Xenon (XENE) AI Stock Analysis

• Market Cap: $2.94B
• Dividend Yield: N/A
• Average Volume (3M): 955.09K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.02
• Revenue Growth: N/A
• EPS Growth: -29.45%
• Country: US
• Employees: 316
• Sector: Healthcare
• Sector Strength: 47
• Industry: Biotechnology
• EPS (TTM): -1.07
• Shares Outstanding: 77,105,800
• 10 Day Avg. Volume: 1,024,804
• 30 Day Avg. Volume: 955,090
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.68
• Enterprise Value/Revenue: 198.92
• Enterprise Value/Gross Profit: 267.19
• Enterprise Value/Ebitda: -6.30
• 1Y Price Target: $54.40
• Price Target Upside: 40.06% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11

• Rating: 48 Neutral
• Price Target: ―

Xenon's primary strengths lie in its strong financial position and positive clinical development progress, as highlighted in the earnings call. However, the absence of revenue and profitability, along with technical and valuation concerns, weigh heavily on the overall stock score.

Positive Factors

Clinical Trials

The company announced the completion of patient recruitment in X-TOLE2 and reaffirmed its guide for top-line data, which should be received positively by investors.

Drug Development

Azetukalner’s strong and durable efficacy, novel mechanism, convenient dosing, and positive mood impact are seen as key differentiators among anti-seizure medications.

Financial Performance

The company ended the quarter with approximately $625 million in cash, which management believes should fund operations into 2027.

Negative Factors

Investment and Patience

Further investment and patience are required for azetukalner, despite its strong Phase 2b data and differentiated mechanism.

Market Competition

Potential competition from BioHaven Pharmaceuticals with its Kv7 channel modulator, BHV-7000, which is expected to readout results in focal onset epilepsy.

Regulatory Challenges

XENE will refine timelines for trial results once the trial's last patient has been randomized, indicating potential regulatory challenges.

Xenon Business Overview & Revenue Model

Company Description

Xenon Pharmaceuticals Inc., a clinical-stage biopharmaceutical company, engages in developing therapeutics to treat patients with neurological disorders in Canada. Its clinical development pipeline includes XEN496, A Kv7 potassium channel opener that is Phase III clinical trials for the treatment of KCNQ2 developmental and epilepsy encephalopathy; and XEN1101, A Kv7 potassium channel opener, which is in Phase II clinical trial for the treatment of epilepsy and other neurological disorders. The company's product candidates also comprise NBI-921352, a selective Nav1.6 sodium channel inhibitor that is in Phase II clinical trials for the treatment of SCN8A developmental and epileptic encephalopathy, and other potential indications, including adult focal epilepsy; and XEN007, A central nervous system-acting calcium channel modulator, which is in Phase II clinical trials. It has a license and collaboration agreement with the Neurocrine Biosciences, Inc. to develop treatments for epilepsy; and with Flexion Therapeutics, Inc. to develop PCRX301 (XEN402, a Nav1.7 inhibitor) for the treatment of post-operative pain. Xenon Pharmaceuticals Inc. was incorporated in 1996 and is headquartered in Burnaby, Canada.

How the Company Makes Money

Xenon Pharmaceuticals generates revenue through a combination of collaboration and licensing agreements as well as potential milestone payments and royalties from its partnered programs. The company's revenue model is heavily reliant on strategic partnerships with larger pharmaceutical companies, which provide funding and resources in exchange for rights to develop and commercialize Xenon's drug candidates. These partnerships often involve upfront payments, research funding, and milestone-based payments as the drug candidates advance through clinical trials and regulatory approvals. Additionally, Xenon may earn royalties on future sales of successfully commercialized drugs developed from its proprietary platform.

Xenon Financial Statement Overview

Summary

Xenon is facing significant financial challenges with zero revenue and persistent unprofitability. While the balance sheet appears stable with low debt and strong equity, the negative cash flows and lack of revenue growth are critical issues.

Income Statement

Xenon's income statement shows a consistent decline in revenue, with total revenue dropping to zero in the most recent year. The company consistently reports negative net income, indicating ongoing unprofitability. The absence of revenue growth and negative profit margins are significant concerns.

Balance Sheet

Xenon's balance sheet reflects a strong equity position with a high equity ratio, which suggests financial stability. However, the company has a low return on equity due to consistent losses. The low debt levels are a positive aspect, but the absence of revenue and profitability diminishes the overall financial health.

Cash Flow

The cash flow statement reveals negative free cash flow and operating cash flow, indicating a cash burn situation. While the company has a substantial cash reserve, the inability to generate positive operating cash flow presents a long-term risk unless revenue generation improves.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.02M	0.00	0.00	9.43M	18.44M	32.17M
Gross Profit	7.46M	-2.56M	-167.51M	-96.33M	-57.03M	-18.36M
EBITDA	-316.19M	-235.86M	-210.51M	-127.52M	-78.09M	-27.97M
Net Income	-278.23M	-234.33M	-182.39M	-125.37M	-78.88M	-28.84M
Balance Sheet
Total Assets	674.28M	798.14M	964.80M	754.15M	572.01M	189.19M
Cash, Cash Equivalents and Short-Term Investments	487.55M	626.90M	638.08M	592.09M	551.77M	177.00M
Total Debt	8.71M	9.02M	10.90M	10.44M	8.26M	3.31M
Total Liabilities	40.30M	43.24M	36.88M	32.65M	21.97M	17.83M
Stockholders Equity	633.98M	754.90M	927.92M	721.50M	550.03M	171.35M
Cash Flow
Free Cash Flow	-232.99M	-184.46M	-150.94M	-101.32M	-71.55M	-50.76M
Operating Cash Flow	-231.42M	-181.39M	-145.33M	-98.43M	-69.50M	-48.12M
Investing Cash Flow	217.25M	165.00M	-117.17M	-296.00M	-246.77M	-16.82M
Financing Cash Flow	13.35M	12.13M	353.52M	278.47M	447.54M	85.80M

Xenon Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 38.84
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For XENE, the sentiment is Positive. The current price of 38.84 is above the 20-day moving average (MA) of 34.82, above the 50-day MA of 33.11, and above the 200-day MA of 36.10, indicating a bullish trend. The MACD of 1.73 indicates Negative momentum. The RSI at 74.10 is Negative, neither overbought nor oversold. The STOCH value of 87.62 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for XENE.

Xenon Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MRUS	62 Neutral	$5.04B	―	-48.54%	―	59.77%	-92.92%
APLS	58 Neutral	$3.49B	―	-108.49%	―	20.02%	33.45%
Sector *	51 Neutral	$7.88B	-0.12	-39.86%	2.18%	21.38%	-1.56%
SRRK	50 Neutral	$3.33B	―	-172.08%	―	―	-29.50%
XENE	48 Neutral	$2.94B	―	-37.65%	―	―	-29.45%
IMVT	45 Neutral	$2.59B	―	-77.58%	―	―	-48.38%
MLTX	41 Neutral	$3.48B	―	-40.29%	―	―	-208.46%

Xenon Corporate Events

Xenon CFO Resignation Amidst Strong Financial Outlook

On February 24, 2025, Sherry Aulin announced her resignation as CFO of Xenon Pharmaceuticals, effective June 30, 2025, for personal reasons, with no disputes related to the company’s operations. She will continue as an advisor until August 31, 2025, while the company searches for her replacement. Xenon also reported its financial results for 2024 and provided a business update, highlighting its ongoing and planned clinical trials for azetukalner in epilepsy and neuropsychiatric disorders. The company anticipates a catalyst-rich period in the next 12 to 24 months, with multiple regulatory filings and potential commercial launches. Despite a net loss increase in 2024, Xenon maintains a strong cash position to fund operations into 2027.