Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of disclosure controls and procedures . Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2024. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of December 31, 2024, our Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were, in design and operation, effective at the reasonable assurance level.
103
Management’s Annual Report on Internal Control over Financial Reporting. Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over our financial reporting, as such term is defined in Rule 13a-15(f) and Rule 15d-15(f) of the Securities Exchange Act of 1934. Our internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute, assurances. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. In making its assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013) to evaluate the effectiveness of our internal control over financial reporting. Based on this assessment using those criteria, management has concluded that our internal control over financial reporting was effective as of December 31, 2024.
Attestation Report of Independent Registered Public Accounting Firm. The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report included elsewhere in this Annual Report on Form 10-K.
Changes in internal control over financial reporting. There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
We have a written code of conduct that applies to all of our directors, officers and employees. A copy of the most up-to-date version of our code of conduct is available within the “Investors” section on our company website located at http://www.xenon-pharma.com and on SEDAR+ at www.sedarplus.ca . We will post amendments to our code of conduct or waivers of the same for directors and executive officers on the “Investors” section on our website located at https://www.xenon-pharma.com .
During the three months ended December 31, 2024, no director or officer, as defined in Rule 16a-1(f), adopted or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement," each as defined in Item 408 of Regulation S-K.
Adoption of 2025 Inducement Plan
On February 27, 2025, the Board of Directors of the Company approved the 2025 Inducement Equity Incentive Plan (the "2025 Inducement Plan"). Pursuant to the terms of the 2025 Inducement Plan, the Company may grant nonstatutory stock options, stock appreciation rights, restricted stock units, restricted stock, and performance awards as an inducement material to individuals being hired, or rehired following a bona fide period of interruption of employment, as an employee of the Company or any of its subsidiaries. The Company has reserved 775,000 common shares for issuance under the 2025 Inducement Plan. In accordance with Nasdaq Listing Rule 5635(c)(4), the Company did not seek approval of the 2025 Inducement Plan by its shareholders.
The foregoing is a brief description of the material terms of the 2025 Inducement Plan and is qualified in its entirety by reference to the full text of the 2025 Inducement Plan filed as an exhibit to this Annual Report on Form 10-K.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by Item 10 of Form 10-K, including discussion of our Insider Trading Policy under the heading "Insider Trading Policies," is incorporated by reference to our Proxy Statement for the 2025 Annual Meeting of Shareholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2024.
Item 11. Executive Compensation
The information required by Item 11 of Form 10-K is incorporated by reference to our Proxy Statement for the 2025 Annual Meeting of Shareholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2024.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
The information required by Item 12 of Form 10-K is incorporated by reference to our Proxy Statement for the 2025 Annual Meeting of Shareholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2024.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by Item 13 of Form 10-K is incorporated by reference to our Proxy Statement for the 2025 Annual Meeting of Shareholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2024.
Item 14. Principal Accounting Fees and Services
The information required by Item 14 of Form 10-K is incorporated by reference to our Proxy Statement for the 2025 Annual Meeting of Shareholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2024.
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PART IV
Item 15. Exhibits, Financial Statement Schedules
(a)(1) Financial Statements — The financial statements included in Item 8 are filed as part of this Annual Report on Form 10-K.
(a)(2) Financial Statement Schedules — All schedules have been omitted because they are not applicable or required, or the information required to be set forth therein is included in the consolidated Financial Statements or notes thereto included in Item 8 of this Annual Report on Form 10-K.
(a)(3) Exhibits — The exhibits required by Item 601 of Regulation S-K are listed in paragraph (b) below.
(b) Exhibits — The exhibits listed in the table below are filed herewith or are incorporated by reference to exhibits previously filed with the SEC.
Exhibit
Number
Description of Document
Incorporated by Reference
Form
File No.
Exhibit
Filing Date
3.1
Articles of the Company.
10-Q
001-36687
3.1
December 15, 2014
3.1A
Articles of Amendment to the Articles of the Company, creating the Series 1 Preferred Shares.
8-K
001-36687
3.1
March 28, 2018
3.2
Amended and Restated By-laws of the Company.
10-Q
001-36687
3.2
December 15, 2014
4.1
Form of Common Share Certificate.
S-1/A
333-198666
4.1
October 6, 2014
4.2
Warrant to Purchase Shares, dated August 3, 2018, by and between Xenon Pharmaceuticals Inc. and Silicon Valley Bank.
8-K
001-36687
4.1
August 7, 2018
4.3
Description of Securities.
4.4
Form of Pre-Funded Warrant .
8-K
001-36687
4.1
October 6, 2021
4.5
Form of Pre-Funded Warrant.
8-K
001-36687
4.1
June 23, 2022
4.6
Form of Pre-Funded Warrant.
8-K
001-36687
4.1
November 30, 2023
10.1#
Stock Option Plan, as amended, and form of option agreement thereunder.
S-1/A
333-198666
10.7
October 6, 2014
10.2#
Amended and Restated 2014 Equity Incentive Plan and form of share option agreement used thereunder.
8-K
001-36687
10.1
June 2, 2022
10.3#
Amended and Restated 2014 Equity Incentive Plan and form of share option agreement used thereunder.
8-K
001-36687
10.1
June 5, 2024
10.4#
Form of Director and Executive Officer Indemnification Agreement.
S-1/A
333-198666
10.15
October 6, 2014
10.5
Asset Purchase Agreement, dated April 25, 2017, by and between the Company and 1st Order Pharmaceuticals, Inc.
10-Q
001-36687
10.2
August 3, 2017
10.6
Milestone and Royalty Buy-Out Agreement, dated September 7, 2018, by and among Xenon Pharmaceuticals Inc., Valeant Pharmaceuticals Ireland Limited and Valeant Pharmaceuticals Luxembourg S.a.r.l.
8-K
001-36687
10.1
September 11, 2018
10.7#
Amended and Restated Employment Agreement, dated March 19, 2019, by and between the Company and Robin Sherrington.
10-K
001-36687
10.1
March 9, 2020
10.8#
Employment Agreement, dated July 14, 2020, by and between the Company and Christopher Von Seggern.
10-Q
001-36687
10.3
November 5, 2020
10.9#
Employment Agreement, dated January 13, 2021, by and between the Company and Ian Mortimer.
8-K
001-36687
10.2
January 14, 2021
106
Exhibit
Number
Description of Document
Incorporated by Reference
Form
File No.
Exhibit
Filing Date
10.10#
Employment Agreement, dated January 13, 2021, by and between the Company and Sherry Aulin.
8-K
001-36687
10.4
January 14, 2021
10.11#
Employment Agreement, dated August 18, 2021, by and between the Company and Christopher Kenney.
10-Q
001-36687
10.3
November 10, 2021
10.12#
2019 Inducement Equity Incentive Plan and related form of share option agreement .
8-K
001-36687
10.1
September 10, 2019
10.13
License and Collaboration Agreement, dated as of December 2, 2019, by and between Xenon Pharmaceuticals Inc. and Neurocrine Biosciences, Inc.
8-K
001-36687
10.1
December 2, 2019
10.14
Share Purchase Agreement, dated as of December 2, 2019, by and between Xenon Pharmaceuticals Inc. and Neurocrine Biosciences, Inc.
8-K
001-36687
10.2
December 2, 2019
10.15
Amendment No. 1 to Asset Purchase Agreement, dated August 4, 2020, by and between the Company and 1st Order Pharmaceuticals Inc.
10-Q
001-36687
10.2
August 6, 2020
10.16
At-the-Market Equity Offering Sales Agreement dated as of August 6, 2020, by and among Xenon Pharmaceuticals Inc., Jefferies LLC and Stifel, Nicolaus & Company, Incorporated.
8-K
001-36687
1.1
August 6, 2020
10.17
Amendment No. 1 to the At-the-Market Equity Offering Sales Agreement, dated March 1, 2022, by and among Xenon Pharmaceuticals Inc., Jefferies LLC and Stifel, Nicolaus & Company, Incorporated.
8-K
001-36687
1.1
March 1, 2022
10.18
Amendment #1, dated January 13, 2021, to the License and Collaboration Agreement, dated December 2, 2019, by and between Xenon Pharmaceuticals Inc. and Neurocrine Biosciences, Inc.
8-K
001-36687
10.1
January 14, 2021
10.19
Share Purchase Agreement, dated as of September 8, 2021, by and between Xenon Pharmaceuticals Inc. and Neurocrine Biosciences, Inc .
8-K
001-36687
10.1
September 8, 2021
10.20
Lease Agreement, effective November 24, 2021, by and between the Company and Redstone Enterprises Ltd.
8-K
001-36687
10.1
December 1, 2021
10.21
Share Purchase Agreement, dated as of January 11, 2022, by and between Xenon Pharmaceuticals Inc. and Neurocrine Biosciences, Inc.
8-K
001-36687
10.1
January 12, 2022
10.22
Amendment #2, dated February 25, 2022, to the License and Collaboration Agreement, dated December 2, 2019, by and between Xenon Pharmaceuticals Inc. and Neurocrine Biosciences, Inc.
10-K
001-36687
10.30
March 1, 2022
10.23
Consent to Alterations and Lease Modification Agreement between Redstone Enterprises Ltd. and Xenon Pharmaceuticals Inc., effective May 19, 2022.
10-Q
001-36687
10.1
August 9, 2022
10.24#
Employment Agreement, dated November 4, 2022, by and between the Company and Andrea DiFabio.
10-Q
001-36687
10.1
November 8, 2022
10.25#
Executive Incentive Compensation Plan.
8-K
001-36687
10.1
March 14, 2023
10.26
Consent to Alterations Agreement between Redstone Enterprises Ltd. and Xenon Pharmaceuticals Inc., effective March 27, 2023.
10-Q
001-36687
10.1
August 9, 2023
107
Exhibit
Number
Description of Document
Incorporated by Reference
Form
File No.
Exhibit
Filing Date
10.27
Consent to Alterations Agreement between Redstone Enterprises Ltd. and Xenon Pharmaceuticals Inc., effective August 16, 2023.
10-K
001-36687
10.27
February 29, 2024
10.28#
Employment Agreement, dated December 15, 2023, by and between the Company and James Empfield.
10-K
001-36687
10.28
February 29, 2024
10.29
Form of Performance Share Award Agreement
10-Q
001-36687
10.1
May 9, 2024
10.30#
Letter Agreement, dated January 15, 2025, by and between the Company and Christopher Von Seggern.
10.31#
Consulting Agreement, dated January 17, 2025, by and between the Company and Christopher Von Seggern.
10.32#
2025 Inducement Equity Incentive Plan and related form agreements.
10.33#
Post-Employment Consulting Agreement, dated February 27, 2025, by and between the Company and Sherry Aulin.
19
Insider Trading Policy.
21.1
List of Subsidiaries of the Company.
10-K
001-36687
21.1
March 8, 2017
23.1
Consent of KPMG LLP, Independent Registered Public Accounting Firm.
24.1
Powers of Attorney (contained on signature page).
31.1
Rule 13a-14(a) / 15d-14(a) Certification of Principal Executive Officer
31.2
Rule 13a-14(a) / 15d-14(a) Certification of Principal Financial Officer
32.1*
Section 1350 Certification of Principal Executive Officer
32.2*
Section 1350 Certification of Principal Financial Officer
97
Clawback Policy, effective as of October 2, 2023.
10-K
001-36687
97
February 29, 2024
101.INS
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document
101.SCH
Inline XBRL Taxonomy Extension Schema Document with Embedded Linkbases Document
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
Confidential treatment has been granted with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission.
Portions of this exhibit have been omitted in accordance with Item 601(b)(10) of Regulation S-K because they are private, confidential and not material.
# Indicates management contract or compensatory plan.
* The Certifications attached as Exhibits 32.1 and 32.2 that accompany this Annual Report on Form 10-K are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Xenon Pharmaceuticals Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-K, irrespective of any general incorporation language contained in such filing.
Item 16. Form 10-K Summary
Not applicable.
108
SIGNA TURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: February 27, 2025
XENON PHARMACEUTICALS INC.
By:
/s/ Ian Mortimer
Ian Mortimer
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints Dawn Svoronos, Ian Mortimer and Sherry Aulin, and each of them severally, as his or her true and lawful attorneys-in-fact and agents, with full power to act without the other and with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities (including his or her capacity as a director and/or officer of Xenon Pharmaceuticals Inc.) to sign any and all amendments and supplements to this report, and any and all other instruments necessary or incidental in connection herewith, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Commission.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Ian Mortimer
Ian Mortimer
President, Chief Executive Officer and Director (Principal Executive Officer)
February 27, 2025
/s/ Sherry Aulin
Chief Financial Officer (Principal Financial and Accounting Officer)
February 27, 2025
Sherry Aulin
/s/ Dawn Svoronos
Chair of the Board of Directors
February 27, 2025
Dawn Svoronos
/s/ Gillian Cannon
Director
February 27, 2025
Gillian Cannon
/s/ Steven Gannon
Director
February 27, 2025
Steven Gannon
/s/ Elizabeth Garofalo
Director
February 27, 2025
Elizabeth Garofalo
/s/ Justin Gover
Director
February 27, 2025
Justin Gover
/s/ Patrick Machado
Director
February 27, 2025
Patrick Machado
/s/ Gary Patou
Director
February 27, 2025
Gary Patou
109