Item 1.01 Entry into a Material Definitive Agreement.
On January 13, 2021, Xenon Pharmaceuticals Inc. (the "Company") and Neurocrine
Biosciences, Inc. ("Neurocrine") entered into an amendment (the "Amendment") to
the License and Collaboration Agreement (the "Collaboration Agreement")
originally entered into on December 2, 2019 pursuant to which the parties
revised certain investigational new drug application ("IND") acceptance criteria
relating to Neurocrine's NBI-921352 product candidate (formerly known as XEN901)
(the "Product Candidate") for the potential treatment of SCN8A-DEE.
Under the terms of the Amendment, a partial IND acceptance ("Partial IND
Acceptance") for the Product Candidate in the SCN8A-DEE indication will be
deemed to have occurred upon the authorization of the U.S. Food and Drug
Administration ("FDA") to initiate a Phase 2 randomized, double-blind,
placebo-controlled study to evaluate the efficacy, safety, tolerability, and
pharmacokinetics of the Product Candidate in subjects with SCN8A-DEE (the
"Study") aged between 12 and 21 years. A full IND acceptance ("Full IND
Acceptance") for the Product Candidate in the SCN8A-DEE indication will be
deemed to have occurred upon FDA approval of a protocol amendment to the Study
that expands the subject population to include subjects with SCN8A-DEE aged
between 2 and 11 years.
If the Product Candidate achieves Full IND Acceptance in SCN8A-DEE or IND or
equivalent regulatory authority acceptance in a Major Indication (each of Full
IND Acceptance for SCN8A-DEE or IND or equivalent regulatory acceptance in a
Major Indication are referred to as an "IND Acceptance"), the Company will be
entitled to a milestone cash payment of $11.25 million or $4.5 million,
respectively. In addition to such cash payment, the Company will issue and sell
either $13.75 million or $5.5 million of its common shares to Neurocrine,
depending on whether the IND Acceptance is for SCN8A-DEE or a Major Indication,
respectively (the "Milestone Equity Purchase"). The common shares sold to
Neurocrine in the Milestone Equity Purchase will have a price equal to 115% of
the Company's 30-day volume-weighted average price immediately prior to the
public announcement of the IND Acceptance. "Major Indication" means an
indication that meets or exceeds a specified prevalence threshold, including
without limitation, focal seizures.
If the IND Acceptance first occurs for a Major Indication and subsequently Full
IND Acceptance for the Product Candidate in SCN8A-DEE occurs, Neurocrine will
pay to the Company an additional $6.75 million cash payment and an additional
$8.25 million of common shares will be issued and sold to Neurocrine at a price
equal to 115% of the Company's 30-day volume-weighted average price immediately
prior to the public announcement of the subsequent IND Acceptance (the
"Subsequent Milestone Equity Purchase"). If the aggregate number of common
shares to be sold to Neurocrine pursuant to the terms of the Collaboration
Agreement, as amended by the Amendment, would exceed 19.9% of the Company's
common shares outstanding on the date of the Collaboration Agreement, then the
number of shares to be purchased shall be reduced such that the percentage cap
is not exceeded.
Except as amended by the Amendment, the terms of the Collaboration Agreement
remain in full force and effect. The foregoing description of the Amendment is
not complete and is qualified in its entirety by reference to the full text of
the Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report
on Form 8-K and is incorporated by reference herein.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Officer Changes
On January 12, 2021, the Company's Board of Directors (the "Board") approved the
following changes to the Company's management, which will become effective on
the date of the Company's 2021 Annual Meeting of Shareholders (the "Annual
Meeting").
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The Board appointed Mr. Ian Mortimer, the Company's current President and Chief
Financial Officer, as the Company's new Chief Executive Officer, succeeding Dr.
Simon Pimstone in this role. Following the appointment, Mr. Mortimer will retain
his current responsibilities as President and principal operating officer of the
Company and Dr. Pimstone will begin serving as the Company's Executive Chair of
the Board. The Board further appointed Ms. Sherry Aulin, the Company's current
Vice President, Finance, as the Company's new Chief Financial Officer.
Mr. Mortimer, 45, has served as the Company's President and Chief Financial
Officer since March 2018. Mr. Mortimer previously served as the Company's Chief
Financial Officer and Chief Operating Officer since March 2015 and as its Chief
Financial Officer since October 2013. Prior to joining the Company, Mr. Mortimer
served as Executive Vice President and Chief Financial Officer at Tekmira
Pharmaceuticals Corporation (now Arbutus Biopharma Corporation), a Nasdaq-listed
biotechnology company, from 2007 until October 2013. From 2004 to 2007, Mr.
Mortimer was Chief Financial Officer at Inex Pharmaceuticals and held various
other positions at Inex Pharmaceuticals from 1997 to 2004. Since November 2017,
Mr. Mortimer has served on the Board of Directors and as chair of the audit
committee, and since January 2020 has served as chair of the Board of Directors
and of the audit committee, for Appili Therapeutics Inc., a publicly-traded
biopharmaceutical company focused on developing treatments for infectious
diseases. Since July 2020, Mr. Mortimer has served on the Board of Directors and
as chair of the audit committee of Perimeter Medical Imaging AI, Inc., a
publicly-traded medical device company focused on advanced in-procedural medical
imaging tools. Mr. Mortimer has an M.B.A. from Queen's University, a B.Sc. in
Microbiology from the University of British Columbia and is a Chartered
Professional Accountant, Certified Management Accountant.
Dr. Pimstone, 53, has served as a member of the Board since November 1996, as
the Company's Chief Executive Officer since January 2003 and as the Company's
President from January 2003 to March 2018. Since 2012, Dr. Pimstone has been a
Consultant Physician at the University of British Columbia Hospital, Cardiology
Clinic, and since 2014, he has held the position of Clinical Associate Professor
at the University of British Columbia, Division of General Internal Medicine.
Currently, Dr. Pimstone is an Investigator at the Centre for Heart Lung
Innovation (HLI) research centre. Dr. Pimstone currently serves as chair of the
board of Eupraxia Pharmaceuticals Inc., TopiRx Pharmaceuticals, and Alpha9
Theranostics Inc., three private specialty pharmaceutical companies, where he
has served as a director since 2012, 2019 and 2020, respectively. Dr. Pimstone
holds an MBChB from the University of Cape Town, a FRCPC from the University of
British Columbia, and a Ph.D. from the University of Amsterdam in cardiovascular
genetics. Dr. Pimstone is a former director of Accuro Technologies, Indel
Therapeutics Inc., Cyon Therapeutics Inc. and Enject, Inc. Previously, Dr.
Pimstone was director and chair of the board of directors of LifeSciences
British Columbia, a non-profit industry association that supports the life
science community, and a former director of the Providence Healthcare Research
Trust, BC Advantage Life Sciences Fund, Centre for Molecular Medicine and
Therapeutics, BIOTECanada, and BC Health Research Strategy Advisory Board of the
Michael Smith Foundation for Health Research.
Ms. Aulin, 37, has served as the Company's Vice President, Finance since March
2019, and has led the Company's finance function since June 2015. From 2011
until 2015, Ms. Aulin provided independent financial consulting and advisory
services to various publicly-traded companies including to support the Company
through its initial public offering process. From 2004 to 2011, Ms. Aulin was at
KPMG LLP, most recently as Senior Manager in the assurance practice, where she
provided professional services to publicly-traded companies across various
industries including in the life sciences sector. Ms. Aulin holds a BCom from
the University of British Columbia and is a Chartered Professional Accountant,
Chartered Accountant.
There are no arrangements or understandings between any of Mr. Mortimer, Dr.
Pimstone and Ms. Aulin and any other persons pursuant to which any of them were
appointed to their new positions. There are no family relationships between any
of Mr. Mortimer, Dr. Pimstone and Ms. Aulin and any director or executive
officer of the Company, and none of Mr. Mortimer, Dr. Pimstone and Ms. Aulin has
any direct or indirect material interest in any transaction required to be
disclosed pursuant to Item 404(a) of Regulation S-K.
Employment Agreements
On January 13, 2021, the Company entered into new employment agreements with Mr.
Mortimer, Dr. Pimstone and Ms. Aulin. The material terms of these employment
agreements, which will become effective on the date of the Annual Meeting, are
as follows:
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Mr. Mortimer
Mr. Mortimer's employment agreement will be for an indefinite term.
Mr. Mortimer's annual base salary will be $541,000, and he will be eligible for
an annual incentive payment up to 55% of his base salary, subject to achievement
of performance metrics. Subject to approval of the Board or its Compensation
Committee, Mr. Mortimer will also be granted a one-time option grant to purchase
125,000 common shares of the Company. The U.S. dollar amount of Mr. Mortimer's
semi-monthly pay will be converted to Canadian dollars at the Bank of Canada
exchange rate five (5) days prior to each pay date and paid to Mr. Mortimer in
Canadian dollars. Additionally, the employment agreement will provide for
severance benefits if Mr. Mortimer is terminated without cause or resigns for
good reason in connection with a change of control. For details regarding the
Company's obligations to Mr. Mortimer under such circumstances, please see the
section captioned "Potential Payments upon a Termination or Change in Control"
below.
Dr. Pimstone
Dr. Pimstone's employment agreement will be for a fixed period (the "Pimstone
Term") beginning on the date of the Annual Meeting and ending on the date of the
Company's 2022 Annual Meeting of Shareholders. Unless previously terminated in
accordance with the terms of the employment agreement or extended by mutual
written consent, Dr. Pimstone's employment with the Company will automatically
terminate as of the date of the Company's 2022 Annual Meeting of Shareholders.
Dr. Pimstone's annual base salary will be $525,000, and he will be eligible for
an annual incentive payment up to 55% of his base salary, subject to achievement
of performance metrics. For 2022, any bonus that Dr. Pimstone may be entitled to
will be based on the period he is employed as the Executive Chair in 2022, and
any such bonus would be evaluated and paid in the first quarter of 2023. The
U.S. dollar amount of Dr. Pimstone's semi-monthly pay will be converted to
Canadian dollars at the Bank of Canada exchange rate five (5) days prior to each
pay date and paid to Dr. Pimstone in Canadian dollars. Additionally, the
employment agreement will provide for severance benefits if Dr. Pimstone is
terminated without cause or resigns for good reason in connection with a change
of control. For details regarding the Company's obligations to Dr. Pimstone
under such circumstances, please see the section captioned "Potential Payments
upon a Termination or Change in Control" below.
Ms. Aulin
Ms. Aulin's employment agreement will be for an indefinite term. Ms. Aulin's
annual base salary will be $320,000, and she will be eligible for an annual
incentive payment up to 40% of her base salary, subject to achievement of
performance metrics. Subject to approval of the Board or its Compensation
. . .
Item 8.01 Other Events.
On January 14, 2021, the Company issued a press release announcing the matters
described above and providing an update on the Company's development programs, a
copy of which is filed as Exhibit 99.1 to this Current Report on Form 8-K and is
incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
10.1† Amendment #1, dated January 13, 2021, to the License and
Collaboration Agreement, dated December 2, 2019, by and between
Xenon Pharmaceuticals Inc. and Neurocrine Biosciences, Inc.
10.2 Employment Agreement, dated January 13, 2021, by and between
the Company and Ian Mortimer.
10.3 Employment Agreement, dated January 13, 2021, by and between
the Company and Simon Pimstone.
10.4 Employment Agreement, dated January 13, 2021, by and between
the Company and Sherry Aulin .
99.1 Press Release issued by Xenon Pharmaceuticals Inc. dated
January 14, 2021.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
† Certain portions of this exhibit have been omitted because they are not
material and would likely cause competitive harm to the registrant if
disclosed.
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