Xenon Pharmaceuticals Inc. (NASDAQ: XENE)

Sector: Healthcare Industry: Biotechnology CIK: 0001582313
Market Cap 3.26 Bn
P/B 5.82
P/E -10.64
P/S 434.49
ROIC (Qtr) -56.73
Div Yield % 0.00
Rev 1y % (Qtr) 0.00
Total Debt (Qtr) 8.33 Mn
Debt/Equity (Qtr) 0.01

About

Xenon Pharmaceuticals Inc., often recognized by the symbol XENE on the NASDAQ stock exchange, is a company that operates within the biopharmaceutical industry. Its primary focus is on neuroscience, with an aim to enhance the lives of individuals dealing with neurological and psychiatric disorders. The company's main business activities revolve around the development of a novel product pipeline, specifically targeting areas of high unmet medical need such as epilepsy and depression. Xenon Pharmaceuticals Inc. operates in various countries, including...

Read more

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 104.51M provide 69.91x coverage of short-term debt 1.50M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 607.84M provides 73x coverage of total debt 8.33M, indicating robust asset backing and low credit risk.
  • Long-term investments of 92.99M provide solid 13.61x coverage of long-term debt 6.83M, indicating strategic financial planning.
  • Cash reserves of 104.51M provide robust 2.73x coverage of current liabilities 38.34M, indicating strong short-term solvency.
  • Cash reserves of 104.51M provide solid 33.09x coverage of other non-current liabilities 3.16M, indicating strong liquidity.

Bear case

  • Operating cash flow of (252.02M) barely covers its investment activities of 253.80M, with a coverage ratio of -0.99, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of 253.80M provide weak support for R&D spending of 272.71M, which is 0.93x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Short-term investments of 357.75M significantly exceed cash reserves of 104.51M, which is 3.42x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • The company's operating cash flow of (252.02M) shows concerning coverage of stock compensation expenses of 53.19M, with a -4.74 ratio indicating potential earnings quality issues.
  • Free cash flow of (253.29M) provides weak coverage of capital expenditures of 1.26M, with a -200.38 ratio suggesting additional external financing needs for growth initiatives.

Product and Service Breakdown of Revenue (2022)

Peer comparison

Companies in the Biotechnology
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SMMT Summit Therapeutics Inc. 1,151.25 Bn -1,249.17 0.00 0.01 Bn
2 ONC BeOne Medicines Ltd. 485.22 Bn 7,078.40 97.58 1.90 Bn
3 VRTX Vertex Pharmaceuticals Inc / Ma 122.74 Bn 33.40 10.47 1.83 Bn
4 REGN Regeneron Pharmaceuticals, Inc. 82.16 Bn 18.24 5.73 2.71 Bn
5 ARGX Argenx Se 48.85 Bn 32.43 25,472.44 -
6 ALNY Alnylam Pharmaceuticals, Inc. 46.12 Bn 1,058.58 14.37 3.21 Bn
7 BNTC Benitec Biopharma Inc. 42.24 Bn -1,010.00 0.00 0.00 Bn
8 INSM INSMED Inc 28.75 Bn -24.29 64.32 0.74 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 5.15 11.11
EV to Cash from Ops. EV/CFO -12.43 26.32
EV to Debt EV to Debt 376.12 688.48
EV to EBIT EV/EBIT -10.11 -10.97
EV to EBITDA EV/EBITDA -9.32 8.32
EV to Free Cash Flow [EV/FCF] EV/FCF -12.37 25.03
EV to Market Cap EV to Market Cap 0.96 163.46
EV to Revenue EV/Rev 417.60 148.57
Price to Book Value [P/B] P/B 5.82 20.73
Price to Earnings [P/E] P/E -10.64 -0.34
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -12.47
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 0.17
Dividend per Basic Share Div per Share (Qtr) 0.00 0.01
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -0.14
Interest Coverage Int. cover (Qtr) 0.00 860.86
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 46.67 -26.99
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 19.28 756.75
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -43.56 -53.03
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -33.27 -4.42
EBIT Growth (1y) % EBIT 1y % (Qtr) -44.83 -62.56
EBT Growth (1y) % EBT 1y % (Qtr) -44.83 -19.19
EPS Growth (1y) % EPS 1y % (Qtr) -37.94 -4.07
FCF Growth (1y) % FCF 1y % (Qtr) -53.72 -33.40
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 0.00 264.38
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.01 0.14
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.00
Cash Ratio Cash Ratio (Qtr) 2.73 3.81
Current Ratio Curr Ratio (Qtr) 12.53 7.25
Debt to Equity Ratio Debt/Equity (Qtr) 0.01 0.43
Interest Cover Ratio Int Coverage (Qtr) 0.00 860.86
Times Interest Earned Times Interest Earned (Qtr) 0.00 860.86
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -4,065.40 -17,746.13
EBIT Margin % EBIT Margin % (Qtr) -4,129.39 -18,101.92
EBT Margin % EBT Margin % (Qtr) -4,129.39 -18,961.86
Gross Margin % Gross Margin % (Qtr) 100.00 -9.24
Net Profit Margin % Net Margin % (Qtr) -4,084.50 -18,911.61