Xenon Pharmaceuticals Inc.

Previous wording

We are a neuroscience-focused biopharmaceutical company dedicated to drug discovery, clinical development, and commercialization of life-changing therapeutics. We are advancing an ion channel product portfolio to address areas of high unmet medical need, including epilepsy and depression.

Current wording

We are a neuroscience-focused biopharmaceutical company dedicated to discovering, developing, and delivering life-changing therapeutics. We are advancing an ion channel product portfolio to address areas of high unmet medical need, including epilepsy and depression.

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, 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.

Current wording

Azetukalner is a novel, potent Kv7 potassium channel opener in Phase 3 clinical development for multiple indications, including two in epilepsy – focal onset seizures (FOS) and primary generalized tonic-clonic seizures (PGTCS) – as well as neuropsychiatric disorders, including major depressive disorder (MDD) and bipolar depression (BPD).

Previous wording

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

Current wording

The Phase 3 X-TOLE3 study of azetukalner in FOS continues to enroll and is intended to support regulatory submissions outside the United States. X-TOLE3 enrollment outside of Japan is expected to complete in 2026.

Previous 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.

Current wording

The Phase 3 X-ACKT study of azetukalner in PGTCS continues to enroll 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 studies evaluating azetukalner in patients with MDD, are underway.

Current wording

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.

Previous wording

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

Current wording

Enrollment is ongoing in the Phase 3 X-CEED study evaluating azetukalner in patients with BPD I or II.

Previous 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.

Current wording

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.

Previous 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.

Current wording

In collaboration with Neurocrine Biosciences, a Phase 1b 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. Data from the Phase 1b study are expected in 2027.

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 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.

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 three months ended March 31, 2026 and 2025, we recognized revenue of nil and $7.5 million, 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 $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:

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 $102.3 million and $65.0 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $1,347.7 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

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.

Current wording

Foreign exchange gain. Foreign exchange gain consists of gains 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

Critical accounting policies and significant judgments and estimates are those that we consider the most important to the portrayal of our financial condition and results of operations because they require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies and significant estimates include those related to revenue recognition, research and development costs and stock-based compensation.

Current wording

Critical accounting policies and significant judgments and estimates are those that we consider the most important to the portrayal of our financial condition and results of operations because they require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies and significant estimates include those related to research and development costs and stock-based compensation.

Previous 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.

Current wording

There have been no material changes in our critical accounting policies and significant judgments and estimates during the three months ended March 31, 2026, 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 2025 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 26, 2026. 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

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):

Current wording

The following table summarizes the results of our operations together with changes in those items (in thousands):

Previous 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.

Current wording

We did not recognize any revenue during the three months ended March 31, 2026. Collaboration revenue of $7.5 million recognized during the three months ended March 31, 2025 was related to a milestone payment in connection with the Neurocrine Collaboration.

Previous 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):

Current wording

The following table summarizes research and development expenses together with changes in those items (in thousands):

Previous 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.

Current wording

Direct external costs related to azetukalner increased by $15.6 million for the three months ended March 31, 2026, primarily due to our ongoing Phase 3 clinical studies in the MDD and BPD programs. Pain programs costs increased by $3.3 million due to our ongoing Phase 1 clinical studies of XEN1701 and XEN1120. Personnel-related costs increased by $8.6 million due to higher headcount to support late-stage development.

Previous 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):

Current wording

The following table summarizes general and administrative expenses together with changes in those items (in thousands):

Previous 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.

Current wording

Personnel-related costs increased by $2.5 million for the three months ended March 31, 2026, primarily due to higher headcount to support our expanding research and development activities and future potential commercialization. Professional and consulting fees increased by $1.8 million due to an increase in pre-commercial expenses and higher expenses related to maintenance and filing of intellectual property.

Previous 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):

Current wording

The following table summarizes our other income together with changes in those items (in thousands):

Previous 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.

Current wording

Interest income decreased by $1.2 million for the three months ended March 31, 2026, driven by lower average market yields on investments, partially offset by a higher average balance of cash and cash equivalents and marketable securities.

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 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.

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 March 31, 2026, we have raised aggregate net cash proceeds of approximately $2.3 billion primarily from the issuance of equity securities. As of March 31, 2026, we had cash and cash equivalents and marketable securities of $1,339.6 million.

Previous wording

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 September 30, 2025, an aggregate of 310,000 common shares have been sold for proceeds of $12.1 million, net of commissions and transaction expenses.

Current wording

We entered into an “at-the-market” equity offering sales agreement, amended as of March 2022, with Jefferies LLC and Stifel, Nicolaus & Company, Incorporated, pursuant to which we may sell common shares from time to time (the “ATM Program”). Pursuant to a prior prospectus, we sold an aggregate of 3,134,119 common shares for proceeds of $130.0 million, net of commissions and transaction expenses, during the period from January 1, 2026 to February 26, 2026. On February 27, 2026, a new prospectus supplement was filed replacing the prior prospectus, pursuant to which we refreshed the ATM Program and may sell common shares having gross proceeds of up to $400.0 million, from time to time.

Previous 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.

Current wording

We have incurred significant operating losses since inception. As of March 31, 2026, we had an accumulated deficit of $1,347.7 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

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

Current wording

The following table shows a summary of our cash flows for the three months ended March 31, 2026 and 2025 (in thousands):

Previous 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.

Current wording

For the three months ended March 31, 2026, net cash used in operating activities totaled $88.9 million, compared to $61.7 million for the same period in 2025. The increase in cash used in operating activities was primarily driven by higher research and development and general and administrative expenses and no revenue recognized in the period ended March 31, 2026, lower interest income, partially offset by changes in operating assets and liabilities.

Previous 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.

Current wording

For the three months ended March 31, 2026, net cash used in investing activities totaled $407.3 million, compared to net cash provided of $34.5 million for the same period in 2025. The change was driven primarily by an increase in the purchase of marketable securities, net of redemptions.

Previous 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.

Current wording

For the three months ended March 31, 2026, net cash provided by financing activities was $843.0 million, compared to $1.2 million for the same period in 2025. The increase was primarily related to $837.5 million net proceeds from offerings, as well as an increase in proceeds from stock option exercises.