v3.26.1
Fair Value of Financial Assets and Liabilities
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value of Financial Assets and Liabilities 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 of the Company's financial instruments are measured at fair value on the condensed consolidated balance sheets on a recurring basis. The fair values of these instruments are based on valuations that include inputs that can be classified within one of three levels of a hierarchy established by GAAP. See Fair Value Measurements in Note 2, "Summary of Significant Accounting Policies," included in the 2025 Form 10-K for a description of the type of valuation information ("valuation inputs") that qualifies a financial asset or liability for each level.
Financial assets and liabilities measured at fair value on a recurring basis on the condensed consolidated balance sheets at June 30, 2026 and December 31, 2025 were as follows:
Fair Value Measurement Using:
Balance Sheet ClassificationType of InstrumentLevel 1Level 2Level 3Total
June 30, 2026
Assets:
Cash and cash equivalents
Money market funds$104,383 $— $— $104,383 
Cash and cash equivalents
U.S. treasury bills29,875 74,705 — 104,580 
Marketable securities
U.S. treasury bonds
— 29,833 — 29,833 
Other non-current assetsMoney market funds2,282 — — 2,282 
Total assets$136,540 $104,538 $— $241,078 
Liabilities:
Notes payable
Notes payable, non-current
— — 259,480 259,480 
Total liabilities$— $— $259,480 $259,480 
December 31, 2025
Assets:
Cash and cash equivalents
Money market funds$195,265 $— $— $195,265 
Cash and cash equivalentsU.S. treasury bills— 24,990 — 24,990 
Marketable securitiesU.S. treasury bills— 89,180 — 89,180 
Other current assets
Money market funds250 — — 250 
Other non-current assetsMoney market funds3,017 — — 3,017 
Total assets$198,532 $114,170 $— $312,702 
Liabilities:
Notes payable
Notes payable, non-current
$— $— $238,900 $238,900 
Total liabilities$— $— $238,900 $238,900 
There were no securities transferred between Level 1, 2, and 3 during the three and six months ended June 30, 2026 and 2025.
The following is a description, including valuation methodology, of the financial assets and liabilities measured at fair value on a recurring basis:
Cash and Cash Equivalents, Other Current Assets, and Other Non-Current Assets
Financial assets measured at fair value on a recurring basis classified within cash and cash equivalents and other non-current assets at June 30, 2026 and within cash and cash equivalents, other current assets and other non-current assets at December 31, 2025, consisted of cash invested in U.S. treasury bills with original maturities of three months or less at time of purchase and short-term money market funds that are readily convertible to known amounts of cash and redeemable daily at the election of the Company. The carrying value for these financial assets approximates fair value due to the near-term maturities of the U.S treasury bills and money market funds underlying security holdings resulting in an insignificant change in value because of changes in interest rates.
Marketable Securities
At June 30, 2026, the fair value of the Company’s Level 2 debt securities is obtained from quoted market prices of debt securities with similar characteristics, quoted prices from identical assets in inactive markets, or discounted cash flows to estimate fair value. The Company's Level 2 marketable securities consisted of off-the-run U.S. treasury bills. When quoted prices are available in an active market, these assets are classified in Level 1 of the fair value hierarchy. The Company's Level 1 marketable securities consisted of on-the-run U.S. treasury bills.
Note Purchase Agreement
On April 28, 2025, the Company entered into a Note Purchase Agreement (the "NPA" or "Note Purchase Agreement") as described in further detail in Note 6, "Notes Payable." The Company elected to account for the NPA under the fair value option as permitted by ASC 825, Financial Instruments ("ASC 825").
The Company determined the fair value of the First Notes (as defined in Note 6, "Notes Payable") on April 28, 2025 was $255,880. The difference between the fair value at execution and the principal of $250,000 was due to a purchased loan commitment for the Second Notes (as defined in Note 6, "Notes Payable"). The purchased loan commitment resulted in a $5,880 offsetting asset recorded at its fair value within other current assets on the condensed consolidated balance sheet which was determined to be impaired and fully expensed to other (expense) income, net, as of December 31, 2025. The following table provides a roll forward of the fair value of the First Notes for which fair value is determined by Level 3 inputs from December 31, 2025 to June 30, 2026:
Amount
Fair value at December 31, 2025
$238,900 
Loss on change in fair value reported in other (expense) income, net3,012 
Fair value at March 31, 2026
$241,912 
Loss on change in fair value reported in other (expense) income, net14,637 
Loss on change in fair value reported in other comprehensive loss2,931 
Fair value at June 30, 2026
$259,480 
The fair value of the First Notes represents the present value of estimated future payments under the NPA for the First Notes. The fair value of the First Notes is calculated using a scenario-based discounted cash flow model. The fair value measurement is based on significant Level 3 unobservable inputs such as management's assumptions on the probability and timing of regulatory approvals for product candidates, probability and timing of an early redemption of all obligations under the NPA for the First Notes, and discount rate using a risk-free rate plus Biohaven-specific senior secured credit risk.
Actual probability and timing of regulatory approvals, probability and timing of an early redemption event at the reporting date, and Biohaven-specific senior secured credit risk could be materially different than our assumptions, and, if so, would mean the estimated fair value could be significantly higher or lower than the fair value determined. An increase in the liability related to the First Notes between the reporting date and settlement date of the liability would have a material adverse effect on the Company's financial performance.
At June 30, 2026, the difference between the aggregate fair value and the aggregate unpaid principal balance of the First Notes was $9,480.