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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
OR
         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 001-38080
bhvn-20220630_g1.jpg
Biohaven Pharmaceutical Holding Company Ltd.
(Exact Name of Registrant as Specified in its Charter)
British Virgin Islands Not applicable
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
c/o Biohaven Pharmaceuticals, Inc.
215 Church Street, New Haven, Connecticut
 06510
(Address of principal executive offices) (Zip Code)
(203) 404-0410
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Shares, no par valueBHVNNew York Stock Exchange

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



Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmall reporting company
 Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
As of August 4, 2022, the registrant had 71,494,798 common shares, without par value per share, outstanding.
2











Part I.     Financial Information

Item 1.    Condensed Consolidated Financial Statements (Unaudited)

Index to Condensed Consolidated Financial Statements (Unaudited)
Page
Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021
Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2022 and 2021
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021
Notes to Condensed Consolidated Financial Statements

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BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share amounts)
June 30, 2022December 31, 2021
(Unaudited)
Assets
Current assets:
Cash and cash equivalents$235,807 $171,945 
Marketable securities317,679 192,648 
Trade receivable, net352,449 308,269 
Inventory106,561 80,608 
Prepaid expenses100,360 88,838 
Other current assets61,485 33,946 
Total current assets1,174,341 876,254 
Property and equipment, net15,727 14,690 
Intangible assets, net75,112 56,438 
Other assets121,069 129,830 
Total assets$1,386,249 $1,077,212 
Liabilities and Shareholders’ Deficit
Current liabilities:
Accounts payable$64,149 $51,683 
Accrued expenses and other current liabilities545,307 420,019 
Current portion of mandatorily redeemable preferred shares62,500 62,500 
Total current liabilities671,956 534,202 
Long-term debt764,983 626,720 
Liability related to sale of future royalties, net388,027 367,645 
Mandatorily redeemable preferred shares, net180,213 155,737 
Derivative liabilities110,129 13,110 
Obligation to perform R&D services29,972 50,571 
Other long-term liabilities46,527 12,236 
Total liabilities2,191,807 1,760,221 
Commitments and contingencies (Note 15)
Contingently redeemable non-controlling interests 60,000 
Shareholders’ deficit:
Common shares, no par value; 200,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 71,111,071 and 66,933,531 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively
2,181,398 1,676,792 
Additional paid-in capital167,021 169,656 
Accumulated other comprehensive loss(5,811)(73)
Accumulated deficit(3,143,541)(2,585,755)
Total shareholders’ deficit attributable to Biohaven Pharmaceutical Holding Company Ltd.(800,933)(739,380)
Non-controlling interests in consolidated subsidiaries(4,625)(3,629)
Total shareholders' deficit(805,558)(743,009)
Total liabilities and shareholders’ deficit$1,386,249 $1,077,212 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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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 June 30,Six Months Ended June 30,
 2022202120222021
Revenues:
Product revenue, net$193,954 $92,933 $317,544 $136,756 
Collaboration and other revenue
21,125  216,387  
Total revenues215,079 92,933 533,931 136,756 
Operating expenses:
Cost of sales
35,741 17,339 62,083 30,201 
Research and development218,480 77,428 337,579 184,539 
Selling, general and administrative250,455 170,057 477,698 329,580 
Total operating expenses504,676 264,824 877,360 544,320 
Loss from operations(289,597)(171,891)(343,429)(407,564)
Other income (expense):
Interest expense(17,114)(7,836)(34,330)(15,567)
Interest expense on mandatorily redeemable preferred shares(8,077)(8,042)(15,994)(15,985)
Interest expense on liability related to sale of future royalties(18,045)(14,499)(35,359)(28,007)
Change in fair value of derivatives(111,197)(1,490)(107,593)(1,700)
Gain from equity method investment
   5,261 
Other income (expense), net
2,229 (3,051)2,310 (4,751)
Total other expense, net
(152,204)(34,918)(190,966)(60,749)
Loss before provision for income taxes
(441,801)(206,809)(534,395)(468,313)
Provision for income taxes
84 4,350 24,387 8,174 
Net loss(441,885)(211,159)(558,782)(476,487)
Net loss attributable to non-controlling interests
498 540 996 900 
Deemed dividend upon repurchase of preferred shares in consolidated subsidiary
  (92,673) 
Net loss attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd.
$(441,387)$(210,619)$(650,459)$(475,587)
Net loss per share attributable to common shareholders of Biohaven Pharmaceutical Holding Company Ltd. — basic and diluted
$(6.21)$(3.23)$(9.20)$(7.48)
Weighted average common shares outstanding—basic and diluted71,043,693 65,112,179 70,689,949 63,584,932 
Comprehensive loss:
Net loss$(441,885)$(211,159)$(558,782)$(476,487)
Other comprehensive loss, net of tax
(3,413)(129)(5,738)(34)
Comprehensive loss(445,298)(211,288)(564,520)(476,521)
Less: comprehensive loss attributable to non-controlling interests498 540 996 900 
Comprehensive loss attributable to Biohaven Pharmaceutical Holding Company Ltd.
$(444,800)$(210,748)$(563,524)$(475,621)
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
 Six Months Ended June 30,
 20222021
Cash flows from operating activities:
Net loss$(558,782)$(476,487)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash share-based compensation expense122,094 74,312 
Interest expense on mandatorily redeemable preferred shares 15,985 
Interest expense on liability related to sale of future royalties35,359 28,007 
Deferred interest paid-in-kind on long-term debt13,037 5,649 
Acquisition of IPR&D asset93,747  
Issuance of common shares as payment for license agreement
1,779 4,243 
Change in fair value of derivatives107,593 1,700 
Gain from equity method investment
 (5,261)
Depreciation and amortization9,783 11,278 
Change in obligation to perform R&D services(12,326)(10,205)
Other non-cash items373 2,993 
Changes in operating assets and liabilities:
Trade receivable, net
(44,180)(48,526)
Inventory
(29,088)(19,046)
Prepaid expenses, other current assets, and other assets(35,273)(58,173)
Accounts payable12,466 5,085 
Accrued expenses, other current liabilities, and other liabilities125,738 35,730 
Net cash used in operating activities$(157,680)$(432,716)
Cash flows from investing activities:
Purchases of marketable securities(246,816) 
Sales of marketable securities54,015 113,441 
Maturities of marketable securities62,893 48,852 
Purchases of property and equipment(2,393)(1,657)
Payment for intangible asset
(20,000) 
Payment for IPR&D asset acquisition
(35,000) 
Net cash (used in) provided by investing activities
$(187,301)$160,636 
Cash flows from financing activities:
Proceeds from issuance of long-term debt125,000  
Proceeds from issuance of common shares252,000 308,743 
Proceeds from obligation to perform R&D services 100,000 
Proceeds from the issuance of series B preferred shares29,158 35,170 
Proceeds from exercise of share options
9,983 8,643 
Payments for term loan, finance leases, and other(6,224)(6,369)
Net cash provided by financing activities$409,917 $446,187 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(2,722)(189)
Net increase in cash, cash equivalents and restricted cash
62,214 173,918 
Cash, cash equivalents and restricted cash at beginning of period174,343 134,231 
Cash, cash equivalents and restricted cash at end of period$236,557 $308,149 

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

1.   Nature of the Business and Basis of Presentation
Biohaven Pharmaceutical Holding Company Ltd. (“we,” “us," "our," "Biohaven" or the “Company”) was incorporated in Tortola, British Virgin Islands in September 2013. We are a biopharmaceutical company with a portfolio of innovative product candidates targeting neurological diseases, including rare disorders. The Company's lead product, NURTEC® ODT (rimegepant), was approved by the U.S. Food and Drug Administration ("FDA") in February 2020, for the acute treatment of migraine and was approved for the preventive treatment of migraine in May 2021. NURTEC ODT is the first and only calcitonin gene-related peptide ("CGRP") receptor antagonist available in a quick-dissolve orally dissolving tablet ("ODT") formulation that is approved by the FDA for both the acute and preventive treatment of migraine in adults. In April 2022, the European Commission approved rimegepant 75 mg (available as an ODT), for the prophylaxis and acute treatment of migraine. VYDURA™ (rimegepant) will be the commercial name for rimegepant in the EU. Our Neuroinnovation portfolio includes product candidates based on multiple mechanisms — CGRP receptor antagonists, glutamate modulators, myeloperoxidase inhibition, Kv7 ion channel activators ("Kv7"), and Myostatin inhibition — which we believe have the potential to significantly alter existing treatment approaches across a diverse set of neurological indications with high unmet need in both large and orphan indications.
The Company is subject to risks and uncertainties common to companies in the biopharmaceutical industry, including, but not limited to, the risks associated with developing product candidates at each stage of non-clinical and clinical development; the challenges associated with gaining regulatory approval of such product candidates; the risks associated with commercializing pharmaceutical products for marketing and sale; the potential for development by third parties of new technological innovations that may compete with the Company’s products; the dependence on key personnel; the challenges of protecting proprietary technology; the need to comply with government regulations; the high costs of drug development; and the uncertainty of being able to secure additional capital when needed to fund operations.
The Company has incurred recurring losses since its inception, had an accumulated deficit as of June 30, 2022, and expects to continue to generate operating
losses during the continued global commercial launch of rimegepant. Prior to the commercial launch of rimegepant the Company has primarily raised funds through sales of equity in private placements and public offerings, sale of revenue participation rights related to potential future royalties, and debt financings.
As of August 5, 2022, the issuance date of our condensed consolidated financial statements, the Company expects that its cash, cash equivalents and marketable securities as of June 30, 2022, its future operating cash flows from sales of NURTEC ODT, Series B Preferred Shares receipts, and product sales and other proceeds from its Pfizer Collaboration will be sufficient to fund its current forecast for operating expenses, including commercial operations, financial commitments and other cash requirements for more than one year. The Company may need to raise additional capital to execute its business plans and growth strategy until it is profitable. If no additional capital is raised through either public or private equity financings, debt financings, strategic relationships, alliances and licensing agreements, or a combination thereof, the Company may delay, limit or reduce discretionary spending in areas related to research and development activities and other general and administrative expenses in order to fund its operating costs and working capital needs.
Pfizer Merger and Distribution Agreement
On May 9, 2022, the Company, Pfizer and a wholly owned subsidiary of Pfizer (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, Pfizer will acquire all outstanding shares of Biohaven for $148.50 per share in cash and Merger Sub will merge with and into the Company (the “Pfizer Merger”), with the Company surviving the Pfizer Merger as a wholly owned subsidiary of Pfizer.
In connection with the Merger Agreement, Biohaven and Biohaven Research Ltd. entered into a Separation and Distribution Agreement, dated as of May 9, 2022 (the “Distribution Agreement”). In connection with the Distribution Agreement, the Board of Directors of the Company approved and directed management to effect the spin-off of the Kv7 ion channel activator, glutamate modulation, MPO inhibition and myostatin inhibition platforms, preclinical product candidates, and certain corporate infrastructure currently owned by
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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)
1.   Nature of the Business and Basis of Presentation (Continued)
Biohaven, or collectively the “Biohaven Research Business”.
To implement the spin-off, the Company expects to transfer the related license agreements, intellectual property and certain corporate infrastructure to Biohaven Research Ltd, through a series of internal restructuring transactions, referred to as the pre-closing reorganization.
To effect the spin-off, each of the Company's shareholders will receive one common share of Biohaven Research Ltd. for every two common shares of Biohaven held of record at the close of business on the record date for the distribution. Upon completion of the spin-off, Biohaven Research Ltd. will be a stand-alone, publicly traded company focused on the development of the Biohaven Research Business.
Pfizer Collaboration
On November 9, 2021, the Company entered into a strategic commercialization arrangement with Pfizer Inc. ("Pfizer"), including a collaboration and license agreement and a related sublicense agreement (the "Pfizer Collaboration"), pursuant to which Pfizer would commercialize product candidates containing the Company's proprietary compounds rimegepant (BHV-3000) and gains rights to zavegepant (BHV-3500) (the "Licensed Products") in all countries worldwide outside of the United States (the "Territory"). The Pfizer Collaboration became effective on January 4, 2022. Refer to Note 13, "Collaboration, License and Other Agreements" for further details.
2.   Summary of Significant Accounting Policies
Our significant accounting policies are described in Note 2 of the notes to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 (the "2021 Form 10-K"). Updates to our accounting policies, including impacts from the adoption of new accounting standards, are discussed below in this Note 2.
Basis of Presentation
The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its controlled subsidiaries after elimination of all significant intercompany accounts and transactions. Investments in companies in which the Company owns less than a 50% equity interest and where it exercises significant influence over the
operating and financial policies of the investee are accounted for using the equity method of accounting.
The financial statements of our subsidiaries with functional currencies other than the U.S. dollar are translated into U.S. dollars using period-end exchange rates for assets and liabilities, historical exchange rates for shareholders' equity (deficit) and weighted average exchange rates for operating results. Translation gains and losses are included in accumulated other comprehensive income, net of tax, in shareholders' deficit. Foreign currency transaction gains and losses are included in other income (expense) in the condensed consolidated statements of operations and comprehensive loss.
Reclassifications
Certain items in the prior period’s condensed consolidated financial statements have been reclassified to conform to the current period presentation.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of income and expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, revenue recognition, interest expense on liability related to sale of future royalties, valuation of derivative liabilities, and income taxes. In addition, management’s assessment of the Company’s ability to continue as a going concern involves the estimation of the amount and timing of future cash inflows and outflows. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.
Unaudited Interim Condensed Consolidated Financial Information
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. The accompanying unaudited condensed consolidated financial statements do not include all of the information and footnotes required by
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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)
2.   Summary of Significant Accounting Policies (Continued)


accounting principles generally accepted in the United States of America for complete consolidated financial statements. The accompanying year-end condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of June 30, 2022 and the results of its operations for the three and six months ended June 30, 2022 and 2021 and its cash flows for the six months ended June 30, 2022 and 2021. The results for the three and six months ended June 30, 2022 are not necessarily indicative of results to be expected for the year ending December 31, 2022, any other interim periods or any future year or period.  The financial information included herein should be read in conjunction with the financial statements and notes in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.
Revenue Recognition - Collaboration and Other Revenue
The Company analyzes its collaboration arrangements to assess whether they are within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities. This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and those that are more reflective of a vendor-customer relationship and, therefore, within the scope of ASC 606, Revenue from Contracts with Customers ("ASC 606"). For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently, generally by analogy to ASC 606. The accounting treatment pursuant to ASC 606 is outlined below.
The terms of licensing and collaboration agreements entered into typically include payment of one or more of the following: non-refundable, up-front
license fees; development, regulatory and commercial milestone payments; payments for manufacturing supply and research and development services and royalties on net sales of licensed products. Each of these payments results in collaboration and other revenue, except for revenues related to manufacturing supply services, which are classified as product revenue. The core principle of ASC 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received in exchange for those goods or services.
In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.
Amounts received prior to recognizing revenue are recorded as contract liabilities in the Company’s condensed consolidated balance sheets.
At contract inception, the Company assesses the goods or services promised in a contract with a customer and identifies those distinct goods and services that represent a performance obligation. A promised good or service may not be identified as a performance obligation if it is immaterial in the context of the contract with the customer, if it is not separately identifiable from other promises in the contract (either because it is not capable of being separated or because it is not separable in the context of the contract), or if the promised good or service does not provide the customer with a material right.
The Company considers the terms of the contract to determine the transaction price. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration will only be included in the transaction price when it is not considered constrained, which is when it is probable that a significant reversal in
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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)
2.   Summary of Significant Accounting Policies (Continued)


the amount of cumulative revenue recognized will not occur.
If it is determined that multiple performance obligations exist, the transaction price is allocated at the inception of the agreement to all identified performance obligations based on the relative standalone selling prices ("SSP"). The relative SSP for each deliverable is estimated using external sourced evidence if it is available. If external sourced evidence is not available, the Company uses its best estimate of the SSP for the deliverable.
Revenue is recognized when, or as, the Company satisfies a performance obligation by transferring a promised good or service to a customer. An asset is transferred when, or as, the customer obtains control of that asset, which for a service is considered to be as the services are received and used. The Company recognizes revenue over time by measuring the progress toward complete satisfaction of the relevant performance obligation using an appropriate input or output method based on the nature of the service promised to the customer.
After contract inception, the transaction price is reassessed at every period end and updated for changes such as resolution of uncertain events. Any change in the transaction price is allocated to the performance obligations on the same basis as at contract inception, or to a single performance obligation as applicable.
Management may be required to exercise considerable judgment in estimating revenue to be recognized. Judgment is required in identifying performance obligations, estimating the transaction price, estimating the SSP of identified performance obligations, which may include forecasted revenue, development timelines, estimated future costs, discount rates and probabilities of technical and regulatory success, and estimating the progress towards satisfaction of performance obligations.
Acquired In-Process Research and Development
IPR&D that the Company acquires in conjunction with the acquisition of a business represents the fair value assigned to incomplete research projects which, at the time of acquisition, have not reached technological feasibility. The amounts are capitalized and accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment of the projects. Upon successful completion of each project, the asset is classified as a definite-lived intangible and the Company will make a determination as to the then-useful life of the intangible
asset, generally determined by the period in which the substantial majority of the cash flows are expected to be generated, and begin amortization.
The Company evaluates IPR&D for impairment at least annually, or more frequently if impairment indicators exist, by performing a quantitative test that compares the fair value of the IPR&D intangible asset with its carrying value. If the fair value is less than the carrying amount, an impairment loss is recognized in operating results.
If we acquire an asset or group of assets that do not meet the definition of a business under applicable accounting standards, the acquired IPR&D is expensed on its acquisition date, unless it has an alternative future use. Future costs to develop these assets are recorded to research and development expense as they are incurred.
Recently Adopted Accounting Pronouncements
Effective January 1, 2022 the Company adopted ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The update addresses issues identified as a result of the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. The adoption of ASU 2020-06 did not have a material effect on the Company's consolidated financial statements.
Effective January 1, 2022 the Company adopted ASU No. 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force), which provides guidance on modifications or exchanges of a freestanding equity-classified written call option that is not within the scope of another topic. An entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument, and provides further guidance on measuring the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange. ASU 2021-04 also provides guidance on the recognition of the effect of a modification or an exchange of a freestanding equity-
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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)
2.   Summary of Significant Accounting Policies (Continued)


classified written call option that remains equity classified after modification or exchange on the basis of the substance of the transaction, in the same manner as if cash had been paid as consideration. The guidance has been applied prospectively and did not have a material effect on the consolidated financial statements of the Company.
Future Adoption of New Accounting Pronouncements
In January 2021 the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, providing temporary guidance to ease the burden in accounting for reference rate reform primarily resulting from the discontinuation of LIBOR, which is currently expected to occur in mid-2023 for legacy contracts. The amendments in ASU 2021-01 are elective immediately and apply to all entities that have contracts, hedging relationships, and other transactions that
reference LIBOR or another reference rate expected to be discontinued. The Company does not expect that the adoption of ASU 2021-01 will have a material effect on its consolidated financial statements.
In June 2022 the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, to clarify the guidance in Topic 820 when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security. The ASU also introduced new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The amendments in ASU 2022-03 are effective for fiscal years beginning after December 15, 2023. The Company does not expect the adoption ASU 2022-03 to have a material effect on its consolidated financial statements.
3. Marketable Securities
The amortized cost, gross unrealized holding gains, gross unrealized holding losses and fair value of debt securities available-for-sale by type of security at June 30, 2022 and December 31, 2021 was as follows:
Amortized CostAllowance for Credit LossesNet Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
June 30, 2022
Corporate bonds
U.S.$220,913 $ $220,913 $ $(2,589)$218,324 
Foreign30,276  30,276  (411)29,865 
Government related obligations
U.S.69,830  69,830  (340)69,490 
Total $321,019 $ $321,019 $ $(3,340)$317,679 
December 31, 2021
Corporate bonds
U.S.$130,388 $ $130,388 $1 $(234)$130,155 
Foreign20,643  20,643  (82)20,561 
Government related obligations
U.S.41,939  41,939  (8)41,931 
Total$192,971 $ $192,971 $1 $(324)$192,648 
The Company had 68 and 53 available-for-sale debt securities in an unrealized loss position, with an aggregate fair value of $317,679 and $185,296, as of June 30, 2022 and December 31, 2021, respectively. As of June 30, 2022, the Company did not intend to sell these securities, and did not believe it was more likely than not that it would be required to sell these securities prior to the anticipated recovery of their amortized cost basis. We did not have any investments in a continuous unrealized loss position for more than twelve months as of June 30, 2022 and December 31, 2021.
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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)
3.  Marketable Securities (Continued)

The net amortized cost and fair value of debt securities available-for-sale at June 30, 2022 and December 31, 2021 are shown below by contractual maturity. Actual maturities may differ from contractual maturities because securities may be restructured, called or prepaid, or the Company intends to sell a security prior to maturity. The fair values of available for sale debt securities are classified as marketable securities in the condensed consolidated balance sheets at June 30, 2022 and December 31, 2021.
June 30, 2022December 31, 2021
Net Amortized CostFair ValueNet Amortized CostFair Value
Due to mature:
Less than one year$294,150 $291,394 $155,359 $155,226 
One year through five years26,869 26,285 37,612 37,422 
Total$321,019 $317,679 $192,971 $192,648 
Net Investment Income
Sources of net investment income included in other income (expense) in the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2022 and 2021 were as follows:
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Gross investment income from debt securities available-for-sale$1,084 $89 $1,224 $161 
Investment expenses(57)(24)(75)(76)
Net investment income (excluding net realized capital gains or losses)1,027 65 1,149 85 
Net realized capital (losses) gains
(157) (160)19 
Net investment income$870 $65 $989 $104 
We utilize the specific identification method in computing realized gains and losses. The proceeds from the sale of available-for-sale debt securities and the related gross realized capital gains and losses for the three and six months ended June 30, 2022 and 2021 were the following:
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Proceeds from sales$54,015 $ $54,015 $113,441 
Gross realized capital gains9  9 19 
Gross realized capital losses$166  $166  
4.   Fair Value of Financial Assets and Liabilities
The preparation of the Company’s condensed consolidated financial statements in accordance with GAAP requires certain assets and liabilities to be reflected at their fair value and others to be reflected on another basis, such as an adjusted historical cost basis. In this note, the Company provides details on the fair value of financial assets and liabilities and how it determines those fair values.
Financial Instruments Measured at Fair Value on the Condensed Consolidated Balance Sheets
Certain assets of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three
10


BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share amounts)
(Unaudited)
4.   Fair Value of Financial Assets and Liabilities (Continued)
levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:
Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.
Level 3 — Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.
For a description of the methods and assumptions that are used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument, see Note 4 “Fair Value of Financial Assets and Liabilities” in the 2021 Form 10-K. Financial assets and liabilities measured at fair value on a recurring basis on the condensed consolidated balance sheets at June 30, 2022 and December 31, 2021 were as follows:
11


BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share amounts)
(Unaudited)
4.   Fair Value of Financial Assets and Liabilities (Continued)
Fair Value Measurement Using:
Balance Sheet ClassificationType of InstrumentLevel 1Level 2Level 3Total
June 30, 2022
Assets:
Cash equivalentsMoney market funds$3,142 $ $ $3,142 
Marketable securitiesU.S. treasury bills 69,489  69,489 
Marketable securitiesU.S. corporate bonds 218,326  218,326 
Marketable securitiesForeign corporate bonds 29,865  29,865 
Total assets$3,142 $317,680 $ $320,822 
Liabilities:
Derivative liabilitiesSeries B preferred shares forward contracts$ $ $71,110 $71,110 
Derivative liabilitiesSeries B preferred shares derivative liability  33,760 33,760 
Derivative liabilitiesSeries A preferred shares derivative liability  5,259 5,259 
Total liabilities$ $ $110,129 $110,129 
December 31, 2021
Assets:
Cash equivalentsMoney market funds$32,420 $ $ $32,420 
Marketable securitiesU.S. treasury bills5,994 35,937  41,931 
Marketable securitiesU.S. corporate bonds 130,155  130,155 
Marketable securitiesForeign corporate bonds 20,561  20,561 
Total assets$38,414 $186,653 $ $225,067 
Liabilities:
Derivative liabilitySeries B preferred shares forward contracts$ $ $13,110 $13,110 
Total liabilities$ $ $13,110 $13,110 
There were no securities transferred between Level 1, 2 and 3 during the six months ended June 30, 2022 or 2021.
12


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

Series B Preferred Shares Forward Contract
In August 2020, the Company entered into Series B preferred share agreement, whereby RPI will invest in the Company through the purchase of up to 3,992 Series B preferred shares (the "Series B Preferred Shares") at a price of $50,100 per share (the "RPI Series B Preferred Share Agreement"). Upon issuance of the Series B Preferred Shares, they qualify as mandatorily redeemable instruments and are initially classified at their fair value as preferred shares liabilities. The Company will then accrete the carrying value to the redemption value through interest expense using the effective interest rate method.
The Company is required to redeem the Series B Preferred Shares for 1.77 times the original purchase price, payable beginning March 31, 2025 in equal quarterly installments through December 31, 2030 (the "Normal Series B Redemption Provision").
The holders of the Company's outstanding Series B Preferred Shares will have the right to require redemption of the shares in certain circumstances, including in the event of a Change of Control, as defined in the Company's memorandum and article of association. If a Change of Control occurs, the Company will be required to sell and RPI will be required to buy the remaining unissued Series B Preferred Shares. The holders of a majority of outstanding Series B Preferred Shares will then have an option to redeem all outstanding Series B Preferred Shares in a single payment at a price equal to 1.77 times the original issuance price of the Series B Preferred Shares (the "Change of Control Series B Redemption Provision").
Accordingly, the Company has concluded that the agreement to issue Series B Preferred Shares at a future date represents a forward contract, and classified as a derivative.
The fair value of the forward contract recognized in connection with the RPI Series B Preferred Share Agreement was determined based on significant inputs not observable in the market, and therefore represents a Level 3 measurement within the fair value hierarchy. The fair value of the forward contract is made up of the probability weighted fair value of the Normal Series B Redemption Provision and the Change of Control Series B Redemption Provision for the 2,004 unissued Series B Preferred Shares at June 30, 2022. The fair value of the Normal Series B Preferred Shares Redemption Provision for the forward contract is calculated as the difference between the present value of proceeds to the
Company for the quarterly issuances of the remaining unissued Series B Preferred Shares and the present value of the required quarterly redemption payments to the holders. The fair value of the Change of Control Series B Redemption Provision for the forward contract is calculated as the difference between the present value of the proceeds to the Company on the estimated change of control date for the issuance of the remaining unissued Series B Preferred Shares and the present value of the lump sum redemption payment to the holders.
As inputs into the valuation, the Company assessed the Change of Control Series B Redemption Provision as highly likely due to Pfizer's pending acquisition of Biohaven, see Note 1 for additional details. In addition, the Company considered the amount of the payments and a risk-adjusted discount rate ranging from low single digits to low-twenty percent. Due to the uncertainty around the close date of Pfizer's pending acquisition of Biohaven, the Company's expectation of the timing of a change of control event at the reporting date could reasonably be different than the timing of an actual change of control event, and if so, would mean the estimated fair value could be significantly higher or lower than the fair value determined.
In accordance with ASC 815, Derivatives and Hedging, the fair value of the forward contract was recorded on the balance sheet as a derivative liability with changes in fair value recorded in other income (expense) in the condensed consolidated statements of operations and comprehensive loss.
The following table provides a roll forward of the aggregate fair value of the Company's series B preferred shares forward contract for which fair value is determined by Level 3 inputs for the six months ended June 30, 2022 and 2021:
Carrying Value
Balance at December 31, 2021$13,110 
Change in fair value of derivative liability68,574 
Partial settlement of derivative liability(10,574)
Balance at June 30, 2022$71,110 
Balance at December 31, 2020$14,190 
Change in fair value of derivative liability3,295 
Partial settlement of derivative liability(1,595)
Balance at June 30, 2021$15,890 
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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)
4.   Fair Value of Financial Assets and Liabilities (Continued)
Series B Preferred Shares Derivative Liability
As of June 30, 2022, the Company has 1,988 Series B Preferred Shares outstanding, see Note 8 for details. As discussed in the Series B Preferred Shares Forward Contracts section above, the holders of the Company's outstanding Series B Preferred Shares will have the right to require redemption of the shares in certain circumstances, including in the event of a Change of Control, as defined in the Company's memorandum and article of association.
If a Change of Control occurs the holders of the outstanding Series B Preferred Shares will have the option to exercise the Change of Control Series B Redemption Provision. The Company would then be required to redeem the outstanding Series B Preferred Shares in a lump sum payment of 1.77 times the original issue price instead of in equal quarterly installments.
The series B preferred shares derivative liability recognized in connection with the RPI Series B Preferred Share Agreement was determined based on significant inputs not observable in the market, and therefore represents a Level 3 measurement within the fair value hierarchy. The fair value of the series B preferred shares derivative liability is calculated as the difference between the fair value of the outstanding Series B Preferred Shares with and without the derivative. The fair value of the outstanding Series B Preferred Shares both with and without the derivative is calculated as the probability weighted present value of the required quarterly redemption payments considering the likelihood of a Change of Control.
As inputs into the valuation, the Company assessed the likelihood of a Change of Control, and the risk-adjusted discount rate similarly to these same inputs for the Series B Preferred Shares Forward Contract.
In accordance with ASC 815, Derivatives and Hedging, the fair value of the series B preferred shares derivative liability was recorded on the balance sheet as a derivative liability with changes in fair value recorded in other income (expense) in the condensed consolidated statements of operations and comprehensive loss.
The following table provides a roll forward of the aggregate fair value of the Company's series B preferred shares derivative liability for which fair value
is determined by Level 3 inputs for the six months ended June 30, 2022:
Carrying Value
Balance at December 31, 2021$ 
Change in fair value of derivative liability33,760 
Balance at June 30, 2022$33,760 
The series B preferred shares derivative liability had no material value at December 31, 2021.
Series A Preferred Shares Derivative Liability
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 "RPI Series A Preferred Share Agreement"). The Company is required to redeem the Series A Preferred Shares for two times (2x) the original purchase price, payable beginning March 31, 2021 in equal quarterly installments through December 31, 2024 (the "Normal Series A Preferred Share Redemption Provision"). As of June 30, 2022, the Company had 1,559 outstanding Series A Preferred Shares, see Note 8 for additional details.
The holders of the Company's outstanding Series A Preferred Shares will have the right to require a lump sum redemption of the shares in the event of a Change of Control, as defined in the Company's memorandum and article of association. Upon exercise of the put option by the holders, the Company will be required to redeem the outstanding Series A Preferred Shares that have not previously been redeemed 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 (the "Change of Control Series A Preferred Share Redemption Provision").
The series A preferred shares derivative liability recognized in connection with the RPI Series A Preferred Share Agreement was determined based on significant inputs not observable in the market, and therefore represents a Level 3 measurement within the fair value hierarchy. The fair value of the series A preferred shares derivative liability is calculated as the difference between the fair value of the outstanding Series A Preferred Shares with and without the derivative. The fair value of the outstanding Series A Preferred Shares both with and without the derivative is calculated as the probability weighted present value of the required redemption payments considering the likelihood of a Change of Control.
14


BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share amounts)
(Unaudited)
4.   Fair Value of Financial Assets and Liabilities (Continued)
As inputs into the valuation, the Company assessed the likelihood of a Change of Control, and the risk-adjusted discount rate similarly to these same inputs for the Series B Preferred Shares Forward Contract.
In accordance with ASC 815, Derivatives and Hedging, the fair value of the series A preferred shares derivative liability was recorded on the balance sheet as a derivative liability with changes in fair value recorded in other income (expense) in the condensed consolidated statements of operations and comprehensive loss.
The following table provides a roll forward of the aggregate fair value of the Company's series A preferred
shares derivative liability for which fair value is determined by Level 3 inputs for the six months ended June 30, 2022:
Carrying Value
Balance at December 31, 2021$ 
Change in fair value of derivative liability5,259 
Balance at June 30, 2022$5,259 
The series A preferred shares derivative liability had no material value as of December 31, 2021.
Financial Instruments Not Measured at Fair Value on the Consolidated Balance Sheets
The carrying value and estimated fair value classified by level of fair value hierarchy for financial instruments carried on the condensed consolidated balance sheets at adjusted cost or contract value at June 30, 2022 and December 31, 2021 were as follows:
CarryingFair Value Measurement Using:
ValueLevel 1Level 2Level 3Total
June 30, 2022
Liabilities:
Long-term debt(1)
$764,983 $ $861,877 $ $861,877 
December 31, 2021
Liabilities:
Long-term debt(1)
$626,720 $ $646,159 $ $646,159 
(1) Due to the $125,000 draw of the remaining delayed draw term loan commitment in June 2022, see Note 14 for details, and the announcement of the acquisition of Biohaven by Pfizer in May 2022, see Note 1 for details, the Company remeasured the fair value of its long-term debt as of June 30, 2022.
5. Balance Sheet Components
Restricted Cash
Restricted cash included in other current assets in the condensed consolidated balance sheets is primarily employee contributions to the Company's employee share purchase plan held for future purchases of the Company's outstanding shares.
Restricted cash included in other assets in the condensed consolidated balance sheets represents collateral held by a bank for a letter of credit ("LOC") issued in connection with the leased office space in Yardley, Pennsylvania. The following represents a reconciliation of cash and cash equivalents in the condensed consolidated balance sheets to total cash, cash equivalents and restricted cash as of June 30, 2022
and December 31, 2021, respectively, in the condensed consolidated statements of cash flows:
As of June 30, 2022As of December 31, 2021
Cash and cash equivalents$235,807 $171,945 
Restricted cash (included in other current assets) 1,648 
Restricted cash (included in other assets)750 750 
Cash, cash equivalents and restricted cash in the statements of cash flows$236,557 $174,343 
Trade Receivable, Net
The Company’s trade accounts receivable consists of amounts due primarily from pharmacy wholesalers in
15


BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share amounts)
(Unaudited)
5. Balance Sheet Components (Continued)
the U.S. (collectively, its "Customers") related to sales of NURTEC ODT and have standard payment terms. For certain Customers, the trade accounts receivable for the Customer is net of distribution service fees, prompt pay discounts and other adjustments. The Company monitors the financial performance and creditworthiness of its Customers so that it can properly assess and respond to changes in their credit profile. The Company reserves against trade accounts receivable for estimated losses that may arise from a Customer’s inability to pay and any amounts determined to be uncollectible are written off against the reserve when it is probable that the receivable will not be collected. The allowance for doubtful accounts, including reserve amounts for estimated credit losses, was immaterial as of June 30, 2022 and December 31, 2021.
Inventory
Inventory consisted of the following:
As of June 30, 2022As of December 31, 2021
Work-in-process$168,091 $159,075 
Finished goods12,576 9,269 
Total inventories180,667 168,344 
Less noncurrent inventories(1)
74,106 87,736 
Total inventories classified as current$106,561 $80,608 
(1) Included in other assets on the condensed consolidated balance sheets. There are no recoverability issues for these amounts.
Prepaid Expenses
Prepaid expenses consisted of the following:
As of June 30, 2022As of December 31, 2021
Prepaid clinical trial costs$59,996 $42,578 
Prepaid manufacturing1,152 17,448 
Prepaid commercial costs26,940 15,732 
Other prepaid expenses12,272 13,080 
 Prepaid expenses$100,360 $88,838 
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
As of June 30, 2022As of December 31, 2021
Accrued development milestones$25,000 $5,000 
Accrued employee compensation and benefits35,917 40,109 
Accrued clinical trial costs34,822 37,477 
Accrued commercialization and other professional fees31,793 19,994 
Accrued sales discounts and allowances292,292 203,760 
Current obligation to perform R&D services30,303 22,030 
Other accrued expenses and other current liabilities95,180 91,649 
 Accrued expenses and other current liabilities$545,307 $420,019 
6.   Acquisitions
Acquisition of Kleo Pharmaceuticals, Inc.
On January 4, 2021, the Company acquired Kleo Pharmaceuticals, Inc. (“Kleo”). Kleo is a development-stage biopharmaceutical company focused on advancing the field of immunotherapy by developing small molecules that emulate biologics. The transaction was accounted for as the acquisition of a business using the acquisition method of accounting.
The total fair value of the consideration transferred was $20,043 which primarily consisted of the issuance of a total of 115,836 common shares of the Company to Kleo stockholders and contingent consideration in the form of a contingent value right to receive one dollar in cash for each Kleo share if certain specified Kleo biopharmaceutical products or product candidates receive the approval of the FDA prior to the expiration of 30 months following the effective time of the transaction. The maximum amount payable pursuant to the contingent value right was approximately $17,300. At December 31, 2021, the Company determined the value of the contingent value right to be immaterial and recognized a gain of $1,457 related to the contingent value right in other income (expense) during the fourth quarter of 2021. The value of the contingent value right continues to be immaterial with no value included on the condensed consolidated balance sheet as of June 30, 2022.
16


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


Prior to the consummation of the transaction, the Company owned approximately 41.9% of the outstanding shares of Kleo and accounted for it as an equity method investment. As part of the transaction, the Company acquired the remainder of the shares of Kleo, and post-transaction the Company owns 100% of the outstanding shares of Kleo. The carrying value of the Company’s investment in Kleo was $1,176 immediately prior to the acquisition date. The Company determined the fair value of the existing interest was $6,437, and recognized a gain from our equity method investment during the first quarter of 2021 of $5,261 on the condensed consolidated statements of operations and comprehensive loss as a result of remeasuring to fair value the existing equity interest in Kleo.
In connection with the transaction, we recorded: net working capital of $573; property, plant and equipment of $1,257; intangible assets consisting of in progress research and development assets of $18,400 which include an oncology therapeutic candidate entering Phase I clinical trials and a COVID-19 therapeutic candidate in the planning stage for clinical development; debt assumed of $1,577; and goodwill of $1,390.
Kleo’s employees, other than its President and Chief Financial Officer, were retained as part of the transaction. In connection with the transaction agreement, the Company filed a registration statement permitting Kleo stockholders to offer and sell the common shares of the Company issued in the transaction.