MeritValue

Xenon Pharmaceuticals Inc.

XENEdata completeness 88%14 fiscal years on file
The thesis, from the filings

Xenon Pharmaceuticals Inc. earns about -30% on invested capital, but has diluted owners by 82% over 5 years — worth asking whether the growth reaches owners. The cash-flow models don't apply cleanly here — the ledger says why below.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$18.4M1$9.43M2$03$03$7.5M3
Net income−$78.9M4−$125.4M5−$182.4M6−$234.3M6−$345.9M6
Operating cash flow−$69.5M7−$101M8−$151.1M9−$181.4M9−$279.1M9
Capital expenditure$2.05M10$2.89M11$5.62M12$3.08M12$799,00012
Free cash flow (derived)−$71.6M7−$103.9M8−$156.7M9−$184.5M9−$279.9M9
Total debt—————
Cash & equivalents$175.7M13$57.2M14$148.6M15$142.7M16$199.2M16
Diluted shares43.6M60.5M66.9M77.9M79.3M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$73.4
your share of equity
Profit it earned you last year
−$43.65
Free cash flow it threw off
−$35.32
Debt you’d be carrying
—

10 shares is a claim on $73.4 of net worth that earned you −$43.65 and generated −$35.32 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
-30% avg · 5y
FY21 -17%FY22 -15%FY23 -19%FY24 -31%FY25 -71%

It earned an average -30% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+82% shares · 5y

Share count is up 82% over 5 years — owners have been diluted. Worth asking what they got for it.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
DCF · Growth Exit 5Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
Earnings Power Value
not applicable
normalized (5y-median) earnings non-positive — EPV undefined
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000950170-24-023177 (RevenueFromContractWithCustomerIncludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0000950170-25-029149 (RevenueFromContractWithCustomerIncludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001193125-26-076650 (RevenueFromContractWithCustomerIncludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0000950170-24-023177 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000950170-25-029149 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001193125-26-076650 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000950170-24-023177 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000950170-25-029149 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001193125-26-076650 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000950170-24-023177 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0000950170-25-029149 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001193125-26-076650 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0000950170-23-005582 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2022-12-31 · accession 0000950170-24-023177 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2023-12-31 · accession 0000950170-25-029149 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2024-12-31 · accession 0001193125-26-076650 (CashAndCashEquivalentsAtCarryingValue)