undisclosed Events or Circumstances. Except for the transactions contemplated by this Agreement and such agreement whereby the Company will purchase the Priority Review Voucher (the “PRV Purchase Agreement”), no event or circumstance has occurred or exists with respect to the Company, its subsidiaries, or their respective businesses, properties, operations or financial condition, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed and which, individually or in the aggregate, would have a Material Adverse Effect.

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2.13    Actions Pending. There is no action, suit, claim, investigation or proceeding pending or, to the knowledge of the Company, threatened against the Company or any subsidiary which questions the validity of this Agreement or the transactions contemplated hereby or any action taken or to be taken pursuant hereto. Except as set forth in the Commission Documents, there is no action, suit, claim, investigation or proceeding pending or, to the knowledge of the Company, threatened, against or involving the Company, any subsidiary, or any of their respective properties or assets that could be reasonably expected to have a Material Adverse Effect. Except as set forth in the Commission Documents, no judgment, order, writ, injunction or decree or award has been issued by or, to the knowledge of the Company, requested of any court, arbitrator or governmental agency which could be reasonably expected to result in a Material Adverse Effect.
2.14    Compliance with Law. The businesses of the Company and its subsidiaries have been and are presently being conducted in accordance with all applicable federal, state and local governmental laws, rules, regulations and ordinances, except as would not reasonably be expected to cause a Material Adverse Effect. The Company and each of its subsidiaries have all franchises, permits, licenses, consents and other governmental or regulatory authorizations and approvals necessary for the conduct of its business as now being conducted by it, except for such franchises, permits, licenses, consents and other governmental or regulatory authorizations and approvals, the failure to possess which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
2.15    Exemption from Registration, Valid Issuance. Subject to, and in reliance on, the representations, warranties and covenants made herein by the Investor, the issuance and sale of the Shares in accordance with the terms and on the bases of the representations and warranties set forth in this Agreement and the issuance of the Common Shares potentially issuable upon conversion of any Unredeemed Shares (as defined in the Terms to Update the Articles of Association), may be issued and sold without registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereof. The sale and issuance of the Shares pursuant to, and the Company’s performance of its obligations under, this Agreement will not (i) result in the creation or imposition of any liens, charges, claims or other encumbrances upon the Shares or any of the assets of the Company, or (ii) entitle the holders of any outstanding shares of the Company to preemptive or other rights to subscribe to or acquire the Shares or other securities of the Company.
2.16    Transfer Taxes. All share transfer or other taxes (other than income taxes) which are required to be paid in connection with the sale and transfer of the Shares to be sold to Investor hereunder will be, or will have been, fully paid or provided for by the Company and all laws imposing such taxes will be or will have been fully complied with.
2.17    Investment Company. The Company is not and, after giving effect to the offering and sale of the Shares, will not be an “investment company” as defined in the Investment Company Act of 1940, as amended.
2.18    Brokers. Except as expressly set forth in this Agreement, no brokers, finders or financial advisory fees or commissions will be payable by the Company or any of its subsidiaries in respect of the transactions contemplated by this Agreement.

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SECTION 3    

Representations and Warranties of the Investor
The Investor hereby represents and warrants to the Company that:
3.1    Experience. The Investor is experienced in evaluating companies such as the Company, has such knowledge and experience in financial and business matters that the Investor is capable of evaluating the merits and risks of the Investor’s prospective investment in the Company, and has the ability to bear the economic risks of the investment.
3.2    Investment. The Investor is acquiring the Shares for investment for the Investor’s own account and not with the view to, or for resale in connection with, any distribution thereof. The Investor understands that the Shares have not been and will not be registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent as expressed herein. The Investor further represents that it does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to any third person with respect to any of the Shares.
3.3    Rule 144. The Investor acknowledges that the Shares must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available. The Investor is aware of the provisions of Rule 144 promulgated under the Securities Act which permit limited resale of shares purchased in a private placement subject to the satisfaction of certain conditions. In connection therewith, the Investor acknowledges that the Company will make a notation on its share ledger regarding the restrictions on transfers set forth in this Section 3, subject to Section 6.2, and will transfer the Shares on the books of the Company only to the extent not inconsistent herewith and therewith.
3.4    Access to Information. The Investor has received and reviewed information about the Company and has had an opportunity to discuss the Company’s business, management and financial affairs with its management and to review the Company’s facilities. The Investor has had a full opportunity to ask questions of and receive answers from the Company, or any person or persons acting on behalf of the Company, concerning the terms and conditions of an investment in the Shares. The Investor is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, except for the statements, representations and warranties contained in this Agreement.
3.5    Authorization. This Agreement when executed and delivered by the Investor will constitute a valid and legally binding obligation of the Investor, enforceable in accordance with its terms, subject to: (i) judicial principles respecting election of remedies or limiting the availability of specific performance, injunctive relief, and other equitable remedies; and (ii) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect generally relating to or affecting creditors’ rights.
3.6    Investor Status. The Investor acknowledges that it is either (i) an institutional “accredited investor” as defined in Rule 501(a) of Regulation D of the Securities Act (an “Institutional Accredited Investor”) or (ii) a “qualified institutional buyer” as defined in Rule 144A of the Securities

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Act, as indicated on Schedule A hereto, and the Investor shall submit to the Company such further assurances of such status as may be reasonably requested by the Company.
3.7    No Inducement. The Investor was not induced to participate in the offer and sale of the Shares by the filing of any registration statement in connection with any public offering of the Company’s securities, and the Investor’s decision to purchase the Shares hereunder was not influenced by the information contained in any such registration statement.
3.8    No Conflicts. The execution, delivery and performance by the Investor of this Agreement do not and will not (i) contravene or conflict with the organizational documents of the Investor, (ii) contravene or conflict with or constitute a default under any material provision of any law binding upon or applicable to the Investor or (iii) contravene or conflict with or constitute a default under any material contract or other material agreement, judgment, order, writ, injunction, citation, award or decree binding upon or applicable to the Investor.
3.9    Consent. No consent, approval, license, order, authorization, registration, declaration or filing with or of any governmental entity or other person is required to be done or obtained by the Investor in connection with (i) the execution and delivery by the Investor of this Agreement, (ii) the performance by the Investor of its obligations under this Agreement or (iii) the consummation by the Investor of any of the transactions contemplated by this Agreement.

SECTION 4    

Conditions to Investor’s Obligations at Closing
The obligations of the Investor under this Agreement are subject to the fulfillment on or before each Closing of each of the following conditions, any of which may be waived in writing by the Investor (except to the extent not permitted by law):
4.1    No Injunction, etc. No preliminary or permanent injunction or other binding order, decree or ruling issued by a court or governmental agency shall be in effect which shall have the effect of preventing the consummation of any of the transactions contemplated by this Agreement. No action or claim shall be pending before any court or quasi-judicial or administrative agency of any federal, state, local or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling or charge would be reasonably likely to (i) prevent consummation of any of the transactions contemplated by this Agreement, (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation or (iii) have the effect of making illegal the purchase of, or payment for, any of the Shares by the Investor.
4.2    Representations and Warranties. The representations and warranties of the Company contained in Section 2 shall have been true and correct in all material respects (except for such representations and warranties that are qualified by “materiality” or “Material Adverse Effect” which shall be true and correct in all respects) on and as of such Closing with the same effect as though such representations and warranties had been made on and as of such Closing.

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4.3    Antitrust Approvals. All governmental and regulatory filings, consents, authorizations, approvals and other licenses that are required for the consummation of the transactions contemplated hereby shall have been duly made and obtained, and all applicable waiting periods (and any extensions thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (the “HSR Act”) or any other applicable Antitrust Laws, shall have expired or been terminated.
4.4    Performance. The Company shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before such Closing.
4.5    Commission Documents, Financial Statements. The representations and warranties of the Company contained in Section 2.8 (disregarding any updated Schedule of Exceptions in respect thereof) shall be true and correct in all respects on and as of such Closing.
4.6    No Material Adverse Effect. Since the date of this Agreement, there shall not have been or occurred any Material Adverse Effect.
4.7    Compliance Certificate. A duly authorized officer of the Company shall deliver to the Investor at such Closing a certificate stating that the conditions specified in Sections 4.2, 4.3, 4.4 and 4.5 have been fulfilled and certifying and attaching the Company’s Memorandum and Articles of Association, as in effect as of the date of such Closing, and authorizing Board of Directors resolutions with respect to this Agreement and the transactions contemplated hereby.
4.8    Securities Laws. The offer and sale of the Shares to the Investor pursuant to this Agreement shall be exempt from the registration requirements of the Securities Act and the registration and/or qualification requirements of all applicable state securities laws.
4.9    Authorizations. All authorizations, approvals or permits, if any, of any governmental authority or regulatory body that are required in connection with the lawful issuance and sale of the Shares pursuant to this Agreement shall have been duly obtained and shall be effective on and as of such Closing.
4.10    Legal Opinion. The Investor shall have received legal opinions from counsel to the Company, each dated as of the date of such Closing and in a form reasonably satisfactory to the Investor.
4.11    PRV Purchase Agreement. In the case of the Initial Closing only, the Company shall have entered into the PRV Purchase Agreement.
4.9    Amended and Restated Memorandum and Articles of Association. In the case of the Initial Closing only, the Company shall have filed with the Registrar of Corporate Affairs in the British Virgin Islands (the “Registrar”), and shall have registered, (i) the amended and restated Memorandum and Articles of Association, updated to memorialize the terms of the Preferred Shares as set forth on Exhibit B (the “Terms to Update the Articles of Association”), with any revisions required by BVI law and mutually agreed between the Investor and the Company and (ii) any notice of change of authorized shares, to the extent required under BVI law.

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SECTION 5    

Conditions to the Company’s Obligations at Closing
The obligations of the Company to the Investor under this Agreement are subject to the fulfillment on or before each Closing of each of the following conditions by the Investor:
5.1    Representations and Warranties. The representations and warranties of the Investor contained in Section 3 shall be true and correct in all material respects (except for such representations and warranties that are qualified by materiality which shall be true and correct in all respects) on and as of such Closing with the same effect as though such representations and warranties had been made on and as of such Closing.
5.2    Securities Law Compliance. The offer and sale of the Shares issuable at such Closing to the Investor pursuant to this Agreement shall be exempt from the registration requirements of the Securities Act and the registration and/or qualification requirements of all applicable state securities laws.
5.3    Antitrust Approvals. All governmental and regulatory filings, consents, authorizations, approvals and other licenses that are required for the consummation of the transactions contemplated hereby shall have been duly made and obtained, and all applicable waiting periods (and any extensions thereof) under the HSR Act or any other applicable Antitrust Laws, shall have expired or been terminated.
5.4    Authorization. All authorizations, approvals or permits, if any, of any governmental authority or regulatory body that are required in connection with the lawful issuance and sale of the Shares pursuant to this Agreement shall have been duly obtained and shall be effective on and as of such Closing.


SECTION 6    
Resales; Covenants
6.1    Rule 144 Reporting. With a view to making available to the Investor the benefits of certain rules and regulations of the Commission which may permit the sale of the Shares to the public without registration and, in each case, for so long as the Investor holds Shares that are not freely transferable without restriction under the Securities Act (including the current public information requirement under Rule 144), the Company agrees to use commercially reasonable efforts to:
(a)    Make and keep public information available, as those terms are understood and defined in Rule 144 promulgated under the Securities Act;

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(b)    File with the Commission in a timely manner all reports and other documents required of the Company under the Exchange Act; and
(c)    Furnish the Investor forthwith upon request (i) a written statement by the Company as to its compliance with the public information requirements of said Rule 144, (ii) a copy of the most recent annual or quarterly report of the Company, and (iii) such other reports and documents as may be reasonably requested in availing the Investor of any rule or regulation of the Commission permitting the sale of any such securities without registration.
6.2    Restrictive Legend. The Investor agrees to the imprinting, so long as is required by this Section 6, of a restrictive legend in substantially the following form:
“THE SECURITIES EVIDENCED OR CONSTITUTED HEREBY HAVE BEEN ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) AND MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE ACT UNLESS EITHER (i) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH DISPOSITION OR (ii) THE SALE OF SUCH SECURITIES IS MADE PURSUANT TO SECURITIES AND EXCHANGE COMMISSION RULE 144.”
The legend set forth in this Section 6.2 and the related notation in the Company’s register of members shall be removed and the Company shall issue a certificate without such legend or any other legend to the holder of the Shares or issue to such holder by electronic delivery at the applicable balance account at The Depository Trust Company, if (i) the Shares are registered for resale under the Securities Act, (ii) the Shares are sold or transferred in compliance with to Rule 144 and the Company has received such customary certifications and other information as it shall have reasonably requested to demonstrate compliance of such transfer or sale with Rule 144, or (iii) the Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144. Following Rule 144 becoming available for the resale of Shares, without the requirement for the Company to be in compliance with the current public information required under Rule 144, the Company shall (at the Company’s expense), upon the written request of Investor, cause its counsel to issue to the Company’s transfer agent a legal opinion authorizing the issuance of a certificate representing the Shares without any restrictive or other legends, if requested by such transfer agent.
6.3    NYSE Listing of Shares. To the extent the Company has not done so prior to the date of this Agreement, the Company shall promptly apply to cause the aggregate number of Common Shares issuable upon the conversion of any Unredeemed Shares (as defined in the Terms to Update the Articles of Association) to be approved for listing on the NYSE, subject to official notice of issuance.
6.4    Reasonable Best Efforts; Filings. Subject to the terms and conditions of this Agreement, each of the Company and the Investor shall cooperate with each other and use its reasonable best efforts to promptly take, or cause to be taken, all actions, and do, or cause to be done, and assist

13




and cooperate with each other in doing, all things necessary, proper or advisable to cause the conditions to the Initial Closing to be satisfied as promptly as reasonably practicable following the date hereof, including incorporating the Terms to Update the Articles of Association into the Company’s Amended and Restated Memorandum and Articles of Association, with any reasonable adjustments thereto as required by the NYSE that do not materially disadvantage either party hereto, and preparing and filing all documentation to effect all necessary notifications, filings and other information required to complete the Closings and to obtain as expeditiously as possible all consents, expirations of waiting periods and authorizations necessary or advisable to be obtained from any third party, the NYSE and/or any governmental entity in order to consummate the transactions contemplated by this Agreement.
6.5    Further Assurances. Each of the Investor and the Company shall execute such further documents and shall take, or shall cause to be taken, such further actions as may be reasonably required to carry out the provisions of this Agreement and give effect to the transactions contemplated hereby. If the Investor determines that a filing or notification under any applicable Antitrust Law is necessary or advisable in connection with any issuance Common Shares issuable upon conversion of the Shares, then Sections 1.3(c), (d) and (e) of this Agreement shall apply to any such filing or notification under any applicable Antitrust Law mutantis mutantis.

SECTION 7    
Indemnification
7.1    Each party (an “Indemnifying Party”) hereby indemnifies and holds harmless the other party, such other party’s respective officers, directors, employees, consultants, representatives and advisers, and any and all other Persons, directly or indirectly, controlling, controlled by, or under common control with, such Person (each, an “Affiliate”) of the foregoing (each of the foregoing, an “Indemnified Party”) from and against all losses, liabilities, costs, damages and expense (including reasonable legal fees and expenses) (collectively, “Losses”) suffered or incurred by any such Indemnified Party to the extent arising from, connected with or related to (i) breach of any representation or warranty of such Indemnifying Party in this Agreement; and (ii) breach of any covenant or undertaking of any Indemnifying Party in this Agreement. If an event or omission (including, without limitation, any claim asserted or action or proceeding commenced by a third party) occurs which an Indemnified Party asserts to be an indemnifiable event pursuant to this Section 7, the Indemnified Party will provide written notice to the Indemnifying Party, setting forth the nature of the claim and the basis for indemnification under this Agreement. The Indemnified Party will give such written notice to the Indemnifying Party immediately after it becomes aware of the existence of any such event or occurrence. Such notice will be a condition precedent to any obligation of the Indemnifying Party to act under this Agreement but will not relieve it of its obligations under the indemnity except to the extent that the failure to provide prompt notice as provided in this Agreement prejudices the Indemnifying Party with respect to the transactions contemplated by this Agreement and to the defense of the liability. In case any such action is brought by a third party against any Indemnified Party and it notifies the Indemnifying Party of the commencement thereof, the Indemnifying Party will be entitled to participate therein and, to the extent that it wishes, to assume the defense and settlement thereof with counsel reasonably selected

14




by it and, after notice from the Indemnifying Party to the Indemnified Party of such election so to assume the defense and settlement thereof, the Indemnifying Party will not be liable to the Indemnified Party for any legal expenses of other counsel or any other expenses subsequently incurred by such Indemnified Party in connection with the defense thereof, provided, however, that an Indemnified Party shall have the right to employ separate counsel at the expense of the Indemnifying Party if (i) the employment thereof has been specifically authorized in writing by the Indemnifying Party; or (ii) representation of both parties by the same counsel would be inappropriate due to actual or potential conflicts of interests between such parties (which such judgment shall be made by the Indemnified Party in good faith after consultation with counsel). The Indemnified Party agrees to cooperate fully with (and to provide all relevant documents and records and make all relevant personnel available to) the Indemnifying Party and its counsel, as reasonably requested, in the defense of any such asserted claim at no additional cost to the Indemnifying Party. No Indemnifying Party will consent to the entry of any judgment or enter into any settlement with respect to any such asserted claim without the prior written consent of the Indemnified Party, not to be unreasonably withheld or delayed, (a) if such judgment or settlement does not include as an unconditional term thereof the giving by each claimant or plaintiff to each Indemnified Party of a release from all liability in respect to such claim or (b) if, as a result of such consent or settlement, injunctive or other equitable relief would be imposed against the Indemnified Party or such judgment or settlement could materially and adversely affect the business, operations or assets of the Indemnified Party. No Indemnified Party will consent to the entry of any judgment or enter into any settlement with respect to any such asserted claim without the prior written consent of the Indemnifying Party, not to be unreasonably withheld or delayed. If an Indemnifying Party makes a payment with respect to any claim under the representations or warranties set forth herein and the Indemnified Party subsequently receives from a third party or under the terms of any insurance policy a sum in respect of the same claim, the receiving party will repay to the other party such amount that is equal to the sum subsequently received.

7.2    Limitations on Liability. No party hereto shall be liable for any punitive or special damages under this Section 7 (and no claim for indemnification hereunder shall be asserted) as a result of any breach or violation of any covenant or agreement of such party (including under this Section 7) in or pursuant to this Agreement.
7.3    Exclusive Remedy. The rights of the parties hereto pursuant to (and subject to the conditions of) this Section 7 shall be the sole and exclusive remedy of the parties hereto and their respective Affiliates with respect to any Losses (whether based in contract, tort or otherwise) resulting from or relating to any breach of the representations, warranties covenants and agreements made under this Agreement or any certificate, document or instrument delivered hereunder, and each party hereto hereby waives, to the fullest extent permitted under applicable law, and agrees not to assert after the Initial Closing, any other claim or action in respect of any such breach. Notwithstanding the foregoing, claims for common law fraud shall not be waived or limited in any way by this Section 7.


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SECTION 8    

Miscellaneous
8.1    Definitions: As used in this Agreement, the terms below shall have the following meanings:
(a)    Antitrust Laws” means any federal, state or foreign law, regulation or decree, including the HSR Act, designed to prohibit, restrict or regulate actions for the purpose or effect of monopolization or restraint of trade.
(b)    HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
(c)    Merger Control Authorities” means all relevant governmental authorities under applicable Antitrust Laws, including the FTC and DOJ.
8.2    Governing Law. This Agreement shall be governed in all respects by the laws of the State of New York as applied to agreements entered into and performed entirely in the State of New York by residents thereof.
8.3    Survival. The representations, warranties, covenants and agreements made herein shall survive any investigation made by the Investor and the last Additional Closing (or, if no Additional Closing occurs, the Initial Closing) until the expiration of the applicable statute of limitations.
8.4    Successors, Assigns. Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto. This Agreement may not be assigned by either party without the prior written consent of the other; except that either party may assign this Agreement to an Affiliate of such party or to any third party that acquires all or substantially all of such party’s business, whether by merger, sale of assets or otherwise.
8.5    Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be sent by facsimile (receipt confirmed) or mailed by registered or certified mail, postage prepaid, return receipt requested, or otherwise delivered by hand or by messenger, addressed
if to the Investor, at the following address:
  
RPI Finance Trust
c/o RP Management, LLC
110 East 59th St, 33rd Floor
New York, NY 10022
Attention: George Lloyd
Telephone: (212) 883-2280
E-mail: glloyd@royaltypharma.com
Facsimile: (212) 883-2260

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with a copy to:
Goodwin Procter LLP
100 Northern Avenue
Boston, Massachusetts 02210
Attention: Arthur McGivern
Telephone: 617-570-1971
Facsimile: (617) 523-1231
E-mail: AMcGivern@goodwinlaw.com
if to the Company, at the following address:

Biohaven Pharmaceutical Holding Company Ltd.
215 Church Street, Suite 304
New Haven, Connecticut 06510
Attention:    Vlad Coric
Facsimile:    203-244-4239
E-mail:        vlad.coric@biohavenpharma.com

with a copy (which shall not constitute notice) to:

Cooley LLP
One Freedom Square
Reston Town Center
11951 Freedom Drive
Reston, VA 20190-5656Attention:    Darren DeStefano
Facsimile:     703-456-8100
E-mail:     ddestefano@cooley.com
or at such other address as one party shall have furnished to the other party in writing. All notices and communications under this Agreement shall be deemed to have been duly given (i) when delivered by hand, if personally delivered, (ii) when received by a recipient, if sent by email, (iii) when sent, if sent by facsimile, with an acknowledgement of sending being produced by the sending facsimile machine or (iv) one business day following sending within the United States by overnight delivery via commercial one-day overnight courier service.
8.6    Expenses. Each of the Company and the Investor shall bear its own expenses and legal fees incurred on its behalf with respect to this Agreement and the transactions contemplated hereby.
8.7    Finder’s Fees. Each of the Company and the Investor shall indemnify and hold the other harmless from any liability for any commission or compensation in the nature of a finder’s fee, placement fee or underwriter’s discount (including the costs, expenses and legal fees of defending against such liability) for which the Company or the Investor, or any of its respective partners, employees, or representatives, as the case may be, is responsible.

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8.8    Counterparts. This Agreement may be executed in counterparts, each of which shall be enforceable against the party actually executing the counterpart, and all of which together shall constitute one instrument.
8.9    Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party.
8.10    Entire Agreement. This Agreement, including the exhibits and schedules attached hereto, constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof. No party shall be liable or bound to any other party in any manner with regard to the subjects hereof or thereof by any warranties, representations or covenants except as specifically set forth herein or therein.
8.11    Waiver. The failure of either party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition by the other party. None of the terms, covenants and conditions of this Agreement can be waived except by the written consent of the party waiving compliance.
8.12    Trustee Capacity of Wilmington Trust Company. Notwithstanding anything contained herein to the contrary, it is expressly understood and agreed by the parties hereto that (i) this Agreement is executed and delivered by Wilmington Trust Company, not individually or personally but solely in its trustee capacity, in the exercise of the powers and authority conferred and vested in it under the trust deed of the Investor, (ii) each of the representations, undertakings and agreements herein made on the part of the Investor is made and intended not as a personal representation, undertaking and agreement by Wilmington Trust Company but is made and intended for the purpose of binding only the Investor and (iii) under no circumstances shall Wilmington Trust Company be personally liable for the payment of any indebtedness or expenses of the Investor or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Investor under this Agreement or any related documents

[SIGNATURE PAGES FOLLOW]


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IN WITNESS WHEREOF, the parties have executed this Series A Preferred Share Purchase Agreement as of the date first set forth above.
 
 
 
 
BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
 
 
 
 
By:
/s/ Vlad Coric MD
 
Name: Vlad Coric MD
 
Title: Chief Executive Officer
 
 
 
 
 
 
RPI FINANCE TRUST
 
 
By:
Wilmington Trust Company, not in its individual capacity but solely in its capacity as owner trustee
 
 
 
 
By:
/s/ Cynthia L. Major
 
Name: Cynthia L. Major
 
Title: Officer
 
 
 





Schedule A
EXHIBIT A
[Attachments omitted in accordance with Item 601(a)(5) of Regulation S-K as they do not contain information material to an investment or voting decision.]







EXHIBIT B
Terms to Update the Articles of Association
[Exhibit omitted in accordance with Item 601(a)(5) of Regulation S-K as it does not contain information material to an investment or voting decision. The preliminary terms set forth in the exhibit were superseded by the final terms included in the Amended and Restated Memorandum and Articles of Association filed as Exhibit 3.1 to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on April 8, 2019]




Exhibit 31.1
 
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 
I, Vlad Coric, M.D., certify that:
 
1.                       I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2019 of Biohaven Pharmaceutical Holding Company Ltd. (the “registrant”);
 
2.                       Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.                       Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.                       The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

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

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

d.
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.                       The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
(a)                 All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
(b)                 Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date:  May 8, 2019
 
 
/s/ Vlad Coric, M.D.
 
Vlad Coric, M.D.
 
President and Chief Executive Officer
 
(principal executive officer)




Exhibit 31.2
 
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 
I, Jim Engelhart, certify that:
 
1.                       I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2019 of Biohaven Pharmaceutical Holding Company Ltd. (the “registrant”);
 
2.                       Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.                       Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.                       The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

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

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

d.
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.                       The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
(a)                 All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
(b)                 Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date: May 8, 2019
 
 
/s/ Jim Engelhart
 
Jim Engelhart
 
Chief Financial Officer
 
(principal financial officer)




Exhibit 32.1
 
CERTIFICATIONS OF
PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Vlad Coric, M.D., President and Chief Executive Officer of Biohaven Pharmaceutical Holding Company Ltd. (the “Company”), and Jim Engelhart, Chief Financial Officer of the Company, each hereby certifies that, to the best of his knowledge:
 
1.                       The Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2019, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and
 
2.                       The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
IN WITNESS WHEREOF, the undersigned have set their hands hereto as of the 8 day of May 2019.
 
/s/ Vlad Coric, M.D.
 
/s/ Jim Engelhart
Vlad Coric, M.D.
 
Jim Engelhart
President and Chief Executive Officer (principal executive officer)
 
Chief Financial Officer (principal financial officer)
 

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