Biohaven .(BHVN) - 2023 Q1 - Quarterly Report

Financial Performance - Net loss for the three months ended March 31, 2023, was $70,492 thousand, a decrease from a net loss of $97,032 thousand in the same period of 2022, representing a 27.3% improvement[44] - The company reported net cash used in operating activities of $77,638 thousand for the three months ended March 31, 2023, compared to $58,836 thousand for the same period in 2022[44] - The company recorded total operating expenses of $77.8 million for the three months ended March 31, 2023, a decrease of $11.99 million from $89.77 million in the same period of 2022[80] - The net loss for the three months ended March 31, 2023, was $70.49 million, an improvement of $26.54 million compared to a net loss of $97.03 million in the same period of 2022[80] - The income tax provision decreased to $0.9 million for the three months ended March 31, 2023, from $7.3 million in the same period of 2022, primarily due to R&D tax credits[82] - The company anticipates continued significant general and administrative expenses as it supports R&D activities and prepares for potential commercialization of product candidates[77] - The company has incurred significant operating losses and negative cash flows from operations, with no revenue from product sales until successful completion of clinical development[100] Cash Flow and Financing - Cash used in operating activities for the three months ended March 31, 2023, was $77,638 thousand, compared to $58,836 thousand in the same period of 2022, indicating an increase of 32%[44] - Cash, cash equivalents, and restricted cash at the end of the period were $190,590 thousand, down from $242,604 thousand at the beginning of the period, reflecting a decrease of 21.5%[44] - The company’s cash flows from financing activities included a net cash provided of $26,668 thousand for the three months ended March 31, 2023, compared to $23,030 thousand in the same period of 2022, showing an increase of 15.5%[44] - Net cash provided by financing activities was $26.7 million for Q1 2023, an increase of $3.6 million compared to $23.0 million in Q1 2022, driven by the advancement of discovery programs and clinical-stage assets[103] - The company expects to require additional capital for in-licenses or acquisitions of other product candidates, especially if regulatory approval is obtained for its product candidates[104] Research and Development - The company is advancing a pipeline of therapies targeting neurological and neuropsychiatric diseases, including Kv7 ion channel modulation and TYK2/JAK1 inhibition[46] - BHV-7000 has received Rare Pediatric Disease Designation from the FDA for the treatment of KCNQ2 developmental epileptic encephalopathy[56] - The company is exploring new product candidates, including therapies for neuropathic pain and autoimmune brain disorders, leveraging its proprietary platforms[46][59] - The company plans to enroll approximately 180 patients in a Phase 3 trial evaluating taldefgrobep as an adjunctive therapy for SMA[66] - The company initiated a Phase 1a/1b trial in multiple myeloma patients, planning to enroll 30 patients to assess safety and tolerability of BHV-1100[67] - The company expects to submit an IND application for BHV-1300 with the FDA in the second half of 2023, following a preclinical study showing a 75% reduction of IgG levels[74] Operating Expenses - R&D expenses for Q1 2023 were $63.5 million, a decrease of $6.6 million from $70.1 million in Q1 2022, primarily due to reduced personnel-related costs[98] - General and administrative expenses for Q1 2023 were $14.3 million, down from $19.7 million in Q1 2022, mainly due to decreased non-cash share-based compensation costs[99] - The total operating expenses for Q1 2023 were $77.8 million, a decrease of $12.0 million compared to $89.8 million in Q1 2022[80] Risks and Challenges - The company is subject to risks typical of early-stage biotechnology firms, including competition and the need for significant additional capital for product development[28] - The company has not generated any revenue since inception and expects to incur significant expenses for several years as it advances product candidates through clinical development and seeks regulatory approval[100] - The company is subject to risks common to early-stage biotechnology companies, including dependence on key personnel and the need for significant additional capital for product development[28] Internal Controls and Compliance - There have been no material changes to the company's internal control over financial reporting during the three months ended March 31, 2023[93] - The company maintains a portion of its cash deposits in government insured institutions in excess of government insured limits, believing these institutions have high credit quality[91] - The company is subject to taxation in the BVI, where it benefits from exemptions from the Income Tax Ordinance for non-residents[96] - The company does not engage in any hedging activities against changes in interest rates[108] - As of March 31, 2023, the company's disclosure controls and procedures were effective at the reasonable assurance level[110] - Management acknowledges that disclosure controls can only provide reasonable, not absolute, assurance of meeting objectives[110] - The evaluation of disclosure controls involved a cost-benefit analysis of possible procedures[110] - There are inherent limitations in the control system, which may lead to undetected misstatements due to error or fraud[110] - The design of controls is based on assumptions about the likelihood of future events, which may change over time[110] - The Chief Executive Officer and Chief Financial Officer conducted an evaluation of the disclosure controls as of March 31, 2023[110] - Controls may become inadequate due to changes in conditions or compliance levels over time[110] - The company recognizes that the effectiveness of controls may deteriorate under certain future conditions[110] - Management's judgment was applied in evaluating the design of disclosure controls[110] - There is no assurance that any design will succeed in achieving its stated goals under all potential future conditions[110]