XBiotech Inc.

Previous wording

Following the Janssen Transaction in December 2019, the tender offer in February 2020, and the dividends paid in July 2021, the accumulated deficit as of June 30, 2025 was ($103.5) million. We had net losses of $1.8 million and $12.6 million for the three months and six months ended June 30, 2025, respectively, compared to $13.0 million and $23.0 million for the three months and six months ended June 30, 2024, respectively. We do not expect to generate any revenue in 2025. In addition, we expect to incur significant and increasing operating losses for the foreseeable future as we advance our drug candidates from discovery through preclinical testing and clinical. In addition to these increasing research and development expenses, we expect general and administrative costs to increase, particularly in consideration of current inflationary trends. We will need to generate significant revenues to achieve or sustain profitability, and we may never do so. As of June 30, 2025, we had 92 employees.

Current wording

Following the Janssen Transaction in December 2019, the tender offer in February 2020, and the dividends paid in July 2021, the accumulated deficit as of September 30, 2025 was $(109.5) million. We had net losses before income tax of $6.0 million and $18.6 million for the three months and nine months ended September 30, 2025, respectively, compared to $5.0 million and $28.0 million for the three months and nine months ended September 30, 2024, respectively. We do not expect to generate any revenue in 2025. In addition, we expect to incur significant and increasing operating losses for the foreseeable future as we advance our drug candidates from discovery through preclinical testing and clinical. In addition to these increasing research and development expenses, we expect general and administrative costs to increase, particularly in consideration of current inflationary trends. We will need to generate significant revenues to achieve or sustain profitability, and we may never do so. As of September 30, 2025, we had 88 employees.

Previous wording

Clinical development timelines, likelihood of success and total costs vary widely. We do not currently track our internal research and development costs or our personnel and related costs on an individual drug candidate basis. We use our research and development resources, including employees and our drug discovery technology, across multiple drug development programs. As a result, we cannot state precisely the costs incurred for each of our research and development programs or our clinical and preclinical drug candidates. From inception through June 30, 2025, we have recorded total research and development expenses, including share-based compensation, of $366.6 million. Our total research and development expenses for the three months and six months ended June 30, 2025 were $5.3 million and $17.0 million, respectively, compared to $13.0 million and $22.8 million for the three months and six months ended June 30, 2024, respectively. Share-based compensation accounted for $19 thousand and $2.7 million for the three months and six months ended June 30, 2025, respectively, compared to $0.2 million and $0.5 million for the three months and six months ended June 30, 2024, respectively, related to research and development.

Current wording

Clinical development timelines, likelihood of success and total costs vary widely. We do not currently track our internal research and development costs or our personnel and related costs on an individual drug candidate basis. We use our research and development resources, including employees and our drug discovery technology, across multiple drug development programs. As a result, we cannot state precisely the costs incurred for each of our research and development programs or our clinical and preclinical drug candidates. From inception through September 30, 2025, we have recorded total research and development expenses, including share-based compensation, of $371.7 million. Our total research and development expenses for the three months and nine months ended September 30, 2025 were $5.1 million and $22.0 million, respectively, compared to $7.1 million and $29.9 million for the three months and nine months ended September 30, 2024, respectively. Share-based compensation related to research and development accounted for $17 thousand and $2.7 million for the three months and nine months ended September 30, 2025, respectively, compared to $0.2 million and $0.7 million for the three months and nine months ended September 30, 2024, respectively.

Previous wording

Research and development expenses, as a percentage of total operating expenses for the three months and six months ended June 30, 2025 were 84% and 85%, respectively, compared to 87% and 89% for the three months and six months ended June 30, 2024, respectively. The percentages, excluding share-based compensation, for the three months and six months ended June 30, 2025 were 85% and 87%, respectively, compared to 85% and 86% for the three months and six months ended June 30, 2024.

Current wording

Research and development expenses, as a percentage of total operating expenses for the three months and nine months ended September 30, 2025 were 84% and 85%, respectively, compared to 90% and 89% for the three months and nine months ended September 30, 2024, respectively. The percentages of research and development expenses compared to total operating expenses, excluding share-based compensation, for the three months and nine months ended September 30, 2025 were 84% and 86%, respectively, compared to 91% and 90% for the three months and nine months ended September 30, 2024.

Previous wording

General and administrative expense consists primarily of salaries and related expenses for personnel in administrative, finance, business development and human resource functions, as well as the legal costs of pursuing patent protection of our intellectual property and patent filing and maintenance expenses, share–based compensation, and professional fees for legal services. Our total general and administration expenses for the three months and six months ended June 30, 2025 were $1.0 million and $2.9 million, respectively, compared to $2.0 million and $3.0 million for the three months and six months ended June 30, 2024, respectively. Share-based compensation accounted for $88 thousand and $0.8 million for the three months and six months ended June 30, 2025, respectively, and $0.1 million and $0.3 million for the three months and six months ended June 30, 2024, respectively, related to general and administrative expenses.

Current wording

General and administrative expense consists primarily of salaries and related expenses for personnel in administrative, finance, business development, and human resource functions, as well as the legal costs of pursuing patent protection of our intellectual property and patent filing, maintenance expenses, share–based compensation, and professional fees for legal services. Our total general and administration expenses for the three months and nine months ended September 30, 2025 were $1.0 million and $3.9 million, respectively, compared to $0.8 million and $3.8 million for the three months and nine months ended September 30, 2024, respectively. Share-based compensation related to general and administrative accounted for $7 thousand and $0.8 million for the three months and nine months ended September 30, 2025, respectively, and $0.1 million and $0.4 million for the three months and nine months ended September 30, 2024, respectively, related to general and administrative expenses.

Previous wording

General and administrative expenses, as a percentage of total operating expenses for the three months and six months ended June 30, 2025 were 16% and 15%, respectively, compared to 13% and 12% for the three months and six months ended June 30, 2024, respectively. The percentages, excluding share-based compensation, for the three months and six months ended June 30, 2025 were 15% and 13%, respectively, compared to 13% and 11% for the three months and six months ended June 30, 2024.

Current wording

General and administrative expenses, as a percentage of total operating expenses for the three months and nine months ended September 30, 2025 were 16% and 15%, respectively, compared to 10% and 11% for the three months and nine months ended September 30, 2024, respectively. The percentages of general and administrative expense compared to total operating expenses, excluding share-based compensation, for the three months and nine months ended September 30, 2025 were 16% and 14%, respectively, compared to 9% and 10% for the three months and nine months ended September 30, 2024.

Previous wording

Research and development expenses decreased $7.6 million to $5.3 million for the three months ended June 30, 2025, compared to $13.0 million for the three months ended June 30, 2024. The decrease of salaries and related expenses was mainly due to the $5.0 million bonus to the Chief Executive Officer in June 2024, in which 85% was allocated to research and development expenses. In 2025, the bonus was granted earlier, in the first quarter. The decrease of clinical trial and sponsored research expenses was mainly due to no trials being active during the three months ended June 30,2025.

Current wording

Research and development expenses decreased $2.0 million to $5.1 million for the three months ended September 30, 2025, compared to $7.1 million for the three months ended September 30, 2024. The decrease was mainly due to clinical trial and sponsored research expenses with no trials being active during the three months ended September 30, 2025. Laboratory and manufacturing supply expenses also declined due to a decrease in drug manufacturing activities.

Previous wording

Research and development expenses decreased $5.9 million to $17.0 million for the six months ended June 30, 2025, compared to $22.8 million for the six months ended June 30, 2024. The decrease was primarily due to clinical trials and sponsored research expenses, as no trials were in progress during the six months ended June 30, 2025. The decrease in salaries and related expenses was mainly due to the $4.0 million bonus to the Chief Executive Officer in March 2025, compared to $5.0 million in June 2024, in which 85% was allocated to research and development expenses. In addition, stock-based compensation increased due to the issuance of stock options with immediate vesting and grant date fair value at $3.0 million to the Chief Executive Officer in March 2025, with 85% of the expense allocated to research and development.

Current wording

Research and development expenses decreased $7.9 million to $22.0 million for the nine months ended September 30, 2025, compared to $30.0 million for the nine months ended September 30, 2024. The decrease was primarily due to clinical trials and sponsored research expenses, as no trials were in progress during the nine months ended September 30, 2025. The decrease in salaries and related expenses was mainly due to the $4.0 million bonus to the Chief Executive Officer in March 2025, compared to $5.0 million in June 2024, in which 85% was allocated to research and development expenses. In addition, stock-based compensation increased due to the issuance of stock options with immediate vesting and grant date fair value at $3.0 million to the Chief Executive Officer in March 2025, with 85% of the expense allocated to research and development.

Previous wording

General and administrative expenses decreased $1.0 million to $1.0 million for the three months ended June 30, 2025 compared to $2.0 million for the three months ended June 30, 2024. General and administrative expenses decreased $78 thousand to $2.9 million for the six months ended June 30, 2025 compared to $3.0 million for the six months ended June 30, 2024.

Current wording

General and administrative expenses increased $190 thousand to $1.0 million for the three months ended September 30, 2025 compared to $0.8 million for the three months ended September 30, 2024. General and administrative expenses increased $111 thousand to $3.9 million for the nine months ended September 30, 2025 compared to $3.8 million for the nine months ended September 30, 2024.

Previous wording

Compared to the six months ended June 30, 2024, the decrease in the general and administrative expense in the six months ended June 30, 2025 was also primarily due to the decrease in salaries and related expenses and other expenses. Stock-based compensation increased due to the issuance of stock options with immediate vesting and grant date fair value at $3.0 million to the Chief Executive Officer in March 2025, with 15% of the expense allocated to general and administrative expenses.

Current wording

Compared to the nine months ended September 30, 2024, the increase in the general and administrative expenses in the nine months ended September 30, 2025 was primarily due to stock-based compensation. The increase resulted from the issuance of stock options with immediate vesting and grant date fair value at $3.0 million to the Chief Executive Officer in March 2025, with 15% of the expense allocated to general and administrative expenses. The decrease in salaries and related expenses was mainly due to the bonus to the Chief Executive Officer, in which 15% was allocated to general and administrative expenses.

Previous wording

The following table summarizes other income (loss) (in thousands):

Current wording

The following table summarizes other income (in thousands):

Previous wording

The interest income for the three months and six months ended June 30, 2025 and 2024 was from the interest generated from the Company’s Canadian bank accounts. The interest expense for the three months and six months ended June 30, 2025 and 2024 was the interest for the convertible loans. The other income during the six months ended June 30, 2025 was the cancellation of a penalty by the Canada Revenue Agency for the 2020 tax year. In accordance with the settlement agreement, a portion of the cancelled amount was allocated to American Stock Transfer & Trust Company, LLC. Foreign exchange gain (loss) was mainly due to the fluctuation between the US dollar and the Canadian dollar in the three months and six months ended June 30, 2025 compared to 2024.

Current wording

The interest income for the three months and nine months ended September 30, 2025 and 2024 was from the interest generated from the Company’s Canadian bank accounts. The interest expense for the three months ended September 30, 2024 and nine months ended September 30, 2025 and 2024 was the interest for the convertible loans. The other expense during the three months ended September 30, 2025 was mainly the donation to non-profit organizations. The other income during the nine months ended September 30, 2025 was the cancellation of a penalty by the Canada Revenue Agency for the 2020 tax year. In accordance with the settlement agreement, a portion of the cancelled amount was allocated to American Stock Transfer & Trust Company, LLC. Foreign exchange gain (loss) was mainly due to the fluctuation between the US dollar and the Canadian dollar in the three months and nine months ended September 30, 2025 compared to 2024.

Previous wording

Since our inception on March 22, 2005 through June 30, 2025, we have funded our operations principally through private placements and public offerings of equity securities, which have provided aggregate cash proceeds of approximately $276.3 million, excluding the February 2020 tender offer cash payment. We received $675 million in cash proceeds from the Janssen Transaction in the year ended December 31, 2019. In June 2021, we received the remaining $75 million in cash from the escrow receivable from the same transaction. In July 2021, we paid $75 million in dividends to shareholders. At June 30, 2025, we had cash and cash equivalents of $152.9 million as compared to cash and cash equivalents of $188.5 million at June 30, 2024. The following table summarizes our sources and uses of cash (in thousands):

Current wording

Since our inception on March 22, 2005 through September 30, 2025, we have funded our operations principally through private placements and public offerings of equity securities, which have provided aggregate cash proceeds of approximately $276.3 million, excluding the February 2020 tender offer cash payment. We received $675 million in cash proceeds from the Janssen Transaction in the year ended December 31, 2019. In June 2021, we received the remaining $75 million in cash from the escrow receivable from the same transaction. In July 2021, we paid $75 million in dividends to shareholders. At September 30, 2025, we had cash and cash equivalents of $147.4 million as compared to cash and cash equivalents of $183.1 million at September 30, 2024. The following table summarizes our sources and uses of cash (in thousands):

Previous wording

During the six months ended June 30, 2025 and 2024, our operating activities used net cash of $12.7 million and $18.6 million, respectively. The use of net cash in each of these periods primarily resulted from our net losses. The decrease in net cash used in operations for the six months ended June 30, 2025 in comparison to the six months ended June, 2024 was mainly due to the decrease in clinical trial expenses.

Current wording

During the nine months ended September 30, 2025 and 2024, our operating activities used net cash of $17.0 million and $24.4 million, respectively. The use of net cash in each of these periods primarily resulted from our net losses. The decrease in net cash used in operations for the nine months ended September 30, 2025 in comparison to the nine months ended September 30, 2024 was mainly due to the decrease in clinical trial expenses.

Previous wording

During the six months ended June 30, 2025 and 2024, our investing activities used net cash of $145 thousand and $882 thousand, respectively. The use of cash was for fixed asset purchases and the preparation for the construction of a new facility.

Current wording

During the nine months ended September 30, 2025 and 2024, our investing activities used net cash of $255 thousand and $1.2 million, respectively. The use of cash was for fixed asset purchases and the preparation for the construction of a new facility.

Previous wording

During the six months ended June 30, 2025 and 2024, the net cash from our financing activities was mainly related to the Convertible Loan. On January 3, 2024, we entered into a Convertible Loan Agreement (the “Loan”) with John Simard, the Company’s Founder, President, Chief Executive Officer and Chairman, which provided $10 million net cash for the construction of a new, state-of-the-art research and development facility at the Company's property at 5217 Winnebago Lane in Austin, Texas. On January 31, 2025, the Loan was terminated upon full repayment of the principal and interest by the Company. Additionally, during the six months ended June 30, 2024, employees exercised stock options to purchase 26,192 shares of our common stock for approximately $103 thousand in net proceeds.

Current wording

During the nine months ended September 30, 2025 and 2024, the net cash (used in) provided by our financing activities was mainly related to the Convertible Loan. On January 3, 2024, we entered into a Convertible Loan Agreement (the “Loan”) with John Simard, the Company’s Founder, President, Chief Executive Officer and Chairman, which provided $10 million net cash for the construction of a new, state-of-the-art research and development facility at the Company's property at 5217 Winnebago Lane in Austin, Texas. On January 31, 2025, the Loan was terminated upon full repayment of the principal and interest by the Company. Additionally, during the nine months ended September 30, 2024, employees exercised stock options to purchase 42,442 shares of our common stock for approximately $167 thousand in net proceeds.

Previous wording

We expect to continue to incur operating losses in the future. We do not expect to receive any additional revenue under the clinical manufacturing agreement with Janssen. Further, we may not receive any product revenue until a drug candidate has been approved by the FDA, EMA or similar regulatory agencies in other countries and successfully commercialized. As of June 30, 2025, our principal sources of liquidity were our cash and cash equivalents, which totaled approximately $152.9 million.

Current wording

We expect to continue to incur operating losses in the future. We do not expect to receive any additional revenue under the clinical manufacturing agreement with Janssen. Further, we may not receive any product revenue until a drug candidate has been approved by the FDA, EMA or similar regulatory agencies in other countries and successfully commercialized. As of September 30, 2025, our principal sources of liquidity were our cash and cash equivalents, which totaled approximately $147.4 million.