Biohaven Ltd.
For the period ended Dec 31, 2025. Filed Mar 2, 2026.
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FY2025 · Filed Mar 2, 2026
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Report of Independent Registered Public Accounting Firm (PCAOB ID:
To the Shareholders and the Board of Directors of Biohaven Ltd.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Biohaven Ltd. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 2, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
| Valuation of Notes Payable | |
| Description of the Matter | As discussed in Note 6 to the consolidated financial statements, in April 2025, the Company and certain of its subsidiaries entered into a Note Purchase Agreement (“NPA”) with Beetlejuice SA LLC, an affiliate of Oberland Capital Management LLC. The Company has elected to account for the NPA under the fair value option as permitted by ASC 825, “Financial Instruments”. The financial liability, which is recorded as notes payable, was initially measured at a fair value of $255.8 million on the issuance date and subsequently remeasured at fair value on a quarterly basis. As of December 31, 2025, the fair value of the notes payable recorded by the Company was $238.9 million. The fair value of the notes payable is based on a scenario-based discounted cash flow model. The fair value measurement utilizes significant Level 3 unobservable inputs such as the probability and timing of regulatory approvals of product candidates, the probability and timing of certain early redemption events, and the Company-specific senior secured credit risk rate.Auditing the fair value of the notes payable was challenging due to the judgmental nature of the assumptions utilized in the model, especially the probability and timing of regulatory approvals of product candidates, the probability and timing of certain early redemption events, and the determination of the Company-specific senior secured credit risk rate. |
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| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design, and tested the operating effectiveness of relevant controls over the Company’s process to account for the notes payable, including controls over the determination and review of the above assumptions. To test the Company’s estimate of the fair value of the notes payable, our audit procedures included, among others, the use of our valuation specialists to perform a comparative calculation of the scenario-based discounted cash flow model, evaluate the Company-specific senior secured credit risk rate, and perform sensitivity analyses on the above assumptions. We assessed the Company’s estimated probability and timing of regulatory approvals of product candidates and certain early redemption events through various procedures which included, among others, inquiries of Company executives and employees responsible for clinical operations, independent verification of the industry publication used by the Company, challenged the above assumptions through searches for contrary evidence, and assessed consistency of the above assumptions with evidence obtained in other areas of our audit. We also verified the scenarios utilized in the model align with the NPA terms and verified the above assumptions were accurately included in the model. |
/s/Ernst & Young LLP
We have served as the Company’s auditor since 2022.
Stamford, Connecticut
March 2, 2026
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