Xenon Pharmaceuticals Inc.

Previous wording

the initiation, timing, cost, progress and success of our research and development programs, pre-clinical studies and clinical trials;

Current wording

the initiation, timing, cost, progress and success of our research and development programs, pre-clinical studies and clinical studies;

Previous wording

our ability to advance product candidates into, and successfully complete, clinical trials;

Current wording

our ability to advance product candidates into, and successfully complete, clinical studies;

Previous wording

our ability to recruit sufficient numbers of patients for our current and future clinical trials;

Current wording

our ability to recruit sufficient numbers of patients for our current and future clinical studies;

Previous wording

the direct and indirect impact of pandemics, epidemics and other public health emergencies on our business and operations, including supply chain, manufacturing, research and development costs, clinical trial conduct, clinical trial data and employees.

Current wording

the direct and indirect impact of pandemics, epidemics and other public health emergencies on our business and operations, including supply chain, manufacturing, research and development costs, clinical study conduct, clinical study data and employees.

Previous wording

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.

Current wording

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, including two in epilepsy–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.

Previous wording

Phase 3 X-TOLE2 clinical study of azetukalner in FOS has now completed patient recruitment, with topline data anticipated in early 2026.

Current wording

Phase 3 X-TOLE2 study of azetukalner in FOS has completed patient enrollment with 380 patients randomized and topline data anticipated in early 2026.

Previous wording

Phase 3 X-TOLE3 clinical study of azetukalner in FOS continues to enroll patients and is intended to support potential regulatory submissions in ex-U.S. jurisdictions.

Current wording

Phase 3 X-TOLE3 study of azetukalner in FOS continues patient enrollment.

Previous wording

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

Current wording

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

Previous wording

X-NOVA2 and X-NOVA3, the first two of three planned Phase 3 clinical trials evaluating azetukalner in patients with MDD, are now underway and screening patients.

Current wording

X-NOVA2 and X-NOVA3, the first two of three planned Phase 3 clinical studies evaluating azetukalner in patients with MDD, are underway.

Previous wording

X-CEED, the first of two planned Phase 3 clinical studies evaluating azetukalner in patients with BPD I and BPD II depression, has been initiated. Our Phase 3 BPD program includes two 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 double-blind period, or DBP, as monotherapy treatment in approximately 400 patients per study with BPD I or BPD II. The primary efficacy endpoint is the change from baseline in the MADRS score at week 6 in patients who received azetukalner compared to placebo. Upon completion of the DBP, eligible patients may enter an open-label extension, or OLE, study for up to 12 months.

Current wording

X-CEED, the first of two planned Phase 3 clinical studies evaluating azetukalner in patients with BPD I and BPD II, is underway.

Previous wording

Phase 1 study was initiated for XEN1701, our lead Nav1.7 development candidate for pain. IND-enabling work remains ongoing for additional Nav1.7 candidates. Nav1.7 is an important pain-related target, based on strong human genetic validation, which may represent a new class of medicines without the limitations of opioids.

Current wording

Phase 1 Single Ascending Dose, or SAD, /Multiple Ascending Dose, or MAD, study is underway for XEN1701, our lead Nav1.7 development candidate for pain. IND-enabling work remains ongoing for additional Nav1.7 candidates. Nav1.7 is an important target for pain based on strong human genetic validation and may represent a new class of pain medicines without the limitations of opioids.

Previous wording

Phase 1 study in healthy adult participants is underway for XEN1120, a Kv7 channel opener in development for pain. Work remains ongoing with additional Kv7 development molecules and chemistries with the hypothesis that Kv7 may have utility in a broad range of therapeutic indications including seizure disorders, pain, and neuropsychiatric disorders, such as MDD and BPD.

Current wording

Phase 1 SAD/MAD study in healthy adult subjects is underway for XEN1120, a Kv7 channel opener in development for pain. Work remains ongoing with additional earlier Kv7 development molecules and chemistries with the hypothesis that Kv7 may have utility in a broad range of therapeutic indications, including seizure disorders, pain, and neuropsychiatric disorders, such as MDD and BPD.

Previous wording

Nav1.1 lead candidate is expected to enter IND-enabling studies in 2025, with pre-clinical data suggesting that targeting Nav1.1 could potentially address the underlying cause and symptoms of Dravet Syndrome.

Current wording

IND-enabling studies are underway for our lead Nav1.1 candidate. Pre-clinical data suggests that targeting Nav1.1 could potentially address the underlying cause and symptoms of Dravet Syndrome.

Previous wording

As part of Xenon’s ongoing collaboration with Neurocrine Biosciences, a Phase 1 study is underway 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.

Current wording

As part of our ongoing collaboration with Neurocrine Biosciences, a Phase 1 study is underway 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.

Previous wording

We have funded our operations primarily through the sale of equity securities, funding received from our licensees and collaborators, and debt financing. For the six months ended June 30, 2025 and 2024, we recognized revenue of $7.5 million and nil, respectively, in connection with our agreement with Neurocrine Biosciences. To date, we have not had any products approved for sale and have not generated any revenue from product sales. We do not expect to generate revenue from product sales unless and until we successfully complete development and obtain regulatory approval for a product candidate, which we expect will take a number of years, if ever, and the outcome of which is subject to significant uncertainty.

Current wording

We have funded our operations primarily through the sale of equity securities, funding received from our licensees and collaborators, and debt financing. For the nine months ended September 30, 2025 and 2024, we recognized revenue of $7.5 million and nil, respectively, in connection with our agreement with Neurocrine Biosciences. To date, we have not had any products approved for sale and have not generated any revenue from product sales. We do not expect to generate revenue from product sales unless and until we successfully complete development and obtain regulatory approval for a product candidate, which we expect will take a number of years, if ever, and the outcome of which is subject to significant uncertainty.

Previous wording

We will continue to require additional capital to develop our product candidates and fund operations for the foreseeable future. We have incurred net losses in each year since inception and expect to continue to incur net losses for the foreseeable future. We had a net loss of $149.8 million and $105.9 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, we had an accumulated deficit of $1,049.2 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We anticipate that our operating expenses will increase substantially, particularly as we:

Current wording

We will continue to require additional capital to develop our product candidates and fund operations for the foreseeable future. We have incurred net losses in each year since inception and expect to continue to incur net losses for the foreseeable future. We had a net loss of $240.6 million and $168.6 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, we had an accumulated deficit of $1,140.1 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We anticipate that our operating expenses will increase substantially, particularly as we:

Previous wording

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

Current wording

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

Previous wording

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;

Current wording

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;

Previous wording

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.

Current wording

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. 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 studies.

Previous wording

Foreign exchange gain. Net foreign exchange gain consists of gains and losses from the impact of foreign exchange fluctuations on our monetary assets and liabilities that are denominated in currencies other than the U.S. dollar (principally the Canadian dollar). We will continue to incur substantial expenses in Canadian dollars and will remain subject to risks associated with foreign currency fluctuations.

Current wording

Foreign exchange gain (loss). Net foreign exchange gain (loss) consists of gains and losses from the impact of foreign exchange fluctuations on our monetary assets and liabilities that are denominated in currencies other than the U.S. dollar (principally the Canadian dollar). We will continue to incur substantial expenses in Canadian dollars and will remain subject to risks associated with foreign currency fluctuations.

Previous wording

There have been no material changes in our critical accounting policies and significant judgments and estimates during the six months ended June 30, 2025, as compared to those disclosed in “Management’s Discussion and Analysis of Financial Conditions and Results of Operations - Critical Accounting Policies and Significant Judgments and Estimates” included in our 2024 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission, or SEC, and with the securities commissions in British Columbia, Alberta and Ontario, or the Canadian Securities Commissions, on February 27, 2025. We believe that the accounting policies discussed in the Annual Report are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Current wording

There have been no material changes in our critical accounting policies and significant judgments and estimates during the nine months ended September 30, 2025, as compared to those disclosed in “Management’s Discussion and Analysis of Financial Conditions and Results of Operations - Critical Accounting Policies and Significant Judgments and Estimates” included in our 2024 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission, or SEC, and with the securities commissions in British Columbia, Alberta and Ontario, or the Canadian Securities Commissions, on February 27, 2025. We believe that the accounting policies discussed in the Annual Report are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Previous wording

Comparison of three and six months ended June 30, 2025 and 2024

Current wording

Comparison of three and nine months ended September 30, 2025 and 2024

Previous wording

The following table summarizes the results of our operations for the three and six months ended June 30, 2025 and 2024 together with changes in those items (in thousands):

Current wording

The following table summarizes the results of our operations for the three and nine months ended September 30, 2025 and 2024 together with changes in those items (in thousands):

Previous wording

Collaboration revenue of $7.5 million recognized during the six months ended June 30, 2025 was related to a milestone payment in connection with the Neurocrine Collaboration. We did not recognize any revenue for the same period in 2024.

Current wording

Collaboration revenue of $7.5 million recognized during the nine months ended September 30, 2025 was related to a milestone payment in connection with the Neurocrine Collaboration. We did not recognize any revenue for the same period in 2024.

Previous wording

The following table summarizes research and development expenses for the three and six months ended June 30, 2025 and 2024 together with changes in those items (in thousands):

Current wording

The following table summarizes research and development expenses for the three and nine months ended September 30, 2025 and 2024 together with changes in those items (in thousands):

Previous wording

Direct external costs related to azetukalner increased by $20.1 million and $28.3 million for the three and six months ended June 30, 2025, respectively, primarily due to our ongoing Phase 3 clinical trials in epilepsy and MDD, as well as start-up costs for our Phase 3 BPD program. Pre-clinical, discovery and other program costs increased by $1.2 million for the six months ended June 30, 2025 due to the advancement of XEN1120 and other potential drug candidates targeting Kv7, Nav1.7 and Nav1.1. Personnel-related costs increased by $5.8 million and $12.8 million for the three and six months ended June 30, 2025, respectively, due to higher headcount to support late-stage development.

Current wording

Direct external costs related to azetukalner increased by $13.1 million and $41.5 million for the three and nine months ended September 30, 2025, respectively, primarily due to our ongoing Phase 3 clinical studies in epilepsy and MDD, as well as start-up costs for our Phase 3 BPD program. Pre-clinical, discovery and other program costs increased by $2.9 million and $4.2 million for the three and nine months ended September 30, 2025, respectively, due to the advancement of XEN1120, XEN1701 and other potential drug candidates targeting Kv7, Nav1.7 and Nav1.1. Personnel-related costs increased by $4.9 million and $17.7 million for the three and nine months ended September 30, 2025, respectively, due to higher headcount to support late-stage development and an increase in stock-based compensation expense.

Previous wording

The following table summarizes general and administrative expenses for the three and six months ended June 30, 2025 and 2024 together with changes in those items (in thousands):

Current wording

The following table summarizes general and administrative expenses for the three and nine months ended September 30, 2025 and 2024 together with changes in those items (in thousands):

Previous wording

Personnel-related costs increased by $3.1 million for the six months ended June 30, 2025 primarily due to higher headcount to support our expanding research and development activities and future potential commercialization.

Current wording

Personnel-related costs increased by $3.5 million for the nine months ended September 30, 2025, primarily due to higher headcount to support our expanding research and development activities and future potential commercialization. Professional and consulting fees increased by $1.5 million and $1.4 million for the three and nine months ended September 30, 2025, respectively, 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 $1.8 million for the nine months ended September 30, 2025, primarily due to higher information technology costs to support our ongoing business activities.

Previous wording

The following table summarizes our other income for the three and six months ended June 30, 2025 and 2024 together with changes in those items (in thousands):

Current wording

The following table summarizes our other income for the three and nine months ended September 30, 2025 and 2024 together with changes in those items (in thousands):

Previous wording

Interest income decreased by $3.6 million and $6.9 million for the three and six months ended June 30, 2025, respectively, due to a lower average balance of marketable securities as well as lower average market yields on investments. The increase in foreign exchange gains of $1.7 million and $1.6 million for the three and six months ended June 30, 2025, respectively, was due to fluctuations in the value of the Canadian dollar and a higher balance of cash and cash equivalents denominated in Canadian dollars.

Current wording

Interest income decreased by $4.1 million and $11.0 million for the three and nine months ended September 30, 2025, respectively, due to a lower average balance of marketable securities as well as lower average market yields on investments. The increase in foreign exchange gains of $1.2 million for the nine months ended September 30, 2025 was due to fluctuations in the value of the Canadian dollar and a higher balance of cash and cash equivalents and marketable securities denominated in Canadian dollars.

Previous wording

To date, we have financed our operations primarily through the sale of equity securities, funding received from collaboration and license agreements, and debt financing. Since our initial public offering through June 30, 2025, we have raised aggregate net cash proceeds of more than $1.4 billion primarily from the issuance of equity securities. As of June 30, 2025, we had cash and cash equivalents and marketable securities of $624.8 million.

Current wording

To date, we have financed our operations primarily through the sale of equity securities, funding received from collaboration and license agreements, and debt financing. Since our initial public offering through September 30, 2025, we have raised aggregate net cash proceeds of approximately $1.4 billion primarily from the issuance of equity securities. As of September 30, 2025, we had cash and cash equivalents and marketable securities of $555.3 million.

Previous wording

We have incurred significant operating losses since inception. As of June 30, 2025, we had an accumulated deficit of $1,049.2 million. We expect to continue to incur significant expenses in excess of our revenue and expect to incur operating losses over the next several years. Our net losses may fluctuate significantly from quarter to quarter and year to year. We expect to incur significant expenses and increasing operating losses for the foreseeable future as we prepare for the potential commercial launch of azetukalner; invest significantly to further develop azetukalner for our current and future indications; 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 studies; manufacture larger quantities of our product candidates of 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; maintain, protect and expand our intellectual property portfolio; establish a sales, marketing, distribution and other commercial infrastructure to commercialize any products for which we may obtain marketing approval; create additional infrastructure and incur additional costs to support our operations and our product development and planned future commercialization efforts; and experience any delays or encounter issues with any of the above.

Current wording

We have incurred significant operating losses since inception. As of September 30, 2025, we had an accumulated deficit of $1,140.1 million. We expect to continue to incur significant expenses in excess of our revenue and expect to incur operating losses over the next several years. Our net losses may fluctuate significantly from quarter to quarter and year to year. We expect to incur significant expenses and increasing operating losses for the foreseeable future as we prepare for the potential commercial launch of azetukalner; invest significantly to further develop azetukalner for our current and future indications; 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 studies; manufacture larger quantities of our product candidates of 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; maintain, protect and expand our intellectual property portfolio; establish a sales, marketing, distribution and other commercial infrastructure to commercialize any products for which we may obtain marketing approval; create additional infrastructure and incur additional costs to support our operations and our product development and planned future commercialization efforts; and experience any delays or encounter issues with any of the above.

Previous wording

Based on our research and development plans and our timing expectations related to the progress of our programs, we expect that our existing cash and cash equivalents and marketable securities as of the date of this report will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. 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. 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.

Current wording

Based on our research and development plans and our timing expectations related to the progress of our programs, we expect that our existing cash and cash equivalents and marketable securities as of the date of this report will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. 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 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 studies.

Previous wording

The following table shows a summary of our cash flows for the six months ended June 30, 2025 and 2024 (in thousands):

Current wording

The following table shows a summary of our cash flows for the nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

For the six months ended June 30, 2025, net cash used in operating activities totaled $125.9 million, compared to $77.3 million for the same period in 2024. The increase in cash used in operating activities was primarily driven by higher research and development and general and administrative expenses, as well as changes in operating assets and liabilities, partially offset by revenue recognized in connection with our collaboration agreement with Neurocrine Biosciences during the six months ended June 30, 2025.

Current wording

For the nine months ended September 30, 2025, net cash used in operating activities totaled $197.6 million, compared to $127.0 million for the same period in 2024. The increase in cash used in operating activities was primarily driven by 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 during the nine months ended September 30, 2025.

Previous wording

For the six months ended June 30, 2025, net cash provided by investing activities totaled $116.8 million, compared to $66.0 million for the same period in 2024. The change was driven primarily by a decrease in the purchase of marketable securities, net of redemption.

Current wording

For the nine months ended September 30, 2025, net cash provided by investing activities totaled $155.3 million, compared to $66.5 million for the same period in 2024. The change was driven primarily by a decrease in the purchase of marketable securities, net of redemptions, and a decrease in the purchases of property, plant and equipment.

Previous wording

For the six months ended June 30, 2025, net cash provided by financing activities was $1.2 million, compared to nil for the same period in 2024. The change was primarily driven by proceeds from stock option exercises during the six months ended June 30, 2025.

Current wording

For the nine months ended September 30, 2025, net cash provided by financing activities was $3.6 million, compared to nil for the same period in 2024. The change was primarily driven by proceeds from stock option exercises during the nine months ended September 30, 2025.

Previous wording

As of August 7, 2025, we had 77,105,799 common shares issued and outstanding, outstanding pre-funded warrants to purchase 2,173,081 common shares, outstanding stock options to purchase 11,214,622 common shares, outstanding performance share units convertible into 275,550 common shares, outstanding restricted share units convertible into 316,057 common shares, and an outstanding warrant to purchase 40,000 common shares.

Current wording

As of October 30, 2025, we had 77,275,005 common shares issued and outstanding, outstanding pre-funded warrants to purchase 2,173,081 common shares, outstanding stock options to purchase 11,265,622 common shares, outstanding performance share units convertible into 257,450 common shares and outstanding restricted share units convertible into 349,282 common shares.