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Item 7. Management’s Discussion and Analysis

2026-02-26 compared with 2025-02-27 · 80 added, 104 removed, 207 unchanged (47% of the section changed)

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Azetukalner Clinical Development

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 – FOS and PGTCS – as well as neuropsychiatric disorders, including MDD and BPD.

Epilepsy Programs

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

• Phase 3 X-ACKT clinical study continues to enroll patients and is intended to support potential regulatory submissions in an additional epilepsy indication of PGTCS.

• Building upon more than 700+ patient-years of data to date from the ongoing X-TOLE open-label extension, or OLE, study, we continue to generate long-term scientific evidence supporting azetukalner’s compelling efficacy and safety profile, with approximately one in three patients on drug for at least 36 months achieving seizure freedom for a period of one year or longer.

Neuropsychiatric Program

• 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.

• We recently announced plans for a Phase 3 BPD program with initiation of the first of two azetukalner clinical studies in bipolar I and bipolar II depression expected by mid-year.

Initiation of this program is based on a strong scientific rationale – supported by promising clinical data with azetukalner and the Kv7 mechanism in MDD and preclinical research examining the genetic links between BPD and Kv7 and evidence of Kv7 downregulation in BPD – as well as a large unmet medical need.

• 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.

Early-Stage Pipeline:

Next Generation Ion Channel Modulators

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

• IND-enabling work is underway with multiple Kv7 development candidates.

Kv7 may have utility in a broad range of therapeutic indications including seizures, pain, and neuropsychiatric disorders, such as MDD and BPD.

• 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 expect a lead candidate within our Nav1.1 program will enter IND-enabling studies in 2025.

Pre-clinical data suggests that targeting Nav1.1 could potentially address the underlying cause and symptoms of Dravet Syndrome

• Topline data from the Phase 3 X-TOLE2 study of azetukalner in FOS is on track for the first half of March 2026.

• Phase 3 X-TOLE3 study of azetukalner in FOS continues to enroll and is intended to support regulatory submissions outside the United States.

We have completed an ethnobridging study and shared results with Japan’s Pharmaceutical and Medical Devices Agency, or PMDA.

We aligned with PMDA to enroll approximately 60 of the planned 360 X-TOLE3 participants in Japan to support a potential regulatory submission in Japan.

X-TOLE3 enrollment outside of Japan is expected to complete in 2026.

• Phase 3 X-ACKT study of azetukalner in PGTCS continues to enroll and is intended to support regulatory submissions for an additional epilepsy indication.

• We presented 48-month data from the X-TOLE OLE study at the American Epilepsy Society, or AES, annual meeting, reinforcing the long-term efficacy and safety of azetukalner with more than 775 patient-years of exposure data in the OLE.

Among participants treated for ≥48 months, reductions in monthly FOS frequency were over 90% from double-blind period baseline, with over 38% achieving at least 12 months of seizure freedom.

Depression Programs

• Enrollment is ongoing for the Phase 3 X-NOVA2 and X-NOVA3 studies evaluating azetukalner in patients with MDD, with topline data from X-NOVA2 expected in H1 2027.

• Phase 3 X-CEED study evaluating azetukalner in patients with BPD I or II is underway.

Early-Stage R&D

We continue to expand our portfolio of innovative potassium and sodium channel modulators.

Nav1.7 and Kv7 are important targets for pain and have been developed using our strong heritage in human genetics, deep understanding of ion channel biology, and expertise in novel chemistries to design potent, selective ion channel modulators.

• Phase 1 SAD/MAD study in healthy adult participants is underway for XEN1701 targeting Nav1.7.

Study completion is expected in 2026 to support initiating a Phase 2 proof-of-concept study in acute pain.

• Phase 1 SAD/MAD study in healthy adult participants is underway for XEN1120 targeting Kv7.

Study completion is expected in 2026 to support initiating a Phase 2 proof-of-concept study in acute pain.

• IND-enabling studies are ongoing for our Nav1.1 program.

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

Partnered Program

• As part of our ongoing collaboration with Neurocrine Biosciences to develop treatments for epilepsy, 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 Xenon.

• In collaboration with Neurocrine Biosciences, a Phase 1 study is ongoing for NBI-921355, an investigational, selective inhibitor of voltage-gated sodium channels Nav1.2 and Nav1.6 in development for the potential treatment of certain types of epilepsy.

We have funded our operations primarily through the sale of equity securities, funding received from our licensees and collaborators, and debt financing.

We did not recognize any revenue in the years ended December 31, 2024 and 2023, as compared to revenue from collaboration agreements of $9.4 million for the year ended December 31, 2022.

We recognized revenue from collaboration agreements of $7.5 million for the year ended December 31, 2025.

We did not recognize any revenue in the years ended December 31, 2024 and 2023.

To date, we have not had any products approved for sale and have not generated any revenue from product sales.

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• advance additional product candidates into pre-clinical and clinical development;

• seek regulatory and marketing approvals for any of our product candidates that successfully complete clinical trials;

• seek regulatory and marketing approvals for any of our product candidates that successfully complete clinical studies;

• require the manufacture of larger quantities of our product candidates for clinical development and potential commercialization;

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We cannot provide assurance as to the timing of future milestone or royalty payments under the Neurocrine Collaboration, or that we will receive any of these payments at all.

The following table is a summary of revenue recognized for the years ended December 31, 2024, 2023 and 2022 (in thousands):

Year Ended December 31,

Recognition of the transaction price

Research and development services

Milestone payments

Total revenue

Pursuant to the terms of the Neurocrine Collaboration, we received an upfront cash payment of $30.0 million and a $20.0 million equity investment in our common shares in December 2019.

The overall transaction price of the arrangement was measured and allocated to certain performance obligations and revenue was recognized as those performance obligations were completed.

In January 2022, based on the U.S.

Food and Drug Administration’s (“FDA”) approval to expand the SCN8A-DEE study population to include subjects aged between 2 and 11 years, we received an aggregate milestone payment of $15.0 million in the form of $6.75 million cash and $8.25 million equity investment in our common shares.

The equity investment was measured at fair value on the date of issuance and the resulting premium with the cash payment, was recognized as revenue.

Research and development services were recognized as revenue at fair market value as the services were rendered.

The research collaboration was completed in June 2022.

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, which was recognized as revenue.

Operating Expenses

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• third-party expenses incurred in connection with the pre-clinical and clinical development of our product candidates, including under agreements with CROs;

• third-party expenses relating to formulation, process development and manufacture of drug substance and drug product for use in our pre-clinical testing, clinical trials and potential commercial supply;

• third-party expenses relating to formulation, process development and manufacture of drug substance and drug product for use in our pre-clinical testing, clinical studies and potential commercial supply;

• third-party acquisition, license and collaboration fees;

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Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and third-party service providers.

We expect that our research and development expenses will increase substantially in the future as we continue to invest in research and development activities related to developing our product candidates, including investments in manufacturing, as our programs advance into later stages of development and we continue to conduct clinical trials, advance our internal drug discovery programs into pre-clinical development and continue our early-stage research.

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size, scope and duration of later-stage clinical trials.

We expect that our research and development expenses will increase substantially in the future as we continue to invest in research and development activities related to developing our product candidates, including investments in manufacturing, as our programs advance into later stages of development and we continue to conduct clinical studies, advance our internal drug discovery programs into pre-clinical development and continue our early-stage research.

Clinical development timelines, likelihood of regulatory approval, and commercialization and associated costs are uncertain, difficult to estimate, and can vary significantly.

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We anticipate that our interest income will continue to fluctuate depending on our cash and investment balances and interest rates.

Unrealized fair value gain (loss) on trading securities.

Unrealized fair value gain on trading securities.

Trading securities are recorded at fair value.

Unrealized fair value gain (loss) on trading securities is related to changes in market pricing on the investments classified as trading securities during the period.

Unrealized fair value gain on trading securities is related to changes in market pricing on the investments classified as trading securities during the period.

Foreign exchange gain (loss).

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The items in our financial statements requiring significant estimates and judgments are as follows:

Revenue recognition:

Revenue recognition is a critical accounting estimate due to the magnitude and nature of the revenues we receive.

Our primary sources of revenue are derived from non-refundable upfront payments, funding for research and development services, milestone payments, and royalties under license and collaboration agreements.

In contracts where we have more than one performance obligation to provide our customer with goods or services, each performance obligation is evaluated to determine whether it is distinct.

The consideration under the contract is then allocated between the distinct performance obligations based on their respective relative standalone selling prices.

The estimated standalone selling price of each deliverable reflects our best estimate of what the selling price would be if the deliverable was regularly sold on a standalone basis and is determined by reference to market rates for the good or service when sold to others or by using an adjusted market assessment approach if selling price on a standalone basis is not available.

The consideration allocated to each distinct performance obligation is recognized as revenue when control is transferred to our customer for the related goods or services.

We generally recognize revenue from non-refundable upfront payments over the estimated term of the performance obligation or period in which the underlying benefit is transferred to our customer.

If non-refundable license fees have value to the customer on a standalone basis, separate from the undelivered performance obligations, they are recognized upon delivery.

We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.

Consideration in exchange for research and development services performed by us on behalf of the licensee is recognized upon performance of such activities at rates consistent with prevailing market rates.

Consideration associated with at-risk substantive performance milestones, including sales-based milestones, is recognized as revenue using the most likely amount method when it is probable that a significant reversal of the cumulative revenue recognized will not occur.

At the end of each subsequent reporting period, we re-evaluate the probability of achievement of such milestones, and if necessary, adjust the estimate of the overall transaction price.

Sales-based royalties received in connection with licenses of intellectual property are subject to a specific exception in the revenue standards, whereby the consideration is not included in the transaction price and recognized in revenue until the customer’s subsequent sales or usages occur.

Research and development costs:

Research and development costs is a critical accounting policy due to the magnitude of the costs and the requirement to estimate the proportionate performance of vendors to calculate third-party accrued and prepaid research and development expenses.

We accrue for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of pre-clinical studies and clinical trials, and manufacturing activities.

Third-party service providers generally provide estimates of proportionate performance to allow us to determine an appropriate accrual.

When determining the adequacy of an accrual, we analyze progress based on the level of services performed, progress of the studies, including the phase or completion of events, and contracted costs.

We recognize external research and development costs for research and development activities conducted by third-party service providers, which include the conduct of pre-clinical studies and clinical studies, and manufacturing activities.

When determining the research and development expense, we use information and data provided by our vendors and third-party service providers.

This process involves reviewing open contracts, communicating with applicable vendors and third-party service providers to identify services that have been performed, estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs.

Payments made to third parties under these arrangements in advance of the receipt of the related services are recorded as prepaid expenses until the services are rendered.

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Stock-based compensation is a critical accounting estimate due to the magnitude of and the many assumptions that are required to calculate stock-based compensation expense.

We grant stock options to employees, consultants, directors and officers pursuant to our equity incentive plans.

We grant stock options, restricted share units (“RSUs”) and performance share units (“PSUs”) to certain employees, consultants, directors and officers pursuant to our equity incentive plans.

Stock-based compensation expense is amortized on a straight-line basis over the requisite service period, and forfeitures are accounted for in the period they occur.

Compensation expense is recorded using the fair value method.

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The expected volatility is based on the historical volatility of our common shares calculated based on a period of time commensurate with the expected term assumption.

The expected term of our stock options has been determined utilizing our available historical data and we recognize forfeitures as they occur.

We amortize the fair value of stock options using the straight-line method over the vesting period of the options.

We also grant performance share unit awards (“PSUs”) to certain employees and officers pursuant to our equity incentive plans.

The grant date fair value of PSUs is determined based on the closing market price of our common shares.

Compensation expense is recognized if the performance condition is considered probable of achievement using our best estimates and is amortized on a straight-line basis over the requisite service period of each separately vesting tranche of the award.

Forfeitures are accounted for in the period they occur.

The expected term of our stock options has been determined utilizing our available historical data.

The grant date fair value of RSUs and PSUs is determined based on the closing market price of our common shares.

Compensation expense for PSUs is recognized if the performance condition is considered probable of achievement using our best estimates.

Changes in any of these assumptions may materially affect the fair value of awards granted and the amount of stock-based compensation expense recognized.

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Increase/(Decrease)

Collaboration revenue

Research and development expenses

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Interest income

Unrealized fair value gain (loss) on trading securities

Unrealized fair value gain on trading

Foreign exchange gain (loss)

Loss before income taxes

We did not recognize any revenue in the years ended December 31, 2024 and 2023, as compared to revenue of $9.4 million for 2022.

Revenue recognized in 2022 was related to the Neurocrine Collaboration, including $0.4 million of the overall transaction price, $1.9 million in research and development services, and a $7.1 million milestone.

Collaboration revenue of $7.5 million recognized for the year ended December 31, 2025 was related to a milestone payment in connection with the Neurocrine Collaboration.

We did not recognize any revenue in the years ended December 31, 2024 and 2023.

Research and Development Expenses

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Direct external costs:

Pre-clinical and discovery programs

Pain programs (XEN1701, XEN1120)

Pre-clinical, discovery and other programs

Indirect costs:

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Research and development expenses

Research and development expenses increased by $42.9 million for the year ended December 31, 2024 as compared to 2023.

Direct external costs related to azetukalner increased by $17.5 million primarily due to our ongoing Phase 3 epilepsy clinical trials and the initiation of our first Phase 3 MDD clinical trial, manufacturing activities to support current and future clinical trials as well as our potential NDA submission, partially offset by a decrease in costs for our Phase 2 MDD clinical trial which completed in late 2023.

The decrease in direct external costs related to XEN496 of $5.2 million is due to our decision in May 2023 to no longer pursue the clinical development of XEN496.

Pre-clinical and discovery program costs increased by $6.0 million due to the advancement of multiple potential drug candidates targeting Kv7, Nav1.7 and Nav1.1.

Personnel-related costs increased by $22.9 million driven by an increase in headcount to support late-stage development and an increase in stock-based compensation expense due to an increase in the number of options granted at a higher fair value.

Research and development expenses increased by $61.7 million for the year ended December 31, 2023 as compared to 2022.

Direct external costs related to azetukalner increased by $51.9 million primarily due to ongoing site initiation and patient enrollment in our Phase 3 epilepsy clinical trials, increase in manufacturing activities to support current and future clinical trials and a potential NDA submission, as well as the completion of our Phase 2 MDD clinical trial.

The decrease in direct external costs related to XEN496 of $9.6 million is due to our decision in May 2023 to no longer pursue the clinical development of XEN496.

Direct external costs related to azetukalner increased by $59.1 million for the year ended December 31, 2025, primarily due to our ongoing Phase 3 clinical studies in epilepsy, MDD and BPD.

Preclinical, discovery and other program costs increased by $7.6 million due to the advancement of multiple potential drug candidates targeting Kv7, Nav1.7 and Nav1.1.

Pain program costs increased by $2.7 million due to the advancement of XEN1120 and XEN1701.

Personnel-related costs increased by $19.8 million due to higher headcount to support late-stage product candidate development and an increase in stock-based compensation expense.

Direct external costs related to azetukalner increased by $17.5 million for the year ended December 31, 2024, primarily due to our ongoing Phase 3 epilepsy clinical studies and the initiation of our first Phase 3 MDD clinical study, manufacturing activities to support current and future clinical studies as well as our potential NDA submission, partially offset by a decrease in costs for our Phase 2 MDD clinical study, which completed in late 2023.

Pre-clinical, discovery and other program costs decreased by $4.0 million due to our decision in May 2023 to no longer pursue the clinical development of XEN496, partially offset by increase in costs due to the advancement of multiple potential drug candidates targeting Kv7, Nav1.7 and Nav1.1.

Pain program costs increased by $4.8 million due to the advancement of XEN1120 and XEN1701.

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General and administrative expenses

General and administrative expenses increased by $22.4 million for the year ended December 31, 2024 as compared to 2023.

Personnel-related costs increased by $16.1 million primarily due to higher headcount to support our expanding research and development activities and future potential commercialization as well as an increase in stock-based compensation expense due to an increase in the number of options granted at a higher fair value.

Personnel-related costs increased by $4.6 million for the year ended December 31, 2025, primarily due to higher headcount to support our expanding research and development activities and future potential commercialization, partially offset by a decrease in stock-based compensation expense and recruitment costs.

Professional and consulting fees increased by $4.3 million due to an increase in pre-commercial expenses, partially offset by lower legal costs associated with our ongoing business activities.

Other general and administrative costs increased by $1.9 million primarily due to higher information technology costs to support our ongoing business activities.

Personnel-related costs increased by $16.1 million for the year ended December 31, 2024, primarily due to higher headcount to support our expanding research and development activities and future potential commercialization as well as an increase in stock-based compensation expense due to an increase in the number of options granted at a higher fair value.

Professional and consulting fees increased by $5.4 million primarily associated with legal services in support of our ongoing business operations and pre-commercial activities.

General and administrative expenses increased by $13.7 million for the year ended December 31, 2023 as compared to 2022.

Personnel-related costs increased by $9.4 million primarily due to higher headcount to support our expanding research and development activities as well as an increase in stock-based compensation expense due to an increase in the number of options granted at a higher fair value.

Professional and consulting fees increased by $3.6 million primarily associated with legal services in support of our ongoing business operations and market research activities.

The following table summarizes our other income for the years ended December 31, 2025, 2024 and 2023 together with changes in those items (in thousands):

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Interest income

Unrealized fair value gain (loss) on trading securities

Unrealized fair value gain on trading securities

Foreign exchange gain (loss)

Other income increased by $9.5 million for the year ended December 31, 2024 as compared to 2023.

Interest income increased by $14.3 million driven by a higher average balance of marketable securities and higher average market yields on investments.

Interest income decreased by $15.1 million for the year ended December 31, 2025, driven by a lower average balance of marketable securities and lower average market yields on investments.

The increase in foreign exchange gains of $2.4 million was due to fluctuations in the value of the Canadian dollar, partially offset by a lower balance of cash and cash equivalents and marketable securities denominated in Canadian dollars.

Interest income increased by $14.3 million for the year ended December 31, 2024, driven by a higher average balance of marketable securities and higher average market yields on investments.

The unrealized fair value gain on trading securities decreased by $3.6 million due to the fact that we did not hold any marketable securities classified as trading in 2024.

Other income increased by $27.5 million for the year ended December 31, 2023 as compared to 2022.

Interest income increased by $18.9 million driven by a higher balance of marketable securities and an increase in market yields on investments.

The unrealized fair value gain on trading securities increased by $6.5 million due to changes in market yields on trading securities, partially offset by a lower balance of trading securities.

Liquidity and Capital Resources

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We entered into an “at-the-market” equity offering sales agreement in August 2020, amended as of March 2022, with Jefferies LLC and Stifel, Nicolaus & Company, Incorporated, or the ATM Program, and a new prospectus supplement was filed with the SEC on August 9, 2024, pursuant to which we refreshed the ATM Program and may sell common shares having gross proceeds of up to $350.0 million, from time to time.

As of December 31, 2024, an aggregate of 310,000 common shares have been sold for proceeds of $12.1 million, net of commissions and transaction expenses.

As of December 31, 2025, an aggregate of 2,961,023 common shares have been sold for proceeds of $124.2 million, net of commissions and transaction expenses, of which $112.2 million, net of commissions and transaction expense.

were raised during the three months ended December 31, 2025.

As of February 23, 2026, we sold an additional 3,134,119 common shares for proceeds of $130.0 million, net of commissions and transaction expenses.

Funding Requirements

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seek regulatory and marketing approvals for any of our product candidates that successfully complete clinical studies;

manufacture larger quantities of our product candidates of clinical development and potential commercialization;

manufacture larger quantities of our product candidates for clinical development and potential commercialization;

hire additional commercial, clinical, scientific, management and administrative personnel;

acquire or in-license other product candidates and technologies;

make milestone or other payments under our in-license or other agreements, including, without limitation, payments to 1st Order Pharmaceuticals, Inc and other third parties;

make milestone or other payments under our in-license or other agreements, including, without limitation, payments to 1st Order Pharmaceuticals, Inc.

and other third parties;

maintain, protect and expand our intellectual property portfolio;

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However, our estimates and assumptions may prove to be wrong, and we cannot guarantee that our existing capital resources will be sufficient to conduct and complete all of our anticipated research and development efforts and future commercialization efforts.

Additionally, the process of testing drug candidates in clinical trials is costly, and the timing of progress in these trials remains uncertain.

Additionally, the process of testing drug candidates in clinical studies is costly, and the timing of progress in these studies remains uncertain.

Further, inflation may affect our use of capital resources by increasing our cost of labor and research and development expenses.

Our long-term funding requirements will consist of operational, capital, and manufacturing expenditures, including those contractual commitments described below.

Because of the inherent risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of capital outflows and operating expenditures associated with our long-term anticipated pre-clinical studies and clinical trials.

Contractual Commitments

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Net cash provided by financing activities

(1) Amounts have been reclassified as described in Note 2 of our consolidated financial statements.

Operating Activities

For the year ended December 31, 2025, net cash used in operating activities totaled $279.1 million, compared to $181.4 million in 2024.

The increase was primarily related to higher research and development and general and administrative expenses, as well as changes in operating assets and liabilities, partially offset by higher interest income.

The increase was primarily related to higher research and development and general and administrative expenses, lower interest income as well as changes in operating assets and liabilities, partially offset by revenue recognized in connection with our collaboration agreement with Neurocrine Biosciences.

For the year ended December 31, 2024, net cash used in operating activities totaled $181.4 million, compared to $151.1 million in 2023.

The increase was primarily related to higher research and development and general and administrative expenses, and a decrease in revenue recognized, partially offset by higher interest income and changes in operating assets and liabilities.

Investing Activities

For the year ended December 31, 2025, net cash provided by investing activities totaled $218.0 million, compared to $165.0 million in 2024.

The change was driven primarily by a decrease in the purchase of marketable securities, net of redemptions, as well as a decrease in the purchases of property, plant and equipment.

For the year ended December 31, 2024, net cash provided by investing activities totaled $165.0 million, compared to net cash used of $111.4 million in 2023.

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In addition, there was a decrease in the purchases of property, plant and equipment.

For the year ended December 31, 2023, net cash used in investing activities totaled $111.4 million, compared to $293.4 million in 2022.

The change was driven primarily by an increase in the redemption of marketable securities, net of purchases.

This was partially offset by an increase in the purchases of property, plant and equipment.

Financing Activities

For the year ended December 31, 2025, net cash provided by financing activities totaled $117.1 million, compared to $12.1 million in 2024.

The decrease was primarily related to net proceeds from the issuance of common shares of $12.1 million in 2024 as compared to net proceeds of $353.5 million in 2023 from the issuance of common shares and pre-funded warrants.

The increase was primarily related to net proceeds from the issuance of common shares of $112.2 million in 2025 as compared to net proceeds of $12.1 million in 2024 from the issuance of common shares.

In addition, there was a $4.9 increase in proceeds from stock options exercises.

For the year ended December 31, 2024, net cash provided by financing activities totaled $12.1 million, compared to $353.5 million in 2023.

The increase was primarily related to net proceeds of $353.5 million in 2023 as compared to net proceeds of $277.8 million in 2022 from the issuance of common shares and pre-funded warrants.

Related Party Transactions

For a description of our related party transactions, see “Certain Relationships and Related Transactions, and Director Independence.”

Outstanding Share Data

As of February 24, 2025, we had 76,542,811 common shares issued and outstanding, outstanding pre-funded warrants to purchase an additional 2,173,081 common shares, outstanding stock options to purchase an additional 10,364,025 common shares, outstanding performance share units convertible into 194,000 common shares and an outstanding warrant to purchase an additional 40,000 common shares.

Quantitative and Qualitat ive Disclosures About Market Risk

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dollars, particularly those denominated in Canadian dollars.

We also hold Canadian dollar denominated cash and cash equivalents, accounts receivable and accounts payable.

We also hold cash and cash equivalents, other receivables and accounts payable denominated in Canadian dollars.

Changes in foreign currency exchange rates can create significant foreign exchange gains or losses to us.

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dollar to the Canadian dollar would have a material effect on our operating results.

Interest rate sensitivity

Interest rate risk

As of December 31, 2025, we had cash and cash equivalents and marketable securities of $586.0 million.

Our interest rate sensitivity is primarily attributable to our cash and cash equivalents and marketable securities.

Interest rate risk relates to potential changes in interest income and the fair value of our investment portfolio.

Cash and cash equivalents are short-term in nature and would not have a material impact from changes in interest rates.

Marketable securities are primarily fixed-income securities and are subject to fair value changes as interest rates fluctuate.

A 100 basis point, or 1%, unfavorable change in interest rates would have resulted in approximately a $1.9 million decrease in the fair value of our marketable securities as of December 31, 2025.

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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 7. Management’s Discussion and Analysis