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In a recent filing with the Securities and Exchange Commission, Xenon Pharmaceuticals Inc. (NASDAQ:XENE) announced significant changes to its accounting oversight. On Monday, the company’s Audit Committee made the decision to part ways with KPMG LLP, their previous independent registered public accounting firm, effective as of March 3, 2025. This move was not due to any disagreements on accounting practices or audit procedures, as the reports from KPMG for the fiscal years ending December 31, 2024, and 2023 did not carry any adverse opinions or modifications. According to InvestingPro data, Xenon maintains a strong financial position with a current ratio of 17.85, indicating robust liquidity with assets well exceeding short-term obligations.
The company confirmed that throughout the fiscal years in question and the subsequent interim period leading up to March 3, 2025, there were no disagreements or "reportable events" as defined by SEC regulations that would have influenced KPMG’s audit opinions. KPMG has provided a letter, dated March 3, 2025, to the SEC agreeing with the statements made by Xenon Pharmaceuticals in their disclosure.
Furthermore, Xenon Pharmaceuticals has appointed PricewaterhouseCoopers LLP (PwC) as its new independent registered public accounting firm for the fiscal year ending December 31, 2025. The company disclosed that neither it nor any of its representatives consulted with PwC on any matters that would require disclosure under the SEC’s regulations during the last two fiscal years or the interim period. InvestingPro analysis shows the company holds more cash than debt on its balance sheet, with a minimal debt-to-equity ratio of 0.01, suggesting strong financial management practices.
The transition of auditors comes at a time when the Burnaby-based pharmaceutical company, specializing in the development of innovative therapeutics, is positioning itself for the upcoming fiscal year. The change is part of routine corporate governance practices and does not reflect any underlying issues with the company’s financial statements.
This announcement is based on the information contained in the SEC filing and does not include any speculative or forward-looking statements. Xenon Pharmaceuticals has not provided any further details on the reasons behind the change in their auditing firm.
In other recent news, Xenon Pharmaceuticals Inc. announced its fourth-quarter 2024 earnings, reporting a slight beat on earnings per share (EPS) forecasts with an EPS of -0.84, compared to the expected -0.85. The company also reported revenue of $357.14 million, although forecast data was not specified. Xenon plans to significantly increase its research and development spending in the next two years to support its ongoing Phase 3 programs, including studies in epilepsy and bipolar depression. Notably, CFO Sherry Allen announced her intention to step down by June 2025, which may have contributed to investor concerns despite the earnings beat.
In terms of strategic developments, Xenon is advancing its lead asset, AZETU Calnar, a KV7 opener, in epilepsy and bipolar depression, with plans to initiate bipolar depression studies in mid-2025. The company maintains a strong cash position with $754.4 million in cash and cash equivalents, which is expected to extend its cash runway into 2027. Additionally, Xenon has announced plans to submit a New Drug Application (NDA) for focal onset seizures following the release of Phase 3 epilepsy data in the second half of 2025. Analyst firm Stifel noted the company’s emphasis on bipolar depression rather than mania, highlighting Xenon’s confidence in the scientific rationale for its program.
Furthermore, Xenon Pharmaceuticals’ CEO, Ian Mortimer, expressed optimism about AZETU Calnar’s potential, stating it could be a paradigm-shifting treatment for epilepsy. This confidence is supported by ongoing enrollment in epilepsy and major depressive disorder (MDD) studies. As Xenon continues to expand its clinical pipeline, the company is also leveraging its discovery knowledge to progress multiple drug candidates targeting KV7 and NAV1.7 into IND enabling studies.
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