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Item 1. Business

2026-02-26 compared with 2025-02-27 · 140 added, 130 removed, 594 unchanged (31% of the section changed)

We are a neuroscience-focused biopharmaceutical company committed to improving the lives of people living with neurological and psychiatric disorders.

We are advancing a novel product pipeline to address areas of high unmet medical need, including epilepsy and depression.

In addition to our proprietary product candidates, we also have partnered programs with academic and industry collaborators, including Neurocrine Biosciences, Inc., or Neurocrine Biosciences.

We are a neuroscience-focused biopharmaceutical company dedicated to drug discovery, clinical development and commercialization of life-changing therapeutics for patients in need.

We are advancing a differentiated product pipeline led by our investigational candidate, azetukalner, which is being studied in multiple Phase 3 studies in epilepsy, major depressive disorder, or MDD, and bipolar depression, or BPD.

Our early-stage pipeline includes Kv7 potassium channel openers and Nav sodium channel modulators being advanced for select high‑need indications, including pain.

Our goal is to build a fully-integrated and profitable biopharmaceutical company that discovers, develops, and commercializes innovative therapeutics to treat a range of neurological and psychiatric disorders.

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• Selectively establishing collaborations that allow us to potentially expand our internal capabilities and/or address broader commercial opportunities than may be possible independently;

• Identifying opportunities to further expand our pipeline though indication expansion, acquisition, or in-licensing of external product candidates;

• Commercializing product candidates alone or in collaboration with others.

• Identifying opportunities to further expand our pipeline through indication expansion, acquisition, or in-licensing of external product candidates;

• Commercializing product candidates alone or in collaboration with others, including our late-stage investigational candidate, azetukalner, which is being studied in epilepsy and depression.

Our Product Candidates

Azetukalner, a novel, highly potent, selective Kv7 potassium channel opener, represents the most advanced, clinically validated potassium channel modulator in late-stage clinical development for the treatment of multiple indications that include epilepsy, including focal onset seizures, or FOS, and primary generalized tonic-clonic seizures, or PGTCS, as well as neuropsychiatric disorders including major depressive disorder, or MDD, and bipolar depression, or BPD.

Azetukalner, a novel, potent Kv7 potassium channel opener, represents the most advanced, clinically-validated potassium channel modulator in late-stage clinical development for the treatment of multiple indications, including two in epilepsy – focal onset seizures, or FOS, and primary generalized tonic-clonic seizures, or PGTCS, – as well as neuropsychiatric disorders, including MDD or BPD.

Epilepsy Programs

Focal Onset Seizures

Phase 3 azetukalner clinical studies in FOS (X-TOLE2 and X-TOLE3) continue to advance, with the first topline data readout anticipated in the second half of 2025.

Designed closely after the Phase 2b X-TOLE clinical trial, the Phase 3 X-TOLE clinical trials are multicenter, randomized, double-blind, placebo-controlled studies evaluating the clinical efficacy, safety, and tolerability of 15 mg or 25 mg of azetukalner administered orally with food as adjunctive treatment in approximately 360 patients with FOS per study.

Phase 3 azetukalner clinical studies in FOS (X-TOLE2 and X-TOLE3) continue to progress.

The X-TOLE2 study has completed enrollment with 380 patients randomized, and the topline data readout is anticipated in the first half of March 2026.

The X-TOLE3 study continues to enroll and is intended to support regulatory submissions outside the United States.

X-TOLE3 enrollment in all countries except Japan is expected to complete in 2026.

Designed closely after the Phase 2b X-TOLE clinical study, the Phase 3 X-TOLE2 and X-TOLE3 clinical studies are multicenter, randomized, double-blind, placebo-controlled studies evaluating the clinical efficacy, safety, and tolerability of 15 mg or 25 mg of azetukalner administered orally with food as adjunctive treatment in approximately 360 patients with FOS per study.

The primary efficacy endpoint is the median percent change, or MPC, in monthly seizure frequency from baseline through the 12-week double-blind period, or DBP, of azetukalner compared to placebo.

Upon completion of the DBP in the Phase 3 FOS epilepsy studies, eligible patients may enter an OLE study for up to three years.

Upon completion of the DBP in the Phase 3 FOS epilepsy studies, eligible patients may enter an open label extension, or OLE, study for up to three years.

Primary Generalized Tonic-Clonic Seizures

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The primary efficacy endpoint is the MPC in monthly PGTCS frequency from baseline through the 12-week DBP of azetukalner compared to placebo.

Upon completion of the DBP in the X-ACKT study, eligible patients may enter an open-label extension, or OLE, study for up to three years.

Upon completion of the DBP in the X-ACKT study, eligible patients may enter an OLE study for up to three years.

Summary of Azetukalner Clinical Results in Epilepsy

Phase 1 studies conducted in healthy subjects suggested that azetukalner was generally well tolerated in the doses examined, and its pharmacokinetic profile supported a once-daily dosing schedule with food and without the need for titration, which has been utilized in all Phase 2 and Phase 3 trials.

In addition, data from a Phase 1b transcranial magnetic stimulation, or TMS, study – which was designed to assess azetukalner’s ability and potency to modulate cortical excitability – demonstrated activity in the target CNS tissue and helped inform dose selection for our Phase 2b clinical trial.

Phase 2b X-TOLE Clinical Trial:

In October 2021, we announced topline results from the Phase 2b X-TOLE clinical trial, which was designed as a randomized, double-blind, placebo-controlled, multicenter study to evaluate the clinical efficacy, safety, and tolerability of 10 mg, 20 mg, or 25 mg of azetukalner administered as once-daily adjunctive treatment with food in adult patients with focal epilepsy.

In addition, data from a Phase 1b transcranial magnetic stimulation, or TMS, study – which was designed to assess azetukalner’s ability and potency to modulate cortical excitability – demonstrated activity in the target central nervous system, or CNS, tissue and helped inform dose selection for our Phase 2b clinical study.

Phase 2b X-TOLE Clinical Study:

In October 2021, we announced topline results from the Phase 2b X-TOLE clinical study, which was designed as a randomized, double-blind, placebo-controlled, multicenter study to evaluate the clinical efficacy, safety, and tolerability of 10 mg, 20 mg, or 25 mg of azetukalner administered as once-daily adjunctive treatment with food in adult patients with focal epilepsy.

The study included a total of 325 randomized and treated subjects in the safety population and 323 subjects in the modified intent-to-treat population for the efficacy analyses.

Subjects had an average age of 40.8 ± 13.3 years, and 8.9%, 40.6%, or 50.5% of the subjects were on and continued taking one, two, or three stable background ASMs throughout the study, respectively, and failed a median of 6 previous ASMs prior to study entry.

The median baseline seizure frequency across the study groups was approximately 13.5 seizures per month.

Subjects had an average age of 40.8 ± 13.3 years, and 8.9%, 40.6%, or 50.5% of the subjects were on and continued taking one, two, or three stable background anti-seizure medications, or ASMs, throughout the study, respectively, and failed a median of six previous ASMs prior to study entry.

The median baseline seizure frequency across the study groups was approximately 13.5 seizures per 28 days.

Of the 285 subjects who completed the double-blind period, 96.5% entered the OLE to evaluate the long-term safety, tolerability, and effectiveness of azetukalner.

Summary of X-TOLE Efficacy Results in the DBP :

The X-TOLE trial met its primary efficacy endpoint with azetukalner demonstrating a statistically significant and dose-dependent reduction from baseline in monthly (defined as 28 days) focal seizure frequency when compared to placebo (monotonic dose response;

The X-TOLE study met its primary efficacy endpoint with azetukalner demonstrating a statistically significant and dose-dependent reduction from baseline in monthly (defined as 28 days) focal seizure frequency when compared to placebo (monotonic dose response;

Primary and secondary measures in the topline data set included a pairwise comparison of each active dose to placebo and a responder analysis with the proportion of patients who achieved a 50% or greater reduction in monthly focal seizure frequency from baseline.

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Summary of X-TOLE Safety Results in the DBP :

Azetukalner was generally well tolerated in the DBP with AEs generally consistent with other ASMs.

Azetukalner was generally well tolerated in the DBP with adverse events, or AEs, generally consistent with other ASMs.

The incidence of treatment-emergent adverse events, or TEAEs, was higher in the treatment groups as compared to the placebo group, with 62.3% of patients in the placebo group, 67.4% of patients in the azetukalner 10 mg group, 68.6% of patients in the azetukalner 20 mg group, and 85.1% of patients in the azetukalner 25 mg group experiencing at least one TEAE.

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The most recent interim data from the ongoing 7-year X-TOLE OLE, in which participants received open‑label azetukalner at a dose of 20 mg once daily with food, were presented in December 2025.

For ongoing OLE patients, monthly MPC reductions in FOS frequency ranged from 61% to 82% during month 1 to OLE study month 24 and were maintained at 85% at OLE study month 36.

Patients who were receiving 1 to 2 anti-seizure medications, or ASMs, at baseline experienced higher monthly MPC reductions in FOS frequency from baseline at OLE study month 36 (100% seizure reduction, n=67), compared to those receiving 3 ASMs (80.6% seizure reduction, n=80).

For ongoing OLE patients, monthly MPC reductions in FOS frequency ranged from 61% to 82% during month one to OLE study month 24 and were maintained at 91% at OLE study month 48.

Patients who were receiving one to two ASMs at baseline experienced higher monthly MPC reductions in FOS frequency from baseline at OLE study month 48 (100% seizure reduction, n=60), compared to those receiving three ASMs (82% seizure reduction, n=69).

For those participants who were treated for >48 months in the OLE, 38% (50/131) achieved seizure freedom for a period of at least 12 months.

Azetukalner continues to be generally well‑tolerated in the OLE, with AEs generally consistent with prior results in the double-blind period and other ASMs;

no new safety signals were identified.

A total of 182 participants were treated in the OLE for ≥12 months, 165 participants were treated for ≥24 months, and 143 participants were treated for ≥36 months at the time of the analysis cutoff (October 7, 2024).

Long-term safety of azetukalner in the OLE was comparable with the safety observed in the DBP.

Retention rates with azetukalner at 12, 24, 36, and 48 months into the OLE study period were 66%, 60%, 52%, and 46%, respectively.

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Seizures are generally described in two major groups:

focal onset seizures, or FOS, and generalized onset seizures.

focal onset seizures or FOS, and generalized seizures.

FOS are the most common type of seizure experienced by people with epilepsy.

FOS are localized within the brain and can either stay localized or spread to the entire brain, which is typically categorized as a secondarily generalized seizure.

FOS account for approximately 60% of seizures in the U.S., which results in a total FOS patient population of approximately 1.8 million patients.

Generalized onset seizures affect both sides of the brain or groups of cells on both sides of the brain at the same time.

Approximately 60% of people with epilepsy in the U.S.

have FOS, which results in a total patient population of approximately 1.8 million.

Generalized seizures affect both sides of the brain or groups of cells on both sides of the brain at the same time.

This term includes primary generalized tonic-clonic seizures, or PGTCS, absence seizures, and atonic seizures.

Generalized onset seizures account for approximately 30% of seizures in the U.S., or approximately 0.9 million patients, of which the majority experience PGTCS.

The remaining 10% of seizures in the U.S.

are characterized as unknown onset seizures, which occurs when the beginning of the seizure is unknown.

As more information is learned, unknown onset seizures may later be diagnosed as focal onset or generalized onset seizures.

Approximately 30% of people with epilepsy in the U.S., or approximately 0.9 million, have generalized seizures, of which the majority experience PGTCS.

The remaining 10% of people with epilepsy in the U.S.

experience seizures characterized as unknown onset seizures, which occurs when the beginning of the seizure is unknown.

As more information is learned, unknown onset seizures may later be diagnosed as focal onset or generalized seizures.

Numerous ASMs are available for the treatment of seizures in the U.S., although there are fewer indicated for PGTCS.

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We continue to explore the applicability of azetukalner in neuropsychiatric disorders based on establishing a strong scientific rationale, availability of preclinical and clinical data, and a determination of unmet medical needs.

A Phase 3 program evaluating azetukalner in major depressive disorder, or MDD, is underway, and we recently announced plans for a Phase 3 program in bipolar depression, or BPD, with initiation of the first of two azetukalner clinical studies in bipolar I and bipolar II depression expected by mid-year.

Phase 3 studies evaluating azetukalner in major depressive disorder, or MDD, and bipolar depression I or II, or BPD, are underway.

Major Depressive Disorder

Our Phase 3 MDD program includes three multicenter, randomized, double-blind, placebo-controlled clinical trials to evaluate the clinical efficacy, safety, and tolerability of 20 mg of azetukalner administered orally with food over the 6-week DBP as monotherapy treatment in approximately 450 patients with moderate-to-severe MDD per study.

Our Phase 3 MDD program currently includes two multicenter, randomized, double-blind, placebo-controlled clinical studies to evaluate the clinical efficacy, safety, and tolerability of 20 mg of azetukalner administered orally with food over the 6-week DBP as monotherapy treatment in approximately 450 patients with moderate-to-severe MDD per study.

The primary efficacy endpoint is the change from baseline in the HAM-D17 score at week 6 in patients who received azetukalner compared to placebo.

Upon completion of the DBP, eligible patients may enter an OLE study for up to 12 months.

X-NOVA2, the first of three planned Phase 3 clinical trials evaluating azetukalner in patients with MDD, is currently enrolling patients, and X-NOVA3 is expected to initiate mid-year.

In addition, patient enrollment in the investigator-sponsored Phase 2 proof-of-concept study of azetukalner in MDD led by Icahn School of Medicine at Mount Sinai is complete, and topline results are anticipated in the first half of 2025.

Two Phase 3 clinical studies evaluating azetukalner in patients with MDD, X-NOVA2 and X-NOVA3, are currently enrolling patients.

Topline data from X-NOVA2 are expected in the first half of 2027.

Bipolar Depression

Our Phase 3 BPD program currently includes one multicenter, randomized, double-blind, placebo-controlled clinical study to evaluate the clinical efficacy, safety, and tolerability of 20 mg of azetukalner administered orally with food over the 6-week DBP as monotherapy treatment in approximately 400 patients with BPD I or II.

The primary efficacy endpoint is the change from baseline in the Montgomery-Åsberg Depression Rating Scale, or MADRS, score at week 6 in patients who received azetukalner compared to placebo.

Upon completion of the DBP, eligible patients may enter an OLE study for up to 12 months.

Summary of Azetukalner Clinical Results in MDD

Phase 2 Proof-of-Concept X-NOVA Clinical Trial:

In November 2023, we reported topline results from the randomized, double-blind, placebo-controlled, Phase 2 proof-of-concept X-NOVA clinical trial, which evaluated the clinical efficacy, safety, and tolerability of 10 mg and 20 mg of azetukalner taken once daily with food in 168 patients with moderate to severe MDD.

The primary objective was to assess the efficacy of azetukalner compared to placebo on improvement of depressive symptoms in subjects diagnosed with moderate to severe MDD, using the Montgomery-Åsberg Depression Rating Scale, or MADRS, score change through week 6.

Phase 2 Proof-of-Concept X-NOVA Clinical Study:

In November 2023, we reported topline results from the randomized, double-blind, placebo-controlled, Phase 2 proof-of-concept X-NOVA clinical study, which evaluated the clinical efficacy, safety, and tolerability of 10 mg and 20 mg of azetukalner taken once daily with food in 168 patients with moderate to severe MDD.

Summary of X-NOVA Efficacy Data in the DBP:

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A clear dose response and a clinically meaningful, but not statistically significant, 3.04 difference between placebo and the azetukalner 20 mg group (p=0.135) was observed.

A significantly different change was achieved on the following additional endpoints in the study:

• Pre-specified endpoint of the Hamilton Depression Rating Scale, or HAM-D17, at week 6 with a mean reduction of 10.18 in the placebo group and 13.26 in the azetukalner 20 mg group (p=0.042);

• Key secondary endpoint of a change in the Snaith-Hamilton Pleasure Scale, or SHAPS, measuring anhedonia at week 6 with a reduction of 5.30 in the placebo group and 7.77 in the azetukalner 20 mg group (p=0.046);

• MADRS at week 1 with a mean reduction of 4.88 in the placebo group and 7.54 in the azetukalner 20 mg group (p=0.047) demonstrating early onset of efficacy;

• At least minimally improved symptoms of depression as assessed by physicians using the Clinical Global Impression of Improvement, or CGI-I, (p=0.004) in the azetukalner 20 mg group compared to placebo.

A significant change was achieved on the following additional endpoints in the study:

• Pre-specified endpoint of the Hamilton Depression Rating Scale, or HAM-D17, at week 6 with a mean reduction of 10.18 in the placebo group and 13.26 in the azetukalner 20 mg group (p=0.042 (nominal));

• MADRS at week 1 with a mean reduction of 4.88 in the placebo group and 7.54 in the azetukalner 20 mg group (p=0.047 (nominal)) demonstrating early onset of efficacy;

• At least minimally improved symptoms of depression as assessed by physicians using the Clinical Global Impression of Improvement, or CGI-I, (p=0.004 (nominal));

in the azetukalner 20 mg group compared to placebo.

Summary of X-NOVA Safety and Tolerability Data in the DBP:

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Azetukalner was not associated with notable weight gain, and patients did not report notable sexual dysfunction.

Investigator-Led Phase 2 Proof-of-Concept Study of Azetukalner in MDD

We are also collaborating with the Icahn School of Medicine at Mount Sinai to support an ongoing investigator-sponsored Phase 2 proof-of-concept, randomized, parallel-arm, placebo-controlled multi-site study of azetukalner for the treatment of MDD in approximately 60 subjects.

The primary objective of the study is to investigate the effect of azetukalner on the brain reward circuit as measured by the change in bilateral ventral striatum activity as assessed by functional MRI, or fMRI.

The secondary objectives are to test the effect of azetukalner compared to placebo on clinical measures of depression and anhedonia using the MADRS and SHAPS, respectively.

About Major Depressive Disorder (MDD)

About Major Depressive Disorder (MDD) and Bipolar Disorder (BPD)

MDD is a common, chronic neurological disorder characterized by low mood, inability to feel pleasure, feelings of guilt and worthlessness, low energy, and other emotional and physical symptoms that last for two weeks or more, and which impairs social, occupational, educational, or other important functioning.

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Results of the Sequenced Treatment Alternatives to Relieve Depression, or STAR*D trial, funded by the National Institute of Mental Health, indicate that nearly two-thirds of diagnosed and treated patients do not experience adequate treatment response with first-line therapy, and that the majority of these initial failures also fail second-line treatment, highlighting the need for new anti-depressant medications with novel mechanisms of action.

BPD refers to the depressive episodes that are part of bipolar disorder, a psychiatric condition impacting an estimated 6 million U.S.

On average, patients diagnosed with bipolar disorder spend 3 times as many days with depressive symptoms than with manic/hypomanic symptoms, and the severity of depressive symptoms has been associated with functional impairment, reduced quality of life, and a higher prevalence of attempted suicide.

Effective treatments for BPD are limited, and many patients are non-adherent due to intolerability and side effects.

There remains a significant unmet medical need for safe and effective therapies to treat patients with BPD.

Intellectual Property Related to Azetukalner

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Next Generation Ion Channel Modulators

We continue to expand our portfolio by leveraging our extensive ion channel expertise to discover and develop potassium and sodium channel therapeutics, with the goal of filing multiple investigational new drug applications, or INDs, or equivalent, in 2025.

IND-enabling work is underway with multiple Kv7 development candidates, which we believe may have utility in a broad range of therapeutic indications including seizures, pain, and neuropsychiatric disorders, such as MDD and BPD.

In addition, IND-enabling work is underway with a lead Nav1.7 development candidate.

Nav1.7 is an important pain-related target, based on strong human genetic validation, that may represent a new class of medicines without the limitations of opioids.

We also expect a lead candidate within our Nav1.1 program will enter IND-enabling studies in 2025 as pre-clinical data suggests that targeting Nav1.1 could potentially address the underlying cause and symptoms of Dravet Syndrome.

We continue to expand our portfolio by leveraging our extensive ion channel expertise to discover and develop potassium and sodium channel therapeutics.

Acute and chronic pain affects more people than diabetes, heart disease, and cancer combined, yet effective, long-term treatment options are scarce.

Acute pain serves as the body's normal, short-term alarm signal in response to an injury or illness.

In contrast, chronic pain is a widespread condition defined by the International Association for the Study of Pain, or IASP, as pain that lasts or recurs for more than three months, persisting even after the initial cause has healed.

2021 data from the US Centers for Disease Control and Prevention, or CDC, show that chronic pain affects more than one in five American adults, often impacting daily life and well-being.

In 2025, we initiated two Phase 1 Single Ascending Dose/Multiple Ascending Dose, or SAD/MAD, studies in healthy adult participants investigating two novel potential candidates for pain.

The first is for XEN1701 targeting the sodium channel Nav1.7 – an important pain-related target based on strong human genetic validation.

The second is for XEN1120 targeting the Kv7 potassium channel.

Both Nav1.7 and Kv7 represent potential new classes of pain medicines without the limitations of opioids.

Completion of both Phase 1 SAD/MAD studies is expected in 2026, and we plan to evaluate the results of both studies for their potential to support initiating Phase 2 proof-of-concept studies in acute pain.

Investigational New Drug, or IND, application-enabling studies are ongoing for our Nav1.1 program for the treatment of Dravet syndrome.

Pre-clinical data suggest that targeting Nav1.1 could potentially address the underlying cause and symptoms of the disease.

Our Partnered Program with Neurocrine Biosciences

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The agreement also included a multi-year research collaboration to discover, identify and develop additional novel Nav1.6 and Nav1.2/1.6 inhibitors, which was completed in June 2022.

As part of this ongoing collaboration, NBI-921355, a Nav1.2/1.6 sodium channel inhibitor, has progressed into a Phase 1 first-in-human study as a potential treatment for certain types of epilepsy, triggering an anticipated $7.5 million milestone payment to Xenon.

For a more detailed description of the terms of this agreement with Neurocrine Biosciences, see “—Collaborations, Commercial and License Agreements” below.

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For the remainder of the upfront payment, concurrently with the entry into the Collaboration Agreement, the parties entered into the Share Purchase Agreement (as defined below) pursuant to which we issued and sold common shares to Neurocrine Biosciences for an aggregate purchase price of $20.0 million.

In January 2022, we received an aggregate milestone payment of $15.0 million in the form of a $6.75 million payment in cash and a $8.25 million equity investment, based on the U.S.

Food and Drug Administration's, or FDA’s, acceptance of a protocol amendment to expand the study population of a clinical trial in pediatric patients with SCN8A-DEE.

In February 2025, NBI-921355, a Nav1.2 and Nav1.6 sodium channel inhibitor in development for the potential treatment for certain types of epilepsy, has progressed into a Phase 1 clinical study in healthy adult participants, triggering an anticipated $7.5 million milestone payment to us.

In February 2025, NBI-921355, a Nav1.2 and Nav1.6 sodium channel inhibitor in development for the potential treatment for certain types of epilepsy, progressed into a Phase 1 clinical study in healthy adult participants, triggering a $7.5 million milestone payment to us.

The Collaboration Agreement also provides for potential aggregate development and regulatory milestone payments from Neurocrine Biosciences to us of up to $325.0 million for a NBI-921352 product and up to $247.5 million for each other Compound up to a maximum of three other Compounds.

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Such license will be royalty-free with respect to any terminated product for which a Phase 2 clinical trial was not completed prior to the effective date of termination, and otherwise will be royalty-bearing ranging from a low-single digit percentage to a high-single digit percentage depending on the stage of development of the applicable product at the effective date of termination.

Share Purchase Agreements

In January 2022, pursuant to the Collaboration Agreement, we entered into a Share Purchase Agreement, or SPA, with Neurocrine Biosciences pursuant to which we issued and sold 258,986 of our common shares to Neurocrine Biosciences in private placements for aggregate purchase price of $8.25 million ($31.855 per share).

The purchase price represented a 15% premium to our 30-day volume-weighted average price immediately prior to the public announcements.

Asset Purchase Agreement with 1st Order Pharmaceuticals, Inc.

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As part of our business strategy, we strive to protect the proprietary technologies that we believe are important to our business, including pursuing and maintaining patent protection intended to cover our product candidates and their methods of use and processes for their manufacture, as well as other inventions that are important to our business.

We plan to continue to expand our intellectual property estate by filing patent applications directed to compositions, methods of use, treatment and patient selection, formulations and manufacturing processes created or identified from our ongoing development of our product candidates and future products.

We plan to continue to expand our intellectual property estate by filing patent applications for new inventions directed to, among other things, compositions, methods of use, treatment and patient selection, formulations and manufacturing processes created or identified from our ongoing development of our product candidates and future products.

We also rely on trade secrets, internal know-how, technological innovations and agreements with third parties to develop, maintain and protect our competitive position.

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As of December 31, 2025, we owned, co-owned or licensed 22 U.S.

issued patents, 78 issued patents in foreign jurisdictions (exclusive of European patent national validations), and over 355 pending patent applications.

issued patents, 68 issued patents in foreign jurisdictions (exclusive of European and Eurasian patent national validations), and over 295 pending patent applications.

With regard to azetukalner, as of December 31, 2025, we owned 8 U.S.

issued patents, 33 issued patents in foreign jurisdictions (exclusive of European patent national validations) and over 175 pending patent applications.

The issued patents, along with any patents issuing from these applications, are expected to expire between 2028 and 2045 (absent any extensions of term).

With regard to our selective inhibitors of Nav1.6 and/or Nav1.2, as of December 31, 2024, we owned 10 U.S.

issued patents, 43 issued patents in foreign jurisdictions (exclusive of European patent national validations), and over 90 pending patent applications.

The issued patents, along with any patents issuing from these applications, are expected to expire between 2037 and 2044 (absent any extensions of term).

Pursuant to our collaboration with Neurocrine Biosciences, Neurocrine Biosciences controls the prosecution, maintenance and other matters relating to the patent portfolio for the selective Nav1.6 inhibitors and dual Nav1.2/1.6 inhibitors subject thereto, although we have a right to comment.

issued patents, 36 issued patents in foreign jurisdictions (exclusive of European and Eurasian patent national validations) and over 170 pending patent applications.

The issued patents, along with any additional patents issuing from these applications, are expected to expire between 2028 and 2046 (absent any extensions of term).

With regard to our selective inhibitors of Nav1.6 and/or Nav1.2 (including NBI-355, formerly known as XEN193), as of December 31, 2025, we owned 10 U.S.

issued patents, 30 issued patents in foreign jurisdictions (exclusive of European and Eurasian patent national validations), and over 35 pending patent applications.

The issued patents, along with any additional patents issuing from these applications, are expected to expire between 2037 and 2046 (absent any extensions of term).

Pursuant to our collaboration with Neurocrine Biosciences, Neurocrine Biosciences controls the prosecution, maintenance and other matters relating to some of the patent portfolio for the selective Nav1.6 inhibitors and dual Nav1.2/1.6 inhibitors subject thereto, although we have a right to comment.

With regard to our development programs, including targets related to Kv7 (exclusive of azetukalner), Nav1.1 and Nav1.7, as of December 31, 2025, we owned 4 U.S.

issued patents and over 80 pending U.S.

and foreign patent applications.

issued patents and over 80 pending patent applications.

The issued patents, along with any patents issuing from these applications, are expected to expire between 2036 and 2046 (absent any extensions of term).

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Any product candidates or products that we, or our collaborators, successfully develop and commercialize will compete with existing products and new products that may become available in the future.

Many of the companies against which we are competing or against which we may compete in the future have significantly greater financial resources and expertise in research and development, manufacturing, pre-clinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we, or our collaborators, do.

Many of the companies against which we are competing or against which we may compete in the future have significantly greater financial resources and expertise in research and development, manufacturing, pre-clinical testing, conducting clinical studies, obtaining regulatory approvals and marketing approved products than we, or our collaborators, do.

Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors.

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Our competitors also may obtain FDA, European Medicines Agency, or EMA, or other foreign regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market.

In addition, our ability to compete may be affected in many cases by insurers or other third-party payers.

Aside from the product marketplace, our competitors also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites, recruiting patients for clinical trials, and by acquiring technologies complementary to, or necessary for, our programs.

In addition, our ability to compete may be affected in many cases by insurers or other third-party payers or public health systems to secure favorable coverage and reimbursement as well as the commercial success of our product candidates.

Aside from the product marketplace, our competitors also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical study sites, recruiting patients for clinical studies, and by acquiring technologies complementary to, or necessary for, our programs.

The key competitive factors affecting the success of all of our product candidates, if approved, are likely to be their efficacy, safety, convenience, price, the effectiveness of alternative products, the level of competition and the availability of coverage, and adequate reimbursement from government and other third-party payers.

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Commonly prescribed ASMs include brivaracetam, carbamazepine, cenobamate, clobazam, eslicarbazepine acetate, ethosuximide, gabapentin, lacosamide, lamotrigine, levetiracetam, oxcarbazepine, perampanel, phenytoin, topiramate, and valproate.

There are other ASMs in development that could potentially compete with our products, including product candidates in development from AbbVie Inc., Biohaven Ltd., Neurona Therapeutics Inc., NeuShen Therapeutics, Inc., Praxis Precision Medicines, Inc., QurAlis Corporation, Rapport Therapeutics, Inc., SK Life Science Inc., Supernus Pharmaceuticals, Inc.

There are other ASMs in development that could potentially compete with our products, including product candidates in development from Biohaven Ltd., Jazz Pharmaceuticals, plc, Neurona Therapeutics Inc., NeuShen Therapeutics, Inc., Otsuka Pharmaceutical Co.

Ltd., Praxis Precision Medicines, Inc., QurAlis Corporation, Rapport Therapeutics, Inc., SK Life Science Inc., Supernus Pharmaceuticals, Inc.

and Zhimeng Biopharma, Inc.

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Patients with MDD are typically treated with a variety of ADs, which include selective serotonin reuptake inhibitors, or SSRIs, benzodiazepines, serotonin / norepinephrine reuptake inhibitors, or SNRIs, norepinephrine and dopamine reuptake inhibitors, or NDRIs, N-methyl-D-aspartate, or NMDA, receptor agonists and atypical antipsychotics.

Currently prescribed antidepressants include benzodiazepines, brexpiprazole, bupropion, bupropion/dextromethorphan, cariprazine, citalopram, duloxetine, escitalopram, esketamine, fluoxetine, ketamine, sertraline, trazodone, tricyclic agents, venlafaxine, vilazodone and vortioxetine.

We are aware of several companies developing product candidates for the treatment of MDD including AbbVie Inc., Alto Neuroscience, Inc., Axsome Therapeutics, Inc., Biohaven Ltd., Intra-Cellular Therapies, Inc., Johnson & Johnson Innovative Medicine, Neumora Therapeutics, Inc., and Neurocrine Biosciences, Inc.

Currently prescribed antidepressants include benzodiazepines, brexpiprazole, bupropion, bupropion/dextromethorphan, cariprazine, citalopram, duloxetine, escitalopram, esketamine, fluoxetine, ketamine, lumateperone, sertraline, trazodone, tricyclic agents, venlafaxine, vilazodone and vortioxetine.

We are aware of several companies developing product candidates for the treatment of MDD including AbbVie Inc., Alto Neuroscience, Inc., Axsome Therapeutics, Inc., Johnson & Johnson Innovative Medicine, Neumora Therapeutics, Inc., Neurocrine Biosciences, Inc., Otsuka Pharmaceutical Co.

Ltd., and Vanda Pharmaceuticsals, Inc.

If one or more of our proprietary product candidates were approved for the treatment of depressive episodes associated with bipolar I or II disorder (bipolar depression), we anticipate that they could potentially compete with other generic antipsychotic and atypical antipsychotic medications.

Patients with bipolar depression are typically treated with a variety of atypical antipsychotics as well as mood stabilizers and sometimes in combination with antidepressants.

We are aware of several companies developing product candidates for the treatment of bipolar depression including Alto Neuroscience, Inc, Neumora Therapeutics, Inc.

and NRx Pharmaceuticals, Inc.

We are aware of several companies developing product candidates for the treatment of bipolar depression including Alto Neuroscience, Inc., Autobahn Therapeutics, Inc., Eli Lilly and Company, Neumora Therapeutics, Inc.

and NeuroRx, Inc.

Government Regulation

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An IND is a request for authorization from the FDA to administer an investigational drug product to humans.

The central focus of an IND submission is on the general investigational plan and the protocol(s) for human trials.

The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns or questions regarding the proposed clinical trials and places the IND on clinical hold within that 30-day time period.

In such a case, the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical trial can begin.

The central focus of an IND submission is on the general investigational plan and the protocol(s) for human studies.

The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns or questions regarding the proposed clinical studies and places the IND on clinical hold within that 30-day time period.

In such a case, the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical study can begin.

Some long-term pre-clinical testing, such as animal tests of reproductive AEs and carcinogenicity, may continue after the IND is submitted.

The FDA may also impose clinical holds on a drug candidate at any time before or during clinical trials due to safety concerns or non-compliance.

Accordingly, submission of an IND does not guarantee the FDA will allow clinical trials to begin, or that, once begun, issues will not arise that could cause the trial to be suspended or terminated.

If the FDA accepts the IND, the drug can then be studied in human clinical trials to determine if the drug is safe and effective.

The clinical stage of development involves the administration of the drug product to human subjects, including patients, under the supervision of qualified investigators in accordance with GCPs, which establish standards for conducting, recording data from, and reporting the results of clinical trials, and also include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial.

The FDA may also impose clinical holds on a drug candidate at any time before or during clinical studies due to safety concerns or non-compliance.

Accordingly, submission of an IND does not guarantee the FDA will allow clinical studies to begin, or that, once begun, issues will not arise that could cause the study to be suspended or terminated.

If the FDA accepts the IND, the drug can then be studied in human clinical studies to determine if the drug is safe and effective.

The clinical stage of development involves the administration of the drug product to human subjects, including patients, under the supervision of qualified investigators in accordance with GCPs, which establish standards for conducting, recording data from, and reporting the results of clinical studies, and also include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical study.

Human clinical studies are typically conducted in three sequential phases that may overlap or be combined:

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These clinical studies are used to gain additional experience from the treatment of patients in the intended therapeutic indication, particularly for long-term safety follow-up.

In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA.

In certain instances, the FDA may mandate the performance of Phase 4 clinical studies as a condition of approval of an NDA.

During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data and clinical study investigators.

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Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the drug does not undergo unacceptable deterioration over its labeled shelf life.

Further, due to disasters and public health emergencies, we may be required to develop and implement additional clinical trial policies and procedures designed to help protect subjects.

For example, the FDA has issued guidance on conducting clinical trials during major disruptions due to disasters and public health emergencies, which describes a number of considerations for sponsors of clinical trials impacted by these events, to ensure the safety of trial participants, maintaining GCP compliance, and minimizing risks to trial integrity.

We may be required to make further adjustments to our clinical trials or business operations based on current or future guidance and regulatory requirements as a result of major disruptions due to disasters and public health emergencies.

Further, due to disasters and public health emergencies, we may be required to develop and implement additional clinical study policies and procedures designed to help protect subjects.

For example, the FDA has issued guidance on conducting clinical studies during major disruptions due to disasters and public health emergencies, which describes a number of considerations for sponsors of clinical studies impacted by these events, to ensure the safety of study participants, maintaining GCP compliance, and minimizing risks to study integrity.

We may be required to make further adjustments to our clinical studies or business operations based on current or future guidance and regulatory requirements as a result of major disruptions due to disasters and public health emergencies.

Review and Approval Processes

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If a complete response letter is issued, the applicant may either resubmit the NDA, addressing all of the deficiencies identified in the letter, or withdraw the application.

If a product receives regulatory approval, the approval will be limited to the specific diseases and dosages studied in clinical trials, and the indications for use may otherwise be limited, which could restrict the commercial value of the product.

If a product receives regulatory approval, the approval will be limited to the specific diseases and dosages studied in clinical studies, and the indications for use may otherwise be limited, which could restrict the commercial value of the product.

Further, the FDA may require that certain contraindications, warnings or precautions be included in the product labeling.

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A fast track drug also may be eligible for accelerated approval and priority review.

In addition, the fast track designation may be withdrawn by the FDA if it believes that the designation is no longer supported by data emerging in the clinical trial process.

In addition, the fast track designation may be withdrawn by the FDA if it believes that the designation is no longer supported by data emerging in the clinical study process.

The FDA may give a priority review designation to drugs that offer major advances in treatment, or provide a treatment where no adequate therapy exists.

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Most products that are eligible for fast track designation are also likely to be considered appropriate to receive a priority review.

Under the provisions of the new Food and Drug Administration Safety and Innovation Act, or FDASIA, enacted by Congress in 2012, a sponsor can request designation of a drug candidate as a “breakthrough therapy,” typically by the end of the drug’s Phase II trials.

A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

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The Hatch-Waxman Act permits a patent term extension of up to five years as compensation for patent term lost during product development and the FDA regulatory review process.

Patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date.

Patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the product’s FDA approval date.

Only one patent applicable to an approved product is eligible for extension and the application for the patent term extension must be submitted within 60 days of receipt of FDA approval.

Patent and Trademark Office, in consultation with the FDA, reviews and approves the application for any patent term extension.

Patent and Trademark Office, in consultation with the FDA, reviews and approves any application for patent term extension.

Under the Hatch-Waxman Act, a drug product containing a new chemical entity as its active ingredient is entitled to five years of market exclusivity.

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During this exclusivity period, the FDA may not approve an abbreviated new drug application, or ANDA, or a 505(b)(2) NDA submitted by another company that contains the previously approved active moiety.

However, an ANDA or 505(b)(2) NDA may be submitted after four years if it contains a certification of patent invalidity or non-infringement.

However, an ANDA or 505(b)(2) NDA may be submitted to the FDA after four years if it contains an appropriate certification of patent invalidity or non-infringement.

A drug product whose active ingredient was previously FDA-approved, and for which the sponsor is required to generate new clinical investigations such as to support new indications, dosages, strengths or dosage forms, is entitled to three years of market exclusivity.

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A drug product can also obtain pediatric market exclusivity in the U.S.

and, if granted, adds six months to existing marketing exclusivities and any Orange Book-listed patent term(s).

and which, if granted, adds six months to existing marketing exclusivities and any Orange Book-listed patent term(s).

This six-month exclusivity, which runs from the end of other exclusivity periods and/or patent term(s), may be granted based on the timely, voluntary, and as-agreed upon completion of a pediatric study in accordance with an FDA-issued “Written Request” for such a study, even if the data do not show that the drug product was effective in the pediatric population studied.

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Poison Prevention Packaging Act.

Additionally, prescription drug products must comply with the Drug Supply Chain Security Act, or DSCSA, and its requirements for product tracing and supply chain security.

Manufacturing, sales, promotion and other activities are also potentially subject to federal and state consumer protection and unfair competition laws.

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If the product has not received a national MA in any EEA member state at the time of application, it can be approved simultaneously in various EEA member states through the decentralized procedure.

Under the decentralized procedure, an identical dossier is submitted to the NCAs of each of the EEA member states in which the MA is sought, one of which is selected by the applicant as the Reference Member State (the RMS).

The competent authority of the RMS prepares a draft assessment report, a draft summary of the product characteristics (SmPC), and a draft of the labeling and package leaflet, which are sent to the other EEA member states, referred to as the Concerned Member States, for their approval.

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Since leaving the EU, the MHRA has introduced changes to national licensing procedures, including procedures to prioritize access to new medicines that will benefit patients, an accelerated assessment procedure, and new routes of evaluation for novel products and biotechnological products.

There is no wholesale recognition of EU pharmaceutical legislation between the jurisdictions, and EU MAs do not automatically provide a valid basis for the commercialization of medicinal products in Great Britain, From January 1, 2024, companies are able to request the MHRA to recognize MAs granted by acceptable Reference Regulators in foreign jurisdictions (including the EU) under a new International Recognition Procedure, or IRP.

From January 1, 2024, companies are able to request the MHRA to recognize MAs granted by acceptable Reference Regulators in foreign jurisdictions (including the EU) under a new International Recognition Procedure, or IRP.

IRP allows the MHRA to take into account the expertise and decision-making of trusted regulatory authorities to conduct targeted assessments of IRP applications while retaining the authority to reject applications if the evidence provided is considered insufficiently robust.

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federal and state levels that seek to reduce healthcare costs generally and drug costs specifically.

In the U.S., for example, the Patient Protection and Affordable Care Act, as amended, or PPACA, is a sweeping law enacted in March of 2010 that expanded healthcare coverage through Medicaid expansion and the implementation of the individual mandate for health insurance coverage and which included changes to the coverage and reimbursement of drug products under government healthcare programs.

Beyond the PPACA, there are ongoing and widespread healthcare reform efforts, a number of which have focused on regulation of prices or payment for drug products.

For example, federal legislation eliminated a statutory cap on Medicaid drug rebate program rebates effective January 1, 2024.

As another example, the Inflation Reduction Act (IRA) of 2022 includes a number of changes intended to address rising prescription drug prices in Medicare Parts B and D.

These changes, which have varying implementation dates, include caps on Medicare Part D out-of-pocket costs, Medicare Part B and Part D drug inflation rebates and a new Medicare Part D manufacturer discount drug program (replacing the PPACA Medicare Part D coverage gap discount program), and a drug price negotiation program for certain high-spend Medicare Part B and D drugs.

The IRA is likely to have a significant impact on the pharmaceutical industry as implementation proceeds.

As another example, in 2022, subsequent to the enactment of the IRA, the Biden administration announced its commitment to expanding certain IRA reforms.

There have been significant and wide-ranging reforms to federal policy and the federal government under the new Trump administration.

Drug pricing and payment reform was a focus of the prior Trump administration, and that focus is likely to continue under the new Trump administration.

Other potential healthcare reform efforts under the Trump administration may affect access to healthcare coverage or the funding of healthcare benefits.

There is significant uncertainty regarding the nature or impact of any such reform implemented by the Trump administration through executive action or by Congress.

These changes or other changes could affect the market conditions for our products.

We expect continued scrutiny on drug pricing and government price reporting from Congress, agencies, and other bodies.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

For example, on January 5, 2024, the FDA approved Florida’s Section 804 Importation Program, or SIP, proposal to import certain drugs from Canada for specific state healthcare programs.

It is unclear how this program will be implemented, including which drugs will be chosen, and whether it will be subject to legal challenges in the United States or Canada.

Other states have also submitted SIP proposals that are pending review by the FDA.

Any such approved importation plans, when implemented, may result in lower drug prices for products covered by those programs.

Additionally, a number of states have enacted state drug price transparency and reporting laws that could substantially increase our compliance burdens and expose us to greater liability under such state laws if and when we have marketed products.

Healthcare reform efforts have been and may continue to be subject to scrutiny and legal challenge.

For example, with respect to the PPACA, tax reform legislation was enacted that eliminated the tax penalty established for individuals who do not maintain mandated health insurance coverage beginning in 2019 and, in 2021, the U.S.

Supreme Court dismissed the latest judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the PPACA.

As another example, revisions to regulations under the federal anti-kickback statute would remove protection for traditional Medicare Part D discounts offered by pharmaceutical manufacturers to pharmacy benefit managers and health plans.

Pursuant to court order, the removal was delayed and recent legislation imposed a moratorium on implementation of the rule until January 2032.

As another example, the IRA drug price negotiation program has been challenged in litigation filed by various pharmaceutical manufacturers and industry groups.

For example, in 2010 the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, collectively, the PPACA, was enacted and includes measures that have significantly changed the way healthcare is financed by both governmental and private insurers.

In the U.S., in recent years, including under the current United States presidential administration, the pharmaceutical industry has been a particular focus of such reform efforts and has been significantly affected by major legislative, administrative, and executive initiatives.

For example, the Inflation Reduction Act (IRA) of 2022 includes a number of changes intended to address rising prescription drug prices in Medicare Parts B and D.

These changes include caps on Medicare Part D out-of-pocket costs, Medicare Part B and Part D drug price inflation rebates, a new Medicare Part D manufacturer discount drug program (replacing the PPACA Medicare Part D coverage gap discount program), and a drug price negotiation program for certain high-spend Medicare Part B and D drugs.

The IRA has had and will likely continue to have a significant impact on the pharmaceutical industry.

More recently, an Executive Order was issued in April 2025 with multiple directives aimed at lowering drug prices, including refining the Medicare drug price negotiation program established by the IRA accelerating competition for high-cost prescription drugs by accelerating approval of generics and biosimilars and facilitating the process for re-classifying prescription drugs as over-the-counter drugs, and increasing drug importation.

In May 2025, another Executive Order was issued that directed government agencies and officials to identify most-favored nation pricing targets for prescription drugs (and looked to pharmaceutical manufacturers to make significant progress towards delivering target prices to patients), prevent foreign countries from disproportionately shifting the cost of global pharmaceutical research and development to the United States, and facilitate direct-to-consumer purchasing programs for pharmaceutical manufacturers to sell their products to patients at the most-favored-nation price, In the wake of the Executive Orders and related executive initiatives, some pharmaceutical manufacturers have announced direct-to-consumer offerings with discounted prices or reached agreements with the federal government regarding pricing for drugs, including prices for Medicaid drugs and newly launched products.

A website sponsored by the federal government offering pharmaceutical direct-to-consumer channels has also been launched.

Federal agencies are developing new drug pricing pilot programs, such as a Medicaid model which would authorize the federal government to negotiate Medicaid supplemental rebates with participating manufacturers on behalf of state Medicaid programs, in exchange for standardized coverage criteria for participating manufacturer drugs, and proposed Medicare Part B and Part D pilot models that, if finalized as proposed, would replace existing inflation-based Medicare rebates with rebates determined on the basis of international prices, for drugs and patients subject to the model.

Changes to certain Medicare price reporting requirements for drugs beginning in 2026 will likely increase the administrative and compliance burden for manufacturers.

Many of these reform initiatives would require additional legal and/or administrative action to implement- and may be subject to change.

Other healthcare reform efforts actions may affect access to healthcare coverage or the funding of health care benefits, although the full impact of such efforts or actions cannot be predicted.

For example, the Congressional Budget Office has estimated that Medicaid provisions in the 2025 budget reconciliation legislation, including restrictions in eligibility and funding for Medicaid, as well as changes to the healthcare marketplace such as the elimination of certain subsidies, will increase the number of uninsured patients.

At the state level, legislatures have passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing costs disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

Additionally, a number of states have enacted states drug price transparency and reporting laws that increase compliance burdens and exposure for non-compliance.

Further, a number of states have enacted state drug price transparency and reporting laws that could substantially increase our compliance burdens and expose us to greater liability under such state laws if and when we have marketed products.

These and other health reform measures that are implemented may have a material adverse effect on our operations.

Healthcare reform efforts have been and may continue to be subject to scrutiny, legal challenge and subsequent amendment, creating further uncertainty.

Other government actions could have an adverse effect upon, and could prevent, our products’ commercial success.

For example, the Trump Administration’s announced tariff on branded or patented drugs may increase the cost of drug products that are imported from abroad or manufactured using products or materials imported from abroad.

The timeline for implementation of this tariff has not yet been finalized.

As another example, the Budget Control Act of 2011, as amended, resulted in the imposition of reductions in Medicare (but not Medicaid) payments to providers in 2013 and remains in effect through 2032 unless additional Congressional action is taken.

Any significant spending reductions affecting Medicare, Medicaid or other publicly funded or subsidized health programs that may be implemented and/or any significant taxes or fees that may be imposed on us could have an adverse impact on our results of operations.

We expect that healthcare reform measures that have been or in the future may be adopted, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved product, and could seriously harm any future revenue generation.

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Given the lack of clarity in laws and their implementation, any future activities (if we obtain approval and/or reimbursement from federal healthcare programs for our product candidates) could be subject to challenge.

Federal laws, including the Medicaid Drug Rebate Program, require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs.

Federal laws, including the Medicaid Drug Rebate Program, require pharmaceutical manufacturers to calculate, certify and report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs.

These laws are complex and the failure to calculate reported prices correctly or provide appropriate prices and rebates can expose a manufacturer to penalties and other sanctions.

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Our board of directors and management recognize that creating long-term enterprise value is advanced by considering the interests and concerns of many stakeholders, including those of our employees.

As of December 31, 2024, we had 327 employees, including 316 full-time and part-time permanent employees, of which 181 are located in Canada and 135 are located in the U.S.

As of December 31, 2025, we had 370 employees, including 358 full-time and part-time regular employees, of which 183 are located in Canada and 175 are located in the U.S.

Of our employees, 263 were primarily engaged in research and development, 107 of whom hold a Ph.D.

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For the last several years, our company turnover rate has been lower than the industry market average.

We have established comprehensive and competitive compensation and benefits programs to attract and retain highly qualified personnel and to incentivize and reward strong performance.

In addition to providing our employees with competitive salaries, we believe that employees should share in the potential financial gains resulting from the advancement of our programs by way of annual bonuses to permanent employees based on the achievement of corporate and/or personal objectives.

To align the interests of our employees with those of our shareholders, we award stock options to all permanent employees, both upon initial hiring and annually thereafter.

We have established comprehensive and competitive total compensation and benefits programs to attract and retain highly qualified personnel and to incentivize and reward strong performance.

In addition to providing our employees with competitive salaries, we believe that employees should share in the potential financial gains resulting from the advancement of our programs by way of annual bonuses to regular employees based on the achievement of corporate and/or individual objectives.

To align the interests of our employees with those of our shareholders, we award stock options and RSUs to all regular employees, both upon initial hiring and annually thereafter.

Our leave programs include paid vacation, personal, sick, disability and other paid and unpaid leaves.

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As a biopharmaceutical company with highly educated employees, we believe that our employees must stay current with advances in our industry and continue to grow in their careers.

We support our employees' further development through a variety of internal training and external professional development opportunities, including conference attendance and tuition reimbursement.

We support our employees' further development through a variety of internal training and external professional development opportunities, including conference attendance and tuition assistance to complete advanced degrees.

We recruit the best-qualified employees regardless of sex, gender, ethnicity, race, religion, or other protected traits, and it is our policy to comply with all applicable laws related to discrimination in the workplace.

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Manufacturing

We currently rely, and expect to continue to rely, on third-party contract manufacturers, or CMOs, to manufacture (or produce sufficient quantities of materials required for the manufacture of) our product candidates for pre-clinical testing and clinical trials, and we intend to do so for the commercial manufacture of our products.

We currently rely, and expect to continue to rely, on third-party contract manufacturers, or CMOs, to manufacture (or produce sufficient quantities of materials required for the manufacture of) our product candidates for pre-clinical testing and clinical studies, and we intend to do so for the commercial manufacture of our products.

Similarly, we may rely on collaborators to manufacture, either directly or through CMOs, product candidates licensed to them.

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Corporate Information

We were incorporated in the Province of British Columbia on November 5, 1996 under the predecessor to the Business Corporations Act (British Columbia) under the name “Xenon Bioresearch Inc.” We continued from British Columbia to the federal jurisdiction pursuant to Section 187 of the Canada Business Corporations Act, or the CBCA, on May 17, 2000 and concurrently changed our name to “Xenon Genetics Inc.” We registered as an extra-provincial company in British Columbia on July 10, 2000 and changed our name to “Xenon Pharmaceuticals Inc.” on August 24, 2004.

We were incorporated in the Province of British Columbia on November 5, 1996 under the predecessor to the Business Corporations Act (British Columbia) under the name “Xenon Bioresearch Inc.” We continued from British Columbia to the federal jurisdiction pursuant to Section 187e of the Canada Business Corporations Act, or the CBCA, on May 17, 2000 and concurrently changed our name to “Xenon Genetics Inc.” We registered as an extra-provincial company in British Columbia on July 10, 2000 and changed our name to “Xenon Pharmaceuticals Inc.” on August 24, 2004.

We had one wholly-owned subsidiary as of December 31, 2025, Xenon Pharmaceuticals USA Inc., which was incorporated in Delaware on December 2, 2016.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business