Biohaven Ltd.BHVN
Biohaven Ltd. Stock Compensation Disclosure
Non-Cash Share-Based Compensation
2022 Equity Incentive Plan
In September 2022, the Company's shareholders approved the 2022 Equity Incentive Plan (the "2022 Plan"), which became effective on October 3, 2022. The 2022 Plan provides for the grant of incentive share options, nonstatutory share options, share appreciation rights, restricted share awards, restricted share unit awards ("RSUs"), performance-based share awards and other share-based awards.
Upon the effectiveness of the 2022 Plan, there were 9,190,000 common shares reserved for issuance under the 2022 Plan. As of December 31, 2025, the 2022 Plan allows for a maximum of 19,211,126 shares of the Company's common shares to be reserved and available for grants. Also as of December 31, 2025, there were 127,993 shares of the Company's common shares available for future grants under the 2022 Plan. The number of shares reserved for issuance under the 2022 Plan automatically increases on January 1 of each calendar year by 4% of total common shares outstanding as of December 31 of the prior year, beginning October 3, 2022 through January 1, 2032. In January 2026, the number of common shares reserved for future issuance under the 2022 Plan automatically increased by 5,311,004 common shares.
Non-Cash Share-Based Compensation Expense
The Company measures non-cash share-based compensation at the grant date based on the fair value of the award and is recognized as expense over the requisite service period of the award (generally three years) using the straight-line method. Non-cash share-based compensation expense, consisting of expense for stock options, RSUs, and the 2022 Employee Share Purchase Plan (the "ESPP"), was classified in the consolidated statements of operations as follows:
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Research and development expenses | 72,787 | 42,594 | 15,985 | |||||||||||||||||
| General and administrative expenses | 39,574 | 29,369 | 12,802 | |||||||||||||||||
| Total non-cash share-based compensation expense | $ | 112,361 | $ | 71,963 | $ | 28,787 | ||||||||||||||
As of December 31, 2025, total unrecognized compensation cost related to the unvested share-based awards was $99,218, which is expected to be recognized over a weighted average period of 1.58 years.
Share Options
All share option grants are awarded at fair value on the date of grant. The fair value of share options is estimated using the Black-Scholes option pricing model. Share options generally expire 10 years after the grant date.
The aggregate intrinsic value of share options is calculated as the difference between the exercise price of the share options and the fair value of the Company's common shares for those share options that had exercise prices lower than the fair value of the Company's common shares at December 31, 2025. The total intrinsic value of share options exercised for the years ended December 31, 2025, 2024, and 2023 was $2,121, $33,801, and $7,756, respectively. The tax benefit from share options exercised for the years ended December 31, 2025, 2024, and 2023 was not material.
The assumptions that the Company used to determine the grant-date fair value of share options granted under the 2022 Plan were as follows, presented on a weighted average basis:
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Risk-free interest rate | 4.37% | 3.98% | 4.32% | |||||||||||||||||
| Expected term (in years) | 5.71 | 5.74 | 5.93 | |||||||||||||||||
| Expected volatility | 76.06% | 86.31% | 84.60% | |||||||||||||||||
| Expected dividend yield | —% | —% | —% | |||||||||||||||||
| Exercise price | $35.64 | $42.06 | $24.57 | |||||||||||||||||
The following table is a summary of the Company's share option activity for the year ended December 31, 2025:
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||||||||||||||||
| (in years) | ||||||||||||||||||||||||||
| Outstanding as of December 31, 2024 | 12,781,084 | $ | 17.46 | |||||||||||||||||||||||
Granted | 3,205,435 | $ | 35.64 | |||||||||||||||||||||||
Exercised | (139,233) | $ | 7.15 | |||||||||||||||||||||||
| Forfeited | (197,772) | $ | 34.54 | |||||||||||||||||||||||
| Outstanding as of December 31, 2025 | 15,649,514 | $ | 21.06 | 7.47 | $ | 32,095 | ||||||||||||||||||||
| Options exercisable as of December 31, 2025 | 11,565,685 | $ | 15.79 | 7.08 | $ | 32,095 | ||||||||||||||||||||
| Vested and expected to vest as of December 31, 2025 | 15,649,514 | $ | 21.06 | 7.47 | $ | 32,095 | ||||||||||||||||||||
The weighted average grant date fair value per share of share options granted under the Company’s share option plans during the years ended December 31, 2025, 2024, and 2023 was $24.25, $30.76, and $18.01, respectively. The Company expects approximately 4,083,829 of the unvested share options to vest over the requisite service period.
Restricted Share Units
The Company’s RSUs are considered nonvested share awards and require no payment from the employee. For each RSU, employees receive one common share at the end of the vesting period. Compensation cost is recorded based on the market price of the Company’s common shares on the grant date and is recognized on a straight-line basis over the requisite service period.
The total fair value of RSUs vested during the years ended December 31, 2025 and 2024 was $19,425 and $3,991, respectively. No RSUs were granted, forfeited, or vested in the year ended December 31, 2023.
The following table is a summary of the RSU activity for the year ended December 31, 2025:
Number of Shares | Weighted Average Grant Date Fair Value | |||||||||||||
Unvested as of December 31, 2024 | 277,221 | $ | 41.87 | |||||||||||
| Granted | 1,687,087 | $ | 37.74 | |||||||||||
Forfeited | (32,729) | $ | 39.00 | |||||||||||
Vested | (528,883) | $ | 37.85 | |||||||||||
Unvested as of December 31, 2025 | 1,402,696 | $ | 38.48 | |||||||||||
Employee Share Purchase Plan
In September 2022, the Company's board of directors approved the rules and procedures of the 2022 Employee Share Purchase Plan approved by shareholders of the Company on September 28, 2022.
The ESPP allows each eligible employee who is participating in the plan to purchase shares by authorizing payroll deductions of up to 15% of eligible earnings. Unless the participating employee has previously withdrawn from the offering, accumulated payroll deductions will be used to purchase shares on the last business day of the offering period at a price equal to 85% of the fair market value of the shares on the first business day or the last business day of the offering period, whichever is lower. Under applicable tax rules, an employee may purchase no more than $25 worth of ordinary shares, valued at the start of the offering period, under the ESPP in any calendar year. There is no minimum holding period associated with shares purchased pursuant to this plan. An employee’s purchase rights terminate immediately upon termination of employment.
The number of shares reserved for issuance under the ESPP automatically increases on January 1 of each calendar year by 1% of total common shares outstanding as of December 31 of the prior year, beginning October 3, 2022 through January 1, 2032. As of December 31, 2025, the ESPP allows for a maximum of 2,899,049 shares of the Company's common shares to be reserved and available for issuance under the ESPP. As of December 31, 2025, 2,512,521 shares remained available for future issuance under the ESPP. In January 2026, 1,327,751 additional shares were authorized to be issued under the ESPP.
The Company accounts for employee share purchases made under its ESPP using an estimate of the grant date fair value, which is determined in accordance with ASC 718, Stock Compensation. The purchase price discount and the look-back feature cause the ESPP to be compensatory and the Company to recognize compensation expense. The compensation cost is recognized on a straight-line basis over the requisite service period. The Company values ESPP shares using the Black-Scholes model. The Company recognized compensation expense of $1,477, $1,249, and $1,341 for the years ended December 31, 2025, 2024, and 2023, respectively.
As of December 31, 2025, there was $494 of unrecognized non-cash share-based compensation expense related to the ESPP, which is expected to be recognized over the remaining offering period ending May 31, 2026. During the year ended December 31, 2025, 127,097 shares were issued under the ESPP.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 23, 2023 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.