XENE 10-K & 10-Q changes, risk factors and insider trading

Investment in biopharmaceutical product development is highly speculative because it entails substantial capital expenditures and significant risk that a product candidate may fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval and become commercially viable. We have no products approved for commercial sale and have not generated any revenue from product sales to date, and we will continue to incur significant research and development and other expenses related to our clinical development and ongoing operations. As a result, we are not profitable and have incurred losses in each period since our inception. Since our inception, we have devoted substantially all of our financial resources and efforts to research and development, including pre-clinical studies, manufacturing of investigational drug and our clinical trials.studies. Our financial condition and operating results, including net losses, may fluctuate significantly from quarter to quarter and year to year. Accordingly, you should not rely upon the results of any quarterly or annual periods as indications of future operating performance. We do not expect to have sustained profitability for the foreseeable future. We had net losses of $234.3$345.9 million, $182.4$234.3 million and $125.4$182.4 million for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively, and an accumulated deficit of $899.5$1,245.4 million as of December 31, 2024,2025, which were driven by expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase as we continue our research and development of, and seek regulatory approvals for our product candidates.

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

Our expenses could increase beyond expectations for a variety of reasons, including if we are required by the U.S. Food and Drug Administration, or FDA, the European Medicines Agency, or EMA, or other regulatory authorities to perform clinical and other studies including post-approval commitments in addition to those that we currently anticipate, or if there are any delays in establishing appropriate manufacturing arrangements to support our clinical trials,studies, the development of any of our product candidates or commercialization. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our shareholders’ equity and working capital.

Our ability to generate revenue and achieve profitability depends on our ability, alone or with collaborators, to successfully complete the development of, and obtain the regulatory approvals necessary to commercialize, our product candidates. Successful commercialization will require achievement of many key milestones, including demonstrating safety and efficacy in clinical trials,studies, obtaining regulatory, including marketing, approval for these product candidates, manufacturing, marketing and selling those products for which we, or any of our existing or future collaborators, may obtain regulatory approval, satisfying any post-marketing requirements and obtaining reimbursement for our products from private insurance or government payers. Because of the uncertainties and risks associated with these activities, we are unable to accurately and precisely predict the timing and amount of revenues, the extent of any further losses or if or when we might achieve profitability. We and our existing or future collaborators may never succeed in these activities and, even if we do, we may never generate revenues that are large enough for us to achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Additionally, our expenses could increase if we are required by the FDA, EMA or other regulatory authorities to perform clinical trialsstudies in addition to those currently expected, or if there are any delays in completing our clinical trialsstudies or the development of any of our product candidates.

If any of our product candidates fail in clinical trialsstudies or do not gain regulatory approval, or if any of our future products, if any, once approved, fail to achieve market acceptance or adequate market share, we may never become profitable. If we are unable to generate sufficient revenue to become profitable and remain so, our financial condition and operating results will be negatively impacted, and the market price of our common shares might be adversely impacted.

Since our inception, we have dedicated most of our resources to the discovery and development of our pre-clinical and clinical product candidates. We expect to continue to spend substantial amounts of resources to continue the pre-clinical and clinical development of our current and future programs. If we are able to gain marketing approval for product candidates that we develop, we will require significant additional amounts of capital in order to launch and commercialize such product candidates to the extent that such launch and commercialization are not the responsibility of a collaborator. In addition, other unanticipated costs may arise in the course of our development efforts. Because the design and outcome of our planned and anticipated clinical trialsstudies is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of any product candidate we develop.

Many of the companies against which we are competing or against which we may compete in the future have significantly greater financial resources and expertise in research and development, manufacturing, pre-clinical testing, conducting clinical trials,studies, obtaining regulatory approvals and marketing approved products than we, or our collaborators, do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaboration arrangements with large and established companies.

Our commercial opportunities could be reduced or eliminated if our competitors develop and commercialize products or therapies that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop. Our competitors also may obtain FDA, EMA or other foreign regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. In addition, our ability to compete may be affected by decisions made by insurers or other third-party payers.payers or public health systems to secure favorable coverage and reimbursement as well as the commercial success of our product candidates.

As a company, we have no previous experience in completing a Phase 3 clinical trialstudy and related regulatory requirements including a New Drug Application, or NDA, or equivalent submission, or the commercialization of products. We have not yet demonstrated our ability to independently and repeatedly conduct clinical development after Phase 2, obtain regulatory approval, manufacture drug substance or drug product on a registrational and commercial scale or arrange for a third-party to do so on our behalf, and commercialize therapeutic products. We will need to develop such abilities if we are to execute on our business strategy to develop and independently commercialize product candidates. To execute on our business plan for the development of independent programs, we will need to successfully:

build and implement effective market access strategy and gain market acceptance for our future products, if any; and manage our spending as costs and expenses increase due to clinical trials,studies, regulatory approvals and commercialization activities.

If we fail to attract and retain our executive officers and key personnel, we may be unable to successfully develop our product candidates, perform our obligations under our collaboration agreements, conduct our clinical trialsstudies and commercialize our product candidates.

Various laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Any misconduct could also involve the improper use or misrepresentation of information obtained in the course of clinical trialsstudies or creating fraudulent data in our pre-clinical studies or clinical trials,studies, which could result in regulatory sanctions and cause serious harm to our reputation. We have adopted a code of conduct applicable to all of our employees, officers, directors, agents and representatives, including consultants, but it is not always possible to identify and deter misconduct, and the precautions we take to detect and prevent misconduct may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or claims, demands, or lawsuits stemming from an actual or alleged failure to comply with these laws and regulations. Additionally, we are subject to the risk that a person or government could allege such fraud or other misconduct, even if none occurred. If any such actions are instituted against us, and we are not successful in defending ourselves, achieving a favorable settlement or otherwise asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, disgorgement, integrity oversight and reporting obligations, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations. Additionally, defending against any such actions can be costly, time-consuming and may require significant financial and personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired.

In the ordinary course of business, we process personal data and other sensitive information, including our proprietary and confidential business data, trade secrets, intellectual property, data about trialstudy participants collected in connection with clinical trials,studies, and other sensitive data. Our data processing activities subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contracts, and other obligations that govern the processing of personal data by us and on our behalf.

In the U.S., federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, and consumer protection laws. For example, the U.S. federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, imposes specific requirements relating to the privacy, security, and transmission of individually identifiable health information that apply to most U.S. healthcare providers with which we interact, such as our U.S. clinical trial sites. At the state level, the California Consumer Privacy Act of 2018, or CCPA, as amended and supplemented by the California Privacy Rights Act, imposes obligations on businesses to which it applies. The CCPA allows for statutory fines for noncompliance. Although the CCPA exempts some data processed in the context of clinical trials, the CCPA, to the extent applicable to our business and operations, may increase compliance costs and potential liability with respect to other personal information we maintain about California residents. Other states have also enacted data privacy laws. In addition, Washington state enacted the My Health, My Data Act, a health-focused consumer privacy law, which took effect in March 2024. This law imposes obligations related to the collection and sharing of certain health-related information that is not subject to HIPAA and that does not fall within certain other exceptions in the law. Other states have enacted, or are in the process of enacting, similar health-focused consumer privacy laws. Additional data privacy and security laws have been proposed and enacted at the federal, state, and local levels in recent years, which could further complicate compliance efforts. For example, in June 2024, the Protecting Americans’ Data from Foreign Adversaries Act of 2024 took effect. This law prohibits data brokers from making available certain personally identifiable sensitive data of U.S. individuals to “foreign adversary” countries, such as the People’s Republic of China, or the PRC, and entities controlled by such countries. Additionally, in January 2025, the U.S. Department of Justice published a final rule implementing President Biden’s Executive Order 14117, “Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern.Concern,” which became effective in April 2025. This final rule prohibits certain data brokerage transactions and transactions involving certain bulk humansensitive ‘omicpersonal data,information, including human genomic data and biospecimens from which such data can be derived, with restricted persons and jurisdictions, such as the PRC. The final rule also places restrictions on certain vendor, employment and investment agreements with such jurisdictions. Most provisions of the final rule are scheduled to take effect in April 2025. These restrictions may affect our ability to engage in collaborations or license agreements with entities in restricted countries or with a nexus to such countries going forward.

Although we endeavor to comply with all applicable data privacy and security obligations, these obligations are quickly changing in an increasingly stringent fashion, creating some uncertainty as to how to comply, and potentially requiring us to modify our policies and practices, which may be costly and may divert the attention of management and technical personnel. Further, we may at times fail, or be perceived to have failed, to have complied and could face significant consequences. These consequences may include, but are not limited to, government enforcement actions, investigations and other proceedings; additional reporting requirements and/or oversight; bans on processing personal data; orders to destroy or not use personal data; and imprisonment of company officials. Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to: interruptions or stoppages in our business operations, including our clinical trialsstudies; inability to process personal data or to operate in certain jurisdictions; limited ability to develop or commercialize our products; expenditure of time and resources to defend any claim or inquiry; adverse publicity; or revision or restructuring of our operations.

We rely on both internal information technology systems and networks, and those of third-party vendors and contractors, to acquire, transmit, store and otherwise process information in connection with our business activities. Our ability to effectively manage our business depends on the security, reliability and adequacy of our and our third-party contractors’ and vendors’ technology systems. Any incident, whether hostile or inadvertent, that adversely impacts the confidentiality, integrity or availability of our systems and/or data, including phishing, business email compromise, social engineering, ransomware or other malware, or any security breach, security incident or other destruction, loss, or unauthorized use or other processing of data maintained or otherwise processed by us or on our behalf could result in a loss of intellectual property or misappropriation of trade secrets, disruptions to our business and operations, subject us to increased costs and require us to expend time and resources to address the matter, may subject us to claims, demands, and proceedings by private parties, regulatory investigations and other proceedings, and fines, penalties, and other liability and have a material adverse effect on our business. In addition, the loss, alteration or other damage to or other unavailability of pre-clinical data or clinical trialstudy data from completed or ongoing clinical trialsstudies for our product candidates could result in delays in our development and regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Any cyber-attack,cyberattack, security breach or incident, or other destruction, loss or unauthorized processing of data maintained or otherwise processed by us or on our behalf, or the perception any such matter has occurred, could result in actual or alleged violations of applicable U.S. and international privacy, data protection, information security and other laws and regulations, harm our reputation and subject us to litigation and governmental investigations and proceedings by federal, state and local regulatory entities in the U.S. and by international regulatory entities, resulting in exposure to material civil and/or criminal proceedings and liability. In addition, we may incur significant additional expense to implement further measures relating to privacy, data protection and information security, whether in response to an actual or perceived security breach or incident or otherwise.

To date, we have not experienced any material impact to our business, financial position or operations resulting from cyberattacks or other information security incidents; however, because of frequently changing attack techniques, along with the increased volume and sophistication of such attacks, our business, financial position or operations could be adversely impacted in the future. Moreover, the increasingly distributed nature of computing, including prevalent use of mobile devices to access confidential information and widespread use of cloud-based applications hosted in remote data centers, increases the risk of security breaches and incidents. These risks may be heightened due to the increasing number of our and our third-party vendors’ and contractors’ personnel working remotely. As cyber threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate information security vulnerabilities, threats and incidents. While we have implemented layered security measures, our computer systems and the external systems and services used by our third-party contract manufacturers, or CMOs, and contract research organizations, or CROs, and their vendors and contractors remain potentially vulnerable to these events and there can be no assurance that we will be successful in preventing cyber-attackscyberattacks or successfully mitigating their effects. Our liability insurance may not be sufficient in type or amount to cover us against claims related to security breaches, cyberattacks and other related breaches.

We must dedicate additional resources to comply with numerous laws and regulations in each jurisdiction in which we operate and plan to operate outside the U.S., including those countries outside the U.S. in which we are conducting clinical trials.studies. As we engage in significant cross-border and international activities, we will be subject to risks related to international operations, including:

different regulatory requirements for conducting clinical trials,studies, registering and maintaining approval of, manufacturing and advertising drugs in foreign countries;

potential or actual violations of domestic and international anti-corruption laws, such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, or of U.S. and international import, export and re-export control and sanctions laws and regulations, the likelihood of which may increase with an increase of operations in foreign jurisdictions, directly or indirectly through third parties (whose corrupt or other illegal conduct may subject us to liability), which may involve interactions with government agencies or government-affiliated hospitals, universities and other organizations, such as conducting clinical trials,studies, selling our products, and obtaining necessary permits, licenses, patent registrations, and other regulatory approvals;

Generally, for any taxable year in which 75% or more of our gross income is passive income, or at least 50% of the quarterly average percentage of our assets (as determined under applicable Treasury Regulations) are held for the production of, or produce, passive income, we would be characterized as a PFIC, for U.S. federal income tax purposes. For PFIC testing purposes, a range of factors can affect the determination,determination including the market price of our common shares and how we spend or otherwise hold our cash. Thus, our status as a PFIC is a fact-intensive determination made on an annual basis and the applicable law is subject to varying interpretation. In addition, a company’s PFIC status can be made only after the end of each taxable year. Accordingly, we cannot provide any assurance regarding our PFIC status for the current taxable year or future taxable years.

Healthcare providers and third-party payers in the U.S. and elsewherenational health systems in other jurisdictions play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing approval. Our arrangements with healthcare providers, third-party payers, patients and other parties within the healthcare industrydelivery system may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell, and distribute any products for which we obtain marketing approval. Restrictions under applicable healthcare and data privacy laws and regulations include the following, some of which will apply only if and when we have a marketed product:

Efforts to ensure that our activities comply with applicable healthcare laws and regulations will involve substantial costs.costs and, if and when one of our product candidates is approved, our compliance efforts will need to expand and evolve to address newly applicable laws. Given the breadth of the laws and regulations, limited guidance for certain laws and regulations and evolving government interpretations of the laws and regulations, governmental authorities may possibly conclude that our business practices may not comply with such laws. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, exclusion from government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations. Further, defending against any such actions can be costly, time-consuming and may require significant personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired.

We or the third parties upon whom we depend may be adversely affected by earthquakesearthquakes, climate change or other natural disasters and our business continuity and disaster recovery plans may not adequately protect us from serious disaster.

Our headquarters are located in Burnaby, British Columbia, Canada. We are vulnerable to natural disasters such as earthquakes that could disrupt our operations. If a natural disaster, power outage, fire or other event occurred that prevented us from using all or a significant portion of our headquarters, that damaged critical infrastructure, such as the manufacturing facilities of our CMOs,CMOs upon whom we rely, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time. Such events may result in damage or loss of our products and product candidates during their manufacture and shipment, cause delays in clinical development due to study site disasters or result in losses of critical data, any of which may adversely impact our operations. Although we carry insurance for earthquakes and other natural disasters, we may not carry sufficient business interruption insurance to compensate us for all losses that may occur. The disaster recovery and business continuity plans that we have in place may not be adequate in the event of a serious disaster or similar event. We may incur substantial expenses as a result of a natural disaster or earthquake, which could have a material adverse effect on our business. In addition, we may lose samples or other valuable data. The occurrence of any of the foregoing could have a material adverse effect on our business.

We currently have no products approved for commercial sale and are investing significant efforts and financial resources in the development of our clinical-stage product candidate, azetukalner for the treatment of epilepsy, MDD, BPD and potentially other neurological disorders. While we are advancing our Phase 3 clinical studies in azetukalner, there can be no assurance that these or any future clinical studies will be successful, that we will be able to obtain regulatory approval, or that we will be able to manufacture or independently commercialize any product candidates. Our future business success depends on the continued development and ultimate regulatory approval of azetukalner. We will need to successfully enroll and complete our azetukalner Phase 3 clinical trials and any other future Phase 3 clinical trials. The future regulatory and commercial success of azetukalner is subject to a number of risks, including:

successful patient enrollment in clinical trialsstudies and ultimate completion of clinical trialsstudies;

acceptance of azetukalner, if and when approved, by patients, the medical communitycommunity, third-party payers, national health systems, and third-partyhealth payerstechnology authorities where applicable to ensure effective market access and adoption by healthcare providers and patients;

maintaining a continued acceptable safety and durable efficacy profile of azetukalner following approval;

In addition, of the large number of drugs in development in the pharmaceutical industry, only a small percentage result in the submission of an NDA to the FDA or the equivalent foreign regulatory authorities and even fewer are approved for commercialization. Furthermore, even if we do receive regulatory approval for azetukalner for any indication, any such approval may be subject to limitations on the indications or uses or patient populations for which we may market azetukalner. Accordingly, even if we are able to obtain the requisite financing to continue to fund our development programs, we cannot ensure that we will successfully develop or commercialize azetukalner for any indication.

Results of pre-clinical studies and/or earlier clinical trialsstudies may not be predictive of the results of later-stage clinical trialsstudies and the results of our clinical trialsstudies may not satisfy regulatory requirements and we may experience delays or unexpected difficulties in obtaining regulatory approval.

The results of pre-clinical studies, either generated by us, by our CROs or by other third parties from which we have in-licensed or acquired a product candidate, may not be predictive of results in clinical testing. Moreover, pre-clinical results can often be difficult to compare across different studies for a variety of reasons, including differences in experimental protocols and techniques, personnel, equipment and other factors, which may make the pre-clinical results less reliable and predictive of clinical trialstudy results. In addition, published clinical data or case reports from third parties or early clinical trialstudy data of our product candidates may not be predictive of the results of later-stage clinical trials.studies. Interpretation of results from early, usually smaller, studies that suggest a clinically meaningful response in some patients, requires caution. Results from later stages of clinical trialsstudies enrolling more patients may fail to show the desiredacceptable safety and efficacy results according to applicable regulatory requirements or otherwise fail to be consistent with the results of earlier trialsstudies of the same product candidate. Later clinical trialstudy results may not replicate earlier clinical trialsstudies for a variety of reasons, including differences in trialstudy design, different trialstudy endpoints (or lack of trialstudy endpoints in exploratory studies), patient population, number of patients, patient selection criteria, trialstudy duration, drug dosage and formulation and lack of statistical power in the earlier studies. These uncertainties are enhanced where the diseases or disorders under study lack established clinical endpoints, validated measures of efficacy, as is often the case with disorders for which no drugs have been developed previously and where the product candidates target novel mechanisms. The absence of well-defined regulatory pathways and recognized efficacy benchmarks can make clinical development, regulatory approval, and commercialization more challenging and unpredictable.

Further, our product candidates may not be approved even if they achieve their primary endpoints in our Phase 3 clinical trials.studies. The FDA, EMA or other foreign regulatory authorities may disagree with our trialstudy design and our interpretation of data from pre-clinical studies and clinical trialsstudies or require additional data. In addition, any of these regulatory authorities may change its requirements or recommendations for the approval of a product candidate at any time in the future, even after reviewing and providing comments or advice on a protocol for a pivotal clinical trialstudy that, if successful, would potentially form the basis for an application for approval by the FDA, EMA or another foreign regulatory authority. For example, the FDA may refuse to accept our planned NDA for substantive review or may conclude after review of our data that our application is insufficient to obtain regulatory approval. If the FDA does not approve our planned NDA, it may require that we conduct additional clinical, nonclinical or manufacturing studies before it will reconsider our application. Depending on the extent of these or any other studies required by the FDA or another regulatory authority, approval of an NDA or equivalent filing may be significantly delayed or we may be unable to obtain approval of an NDA or equivalent filing because such studies may require us to expend more resources than we have available. Furthermore, applicable regulatory authorities may also approve our product candidates for a narrower indication or population than we request or may grant approval contingent on the performance of costly post-marketing commitments.

Interim, initial, “top-linetopline” and preliminary data from our clinical trialsstudies that we announce or publish from time to time may change as more patient data become available, and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publicly disclose preliminary or top-linetopline data from our pre-clinical studies and clinical trials,studies, which are based on preliminary analyses of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the complete data relatedset tofor the particularrelevant pre-clinical study or clinical trial.study . We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or have access to all data, and we may not have had the opportunity to fully and carefully evaluate all data. As a result, the top-linetopline or preliminary results that we report may differ from future results of the same studies or trials,studies, or different conclusions or considerations may qualify suchthe results,initial findings, once additional data have been received and fully evaluated. Top-lineTopline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published.published or disclosed. As a result, top-linetopline data should be viewedinterpreted with caution until the finalfinal, comprehensive data are available.

Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the perceived value of the particular program, the approvability or commercializationcommercial potential of the particular product candidate or product and could have a material adverse effect on the success of our business.business prospects. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive complex body of information, and you or others may not agree with our determination of what we determine isconstitutes material or otherwise appropriate information to include in ourfor disclosure. If the interim, topline or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed,adversely affected, which could harmnegatively impact our business, results of operations, prospects or financial condition. Further, disclosure of interim, top-linetopline or preliminary data by us or by our competitors could result in volatility in the price of our common shares.

Clinical trialsstudies may fail to demonstrate adequately the safety and efficacy of our, or our collaborators’, product candidates at any stage of clinical development. Terminating the development of any of our, or our collaborators’, product candidates could materially harm our business and the market price of our common shares.

Before obtaining regulatory approvals for the commercial sale of our product candidates, we, or our collaborators, must demonstrate through lengthy, complex and expensive pre-clinical testing and clinical trialsstudies that each product candidate is both safe and effective for use in each target indication. Failure can occur at any time during the clinical trialstudy process. Clinical trialsstudies often fail to demonstrate safety and efficacy of the product candidate studied for the target indication. Most product candidates that commence clinical trialsstudies are never approved as products. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trialsstudies due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials.studies. In addition to the safety and efficacy trialsstudies of any product candidate, clinical trialstudy failures may result from a multitude of factors including flaws in trialstudy design, dose selection, statistical analysis plan, placebo effect, patient enrollment criteria, patient compliance and trialstudy execution. Data obtained from trials and studies are susceptible to varying interpretations, and regulators may not interpret our data as favorably as we do, which may delay, limit or prevent regulatory approval. Failure of a clinical trialstudy due to any of these reasons could materially harm our business and the market price of our common shares.

In the case of some of our and our collaborators’ product candidates, we and our collaborators are seeking to develop treatments for certain diseases or disorders for which there is relatively limited clinical experience, and clinical trialsstudies may use novel endpoints and measurement methodologies or subjective patient feedback, which adds a layer of complexity to these clinical trialsstudies and may delay regulatory approval. Negative or inconclusive results from our, or our collaborators’, clinical trialsstudies could lead to a decision or requirement to conduct additional pre-clinical testing or clinical trialsstudies or result in a decision to terminate the continued development of a product candidate. For example, in October 2021, we releasedexpect to report topline data from our Phase 2b3 X-TOLEX-TOLE2 clinicalFOS trial ofin azetukalnerepilepsy in adultthe patientsfirst withhalf focalof epilepsy.March 2026. In addition, our Phase 3 X-NOVA2 and X-NOVA3 studies in NovemberMDD 2023, we released topline data fromand our Phase 23 X-NOVAX-CEED clinical trial of azetukalnerstudy in patientsBPD withare MDD.ongoing and continue to recruit patients. There can be no assurance that our ongoing azetukalner Phase 3 clinical trialsstudies or any other future Phase 3 clinical trialsstudies will demonstrate adequate efficacy and safety results and that we will be able to obtain regulatory approval of azetukalner. Any of the foregoing outcomes would materially and adversely impact our business, product candidate pipeline and future prospects.

If our, or our collaborators’, product candidates are not shown to be both safe and effective in clinical trials,studies, such product candidates will be unable to obtain regulatory approval or be successfully commercialized. In addition, our, or our collaborators’, failure to demonstrate positive results in clinical trialsstudies in any indication for which we, or our collaborators, are developing clinical product candidates could adversely affect development efforts in other indications. In such case, we would need to develop other compounds and conduct associated pre-clinical testing and clinical trials,studies, as well as potentially seek additional financing, all of which would have a material adverse effect on our business, growth prospects, operating results, financial condition and results of operations.

We, or our collaborators, may find it difficult to enroll patients in our clinical trialsstudies which could delay or prevent the successful completion of clinical trialsstudies of our product candidates.

We, or our collaborators, may not be able to identify, recruit and enroll a sufficient number of patients, or those with required or desired characteristics to achieve diversity in a study, to complete clinical trialsstudies in a timely manner, or at all. Patient enrollment for clinical trialsstudies is affected by factors including:

our ability to recruit clinical trialstudy investigators with the appropriate competencies, staff and experience;

proximity and availability of clinical trialstudy sites for prospective patients;

availability of competing therapies and clinical trialsstudies;

efforts to facilitate timely enrollment in clinical trialsstudies; and patient referral practices of physicians.

Our and our collaborators' clinical trialsstudies will compete with other clinical trialsstudies for product candidates that are in the same therapeutic areas as our product candidates, and this competition will reduce the number and types of patients available to us, because some patients who might have opted to enroll in our trialsstudies may instead opt to enroll in a trialstudy being conducted by one of our competitors. Since the number of qualified clinical investigators is limited, we expect to conduct some of our clinical trialsstudies at the same clinical trialstudy sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trialsstudies at such clinical trialstudy sites.

Our and our collaborators' inability to enroll a sufficient number of patients for our clinical trialsstudies would result in significant delays or might require us to abandon one or more clinical trialsstudies altogether. Delays in patient enrollment may result in increased costs, affect the timing or outcome of the planned clinical trials,studies, affect product candidate development and approval process and jeopardize our ability to seek and obtain the regulatory approval required to commence product sales and generate revenue, any of which could cause the value of our company to decline and limit our ability to obtain additional financing if needed.

Our success also depends on the collective performance, contributions, and expertise of the personnel who manage our clinical trialstudy sites. There is significant competition for qualified personnel, particularly those with higher educational degrees, in the biopharmaceutical and related services industries. Increased personnel turnover and labor shortages facing the biopharmaceutical services industry could have a negative impact on the third parties we rely on to execute our clinical trials.studies. While we seek to choose trialstudy sites with adequate staffing support, we cannot be certain that personnel turnover or the broader labor market dynamics in this industry will not negatively impact our trialstudy sites. If our clinical study sites are negatively impacted by these factors, our ability to enroll our clinical trialsstudies in a timely fashion may be hindered and might negatively affect our business, development timelines, and financial condition.

To obtain the requisite regulatory approvals to commercialize any of our product candidates, we, or our collaborators, must demonstrate through extensive pre-clinical studies and clinical trialsstudies that our, or our collaborators’, product candidates are safe and effective in humans. We, or our collaborators, may experience delays in completing our, or our collaborators’, clinical trialspre-clinical or pre-clinicalclinical studies, and initiating or completing additional clinical trialspre-clinical or pre-clinicalclinical studies, including as a result of regulators not allowing or delay in allowing clinical trialsstudies to proceed under an IND, or not approving or delaying approval for any clinical trialstudy application or similar approval we need to initiate a clinical trial.study. We, or our collaborators, may also experience numerous unforeseen events during our clinical trialsstudies that could delay or prevent our, or our collaborators’, ability to complete development for a product candidate, or receive marketing approval or commercialize the product candidates we, or our collaborators, develop, including:

delay or failure in obtaining the necessary approvals from regulators or institutional review boards, or IRBs, in order to commence a clinical trialstudy at a prospective trialstudy site, or their suspension or termination of a clinical trialstudy once commenced;

inability to reach agreement with prospective CROs and clinical trialstudy sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trialstudy sites, or the breach of such agreements;

we may experience challenges or delays in recruiting principal investigators or study sites to lead our clinical trialsstudies;

Azetukalner, a novel, highly potent, selectivepotent Kv7 potassium channel opener, represents the most advanced, clinically validatedclinically-validated potassium channel modulator in late-stage clinical development for the treatment of multiple indications that include epilepsy,indications, including focaltwo onsetin seizures,epilepsy or– FOS,FOS and primaryPGTCS generalized tonic-clonic seizures, or PGTCS,– as well as neuropsychiatric disordersdisorders, including major depressive disorder, or MDD and bipolar depression, or BPD.

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

X-NOVA2,Enrollment is ongoing for the first of three planned Phase 3 clinicalX-NOVA2 trialsand X-NOVA3 studies evaluating azetukalner in patients with MDDMDD, iswith currentlytopline enrollingdata patients,from and X-NOVA3 isX-NOVA2 expected toin initiateH1 mid-year.2027.

WeIND-enabling expectstudies aare leadongoing candidate withinfor our Nav1.1 program will enter IND-enabling studies in 2025.program. Pre-clinical data suggestssuggest that targeting Nav1.1 could potentially address the underlying cause and symptoms of Dravet SyndromeSyndrome.

As part of our ongoingIn collaboration with Neurocrine BiosciencesBiosciences, toa developPhase treatments1 study is ongoing for epilepsy, NBI-921355, aan investigational, selective inhibitor of voltage-gated sodium channels Nav1.2 and Nav1.6 sodium channel inhibitor in development for the potential treatment forof certain types of epilepsy, has progressed into a Phase 1 clinical study in healthy adult participants, triggering an anticipated $7.5 million milestone payment to Xenon.epilepsy.

We have funded our operations primarily through the sale of equity securities, funding received from our licensees and collaborators, and debt financing. We recognized revenue from collaboration agreements of $7.5 million for the year ended December 31, 2025. We did not recognize any revenue in the years ended December 31, 2024 and 2023, as compared to revenue from collaboration agreements of $9.4 million for the year ended December 31, 2022.2023. 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.

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

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

We expect that our research and development expenses will increase substantially in the future as we continue to invest in research and development activities related to developing our product candidates, including investments in manufacturing, as our programs advance into later stages of development and we continue to conduct clinical trials,studies, advance our internal drug discovery programs into pre-clinical development and continue our early-stage research. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size, scope and duration of later-stage clinical trials.studies.

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

Stock-based compensation is a critical accounting estimate due to the magnitude of and the many assumptions that are required to calculate stock-based compensation expense. We alsogrant grantstock options, restricted share units (“RSUs”) and performance share unit awardsunits (“PSUs”) to certain employeesemployees, consultants, directors and officers pursuant to our equity incentive plans. TheStock-based grant date fair value of PSUs is determined based on the closing market price of our common shares. Compensationcompensation expense is recognized if the performance condition is considered probable of achievement using our best estimates and is amortized on a straight-line basis over the requisite service periodperiod, ofand each separately vesting tranche of the award. Forfeituresforfeitures are accounted for in the period they occur.

Research and development expenses increased by $61.7 million for the year ended December 31, 2023 as compared to 2022. Direct external costs related to azetukalner increased by $51.9$59.1 million for the year ended December 31, 2025, primarily due to our ongoing site initiation and patient enrollment in our Phase 3 epilepsy clinical trials, increasestudies in manufacturingepilepsy, activities to support currentMDD and futureBPD. clinicalPreclinical, trialsdiscovery and aother potential NDA submission, as well as the completion of our Phase 2 MDD clinical trial. The decrease in direct externalprogram costs relatedincreased toby XEN496 of $9.6$7.6 million is due to ourthe decisionadvancement inof Maymultiple 2023potential drug candidates targeting Kv7, Nav1.7 and Nav1.1. Pain program costs increased by $2.7 million due to no longer pursue the clinical developmentadvancement of XEN496.XEN1120 and XEN1701. Personnel-related costs increased by $14.3$19.8 million drivendue byto an increase inhigher headcount to support late-stage product candidate development and an increase in stock-based compensation expense due to an increase in the number of options granted at a higher fair value.expense.

GeneralPersonnel-related and administrative expensescosts increased by $22.4$4.6 million for the year ended December 31, 2024 as compared to 2023. Personnel-related costs increased by $16.1 million2025, primarily due to higher headcount to support our expanding research and development activities and future potential commercializationcommercialization, aspartially welloffset asby ana increasedecrease in stock-based compensation expense dueand torecruitment an increase in the number of options granted at a higher fair value.costs. Professional and consulting fees increased by $5.4$4.3 million primarilydue to an increase in pre-commercial expenses, partially offset by lower legal costs associated with legal services in support of our ongoing business operationsactivities. Other general and pre-commercialadministrative costs increased by $1.9 million primarily due to higher information technology costs to support our ongoing business activities.

GeneralPersonnel-related and administrative expensescosts increased by $13.7$16.1 million for the year ended December 31, 2023 as compared to 2022. Personnel-related costs increased by $9.4 million2024, primarily due to higher headcount to support our expanding research and development activities and future potential commercialization as well as an increase in stock-based compensation expense due to an increase in the number of options granted at a higher fair value. Professional and consulting fees increased by $3.6$5.4 million primarily associated with legal services in support of our ongoing business operations and market researchpre-commercial activities.

OtherInterest income increaseddecreased by $9.5$15.1 million for the year ended December 31, 2024 as compared to 2023. Interest income increased by $14.3 million2025, driven by a higherlower average balance of marketable securities and higherlower average market yields on investments. The unrealizedincrease fairin valueforeign gainexchange ongains tradingof securities decreased by $3.6$2.4 million was due to fluctuations in the factvalue thatof wethe didCanadian notdollar, holdpartially anyoffset by a lower balance of cash and cash equivalents and marketable securities classified as tradingdenominated in 2024.Canadian dollars.

OtherInterest income increased by $27.5$14.3 million for the year ended December 31, 2023 as compared to 2022. Interest income increased by $18.9 million2024, driven by a higher average balance of marketable securities and anhigher increase inaverage market yields on investments. The unrealized fair value gain on trading securities increaseddecreased by $6.5$3.6 million due to changesthe fact that we did not hold any marketable securities classified as trading in market yields on trading securities, partially offset by a lower balance of trading securities.2024.

We entered into an “at-the-market” equity offering sales agreement in August 2020, amended as of March 2022, with Jefferies LLC and Stifel, Nicolaus & Company, Incorporated, or the ATM Program, and a new prospectus supplement was filed with the SEC on August 9, 2024, pursuant to which we refreshed the ATM Program and may sell common shares having gross proceeds of up to $350.0 million, from time to time. As of December 31, 2024,2025, an aggregate of 310,0002,961,023 common shares have been sold for proceeds of $12.1$124.2 million, net of commissions and transaction expenses, of which $112.2 million, net of commissions and transaction expense. were raised during the three months ended December 31, 2025. As of February 23, 2026, we sold an additional 3,134,119 common shares for proceeds of $130.0 million, net of commissions and transaction expenses.

We have incurred significant operating losses since inception. As of December 31, 2024,2025, we had an accumulated deficit of $899.5$1,245.4 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 offor 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, IncInc. 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.

Based on our research and development plans and our timing expectations related to the progress of our programs, we expect that our existing cash and cash equivalents and marketable securities as of the date of this report will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. However, our estimates and assumptions may prove to be wrong, and we cannot guarantee that our existing capital resources will be sufficient to conduct and complete all of our anticipated research and development efforts and future commercialization efforts. Additionally, the process of testing drug candidates in clinical trialsstudies is costly, and the timing of progress in these trialsstudies remains uncertain. Further, inflation may affect our use of capital resources by increasing our cost of labor and research and development expenses. Our long-term funding requirements will consist of operational, capital, and manufacturing expenditures, including those contractual commitments described below. Because of the inherent risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of capital outflows and operating expenditures associated with our long-term anticipated pre-clinical studies and clinical trials.studies.

Investment in biopharmaceutical product development is highly speculative because it entails substantial capital expenditures and significant risk that a product candidate may fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval and become commercially viable. We have no products approved for commercial sale and have not generated any revenue from product sales to date, and we will continue to incur significant research and development and other expenses related to our clinical development and ongoing operations. As a result, we are not profitable and have incurred losses in each period since our inception. Since our inception, we have devoted substantially all of our financial resources and efforts to research and development, including pre-clinical studies, manufacturing of investigational drug and our clinical studies. Our financial condition and operating results, including net losses, may fluctuate significantly from quarter to quarter and year to year. Accordingly, you should not rely upon the results of any quarterly or annual periods as indications of future operating performance. We do not expect to have sustained profitability for the foreseeable future. We had net losses of $102.3$213.0 million and $65.0$149.8 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively, and an accumulated deficit of $1,347.7$1,458.4 million as of MarchJune 31,30, 2026, which were driven by expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase as we continue our research and development of, and seek regulatory approvals for our product candidates.

Pursuant to our equity incentive plans, our compensation committee (or a subset or delegate thereof) is authorized to grant equity-based incentive awards to our employees, directors and consultants. Future stock option grants and issuances of common shares under our share-basedstock-based compensation plans will result in dilution to all shareholders and may have an adverse effect on the market price of our common shares.

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

Azetukalner is a novel, potent Kv7 potassium channel opener in Phase 3 clinicallate-stage development for multiple potential 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).

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

DepressionNeuropsychiatry Programs

Enrollment is ongoing forin 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.

We continue to expand our portfolio of potent, selective ion channel modulators using our strong heritage in human genetics, deep understanding of ion channel biology, and expertise in novel chemistries. This includes clinical-stage candidates targeting Nav1.7 and Kv7, which are important novel targets for pain.

Early-Stage R&D and Partnered ProgramPrograms for Epilepsy

We have funded our operations primarily through the sale of equity securities, funding received from our licensees and collaborators, and debt financing. For the threesix months ended MarchJune 31,30, 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.

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$213.0 million and $65.0$149.8 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. As of MarchJune 31,30, 2026, we had an accumulated deficit of $1,347.7$1,458.4 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:

Foreign exchange gain.gain (loss). 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.

There have been no material changes in our critical accounting policies and significant judgments and estimates during the threesix months ended MarchJune 31,30, 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.

Comparison of three and six months ended MarchJune 31,30, 2026 and 2025

We did not recognize any revenue during the threesix months ended MarchJune 31,30, 2026. Collaboration revenue of $7.5 million recognized during the threesix months ended MarchJune 31,30, 2025 was related to a milestone payment in connection with the Neurocrine Collaboration.

Direct external costs related to azetukalner increased by $15.6$12.4 million and $27.9 million for the three months and six months ended MarchJune 31,30, 2026, respectively, primarily due to our ongoing Phase 3 clinical studies in the MDD and BPD programs.programs, as well as manufacturing activities to support our planned NDA submission. Pain programs costs increased by $3.3$4.7 million and $8.0 million for the three months and six months ended June 30, 2026, respectively, primarily due to our ongoing Phase 1 clinical studies of XEN1701 and XEN1120.XEN1120, as well as manufacturing activities to support the clinical studies. Personnel-related costs increased by $8.6$5.7 million and $14.3 million for the three months and six months ended June 30, 2026, respectively, due to higher headcount tosupporting supportour late-stage development.product candidate development and an increase in stock-based compensation.

Personnel-related costs increased by $2.5$2.7 million and $5.2 million for the three months and six months ended MarchJune 31,30, 2026, respectively, primarily due to higher headcount to support our expanding research and development activities and future potential commercialization.commercialization as well as an increase in stock-based compensation expense. Professional and consulting fees increased by $1.8$1.6 million and $3.4 million for the three months and six months ended June 30, 2026, respectively, due to an increase in pre-commercial expenses and higher expenses related to maintenance and filing of intellectual property.

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 MarchJune 31,30, 2026, we have raised aggregate net cash proceeds of approximately $2.3 billion primarily from the issuance of equity securities. As of MarchJune 31,30, 2026, we had cash and cash equivalents and marketable securities of $1,339.6$1,245.1 million.

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”). PursuantDuring the period from January 1, 2026 to aFebruary prior26, prospectus,2026, we sold an aggregate of 3,134,119 common shares under the ATM Program for proceeds of $130.0 million, net of commissions and transaction expenses, during the period from January 1, 2026 to February 26, 2026.expenses. On February 27, 2026, a new prospectus supplement was filed replacing the prior prospectus, pursuant to which we refreshed the ATM Program andby filing a new prospectus supplement, pursuant to which we may sell common shares having gross proceeds of up to $400.0 million, from time to time.

We have incurred significant operating losses since inception. As of MarchJune 31,30, 2026, we had an accumulated deficit of $1,347.7$1,458.4 million. We expect to incur operating losses that may fluctuate significantly from quarter to quarter and year to year over the next several years. In addition, 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.

Based on our research and development plans and our timing expectations related to the progress of our programs, we expect that our existing cash and cash equivalents and marketable securities as of the date of this reportreport, will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. However, our estimates and assumptions may prove to be wrong, and we cannot guarantee that our existing capital resources will be sufficient to conduct and complete all of our anticipated research and development efforts and future commercialization efforts. Additionally, the process of testing drug candidates in clinical studies is costly, and the timing of progress in these studies remains uncertain. Further, inflation may affect our use of capital resources by increasing our cost of labor and research and development expenses. Our long-term funding requirements will consist of operational, capital, and manufacturing expenditures, including those contractual commitments described below. Because of the inherent risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of capital outflows and operating expenditures associated with our long-term anticipated pre-clinical studies and clinical studies.

The following table shows a summary of our cash flows for the threesix months ended MarchJune 31,30, 2026 and 2025 (in thousands):

For the threesix months ended MarchJune 31,30, 2026, net cash used in operating activities totaled $88.9$184.3 million, compared to $61.7$125.9 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 andexpenses, no revenue recognized in the periodsix months ended MarchJune 31,30, 2026, lower cash received from interest income, partially offset byand changes in operating assets and liabilities.

For the threesix months ended MarchJune 31,30, 2026, net cash used in investing activities totaled $407.3$738.5 million, compared to net cash provided of $34.5$116.8 million for the same period in 2025. The change was driven primarily by an increase in the purchase of marketable securities, net of redemptions.

For the threesix months ended MarchJune 31,30, 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.

As of MarchJune 31,30, 2026, there have been no material changes from the contractual commitments previously disclosed in the Annual Report on Form 10-K.