Share Capital

9 Months Ended

Sep. 30, 2023

Stockholders' Equity Note [Abstract]

Share Capital

8.Share capital:

(a)Financing:

In August 2020, the Company entered into an “at-the-market” equity offering sales agreement, amended as of March 2022, with Jefferies LLC ("Jefferies") and Stifel, Nicolaus & Company, Incorporated ("Stifel") and a new prospectus supplement was filed in March 2022 (“the March 2022 ATM") under which the Company may sell common shares having gross proceeds of up to $250,000, from time to time. In September 2023, the Company sold an aggregate of 855,685 common shares for proceeds of $29,508, net of commissions and transaction expenses.

In January 2022, in connection with the License and Collaboration Agreement with Neurocrine Biosciences Inc. (“Neurocrine Biosciences”) entered in December 2019 and amended in January 2021 (the "Neurocrine Collaboration Agreement"), the Company executed a Share Purchase Agreement ("SPA") pursuant to which the Company issued 258,986 common shares for an aggregate purchase price of $8,250, or $31.855 per common share, which represents a premium of $374 when compared to the fair value of common shares on the date of issuance. The SPA contains certain other customary terms and conditions, including mutual representations, warranties and covenants. For additional information regarding the Neurocrine Collaboration Agreement, refer to note 9.

In June 2022, the Company entered into an underwriting agreement with Jefferies, J.P. Morgan Securities LLC, Stifel and SVB Securities LLC, relating to an underwritten public offering of 9,098,362 common shares, including 1,229,508 shares sold upon the full exercise of the underwriters’ over-allotment option, at a public offering price of $30.50 per common share and pre-funded warrants to purchase 327,868 common shares at $30.4999 per pre-funded warrant (note 8c), with each pre-funded warrant having an exercise price of $0.0001. The public offering was completed in June 2022, and the Company received proceeds of $269,890, net of underwriting discounts, commissions and offering expenses.

(b)Exchange agreement with certain funds affiliated with BVF Partners L.P. (collectively, “BVF”):

In March 2018, the Company and BVF entered into an exchange agreement pursuant to which the Company issued to BVF 2,868,000 Series 1 Preferred Shares in exchange for 2,868,000 common shares which were subsequently cancelled by the Company. The Series 1 Preferred Shares were convertible into common shares on a one-for-one basis, subject to certain restrictions.

The Series 1 Preferred Shares ranked equally to the common shares in the event of liquidation, dissolution or winding up or other distribution of the assets of the Company among its shareholders and the holders of the Series 1 Preferred Shares were entitled to vote together with the common shares on an as-converted basis and as a single class, subject to certain restrictions.

The Series 1 Preferred Shares were recorded wholly as equity under ASC 480, with no bifurcation of conversion feature from the host contract, given that the Series 1 Preferred Shares cannot be cash settled and have no redemption features.

During the year ended December 31, 2018, BVF converted 1,852,000 Series 1 Preferred Shares in exchange for an equal number of common shares. In March 2022, the remaining outstanding 1,016,000 Series 1 Preferred Shares were exchanged for an equal number of common shares.

(c)Pre-funded warrants:

The following table summarizes the pre-funded warrants activity for the nine months ended September 30, 2023 and 2022:

	Date of issuance
	March 2021			October 2021			June 2022		Total
Outstanding, December 31, 2021		1,081,081			1,694,915			—		2,775,996
Issued		—			—			327,868		327,868
Exercised		—			—			—		—
Outstanding, September 30, 2022		1,081,081			1,694,915			327,868		3,103,864
Outstanding, December 31, 2022		1,081,081			1,694,915			327,868		3,103,864
Exercised		(1,081,081	)		(193,929	)		—		(1,275,010	)
Outstanding, September 30, 2023		—			1,500,986			327,868		1,828,854

In connection with underwritten public offerings completed in March 2021, October 2021 and June 2022, the Company issued pre-funded warrants to purchase the equivalent number of common shares at $18.4999, $29.4999 and $30.4999, per pre-funded warrant, respectively, with each pre-funded warrant having an exercise price of $0.0001.

The pre-funded warrants are exercisable at the holder’s discretion from the date of issuance until the date the pre-funded warrant is exercised in full. The Company may not affect the exercise of any pre-funded warrant, and a holder will not be entitled to exercise any portion of any pre-funded warrant that, upon giving effect to such exercise, would cause: (i) the aggregate number of common shares beneficially owned by such holder, together with its affiliates, to exceed 4.99% of the total number of common shares outstanding immediately after giving effect to the exercise; or (ii) the combined voting power of the Company’s securities beneficially owned by such holder, together with its affiliates, to exceed 4.99% of the combined voting power of all of the Company’s securities immediately outstanding after giving effect to the exercise, which percentage may be changed at the holder’s election to a higher or lower percentage not in excess of 19.99% upon at least 61 days’ notice to the Company.

Since the pre-funded warrants meet the condition for equity classification, net proceeds from issuances of the pre-funded warrants are recorded in additional paid-in capital. Upon exercise of the pre-funded warrants, the historical costs recorded in additional paid-in capital along with the exercise price collected from holder is recorded in common shares. During the three and nine months ended September 30, 2023, the Company issued 425,000 and 1,275,000 common shares, respectively, upon the exercise of 425,004 and 1,275,010 pre-funded warrants pursuant to a net exercise mechanism under the warrants. Pre-funded warrants to purchase 1,828,854 (September 30, 2022 – 3,103,864) common shares are not included in the number of issued and outstanding common shares as of September 30, 2023.

(d)Stock-based compensation:

The following table presents stock option activity for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Outstanding, beginning of period		8,681,808			7,234,460			7,117,782			5,638,232
Granted		363,200			102,000			2,457,173			2,079,845
Exercised(1)		(6,351	)		(369,334	)		(398,097	)		(718,472	)
Forfeited, cancelled or expired		(32,416	)		(21,357	)		(170,617	)		(53,836	)
Outstanding, end of period		9,006,241			6,945,769			9,006,241			6,945,769
Exercisable, end of period		4,618,002			3,391,011			4,618,002			3,391,011

(1)During the nine months ended September 30, 2023, no stock options were exercised for cash (2022 – 65,844). In the same period, the Company issued 283,863 (2022 – 468,598) common shares for the cashless exercise of 398,097 (2022 – 652,628) stock options.

The fair value of each stock option granted is estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Average risk-free interest rate		4.26	%		3.20	%		3.91	%		2.19	%
Expected volatility		68	%		70	%		69	%		70	%
Average expected term (in years)		5.13			4.92			5.99			6.15
Expected dividend yield		0	%		0	%		0	%		0	%
Weighted average fair value of stock options granted	$	22.85		$	21.63		$	22.59		$	19.40