0000950170-23-061200 | 10-Q | XBRL Viewer | Xenon Pharmaceuticals INC

Basis of Presentation	9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation	2. Basis of presentation: These unaudited interim consolidated financial statements are presented in U.S. dollars and include the accounts of the Company and its wholly-owned subsidiary, Xenon Pharmaceuticals USA Inc., a Delaware corporation. All intercompany transactions and balances have been eliminated on consolidation. The accompanying unaudited interim consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, these consolidated financial statements do not include all of the information and footnotes required for complete consolidated financial statements and should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2022 included in the Company’s 2022 Annual Report on Form 10-K filed with the SEC and with the securities commissions in British Columbia, Alberta and Ontario on March 1, 2023. These unaudited interim consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of results for the interim periods presented. The results of operations for the three and nine month periods ended September 30, 2023 and 2022 are not necessarily indicative of results that can be expected for a full year. These unaudited interim consolidated financial statements follow the same significant accounting policies as those described in the notes to the audited consolidated financial statements of the Company included in the Company’s 2022 Annual Report on Form 10-K for the year ended December 31, 2022.

Basis of Presentation

9 Months Ended

Sep. 30, 2023

Basis of presentation:

These unaudited interim consolidated financial statements are presented in U.S. dollars and include the accounts of the Company and its wholly-owned subsidiary, Xenon Pharmaceuticals USA Inc., a Delaware corporation. All intercompany transactions and balances have been eliminated on consolidation.

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, these consolidated financial statements do not include all of the information and footnotes required for complete consolidated financial statements and should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2022 included in the Company’s 2022 Annual Report on Form 10-K filed with the SEC and with the securities commissions in British Columbia, Alberta and Ontario on March 1, 2023.

These unaudited interim consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of results for the interim periods presented. The results of operations for the three and nine month periods ended September 30, 2023 and 2022 are not necessarily indicative of results that can be expected for a full year. These unaudited interim consolidated financial statements follow the same significant accounting policies as those described in the notes to the audited consolidated financial statements of the Company included in the Company’s 2022 Annual Report on Form 10-K for the year ended December 31, 2022.

Share Capital - Stock Option Activity (Parenthetical) (Details) - shares	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]
Stock Options exercised for Number of Common Shares for cash	0	65,844
Common stock issued for cashless exercise	283,863	468,598
Cashless exercise of stock options	398,097	652,628

Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair value of financial instruments:

The fair value hierarchy consists of the following three levels:

•

Level 1 - Unadjusted quoted prices in active markets for identical instruments.

•

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

•

Level 3 - Inputs are unobservable and reflect the Company’s assumptions as to what market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available.

The Company’s cash and cash equivalents and marketable securities are measured at fair value on a recurring basis. The level of the fair value hierarchy utilized to determine such fair values consisted of the following:


	September 30, 2023								December 31, 2022
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and cash equivalents
Cash and money market fund	$	99,574	$	—	$	—	$	99,574	$	57,242	$	—	$	—	$	57,242
Marketable securities
Guaranteed investment certificates		7,383		—		—		7,383		14,953		—		—		14,953
U.S. treasuries		247,127		—		—		247,127		322,851		—		—		322,851
U.S. government securities		—		102,962		—		102,962		—		32,479		—		32,479
Commercial paper		—		85,041		—		85,041		—		150,560		—		150,560
Corporate debt securities		—		96,994		—		96,994		—		142,684		—		142,684
Total	$	354,084	$	284,997	$	—	$	639,081	$	395,046	$	325,723	$	—	$	720,769

The fair values of the Company’s U.S. government securities, commercial paper and corporate debt securities are based on prices obtained from independent pricing sources. Securities with validated quotes from pricing services are reflected within Level 2, as they are primarily based on observable pricing for similar assets or other market observable inputs. Typical inputs used by these pricing services include, but are not limited to, reported trades, benchmark yields, issuer spreads, bids, offers or estimates of cash flow, prepayment spreads and default rates.

As of September 30, 2023 and December 31, 2022, the Company does not hold any securities classified as Level 3.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Nature of the Business	9 Months Ended
Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of the Business	1. Nature of the business: Xenon Pharmaceuticals Inc. (the “Company”), incorporated in 1996 under the predecessor to the Business Corporations Act (British Columbia) and continued federally in 2000 under the Canada Business Corporations Act, is a clinical stage biopharmaceutical company focused on developing innovative therapeutics to improve the lives of patients with neurological disorders, with a focus on epilepsy. The Company has incurred significant operating losses since inception. As of September 30, 2023, the Company had an accumulated deficit of $620,397 and a net loss of $137,650 for the nine months ended September 30, 2023. Management expects to continue to incur significant expenses in excess of revenue and to incur operating losses for the foreseeable future. To date, the Company has financed its operations primarily through the sale of equity securities, funding received from collaboration and license agreements, and debt financings. Until such time as the Company can generate substantial product revenue, if ever, management expects to finance the Company’s cash needs through a combination of collaboration agreements, equity and debt financings. The continuation of research and development activities and the future commercialization of its products are dependent on the Company’s ability to successfully raise additional funds when needed. It is not possible to predict either the outcome of future research and development programs or the Company’s ability to continue to fund these programs in the future.

Nature of the Business

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of the Business

Nature of the business:

Xenon Pharmaceuticals Inc. (the “Company”), incorporated in 1996 under the predecessor to the Business Corporations Act (British Columbia) and continued federally in 2000 under the Canada Business Corporations Act, is a clinical stage biopharmaceutical company focused on developing innovative therapeutics to improve the lives of patients with neurological disorders, with a focus on epilepsy.

The Company has incurred significant operating losses since inception. As of September 30, 2023, the Company had an accumulated deficit of $620,397 and a net loss of $137,650 for the nine months ended September 30, 2023. Management expects to continue to incur significant expenses in excess of revenue and to incur operating losses for the foreseeable future. To date, the Company has financed its operations primarily through the sale of equity securities, funding received from collaboration and license agreements, and debt financings.

Until such time as the Company can generate substantial product revenue, if ever, management expects to finance the Company’s cash needs through a combination of collaboration agreements, equity and debt financings. The continuation of research and development activities and the future commercialization of its products are dependent on the Company’s ability to successfully raise additional funds when needed. It is not possible to predict either the outcome of future research and development programs or the Company’s ability to continue to fund these programs in the future.

Revenue - Schedule of Collaboration Revenue (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2022
Disaggregation Of Revenue [Line Items]
Revenue	$ 132	$ 9,434
Collaboration Revenue [Member]
Disaggregation Of Revenue [Line Items]
Revenue	132	9,434
Neurocrine Biosciences [Member] \| Collaboration Revenue [Member]
Disaggregation Of Revenue [Line Items]
Recognition of the transaction price		372
Research and development services	$ 132	1,938
Milestone payments		$ 7,124

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- Definition

Amount, including tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value-added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Operating activities:
Net loss	$ (137,650)	$ (87,978)
Items not involving cash:
Depreciation	2,690	1,109
Deferred income tax recovery	(92)	(49)
Stock-based compensation	23,190	14,564
Unrealized foreign exchange (gain) loss	(753)	3,454
Unrealized fair value (gain) loss on trading securities	(3,404)	4,944
Changes in operating assets and liabilities:
Accounts receivable	424	242
Prepaid expenses and other current assets	4,103	(4,028)
Accounts payable and accrued expenses	1,630	2,044
Net cash used in operating activities	(109,862)	(65,698)
Investing activities:
Purchases of property, plant and equipment	(5,539)	(1,142)
Purchases of marketable securities	(417,319)	(436,393)
Proceeds from marketable securities	545,414	155,867
Net cash provided by (used in) investing activities	122,556	(281,668)
Financing activities:
Issuance of common shares and pre-funded warrants, net of issuance costs (note 8a and note 8c)	29,508	277,766
Issuance of common shares pursuant to exercise of stock options		699
Net cash provided by financing activities	29,508	278,465
Effect of exchange rate changes on cash and cash equivalents	130	(3,298)
Increase (decrease) in cash and cash equivalents	42,332	(72,199)
Cash and cash equivalents, beginning of period	57,242	175,688
Cash and cash equivalents, end of period	99,574	103,489
Supplemental disclosures:
Cash paid for operating lease	1,219	638
Cash received for lease incentives	1,265
Supplemental disclosures of non-cash transactions:
Fair value of stock options exercised on a cashless basis	3,183	$ 4,085
Fair value of pre-funded warrants exercised	24,141
Increase in operating lease liability and accounts receivable related to lease incentives claimed in the period	$ 226

Net Income (Loss) Per Common Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Net Income (Loss) Per Common Share

Net income (loss) per common share:

Basic net income (loss) per common share is calculated using the two-class method required for participating securities which includes the Series 1 Preferred Shares as a separate class for the nine months ended September 30, 2022. The convertible preferred shares entitle the holders to participate in dividends and in earnings and losses of the Company on an equivalent basis as common shares. Accordingly, undistributed earnings (losses) are allocated to common shares and participating preferred shares based on the weighted-average shares of each class outstanding during the period. In March 2022, the outstanding 1,016,000 Series 1 Preferred Shares were converted and exchanged for an equal number of common shares of the Company (note 8b).

The weighted average number of common shares used in the basic and diluted net income (loss) per common share calculations includes the weighted-average pre-funded warrants outstanding during the period as they are exercisable at any time for nominal cash consideration.

The treasury stock method is used to compute the dilutive effect of the Company’s stock options and warrants. Under this method, the incremental number of common shares used in computing diluted net income (loss) per common share is the difference between the number of common shares assumed issued and purchased using assumed proceeds.

The if-converted method is used to compute the dilutive effect of the Company’s convertible preferred shares. Under the if-converted method, dividends on the preferred shares, if applicable, are added back to earnings attributable to common shareholders, and the preferred shares and paid-in kind dividends are assumed to have been converted at the share price applicable at the end of the period. The if-converted method is applied only if the effect is dilutive.

For the three and nine months ended September 30, 2023 and 2022, diluted net loss per share attributable to common shareholders is the same as basic net loss per share attributable to common shareholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

Marketable Securities

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Marketable Securities

Marketable securities

As of September 30, 2023, the Company had $39,788 of trading securities and $499,719 of available-for-sale securities (December 31, 2022 – $276,642 and $386,885, respectively). Amortized cost, unrealized losses recognized in accumulated other comprehensive loss and fair value of available-for-sale securities consisted of the following:


	September 30, 2023							December 31, 2022
	Amortized Cost		Unrealized Loss			Fair Value		Amortized Cost		Unrealized Loss			Fair Value
Contractual maturity of 0 to 1 years:
Guaranteed investment certificates	$	7,434	$	(51	)	$	7,383	$	14,953	$	—		$	14,953
U.S. treasuries		196,336		(928	)		195,408		78,880		(837	)		78,043
U.S. government securities		76,872		(314	)		76,558		5,793		(20	)		5,773
Commercial paper		85,114		(73	)		85,041		150,560		—			150,560
Corporate debt securities		22,980		(58	)		22,922		8,942		(68	)		8,874
Contractual maturity of 1 to 3 years:
U.S. treasuries		29,435		(138	)		29,297		60,354		(958	)		59,396
U.S. government securities		26,682		(278	)		26,404		26,741		(35	)		26,706
Corporate debt securities		56,829		(123	)		56,706		42,672		(92	)		42,580
Total	$	501,682	$	(1,963	)	$	499,719	$	388,895	$	(2,010	)	$	386,885

Allowance for credit losses or impairment on these marketable securities have not been recognized as these securities are high credit quality, investment grade securities that the Company does not intend to sell and will not be required to sell prior to their anticipated recovery, and the decline in fair value is primarily due to changes in interest rates.

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common shares, without par value
Common shares, shares authorized	Unlimited	Unlimited
Common shares, Issued	65,002,249	62,587,701
Common shares, Outstanding	65,002,249	62,587,701

Leases (Details) - Lease	9 Months Ended
Leases (Details) - Lease	Sep. 30, 2023	Jul. 31, 2022
Burnaby, British Columbia [Member]
Lessee Lease Description [Line Items]
Number of operating leases	1
Operating lease expiration date	Jun. 30, 2032
Operating lease, description	The Company has an operating lease for research laboratories and office space in Burnaby, British Columbia which expires on June 30, 2032.
Needham Massachusetts [Member]
Lessee Lease Description [Line Items]
Operating lease term		62 months
Operating lease, option to terminate	option to terminate one year prior to the expiry date
Operating lease, description	In July 2022, the Company entered into an additional operating lease agreement for office space in Needham, Massachusetts ("Needham Lease"), which commenced on October 1, 2022. The Needham Lease is for a 62-month term and an option to terminate one year prior to the expiry date, which was not considered in the determination of the right-of-use asset and lease liability.

Accounts Payable and Accrued Expenses - Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Trade payables	$ 6,097	$ 8,491
Employee compensation, benefits, and related accruals	5,851	5,823
Consulting and contracted research	10,506	7,148
Professional fees	937	411
Other	107	341
Total	$ 23,498	$ 22,214

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ (48,462)	$ (47,461)	$ (41,727)	$ (37,150)	$ (31,158)	$ (19,670)	$ (137,650)	$ (87,978)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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+ Details

Share Capital

9 Months Ended

Sep. 30, 2023

Stockholders' Equity Note [Abstract]

Share Capital

Share capital:

(a)

Financing:

In August 2020, the Company entered into an “at-the-market” equity offering sales agreement, amended as of March 2022, with Jefferies LLC ("Jefferies") and Stifel, Nicolaus & Company, Incorporated ("Stifel") and a new prospectus supplement was filed in March 2022 (“the March 2022 ATM") under which the Company may sell common shares having gross proceeds of up to $250,000, from time to time. In September 2023, the Company sold an aggregate of 855,685 common shares for proceeds of $29,508, net of commissions and transaction expenses.

In January 2022, in connection with the License and Collaboration Agreement with Neurocrine Biosciences Inc. (“Neurocrine Biosciences”) entered in December 2019 and amended in January 2021 (the "Neurocrine Collaboration Agreement"), the Company executed a Share Purchase Agreement ("SPA") pursuant to which the Company issued 258,986 common shares for an aggregate purchase price of $8,250, or $31.855 per common share, which represents a premium of $374 when compared to the fair value of common shares on the date of issuance. The SPA contains certain other customary terms and conditions, including mutual representations, warranties and covenants. For additional information regarding the Neurocrine Collaboration Agreement, refer to note 9.

In June 2022, the Company entered into an underwriting agreement with Jefferies, J.P. Morgan Securities LLC, Stifel and SVB Securities LLC, relating to an underwritten public offering of 9,098,362 common shares, including 1,229,508 shares sold upon the full exercise of the underwriters’ over-allotment option, at a public offering price of $30.50 per common share and pre-funded warrants to purchase 327,868 common shares at $30.4999 per pre-funded warrant (note 8c), with each pre-funded warrant having an exercise price of $0.0001. The public offering was completed in June 2022, and the Company received proceeds of $269,890, net of underwriting discounts, commissions and offering expenses.

(b)

Exchange agreement with certain funds affiliated with BVF Partners L.P. (collectively, “BVF”):

In March 2018, the Company and BVF entered into an exchange agreement pursuant to which the Company issued to BVF 2,868,000 Series 1 Preferred Shares in exchange for 2,868,000 common shares which were subsequently cancelled by the Company. The Series 1 Preferred Shares were convertible into common shares on a one-for-one basis, subject to certain restrictions.

The Series 1 Preferred Shares ranked equally to the common shares in the event of liquidation, dissolution or winding up or other distribution of the assets of the Company among its shareholders and the holders of the Series 1 Preferred Shares were entitled to vote together with the common shares on an as-converted basis and as a single class, subject to certain restrictions.

The Series 1 Preferred Shares were recorded wholly as equity under ASC 480, with no bifurcation of conversion feature from the host contract, given that the Series 1 Preferred Shares cannot be cash settled and have no redemption features.

During the year ended December 31, 2018, BVF converted 1,852,000 Series 1 Preferred Shares in exchange for an equal number of common shares. In March 2022, the remaining outstanding 1,016,000 Series 1 Preferred Shares were exchanged for an equal number of common shares.

(c)

Pre-funded warrants:

The following table summarizes the pre-funded warrants activity for the nine months ended September 30, 2023 and 2022:


	Date of issuance
	March 2021			October 2021			June 2022		Total
Outstanding, December 31, 2021		1,081,081			1,694,915			—		2,775,996
Issued		—			—			327,868		327,868
Exercised		—			—			—		—
Outstanding, September 30, 2022		1,081,081			1,694,915			327,868		3,103,864

Outstanding, December 31, 2022		1,081,081			1,694,915			327,868		3,103,864
Exercised		(1,081,081	)		(193,929	)		—		(1,275,010	)
Outstanding, September 30, 2023		—			1,500,986			327,868		1,828,854

In connection with underwritten public offerings completed in March 2021, October 2021 and June 2022, the Company issued pre-funded warrants to purchase the equivalent number of common shares at $18.4999, $29.4999 and $30.4999, per pre-funded warrant, respectively, with each pre-funded warrant having an exercise price of $0.0001.

The pre-funded warrants are exercisable at the holder’s discretion from the date of issuance until the date the pre-funded warrant is exercised in full. The Company may not affect the exercise of any pre-funded warrant, and a holder will not be entitled to exercise any portion of any pre-funded warrant that, upon giving effect to such exercise, would cause: (i) the aggregate number of common shares beneficially owned by such holder, together with its affiliates, to exceed 4.99% of the total number of common shares outstanding immediately after giving effect to the exercise; or (ii) the combined voting power of the Company’s securities beneficially owned by such holder, together with its affiliates, to exceed 4.99% of the combined voting power of all of the Company’s securities immediately outstanding after giving effect to the exercise, which percentage may be changed at the holder’s election to a higher or lower percentage not in excess of 19.99% upon at least 61 days’ notice to the Company.

Since the pre-funded warrants meet the condition for equity classification, net proceeds from issuances of the pre-funded warrants are recorded in additional paid-in capital. Upon exercise of the pre-funded warrants, the historical costs recorded in additional paid-in capital along with the exercise price collected from holder is recorded in common shares. During the three and nine months ended September 30, 2023, the Company issued 425,000 and 1,275,000 common shares, respectively, upon the exercise of 425,004 and 1,275,010 pre-funded warrants pursuant to a net exercise mechanism under the warrants. Pre-funded warrants to purchase 1,828,854 (September 30, 2022 – 3,103,864) common shares are not included in the number of issued and outstanding common shares as of September 30, 2023.

(d)

Stock-based compensation:

The following table presents stock option activity for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Outstanding, beginning of period		8,681,808			7,234,460			7,117,782			5,638,232
Granted		363,200			102,000			2,457,173			2,079,845
Exercised(1)		(6,351	)		(369,334	)		(398,097	)		(718,472	)
Forfeited, cancelled or expired		(32,416	)		(21,357	)		(170,617	)		(53,836	)
Outstanding, end of period		9,006,241			6,945,769			9,006,241			6,945,769
Exercisable, end of period		4,618,002			3,391,011			4,618,002			3,391,011

(1)

During the nine months ended September 30, 2023, no stock options were exercised for cash (2022 – 65,844). In the same period, the Company issued 283,863 (2022 – 468,598) common shares for the cashless exercise of 398,097 (2022 – 652,628) stock options.

The fair value of each stock option granted is estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Average risk-free interest rate		4.26	%		3.20	%		3.91	%		2.19	%
Expected volatility		68	%		70	%		69	%		70	%
Average expected term (in years)		5.13			4.92			5.99			6.15
Expected dividend yield		0	%		0	%		0	%		0	%
Weighted average fair value of stock options granted	$	22.85		$	21.63		$	22.59		$	19.40

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Leases - Schedule of Cost Components of Operating Lease (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Operating lease expense	$ 412	$ 238	$ 1,235	$ 714
Variable lease expense	$ 198	$ 195	$ 593	$ 578
Weighted average remaining lease term (years)	7 years 6 months 7 days	9 years 9 months	7 years 6 months 7 days	9 years 9 months
Weighted average discount rate	3.89%	3.42%	3.89%	3.42%

Share Capital (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended				3 Months Ended					9 Months Ended	12 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Jan. 31, 2022	Mar. 31, 2018	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Dec. 31, 2018	Sep. 30, 2022
Share Capital [Line Items]
Warrants outstanding to purchase common stock					1,828,854					1,828,854		3,103,864
Warrants exercise description										The Company may not affect the exercise of any pre-funded warrant, and a holder will not be entitled to exercise any portion of any pre-funded warrant that, upon giving effect to such exercise, would cause: (i) the aggregate number of common shares beneficially owned by such holder, together with its affiliates, to exceed 4.99% of the total number of common shares outstanding immediately after giving effect to the exercise; or (ii) the combined voting power of the Company’s securities beneficially owned by such holder, together with its affiliates, to exceed 4.99% of the combined voting power of all of the Company’s securities immediately outstanding after giving effect to the exercise, which percentage may be changed at the holder’s election to a higher or lower percentage not in excess of 19.99% upon at least 61 days’ notice to the Company.
Common Shares [Member]
Share Capital [Line Items]
Shares issued					855,685			9,098,362	258,986
Pre-funded warrants exercised					425,004					1,275,010
Common stock issued upon conversion of pre-funded warrants					425,000	425,000	425,000			1,275,000
Conversion of shares		1,016,000							1,016,000		1,852,000
March 2021
Share Capital [Line Items]
Warrants issued price per pre funded warrant					$ 18.4999					$ 18.4999
Warrants exercise price per common share					0.0001					0.0001
October 2021
Share Capital [Line Items]
Warrants issued price per pre funded warrant					29.4999					29.4999
Warrants exercise price per common share					0.0001					0.0001
June 2022
Share Capital [Line Items]
Warrants issued price per pre funded warrant					30.4999					30.4999
Warrants exercise price per common share					$ 0.0001					$ 0.0001
Jefferies L L C And Stifel Nicolaus Company Incorporated \| At Market Equity Offering
Share Capital [Line Items]
Sale proceeds of common shares										$ 29,508
Jefferies L L C And Stifel Nicolaus Company Incorporated \| At Market Equity Offering \| Maximum [Member]
Share Capital [Line Items]
Gross proceeds from issuable of common stock										$ 250,000
Jefferies L L C And Stifel Nicolaus Company Incorporated \| At Market Equity Offering \| Common Shares [Member]
Share Capital [Line Items]
Shares issued										855,685
Jefferies, Stifel, J.P. Morgan Securities LLC and SVB Securities LLC [Member] \| Underwritten Public Offering [Member]
Share Capital [Line Items]
Shares issued	9,098,362
Shares price	$ 30.5							$ 30.5
Warrants outstanding to purchase common stock	327,868							327,868
Warrants issued price per pre funded warrant	$ 30.4999							$ 30.4999
Sale proceeds of common shares	$ 269,890
Warrants exercise price per common share	$ 0.0001							$ 0.0001
Jefferies, Stifel, J.P. Morgan Securities LLC and SVB Securities LLC [Member] \| Over-Allotment Option [Member]
Share Capital [Line Items]
Shares issued	1,229,508
Neurocrine Biosciences [Member] \| Common Shares [Member]
Share Capital [Line Items]
Shares issued			258,986
Sale proceeds of common shares			$ 8,250
Aggregate purchase price per share			$ 31.855
Premium			$ 374
Series 1 Preferred Shares
Share Capital [Line Items]
Conversion of shares		1,016,000									1,852,000
BVF Partners L.P [Member] \| Exchange Agreement [Member] \| Common Shares [Member]
Share Capital [Line Items]
Shares cancelled				2,868,000
BVF Partners L.P [Member] \| Exchange Agreement [Member] \| Series 1 Preferred Shares
Share Capital [Line Items]
Shares issued				2,868,000
Preferred shares convertible into common shares				one-for-one

Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Sep. 30, 2023	Nov. 03, 2023
Cover [Abstract]
Entity Registrant Name	XENON PHARMACEUTICALS INC.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Entity Common Stock, Shares Outstanding		65,429,711
Entity Central Index Key	0001582313
Entity Filer Category	Large Accelerated Filer
Document Period End Date	Sep. 30, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Small Business	false
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity File Number	001-36687
Entity Tax Identification Number	98-0661854
Entity Address, Address Line One	200-3650 Gilmore Way
Entity Address, City or Town	Burnaby
Entity Address, State or Province	BC
Entity Address, Country	CA
Entity Address, Postal Zip Code	V5G 4W8
City Area Code	604
Local Phone Number	484-3300
Title of 12(b) Security	Common Shares, without par value
Trading Symbol	XENE
Security Exchange Name	NASDAQ
Entity Incorporation, State or Country Code	Z4
Document Quarterly Report	true
Document Transition Report	false

Share Capital (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule Of Pre-Funded Warrants Activity

The following table summarizes the pre-funded warrants activity for the nine months ended September 30, 2023 and 2022:


	Date of issuance
	March 2021			October 2021			June 2022		Total
Outstanding, December 31, 2021		1,081,081			1,694,915			—		2,775,996
Issued		—			—			327,868		327,868
Exercised		—			—			—		—
Outstanding, September 30, 2022		1,081,081			1,694,915			327,868		3,103,864

Outstanding, December 31, 2022		1,081,081			1,694,915			327,868		3,103,864
Exercised		(1,081,081	)		(193,929	)		—		(1,275,010	)
Outstanding, September 30, 2023		—			1,500,986			327,868		1,828,854

Stock Option Activity

The following table presents stock option activity for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Outstanding, beginning of period		8,681,808			7,234,460			7,117,782			5,638,232
Granted		363,200			102,000			2,457,173			2,079,845
Exercised(1)		(6,351	)		(369,334	)		(398,097	)		(718,472	)
Forfeited, cancelled or expired		(32,416	)		(21,357	)		(170,617	)		(53,836	)
Outstanding, end of period		9,006,241			6,945,769			9,006,241			6,945,769
Exercisable, end of period		4,618,002			3,391,011			4,618,002			3,391,011

(1)

Fair Value Assumptions for Stock Options

The fair value of each stock option granted is estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Average risk-free interest rate		4.26	%		3.20	%		3.91	%		2.19	%
Expected volatility		68	%		70	%		69	%		70	%
Average expected term (in years)		5.13			4.92			5.99			6.15
Expected dividend yield		0	%		0	%		0	%		0	%
Weighted average fair value of stock options granted	$	22.85		$	21.63		$	22.59		$	19.40

Share Capital - Fair Value Assumptions for Stock Options (Details) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Fair Value Assumptions For Stock Options [Abstract]
Average risk-free interest rate	4.26%	3.20%	3.91%	2.19%
Expected volatility	68.00%	70.00%	69.00%	70.00%
Average expected term (in years)	5 years 1 month 17 days	4 years 11 months 1 day	5 years 11 months 26 days	6 years 1 month 24 days
Expected dividend yield	0.00%	0.00%	0.00%	0.00%
Weighted average fair value of stock options granted	$ 22.85	$ 21.63	$ 22.59	$ 19.4

Revenue

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue

Revenue:

Revenue was as follows for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Neurocrine Biosciences:
Recognition of the transaction price	$	—	$	—	$	—	$	372
Research and development services		—		132		—		1,938
Milestone payments		—		—		—		7,124
Total revenue	$	—	$	132	$	—	$	9,434

In December 2019, the Company entered into the Neurocrine Collaboration Agreement with Neurocrine Biosciences. Pursuant to this agreement, the Company granted an exclusive license to XEN901, now known as NBI-921352, and an exclusive license to pre-clinical compounds for development, XEN393, XPC’535 and XPC’391 (collectively, the “DTCs”). The agreement also includes a two-year research collaboration to discover, identify and develop additional novel Nav1.6 and Nav1.2/1.6 inhibitors (“Research Compounds”). The Company and Neurocrine Biosciences are collaborating on the conduct of two collaboration programs: (a) a joint research collaboration to discover, identify and preclinically develop Research Compounds (the “Research Program”), which completed in June 2022, and (b) a collaborative development program for NBI-921352 and two DTCs selected by the joint steering committee (the “Initial Development Program”).

At execution of the agreement, Neurocrine Biosciences paid the Company an upfront cash payment of $30,000 and a $20,000 equity investment in the Company. The equity investment was measured at fair value of $16,667 on the date of issuance and the resulting premium of $3,333, together with the upfront cash payment totaling $33,333, was the transaction price of the arrangement for allocation to certain performance obligations under the agreement. None of the at-risk substantive performance milestones, including development, regulatory and sales-based milestones, were included in the transaction price at the inception of the agreement, as all milestone amounts are outside the control of the Company and contingent upon Neurocrine Biosciences’ efforts and success in future clinical trials. The overall transaction price of the arrangement was measured and allocated to certain performance obligations and revenue was recognized as those performance obligations were performed; all such performance obligations were completed as of March 2022.

The Neurocrine Collaboration Agreement also includes research and development services for the Research Program and Initial Development Program to be performed on behalf of Neurocrine Biosciences. These services were excluded from the initial transaction price allocation because the consideration and performance were contingent upon Neurocrine Biosciences requesting performance of the services and these services were priced at an estimated fair value. During the three and nine months ended September 30, 2022, the Company recognized $132 and $1,938 of revenue, respectively, for research and development services provided.

In January 2022, based on the receipt of the U.S. Food and Drug Administration’s full IND acceptance for NBI-921352, the Company received an aggregate milestone payment of $15,000 in the form of $6,750 in cash and a $8,250 equity investment in the Company (note 8a). The equity investment was measured at fair value of $7,876 on the date of issuance and the resulting premium of $374, with the cash payment of $6,750, was recognized as revenue in the period as the Company did not have any remaining performance obligations in relation to this milestone on the date it was achieved.

The Company is eligible to receive pre-commercial and commercial milestone payments with respect to the licensed products totaling up to an additional $1,667,500, comprised of up to $1,067,500 in additional development and regulatory milestone payments related to NBI-921352 and other licensed Nav1.6 or Nav1.2/1.6 inhibitor products, and up to $600,000 in additional sales-based milestone payments for multiple products. In addition, the Company is eligible to receive royalties on net sales in and outside the U.S., ranging from (a) for NBI-921352, a low double-digit percentage to a mid-teen percentage and a high-single digit percentage to low double-digit percentage, respectively; (b) for DTCs, a high-single digit percentage to a low double-digit percentage and a mid-single digit percentage to a high-single digit percentage, respectively; and (c) for Research Compounds, a mid-single digit percentage to a high-single digit percentage and a tiered mid-single digit percentage, respectively. Royalty rates are subject to customary reductions. These additional amounts will be recognized as determinable. The Company has an option to co-fund 50% of the development costs of NBI-921352 or another product candidate in the U.S., exercisable upon achievement of certain milestones, in exchange for increased U.S. royalties. The Company has not exercised this option as of September 30, 2023.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

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+ Details

Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Financial Assets Measured at Fair Value on a Recurring Basis

The level of the fair value hierarchy utilized to determine such fair values consisted of the following:


	September 30, 2023								December 31, 2022
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and cash equivalents
Cash and money market fund	$	99,574	$	—	$	—	$	99,574	$	57,242	$	—	$	—	$	57,242
Marketable securities
Guaranteed investment certificates		7,383		—		—		7,383		14,953		—		—		14,953
U.S. treasuries		247,127		—		—		247,127		322,851		—		—		322,851
U.S. government securities		—		102,962		—		102,962		—		32,479		—		32,479
Commercial paper		—		85,041		—		85,041		—		150,560		—		150,560
Corporate debt securities		—		96,994		—		96,994		—		142,684		—		142,684
Total	$	354,084	$	284,997	$	—	$	639,081	$	395,046	$	325,723	$	—	$	720,769

Leases - Future Minimum Lease Payments (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
2023	$ 406
2024	1,676
2025	1,743
2026	1,811
2027	1,797
2028 and thereafter	5,278
Total future minimum lease payments	12,711
Less: imputed interest	(1,708)
Present value of lease liabilities	$ 11,003

Nature of the Business (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
Nature of the Business (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated deficit	$ 620,397						$ 620,397		$ 482,747
Net loss	$ 48,462	$ 47,461	$ 41,727	$ 37,150	$ 31,158	$ 19,670	$ 137,650	$ 87,978

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

- Definition

Amount of accumulated undistributed earnings (deficit).

+ References + Details

Net Income (Loss) Per Common Share (Details)	1 Months Ended
Net Income (Loss) Per Common Share (Details)	Mar. 31, 2022 shares
Series 1 Preferred Shares
Class Of Stock [Line Items]
Preferred shares, converted	1,016,000

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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+ Details

Accounts Payable and Accrued Expenses

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses:

Accounts payable and accrued expenses consisted of the following:


	September 30,		December 31,
	2023		2022
Trade payables	$	6,097	$	8,491
Employee compensation, benefits, and related accruals		5,851		5,823
Consulting and contracted research		10,506		7,148
Professional fees		937		411
Other		107		341
Total	$	23,498	$	22,214

Insider Trading Arrangements	9 Months Ended
Insider Trading Arrangements	Sep. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Revenue - Additional Information (Details) - USD ($)	1 Months Ended	3 Months Ended	9 Months Ended		12 Months Ended
Revenue - Additional Information (Details) - USD ($)	Jan. 31, 2022	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2019
Disaggregation Of Revenue [Line Items]
Revenue		$ 132,000		$ 9,434,000
License and Service [Member]
Disaggregation Of Revenue [Line Items]
Revenue		132,000		9,434,000
Neurocrine Biosciences [Member] \| License and Service [Member]
Disaggregation Of Revenue [Line Items]
Research and development services		$ 132,000		$ 1,938,000
License and Collaboration Agreement [Member] \| Neurocrine Biosciences [Member]
Disaggregation Of Revenue [Line Items]
Upfront payment received in cash					$ 30,000,000
Upfront payment received in equity investment					20,000,000
Equity investment measured at fair value					16,667,000
Collaborate agreement premium related to equity investment					3,333,000
Transaction price allocated to performance obligations					$ 33,333,000
Milestone Payment Received	$ 15,000,000
Milestone Payment Received in Cash	6,750,000
Milestone Payment Received in Equity Investment	8,250,000
Equity investment measure at fair value	7,876,000
Premium	374,000
Performance obligation related to milestone	0
Revenue	$ 6,750,000
Potential milestone payments receivable			$ 1,667,500,000
Percentage of option to co-fund development costs upon achievement of certain milestones			50.00%
License and Collaboration Agreement [Member] \| Neurocrine Biosciences [Member] \| Regulatory Milestone [Member]
Disaggregation Of Revenue [Line Items]
Potential milestone payments receivable			$ 1,067,500,000
License and Collaboration Agreement [Member] \| Neurocrine Biosciences [Member] \| Sales Based Milestone [Member]
Disaggregation Of Revenue [Line Items]
Potential milestone payments receivable			$ 600,000,000

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 99,574	$ 57,242
Marketable securities (note 5)	427,100	534,845
Accounts receivable	805	986
Prepaid expenses and other current assets	3,529	7,225
Total current assets	531,008	600,298
Marketable securities, long-term (note 5)	112,407	128,682
Operating lease right-of-use asset, net (note 6)	9,497	10,406
Property, plant and equipment, net	10,236	6,500
Deferred tax assets	601	509
Prepaid expenses, long-term	7,344	7,751
Total assets	671,093	754,146
Current liabilities:
Accounts payable and accrued expenses (note 7)	23,498	22,214
Operating lease liability (note 6)	1,246	488
Total current liabilities	24,744	22,702
Operating lease liability, long-term (note 6)	9,757	9,947
Total liabilities	34,501	32,649
Shareholders’ equity:
Common shares, without par value; unlimited shares authorized; issued and outstanding: 65,002,249 (December 31, 2022 - 62,587,701) (note 8)	1,121,968	1,065,136
Additional paid-in capital	137,974	142,108
Accumulated deficit	(620,397)	(482,747)
Accumulated other comprehensive loss	(2,953)	(3,000)
Total shareholders' equity	636,592	721,497
Total liabilities and shareholders’ equity	671,093	754,146
Commitments and contingencies (note 10)

Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Schedule of Cost Components of Operating Lease

The cost components of the operating leases were as follows for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Lease Cost
Operating lease expense	$	412		$	238		$	1,235		$	714
Variable lease expense(1)		198			195			593			578
Lease Term and Discount Rate
Weighted average remaining lease term (years)		7.52			9.75			7.52			9.75
Weighted average discount rate		3.89	%		3.42	%		3.89	%		3.42	%

(1)

Variable lease costs are payments that vary because of changes in facts or circumstances and include common area maintenance and property taxes related to the premises. Variable lease costs are excluded from the calculation of minimum lease payments.

Future Minimum Lease Payments

Future minimum lease payments as of September 30, 2023 were as follows:


Year ending December 31:
2023	$	406
2024		1,676
2025		1,743
2026		1,811
2027		1,797
2028 and thereafter		5,278
Total future minimum lease payments	$	12,711
Less: imputed interest		(1,708	)
Present value of lease liabilities	$	11,003

Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Convertible Preferred Shares [Member]	Common Shares [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Loss [Member]
Balance at Dec. 31, 2021	$ 550,033	$ 7,732	$ 783,170	$ 117,495	$ (357,374)	$ (990)
Balance (in Shares) at Dec. 31, 2021		1,016,000	51,634,752
Net loss for the period	(19,670)				(19,670)
Issuance of common shares and pre-funded warrants, net of issuance costs (note 8a and note 8c)	7,876		$ 7,876
Issuance of common shares and pre-funded warrants, net of issuance costs (note 8a and note 8c) (in shares)			258,986
Conversion of preferred shares to common shares (note 8b)		$ (7,732)	$ 7,732
Conversion of preferred shares to common shares (note 8b) (in shares)		(1,016,000)	1,016,000
Stock-based compensation expense	3,614			3,614
Issued pursuant to exercise of stock options			$ 1,529	(1,529)
Issued pursuant to exercise of stock options (in Shares)			149,311
Balance at Mar. 31, 2022	541,853		$ 800,307	119,580	(377,044)	(990)
Balance (in Shares) at Mar. 31, 2022			53,059,049
Balance at Dec. 31, 2021	550,033	$ 7,732	$ 783,170	117,495	(357,374)	(990)
Balance (in Shares) at Dec. 31, 2021		1,016,000	51,634,752
Net loss for the period	$ (87,978)
Issued pursuant to exercise of stock options (in Shares)	718,472
Balance at Sep. 30, 2022	$ 753,119		$ 1,064,698	136,728	(445,352)	(2,955)
Balance (in Shares) at Sep. 30, 2022			62,542,542
Balance at Mar. 31, 2022	541,853		$ 800,307	119,580	(377,044)	(990)
Balance (in Shares) at Mar. 31, 2022			53,059,049
Net loss for the period	(31,158)				(31,158)
Issuance of common shares and pre-funded warrants, net of issuance costs (note 8a and note 8c)	269,890		$ 260,503	9,387
Issuance of common shares and pre-funded warrants, net of issuance costs (note 8a and note 8c) (in shares)			9,098,362
Stock-based compensation expense	5,208			5,208
Issued pursuant to exercise of stock options			$ 880	(880)
Issued pursuant to exercise of stock options (in Shares)			85,472
Balance at Jun. 30, 2022	785,793		$ 1,061,690	133,295	(408,202)	(990)
Balance (in Shares) at Jun. 30, 2022			62,242,883
Net loss for the period	(37,150)				(37,150)
Stock-based compensation expense	5,742			5,742
Issued pursuant to exercise of stock options	$ 699		$ 3,008	(2,309)
Issued pursuant to exercise of stock options (in Shares)	369,334		299,659
Other comprehensive income (loss) (note 5)	$ (1,965)					(1,965)
Balance at Sep. 30, 2022	753,119		$ 1,064,698	136,728	(445,352)	(2,955)
Balance (in Shares) at Sep. 30, 2022			62,542,542
Balance at Dec. 31, 2022	721,497		$ 1,065,136	142,108	(482,747)	(3,000)
Balance (in Shares) at Dec. 31, 2022			62,587,701
Net loss for the period	(41,727)				(41,727)
Conversion of pre-funded warrants to common shares (note 8c)			$ 7,379	(7,379)
Conversion of pre-funded warrants to common shares (note 8c) (in shares)			425,000
Stock-based compensation expense	5,994			5,994
Issued pursuant to exercise of stock options			$ 635	(635)
Issued pursuant to exercise of stock options (in Shares)			94,319
Other comprehensive income (loss) (note 5)	1,180					1,180
Balance at Mar. 31, 2023	686,944		$ 1,073,150	140,088	(524,474)	(1,820)
Balance (in Shares) at Mar. 31, 2023			63,107,020
Balance at Dec. 31, 2022	721,497		$ 1,065,136	142,108	(482,747)	(3,000)
Balance (in Shares) at Dec. 31, 2022			62,587,701
Net loss for the period	$ (137,650)
Conversion of pre-funded warrants to common shares (note 8c) (in shares)			1,275,000
Issued pursuant to exercise of stock options (in Shares)	398,097
Balance at Sep. 30, 2023	$ 636,592		$ 1,121,968	137,974	(620,397)	(2,953)
Balance (in Shares) at Sep. 30, 2023			65,002,249
Balance at Mar. 31, 2023	686,944		$ 1,073,150	140,088	(524,474)	(1,820)
Balance (in Shares) at Mar. 31, 2023			63,107,020
Net loss for the period	(47,461)				(47,461)
Conversion of pre-funded warrants to common shares (note 8c)			$ 7,379	(7,379)
Conversion of pre-funded warrants to common shares (note 8c) (in shares)			425,000
Stock-based compensation expense	8,453			8,453
Issued pursuant to exercise of stock options			$ 2,479	(2,479)
Issued pursuant to exercise of stock options (in Shares)			186,330
Other comprehensive income (loss) (note 5)	(1,479)					(1,479)
Balance at Jun. 30, 2023	646,457		$ 1,083,008	138,683	(571,935)	(3,299)
Balance (in Shares) at Jun. 30, 2023			63,718,350
Net loss for the period	(48,462)				(48,462)
Issuance of common shares and pre-funded warrants, net of issuance costs (note 8a and note 8c)	29,508		$ 29,508
Issuance of common shares and pre-funded warrants, net of issuance costs (note 8a and note 8c) (in shares)			855,685
Conversion of pre-funded warrants to common shares (note 8c)			$ 9,383	(9,383)
Conversion of pre-funded warrants to common shares (note 8c) (in shares)			425,000
Stock-based compensation expense	$ 8,743			8,743
Issued pursuant to exercise of stock options			$ 69	(69)
Issued pursuant to exercise of stock options (in Shares)	6,351		3,214
Other comprehensive income (loss) (note 5)	$ 346					346
Balance at Sep. 30, 2023	$ 636,592		$ 1,121,968	$ 137,974	$ (620,397)	$ (2,953)
Balance (in Shares) at Sep. 30, 2023			65,002,249

Marketable Securities (Tables)

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Summary of Amortized Cost, Unrealized Losses Recognized in AOCI and Fair Value of Available-for-Sale Securities

Amortized cost, unrealized losses recognized in accumulated other comprehensive loss and fair value of available-for-sale securities consisted of the following:


	September 30, 2023							December 31, 2022
	Amortized Cost		Unrealized Loss			Fair Value		Amortized Cost		Unrealized Loss			Fair Value
Contractual maturity of 0 to 1 years:
Guaranteed investment certificates	$	7,434	$	(51	)	$	7,383	$	14,953	$	—		$	14,953
U.S. treasuries		196,336		(928	)		195,408		78,880		(837	)		78,043
U.S. government securities		76,872		(314	)		76,558		5,793		(20	)		5,773
Commercial paper		85,114		(73	)		85,041		150,560		—			150,560
Corporate debt securities		22,980		(58	)		22,922		8,942		(68	)		8,874
Contractual maturity of 1 to 3 years:
U.S. treasuries		29,435		(138	)		29,297		60,354		(958	)		59,396
U.S. government securities		26,682		(278	)		26,404		26,741		(35	)		26,706
Corporate debt securities		56,829		(123	)		56,706		42,672		(92	)		42,580
Total	$	501,682	$	(1,963	)	$	499,719	$	388,895	$	(2,010	)	$	386,885

- Definition

Tabular disclosure of investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale).

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-9

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (aa)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (aaa)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

+ Details

Accounts Payable and Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following:


	September 30,		December 31,
	2023		2022
Trade payables	$	6,097	$	8,491
Employee compensation, benefits, and related accruals		5,851		5,823
Consulting and contracted research		10,506		7,148
Professional fees		937		411
Other		107		341
Total	$	23,498	$	22,214

Marketable Securities - Summary of Amortized Cost, Unrealized Losses Recognized in AOCI and Fair Value of Available-for-Sale Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	$ 501,682	$ 388,895
Unrealized Gain/(Loss)	(1,963)	(2,010)
Fair Value	499,719	386,885
Guaranteed Investment Certificates [Member]
Schedule Of Available For Sale Securities [Line Items]
Contractual maturity of 0 to 1 years, Amortized Cost	7,434	14,953
Contractual maturity of 0 to 1 years, Unrealized Gain/(Loss)	(51)
Contractual maturity of 0 to 1 years, Fair Value	7,383	14,953
U.S. Treasuries [Member]
Schedule Of Available For Sale Securities [Line Items]
Contractual maturity of 0 to 1 years, Amortized Cost	196,336	78,880
Contractual maturity of 0 to 1 years, Unrealized Gain/(Loss)	(928)	(837)
Contractual maturity of 0 to 1 years, Fair Value	195,408	78,043
Contractual maturity of 1 to 3 years, Amortized Cost	29,435	60,354
Contractual maturity of 1 to 3 years, Unrealized Gain/(Loss)	(138)	(958)
Contractual maturity of 1 to 3 years, Fair Value	29,297	59,396
U.S. Government Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Contractual maturity of 0 to 1 years, Amortized Cost	76,872	5,793
Contractual maturity of 0 to 1 years, Unrealized Gain/(Loss)	(314)	(20)
Contractual maturity of 0 to 1 years, Fair Value	76,558	5,773
Contractual maturity of 1 to 3 years, Amortized Cost	26,682	26,741
Contractual maturity of 1 to 3 years, Unrealized Gain/(Loss)	(278)	(35)
Contractual maturity of 1 to 3 years, Fair Value	26,404	26,706
Commercial Paper [Member]
Schedule Of Available For Sale Securities [Line Items]
Contractual maturity of 0 to 1 years, Amortized Cost	85,114	150,560
Contractual maturity of 0 to 1 years, Unrealized Gain/(Loss)	(73)
Contractual maturity of 0 to 1 years, Fair Value	85,041	150,560
Corporate Debt Securities [Member]
Schedule Of Available For Sale Securities [Line Items]
Contractual maturity of 0 to 1 years, Amortized Cost	22,980	8,942
Contractual maturity of 0 to 1 years, Unrealized Gain/(Loss)	(58)	(68)
Contractual maturity of 0 to 1 years, Fair Value	22,922	8,874
Contractual maturity of 1 to 3 years, Amortized Cost	56,829	42,672
Contractual maturity of 1 to 3 years, Unrealized Gain/(Loss)	(123)	(92)
Contractual maturity of 1 to 3 years, Fair Value	$ 56,706	$ 42,580

Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

10.

Commitments and contingencies:

(a)

Asset purchase agreement with 1st Order Pharmaceuticals, Inc. (“1st Order”):

In April 2017, the Company acquired XEN1101 (previously known as 1OP2198) from 1st Order pursuant to an asset purchase agreement. In August 2020, the Company and 1st Order amended the asset purchase agreement to amend certain definitions in the agreement and to modify the payment schedule for certain milestones. Through September 30, 2023, the Company has paid $2,000 based on progress against these milestones. Future potential payments to 1st Order related to the XEN1101 program include up to $6,000 in regulatory milestones. There are no royalty obligations to 1st Order.

(b)

Guarantees and indemnifications:

The Company has entered into license and research agreements with third parties that include indemnification provisions that are customary in the industry. These indemnification provisions generally require the Company to compensate the other party for certain damages and costs incurred as a result of third-party claims or damages arising from these transactions.

The maximum amount of potential future indemnification is unlimited; however, the Company currently holds commercial and product liability insurance. This insurance limits the Company’s exposure and may enable it to recover a portion of any future amounts paid. Historically, the Company has not made any indemnification payments under such agreements and the Company believes that the fair value of these indemnification obligations is minimal. Accordingly, the Company has not recognized any liabilities relating to these obligations for any period presented.

Fair Value of Financial Instruments - Schedule of Financial Assets Measured at Fair Value on a Recurring Basis (Details) - Recurring Basis [Member] - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Financial Assets Measured at Fair Value on a Recurring Basis [Line Items]
Financial assets	$ 639,081	$ 720,769
Level 1 [Member]
Financial Assets Measured at Fair Value on a Recurring Basis [Line Items]
Financial assets	354,084	395,046
Level 2 [Member]
Financial Assets Measured at Fair Value on a Recurring Basis [Line Items]
Financial assets	284,997	325,723
Cash and Money Market Fund [Member]
Financial Assets Measured at Fair Value on a Recurring Basis [Line Items]
Cash and cash equivalents	99,574	57,242
Cash and Money Market Fund [Member] \| Level 1 [Member]
Financial Assets Measured at Fair Value on a Recurring Basis [Line Items]
Cash and cash equivalents	99,574	57,242
Commercial Paper [Member]
Financial Assets Measured at Fair Value on a Recurring Basis [Line Items]
Financial assets	85,041	150,560
Commercial Paper [Member] \| Level 2 [Member]
Financial Assets Measured at Fair Value on a Recurring Basis [Line Items]
Financial assets	85,041	150,560
Guaranteed Investment Certificates [Member]
Financial Assets Measured at Fair Value on a Recurring Basis [Line Items]
Financial assets	7,383	14,953
Guaranteed Investment Certificates [Member] \| Level 1 [Member]
Financial Assets Measured at Fair Value on a Recurring Basis [Line Items]
Financial assets	7,383	14,953
U.S. Treasuries [Member]
Financial Assets Measured at Fair Value on a Recurring Basis [Line Items]
Financial assets	247,127	322,851
U.S. Treasuries [Member] \| Level 1 [Member]
Financial Assets Measured at Fair Value on a Recurring Basis [Line Items]
Financial assets	247,127	322,851
U.S. Government Securities [Member]
Financial Assets Measured at Fair Value on a Recurring Basis [Line Items]
Financial assets	102,962	32,479
U.S. Government Securities [Member] \| Level 2 [Member]
Financial Assets Measured at Fair Value on a Recurring Basis [Line Items]
Financial assets	102,962	32,479
Corporate Debt Securities [Member]
Financial Assets Measured at Fair Value on a Recurring Basis [Line Items]
Financial assets	96,994	142,684
Corporate Debt Securities [Member] \| Level 2 [Member]
Financial Assets Measured at Fair Value on a Recurring Basis [Line Items]
Financial assets	$ 96,994	$ 142,684

Marketable Securities - Additional Information (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]
Trading marketable securities	$ 39,788	$ 276,642
Trading securities available-for-sale	$ 499,719	$ 386,885

Share Capital - Stock Option Activity (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]
Number of Options Outstanding, Beginning balance	8,681,808	7,234,460	7,117,782	5,638,232
Number of Options, Granted	363,200	102,000	2,457,173	2,079,845
Number of Options, Exercised	(6,351)	(369,334)	(398,097)	(718,472)
Number of Options, Forfeited, cancelled or expired	(32,416)	(21,357)	(170,617)	(53,836)
Number of Options Outstanding, Ending balance	9,006,241	6,945,769	9,006,241	6,945,769
Number of Options Exercisable, End of period	4,618,002	3,391,011	4,618,002	3,391,011

Revenue (Tables)

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Schedule Of Collaboration Revenue

Revenue was as follows for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Neurocrine Biosciences:
Recognition of the transaction price	$	—	$	—	$	—	$	372
Research and development services		—		132		—		1,938
Milestone payments		—		—		—		7,124
Total revenue	$	—	$	132	$	—	$	9,434

Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Revenue (note 9)		$ 132		$ 9,434
Operating expenses:
Research and development	$ 42,880	29,431	$ 126,436	70,937
General and administrative	12,804	8,829	33,923	24,309
Total operating expenses	55,684	38,260	160,359	95,246
Loss from operations	(55,684)	(38,128)	(160,359)	(85,812)
Other income (expense):
Interest income	6,982	3,066	18,929	4,250
Unrealized fair value gain (loss) on trading securities	490	(294)	3,404	(4,944)
Foreign exchange gain (loss)	(407)	(2,381)	289	(2,493)
Other income (expense)	7,065	391	22,622	(3,187)
Loss before income taxes	(48,619)	(37,737)	(137,737)	(88,999)
Income tax recovery	157	587	87	1,021
Net loss	(48,462)	(37,150)	(137,650)	(87,978)
Net loss attributable to preferred shareholders				(420)
Net loss attributable to common shareholders	(48,462)	(37,150)	(137,650)	(87,558)
Other comprehensive income (loss):
Unrealized gain (loss) on available-for-sale securities (note 5)	346	(1,965)	47	(1,965)
Comprehensive loss	$ (48,116)	$ (39,115)	$ (137,603)	$ (89,943)
Net loss per common share (note 3):
Basic	$ (0.73)	$ (0.57)	$ (2.09)	$ (1.49)
Diluted	$ (0.73)	$ (0.57)	$ (2.09)	$ (1.49)
Weighted-average common shares outstanding (note 3):
Basic	66,002,163	65,465,069	65,862,661	58,836,928
Diluted	66,002,163	65,465,069	65,862,661	58,836,928

Commitments and Contingencies (Details) - Asset Purchase Agreement [Member] - 1st Order Pharmaceuticals, Inc. [Member]	9 Months Ended
	Sep. 30, 2023 USD ($)
Commitments And Contingencies [Line Items]
Milestone payment paid	$ 2,000,000
Royalty obligations	0
Regulatory Milestone [Member] \| Maximum [Member]
Commitments And Contingencies [Line Items]
Future potential payments	$ 6,000,000

Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

Leases:

The Company has an operating lease for research laboratories and office space in Burnaby, British Columbia which expires on June 30, 2032. In July 2022, the Company entered into an additional operating lease agreement for office space in Needham, Massachusetts ("Needham Lease"), which commenced on October 1, 2022. The Needham Lease is for a 62-month term and an option to terminate one year prior to the expiry date, which was not considered in the determination of the right-of-use asset and lease liability.

The cost components of the operating leases were as follows for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Lease Cost
Operating lease expense	$	412		$	238		$	1,235		$	714
Variable lease expense(1)		198			195			593			578
Lease Term and Discount Rate
Weighted average remaining lease term (years)		7.52			9.75			7.52			9.75
Weighted average discount rate		3.89	%		3.42	%		3.89	%		3.42	%

(1)

Future minimum lease payments as of September 30, 2023 were as follows:


Year ending December 31:
2023	$	406
2024		1,676
2025		1,743
2026		1,811
2027		1,797
2028 and thereafter		5,278
Total future minimum lease payments	$	12,711
Less: imputed interest		(1,708	)
Present value of lease liabilities	$	11,003

Share Capital - Schedule of Pre-Funded Warrants (Details) - shares	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Share Capital [Line Items]
Outstanding, beginning	3,103,864	2,775,996
Exercised	(1,275,010)	0
Issued		327,868
Outstanding, ending	1,828,854	3,103,864
March 2021
Share Capital [Line Items]
Outstanding, beginning	1,081,081	1,081,081
Exercised	(1,081,081)
Outstanding, ending		1,081,081
October 2021
Share Capital [Line Items]
Outstanding, beginning	1,694,915	1,694,915
Exercised	(193,929)
Outstanding, ending	1,500,986	1,694,915
June 2022
Share Capital [Line Items]
Outstanding, beginning	327,868
Issued		327,868
Outstanding, ending	327,868	327,868