XBiotech Inc 10-K for FY2024

XBiotech Inc. (XBIT)

10-K 2025-03-18 For: 2024-12-31

Added on April 08, 2026

About this 10-K

XBiotech Inc filed this 10-K on March 18, 2025, covering the fiscal year ended December 31, 2024 (FY2024).

Headline figures

Fiscal year ended December 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $38.53M; compared with a net loss of $24.56M a year earlier
Diluted EPS: -$1.26; compared with -$0.81 a year earlier

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British Columbia, Canada	N/A
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	XBIT	NASDAQ Global Select Market

Large accelerated filer ☐		Accelerated filer ☐		Non-accelerated filer ☒		Smaller Reporting Company ☒
						Emerging Growth Company ☐

ITEM 1. BUSINESS	6
ITEM 1A. RISK FACTORS	9
ITEM 1B. UNRESOLVED STAFF COMMENTS	32
ITEM 1C. CYBERSECURITY	32
ITEM 2. PROPERTIES	33
ITEM 3. LEGAL PROCEEDINGS	33
ITEM 4. MINE SAFETY DISCLOSURES	33

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	34
ITEM 6. RESERVED	34
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION	34
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS	41
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	42
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	60
ITEM 9A. CONTROLS AND PROCEDURES.	61
ITEM 9B. OTHER INFORMATION	61
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	61

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	62
ITEM 11. EXECUTIVE COMPENSATION	62
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	62
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE	62
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES	62

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	63
ITEM 16. FORM 10–K SUMMARY	65

•	the number of future product candidates we pursue;

•	the scope, progress, results and costs of researching and developing any of our future product candidates, and conducting preclinical research and clinical trials;

•	the timing of, and the costs involved in, obtaining regulatory approvals for any future product candidates we develop;

•	the cost of future commercialization activities for our product candidates and the cost of commercializing any future products approved for sale;

•	the cost of manufacturing our future products; and

•	the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patents, including litigation costs and the outcome of any such litigation.

•	complete development activities, including the necessary clinical trials;

•	complete and submit new drug applications, or NDAs, to the US Food and Drug Administration, or FDA, and obtain regulatory approval for indications for which there is a commercial market;

•	complete and submit applications to, and obtain regulatory approval from, foreign regulatory authorities such as the European Medicines Agency, or EMA;

•	establish our manufacturing operations;

•	develop a commercial organization capable of sales, marketing and distribution for our product candidates and any products for which we obtain marketing approval and intend to sell ourselves in the markets in which we choose to commercialize on our own;

•	find suitable distribution partners to help us market, sell and distribute our approved products in other markets;

•	obtain coverage and adequate reimbursement from third-party payers, including government and private payers;

•	achieve market acceptance for our products, if any;

•	establish, maintain and protect our intellectual property rights; and

•	attract, hire and retain qualified personnel.

•	development of a commercial organization within XBiotech or establishment of a commercial collaboration with a commercial infrastructure;

•	establishment of commercially viable pricing and obtaining approval for adequate reimbursement from third-party and government payers;

•	our ability to manufacture quantities of our product candidates using commercially satisfactory processes and at a scale sufficient to meet anticipated demand and enable us to reduce our cost of manufacturing;

•	our success in educating physicians and patients about the benefits, administration and use of our product candidates;

•	the availability, perceived advantages, relative cost, relative safety and relative efficacy of alternative and competing treatments;

•	the effectiveness of our own or our potential strategic collaborators’ marketing, sales and distribution strategy and operations;

•	acceptance as a safe and effective therapy by patients and the medical community; and

•	a continued acceptable safety profile following approval.

•	disagreement over the design or implementation of our clinical trials;

•	failure to demonstrate that a product candidate is safe and effective;

•	failure of clinical trials to meet the level of statistical significance required for approval;

•	failure to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

•	disagreement over our interpretation of data from preclinical studies or clinical trials;

•	disagreement over whether to accept efficacy results from clinical trial sites outside the United States where the standard of care is potentially different from that in the United States;

•	the insufficiency of data collected from clinical trials of our product candidates to support the submission and filing of an NDA or other submission or to obtain regulatory approval;

•	irreparable or critical compliance issues relating to our manufacturing and/clinical trial processes; or

•	changes in the approval policies or regulations that render our preclinical and clinical data insufficient for approval.

•	we may be forced to suspend marketing of such product;

•	regulatory authorities may withdraw their approvals of such product;

•	regulatory authorities may require additional warnings on the label that could diminish the usage or otherwise limit the commercial success of such product;

•	the FDA or other regulatory bodies may issue safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings about such product;

•	the FDA may require the establishment or modification of REMS or a comparable foreign regulatory authority may require the establishment or modification of a similar strategy that may, for instance, restrict distribution of our product and impose burdensome implementation requirements on us;

•	we may be required to change the way the product is administered or conduct additional clinical trials;

•	we could be sued and held liable for harm caused to subjects or patients;

•	we may be subject to litigation or product liability claims; and

•	our reputation may suffer.

•	issue warning letters or untitled letters;

•	impose restrictions on the marketing or manufacturing of the product candidates;

•	mandate modifications to promotional materials or require us to provide corrective information to healthcare practitioners;

•	require us or any future collaborator to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance;

•	seek an injunction or impose civil or criminal penalties or monetary fines;

•	suspend or withdraw regulatory approval;

•	suspend any ongoing clinical trials;

•	refuse to approve pending applications or supplements to applications filed by us;

•	suspend or impose restrictions on operations, including costly new manufacturing requirements; or

•	seize or detain products, refuse to permit the import or export of products, or require us to initiate a product recall.

•	the efficacy and safety of such product candidates as demonstrated in clinical trials;

•	the clinical indications for which the product candidate is approved;

•	acceptance by physicians and patients of the product candidate as a safe and effective treatment;

•	the potential and perceived advantages of product candidates over alternative treatments;

•	the safety of product candidates seen in a broader patient group, including a product candidate’s use outside the approved indications;

•	the prevalence and severity of any side effects;

•	product labeling or product insert requirements of the FDA or other regulatory authorities;

•	the timing of market introduction of our products as well as competitive products;

•	the cost of treatment in relation to alternative treatments;

•	the availability of coverage and adequate reimbursement and pricing by third-party payers and government authorities;

•	relative convenience and ease of administration;

•	the effectiveness of our sales and marketing efforts and those of our collaborators; and

•	unfavorable publicity relating to the product candidate or the Company.

•	In the development stage, we may be unable to develop a therapy, which would mean us succeeding in isolating appropriate antibodies to reach the clinical trial stage;

•	Any partnerships for the development of antibodies could fail to produce results that would necessitate clinical trials;

•	We may not receive approval from regulatory bodies to move from early stage clinical trials to later stage clinical trials;

•	Even if we are able to move to later stage clinical trials, it may prove to be difficult to enroll patients into the studies according to schedule, or at all;

•	During the clinical trial, there could be unexpected serious adverse events causing severe injury or death in patients, requiring us to cease further enrollment or causing regulatory authorities to place the trial on clinical hold for an indefinite period of time;

•	If a clinical trial is completed, we may not have the appropriate personnel to submit a marketing application to regulatory authorities for approval, and to further respond to the variety of follow up questions that regulatory authorities may have during the review process;

•	Regulatory authorities may reject drug candidates for a variety of reasons, preventing us from proceeding with marketing and commercialization of approved products; and

•	We may run out of the funds necessary to complete development for any of our potential drug candidates.

•	decreased demand for any product candidates or products that we may develop;

•	termination of clinical trial sites or entire clinical trial programs;

•	injury to our reputation and significant negative media attention;

•	withdrawal of clinical trial participants;

•	significant costs to defend the related litigation;

•	substantial monetary awards to clinical trial subjects or patients;

•	loss of revenue;

•	diversion of management and scientific resources from our business operations; and

•	the inability to commercialize our product candidates.

•	managing our clinical trials effectively, which we anticipate potentially being conducted at numerous clinical sites on a global scale;

•	identifying, recruiting, maintaining, motivating and integrating additional employees with the expertise and experience we will require;

•	managing our internal development efforts effectively while complying with our contractual obligations to licensors, licensees, contractors and other third parties;

•	managing additional relationships with various strategic partners, suppliers and other third parties;

•	improving our managerial, development, operational and finance reporting systems and procedures; and

•	expanding our facilities.

•	Others may be able to make compounds that are the same as or similar to our current or future product candidates but that are not covered by the claims of the patents that we own or have exclusively licensed.

•	We might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed.

•	We or any of our licensors or strategic partners might not have been the first to file patent applications covering certain of our inventions.

•	Others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights.

•	It is possible that our pending patent applications will not lead to issued patents.

•	Issued patents that we own or have exclusively licensed may not provide us with any competitive advantages, or may be held invalid or unenforceable, as a result of legal challenges by our competitors.

•	Our competitors might conduct research and development activities in the U.S. and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets.

•	We may not develop additional proprietary technologies that are patentable.

•	The patents of others may have an adverse effect on our business.

•	obtain licenses, which may not be available on commercially reasonable terms, if at all;

•	abandon an infringing drug or therapy candidate;

•	redesign our products or processes to avoid infringement;

•	stop using the subject matter claimed in the patents held by others;

•	pay damages; or

•	defend litigation or administrative proceedings which may be costly whether we win or lose, and which could result in a substantial diversion of our financial and management resources.

•	results of our clinical trials;

•	results of clinical trials of our competitors’ products;

•	regulatory actions with respect to our products or our competitors’ products;

•	actual or anticipated fluctuations in our financial condition and operating results;

•	actual or anticipated changes in our growth rate relative to our competitors;

•	actual or anticipated fluctuations in our competitors’ operating results or changes in their growth rate;

•	competition from existing products or new products that may emerge;

•	announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments;

•	issuance of new or updated research or reports by securities analysts;

•	fluctuations in the valuation of companies perceived by investors to be comparable to us;

•	delisting of the Company’s common shares from the exchange on which they trade due to the Company not being in compliance with the listing requirements of the exchange;

•	share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;

•	additions or departures of key management or scientific personnel;

•	disputes or other developments related to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;

•	announcement or expectation of additional financing efforts;

•	sales of our common stock by us, our insiders or our other shareholders;

•	market conditions for biopharmaceutical stocks in general; and

•	general economic and market conditions.

•	delaying, deferring or preventing a change in control of the Company;

•	impeding a merger, consolidation, takeover or other business combination involving the Company; or

•	discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company.

(i)	for material corporate transactions (i.e. mergers and amalgamations, other extraordinary corporate transactions, amendments to our Articles) the BCBCA generally requires two-thirds majority vote by shareholders, whereas DGCL generally only requires a majority vote of shareholders;

(ii)	the quorum for shareholders meetings is not prescribed under the BCBCA and is only two persons representing 20% of the issued shares under our Articles, whereas under DGCL, quorum requires a minimum of one-third of the shares entitled to vote to be present and companies’ certificates of incorporation frequently require a higher percentage to be present;

(iii)	under the BCBCA, a holder of 5% or more of our common stock can requisition a special meeting at which any matters that can be voted on at our annual meeting can be considered, whereas the DGCL does not give this right;

(iv)	our Articles require two-thirds majority vote by shareholders to pass a resolution for one or more directors to be removed, whereas DGCL only requires the affirmative vote of a majority of the shareholders; however, many public company charters limit removal of directors to a removal for cause; and

(v)	our Articles may be amended by resolution of our directors to alter our authorized share structure, including to consolidate or subdivide any of our shares, whereas under DGCL, a majority vote by shareholders is generally required to amend a corporation’s certificate of incorporation and a separate class vote may be required to authorize alterations to a corporation’s authorized share structure.

	Year Ended December 31,
	2024			2023

Weighted-average grant date fair value per share	$	3.96		$	2.89
Expected volatility		79%-83	%		80%-82	%
Risk-free interest rate		3.6%-4.4	%		3.3%-4.6	%
Expected life (in years)		5.00–6.25			5.38–6.25
Dividend yield		—			—

	Year Ended December 31,				Increase			% Increase
	2024		2023		(Decrease)			(Decrease)
Salaries and related expenses	$	18,091	$	13,385	$	4,706			35	%
Laboratory and manufacturing supplies		4,240		3,723		517			14	%
Clinical trials and sponsored research		7,039		5,380		1,659			31	%
Share-based compensation		1,127		2,797		(1,670	)		-60	%
Other		7,260		7,563		(303	)		-4	%
Total	$	37,757	$	32,848	$	4,909			15	%

	Year Ended December 31,
Net cash (used in) provided by:	2024			2023
Operating activities	$	(30,963	)	$	(18,725	)
Investing activities		(1,304	)		61,497
Financing activities		10,450			(9	)
Effect of foreign exchange rate on cash and cash equivalents		(5,529	)		(46	)
Net change in cash and cash equivalents	$	(27,346	)	$	42,717


Report of Independent Registered Public Accounting Firm (PCAOB Firm ID: 726)	43
Consolidated Balance Sheets	44
Consolidated Statements of Operations	45
Consolidated Statements of Comprehensive Loss	46
Consolidated Statements of Shareholders’ Equity	47
Consolidated Statements of Cash Flows	48
Notes to Consolidated Financial Statements	49

	December 31, 2024			December 31, 2023

Assets
Current assets:
Cash and cash equivalents	$	172,677		$	200,023
Accrued interest receivable		700			860
Income tax receivable		158			75
Prepaid expenses and other current assets		1,032			760
Total current assets		174,567			201,718
Property and equipment, net		24,526			24,897
Total assets	$	199,093		$	226,615

Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	2,223		$	2,516
Accrued expenses		2,632			3,501
Income tax payable		-			83
Convertible loan, related party		10,000			-
Convertible loan, third party		250			-
Total current liabilities		15,105			6,100
Long-term liabilities:
Income tax payable		1,720			1,669
Total liabilities		16,825			7,769

Shareholders’ equity:
Preferred stock, no par value, unlimited shares authorized, no shares outstanding		-			-
Common stock, no par value, unlimited shares authorized, 30,487,731 and 30,436,964 shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively		273,105			271,152
Accumulated deficit		(90,837	)		(52,306	)
Total shareholders’ equity		182,268			218,846

Total liabilities and shareholders’ equity	$	199,093		$	226,615

							Accumulated Other
	Number of			Common Stock			Comprehensive
	Shares			Amount			Income			Accumulated deficit			Total
Balance at December 31, 2022		30,439		$	267,325		$	826		$	(27,749	)	$	240,402
Net loss		-			-			-			(24,557	)		(24,557	)
Tender offer		(4	)		(14	)		-			-			(14	)
Foreign currency translation adjustment		-			-			(252	)		-			(252	)
Reclassification of deferred tax assets		-			574			(574	)		-			-
Issuance of common stock under stock option plan		1			5			-			-			5
Share-based compensation expense		-			3,262			-			-			3,262
Balance at December 31, 2023		30,436			271,152			-			(52,306	)		218,846
Net loss		-			-			-			(38,531	)		(38,531	)
Issuance of common stock under stock option plan		51			200			-			-			200
Share-based compensation expense		-			1,753			-			-			1,753
Balance at December 31, 2024		30,487		$	273,105		$	-		$	(90,837	)	$	182,268

•	Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities.

•	Level 2—Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.

•	Level 3—Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date.

•	Furniture and fixtures	7 years

•	Office equipment	5 years

•	Scientific equipment	5 years

•	Vehicles	5 years

•	Mobile facility	27.5 years

•	Building	39 years