Xenon (XENE) AI Stock Analysis

• Market Cap: $3.60B
• Dividend Yield: N/A
• Average Volume (3M): 744.07K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.87
• Revenue Growth: N/A
• EPS Growth: -38.30%
• Country: US
• Employees: 316
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): -1.31
• Shares Outstanding: 77,275,000
• 10 Day Avg. Volume: 713,723
• 30 Day Avg. Volume: 744,071
• PEG Ratio: -0.23
• Price to Book (P/B): 5.61
• Price to Sales (P/S): 473.62
• P/FCF Ratio: -12.69
• Enterprise Value/Market Cap: 0.88
• Enterprise Value/Revenue: 419.92
• Enterprise Value/Gross Profit: -44.87
• Enterprise Value/Ebitda: -8.76
• 1Y Price Target: $56.45
• Price Target Upside: 30.58% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): -4.72
• Revenue Forecast (FY): $7.80M

• Rating: 63 Neutral
• Price Target: $48.00 ▲(11.03% Upside)
• Action: Reiterated Date: 02/27/26
• Date: Action: Reiterated 02/27/26

The score is driven by a strong balance sheet and positive earnings-call outlook with clear Phase III milestones and stated runway into 2027. These positives are tempered by very weak operating financials (large losses and accelerating cash burn) and only moderate valuation support due to negative earnings, while technicals are favorable but somewhat stretched.

Positive Factors

Strong balance sheet and very low leverage

The company's minimal debt and large equity base materially reduce refinancing and interest-rate risk, giving management flexibility to fund multi-year clinical programs. This capital structure supports durable R&D investment and lowers bankruptcy risk while clinical milestones are pursued.

Phase III X-TOLE2 enrollment completed above target

Exceeding enrollment targets increases statistical power and credibility of upcoming topline results, reducing binary trial risk. A fully randomized, adequately powered Phase III readout strengthens the pathway to regulatory submission and commercial planning over the next several quarters.

Diversified ion-channel pipeline and late-stage expansion

Multiple programs across indications (epilepsy, MDD, bipolar, pain) spread development risk and create multiple value inflection points. The ion-channel expertise and parallel early-stage assets provide optionality beyond the lead candidate, supporting sustainable long-term growth.

Negative Factors

Large and persistent net losses

Sustained, large net losses materially erode equity and constrain returns on invested capital. Until one or more clinical assets reach commercialization, negative profitability will pressure cash reserves and may limit flexibility for non-core investments or marketing buildouts required at launch.

Accelerating operating and free cash flow burn

Rapidly increasing operating cash burn shortens effective runway absent revenue or partner/royalty arrangements. Higher, persistent FCF deficits increase reliance on external funding and raise the probability of dilution or financings before commercialization is achieved.

Reliance on equity raises and potential dilution

Material ATM issuance and expanded equity programs signal dependence on public markets for funding. While necessary to support R&D, recurring equity raises dilute existing shareholders and link future capital access to market conditions, impacting long-term ownership economics.

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

Balance sheet strength (very low leverage) supports financial stability, but operating fundamentals are weak with minimal revenue, large and widening net losses, and heavy, worsening operating/free-cash-flow burn.

Income Statement

The income statement remains weak, with recurring large net losses and deeply negative profitability. Revenue is inconsistent (including multiple years with zero revenue) and TTM (Trailing-Twelve-Months) shows only $7.5M of revenue against a net loss of ~$346M, reflecting a cost structure that is far ahead of commercial scale. While this is not unusual for a clinical-stage biotech, the trend is unfavorable with losses widening meaningfully from 2024 to TTM.

Balance Sheet

The balance sheet is a clear strength: leverage is very low (TTM total debt ~$7.9M vs. equity ~$633M, debt-to-equity ~0.01). However, equity has declined materially from 2023 to TTM, consistent with ongoing losses and cash burn, and returns on equity are sharply negative. Overall, the company appears well-capitalized with minimal debt risk, but the equity base is being pressured by continued operating deficits.

Cash Flow

Cash flow quality is pressured by persistent operating cash burn and negative free cash flow. TTM operating cash flow is about -$279M and free cash flow about -$280M, worsening versus 2024, indicating an accelerating spend profile. A positive note is that cash burn broadly tracks reported losses (free cash flow is roughly in line with net income), suggesting losses are not being masked by working-capital timing; however, the magnitude of burn remains a key risk without a step-change in revenue or funding.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	7.50M	0.00	0.00	9.43M	18.44M
Gross Profit	0.00	-2.56M	-167.51M	9.43M	18.44M
EBITDA	-342.35M	-235.86M	-210.51M	-127.74M	-78.09M
Net Income	-345.91M	-234.33M	-182.39M	-125.37M	-78.88M
Balance Sheet
Total Assets	633.16M	798.14M	964.80M	754.15M	572.01M
Cash, Cash Equivalents and Short-Term Investments	548.89M	626.90M	638.08M	592.09M	551.77M
Total Debt	7.94M	9.02M	10.90M	10.44M	8.26M
Total Liabilities	51.40M	43.24M	36.88M	32.65M	21.97M
Stockholders Equity	633.16M	754.90M	927.92M	721.50M	550.03M
Cash Flow
Free Cash Flow	-279.92M	-184.46M	-150.94M	-101.32M	-71.55M
Operating Cash Flow	-279.12M	-181.39M	-145.33M	-98.43M	-69.50M
Investing Cash Flow	218.00M	165.00M	-117.17M	-296.00M	-246.77M
Financing Cash Flow	117.11M	12.13M	353.52M	278.47M	447.54M

Xenon Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 43.23
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 43.23 is above the 20-day moving average (MA) of 42.41, above the 50-day MA of 42.53, and above the 200-day MA of 38.02, indicating a bullish trend. The MACD of 0.53 indicates Negative momentum. The RSI at 52.88 is Neutral, neither overbought nor oversold. The STOCH value of 69.88 is Neutral, 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
XENE	63 Neutral	$3.60B	-9.91	-45.14%	―	―	-38.30%
IMVT	62 Neutral	$5.64B	-10.34	-69.35%	―	―	-27.70%
VKTX	52 Neutral	$3.91B	-10.63	-47.34%	―	―	-126.16%
MLYS	52 Neutral	$2.32B	-9.89	-42.14%	―	―	9.60%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
SRRK	50 Neutral	$4.52B	-13.62	-218.04%	―	―	-31.71%
RARE	46 Neutral	$2.26B	-4.01	-656.54%	―	20.63%	8.09%

Xenon Corporate Events

Xenon Highlights 2025 Results and Expands Late-Stage Pipeline

On Feb. 26, 2026, Xenon Pharmaceuticals reported its fourth-quarter and full-year 2025 results, highlighting heavy investment in late-stage development of azetukalner across epilepsy and neuropsychiatric indications. The company is advancing multiple Phase 3 programs, including X-TOLE2 and X-TOLE3 in focal onset seizures, X-ACKT in primary generalized tonic-clonic seizures, and X-NOVA and X-CEED in depression and bipolar disorder, supported by 48‑month open-label data showing sustained seizure reduction and long-term safety.

Xenon is also progressing early-stage NaV1.7 and KV7 candidates XEN1701 and XEN1120 in Phase 1 pain studies and continuing IND-enabling work on a NaV1.1 program for Dravet syndrome, while its partnered NaV1.2/NaV1.6 inhibitor with Neurocrine remains in Phase 1. To fund this pipeline, the company raised $242.2 million via at-the-market equity sales, ending 2025 with $586 million in cash and pro forma liquidity of $716 million, which it expects will support operations into the second half of 2027 despite a 2025 net loss of $345.9 million driven by expanded R&D and higher operating costs.

The most recent analyst rating on (XENE) stock is a Buy with a $62.00 price target. To see the full list of analyst forecasts on Xenon stock, see the XENE Stock Forecast page.

Xenon Expands 2025 Equity Incentive Plan

On November 24, 2025, Xenon Pharmaceuticals Inc. amended its 2025 Inducement Equity Incentive Plan to increase the number of shares reserved for issuance from 775,000 to 900,000. This adjustment is intended to facilitate the granting of various stock-related incentives to new or returning employees without requiring shareholder approval, in line with Nasdaq Listing Rule 5635(c)(4).

The most recent analyst rating on (XENE) stock is a Buy with a $44.00 price target. To see the full list of analyst forecasts on Xenon stock, see the XENE Stock Forecast page.