Share Capital

12 Months Ended

Dec. 31, 2022

Stockholders' Equity Note [Abstract]

Share Capital

12.Share capital:

(a)Financing:

In November 2019, the Company entered into an "at-the-market" equity offering sales agreement with Jefferies LLC (“Jefferies”) and Stifel, Nicolaus & Company, Incorporated (“Stifel”) to sell common shares of the Company having aggregate gross proceeds of up to $50,000 from time to time. As of December 31, 2019, the Company had sold 805,643 common shares under the sales agreement for proceeds of $10,729, net of commissions and transaction expenses. In January 2020, the Company sold an additional 2,446,687 common shares for proceeds of $37,796, net of commissions and transaction expenses.

In January 2020, the Company entered into an underwriting agreement with Jefferies, Stifel and Guggenheim Securities, LLC, relating to an underwritten public offering of 3,750,000 common shares, including 562,500 common shares sold upon the full exercise of the underwriters’ over-allotment option, at a public offering price of $16.00 per common share. The public offering was completed in January 2020, and the underwriters exercised their option in full in February 2020. The Company received proceeds of $64,660, net of underwriting discounts, commissions and offering expenses.

In August 2020, the Company entered into an “at-the-market” equity offering sales agreement, amended as of March 2022, with Jefferies and Stifel pursuant to which the Company may sell common shares from time to time. In January 2021, the Company sold an aggregate of 733,000 common shares for proceeds of $10,693, net of commissions and transaction expenses pursuant to a prospectus supplement filed in August 2020 (“August 2020 ATM”). The Company may sell common shares having gross proceeds of up to $250,000, from time to time, pursuant to a new prospectus supplement filed in March 2022 (“March 2022 ATM”), replacing the August 2020 ATM. As of December 31, 2022, no common shares have been sold under the March 2022 ATM.

In March 2021, the Company entered into an underwriting agreement with Jefferies and Stifel, relating to an underwritten public offering of 5,135,135 common shares, including 810,810 common shares sold upon the full exercise of the underwriters’ over-allotment option, at a public offering price of $18.50 per common share and pre-funded warrants to purchase 1,081,081 common shares at $18.4999 per pre-funded warrant (note 12e), with each pre-funded warrant having an exercise price of $0.0001. The public offering was completed in March 2021, and the Company received proceeds of $107,922, net of underwriting discounts, commissions and offering expenses.

In September 2021, in connection with the License and Collaboration Agreement with 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 275,337 common shares for an aggregate purchase price of $5,500, or $19.9755 per common share, which represents a premium of $770 when measured at fair value on the date of issuance. In addition, in January 2022, the Company executed a 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 SPAs contain certain other customary terms and conditions, including mutual representations, warranties and covenants. For additional information regarding the Neurocrine Collaboration Agreement, refer to note 13a.

In October 2021, the Company entered into an underwriting agreement with Jefferies, SVB Leerink LLC (“SVB”) and Stifel, relating to an underwritten public offering of 10,000,000 common shares, including 1,525,423 common shares sold upon the full exercise of the underwriters’ over-allotment option, at a public offering price of $29.50 per common share and pre-funded warrants to purchase 1,694,915 common shares at $29.4999 per pre-funded warrant (note 12e), with each pre-funded warrant having an exercise price of $0.0001. The public offering was completed in October 2021, and the Company received proceeds of $323,938, net of underwriting discounts, commissions and offering expenses.

In June 2022, the Company entered into an underwriting agreement with Jefferies, J.P. Morgan Securities LLC, Stifel and SVB, 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 12e), 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)Authorized share capital:

The Company’s authorized share capital consists of an unlimited number of common and preferred shares without par value.

(c)Stock-based compensation:

The Company has three equity incentive plans: (i) a pre-existing stock option plan (the “Amended and Restated Stock Option Plan”), (ii) the 2014 Equity Incentive Plan (the “2014 Plan”) which was amended and restated in June 2020 and June 2022, and (iii) the 2019 Inducement Equity Incentive Plan (the “2019 Inducement Plan”).

The Amended and Restated Stock Option Plan provided for the grant of stock options for the purchase of common shares to directors, officers, employees and consultants prior to the Company’s initial public offering. The stock options granted under the Amended and Restated Stock Option Plan vest on a graduated basis over a four-year period or less and each option’s maximum term is ten years. The 2014 Plan replaced the Amended and Restated Stock Option Plan. No further options will be granted under the Company’s Amended and Restated Stock Option Plan. The Amended and Restated Stock Option Plan will continue to govern the stock options granted thereunder.

In June 2014, the shareholders of the Company approved the 2014 Plan, which was amended and replaced in June 2020 and June 2022 by the Amended and Restated 2014 Equity Incentive Plan (the “Amended and Restated 2014 Plan”). The Amended and Restated 2014 Plan governs all options granted under the 2014 Plan.

In September 2019, the board of directors of the Company adopted the 2019 Inducement Plan and, subject to the adjustment provisions of the 2019 Inducement Plan, reserved 400,000 of the Company’s common shares for issuance pursuant to equity awards granted under the 2019 Inducement Plan. The 2019 Inducement Plan was adopted without shareholder approval in accordance with the applicable Nasdaq Listing Rules. The 2019 Inducement Plan provided for the grant of equity-based awards, including share options, share appreciation rights, restricted share awards, restricted share unit awards and performance share awards, and its terms are substantially similar to the Company’s Amended and Restated 2014 Plan, including with respect to treatment of equity awards in the event of a “merger” or “change of control” as defined under the 2019 Inducement Plan, but with such other terms and conditions intended to comply with the Nasdaq inducement award exception or to comply with the Nasdaq acquisition and merger exception. The 2019 Inducement Plan was terminated in June 2020. No further options will be granted under the 2019 Inducement Plan, and the 2019 Inducement Plan will continue to govern the options granted thereunder.

The shareholders of the Company approved the Amended and Restated 2014 Plan amended in June 2020 and June 2022, amending certain provisions of the Company’s 2014 Plan. The Amended and Restated 2014 Plan continues to permit the grant of stock-based compensation awards to directors, officers, employees and consultants of the Company and the issuance of restricted shares, restricted share units, share appreciation rights and performance shares. Under the Amended and Restated 2014 Plan, options granted generally vest on a graduated basis over a four-year period or less. The exercise price of the options is determined by the board of directors but must at least be equal to the fair market value of the common shares on the date of grant. Options may be exercised over a maximum term of ten years. The annual share increase provision of the 2014 Plan was eliminated and the number of common shares available for issuance was increased by 9,300,000 over the existing share reserve under the 2014 Plan. The number of common shares that can be issued through restricted share awards, restricted share unit awards, or performance share awards was amended to be limited to 1,000,000 common shares, in the aggregate. Other amendments were made to terms of the 2014 Plan with respect to repricing, change of control and payment of dividends and other distributions. As of December 31, 2022, a total of 5,646,490 common shares remain available for issuance pursuant to the Amended and Restated 2014 Plan.

The following table presents the summary of stock option activity for the period:

	Number of			Weighted Average Exercise		Aggregate
	Options			Price ($)(1)		Intrinsic Value
Outstanding, December 31, 2019		3,534,236			7.90		19,618
Granted		1,482,250			11.75
Exercised(2)		(171,812	)		5.76		1,535
Forfeited, cancelled or expired		(85,677	)		13.04
Outstanding, December 31, 2020		4,758,997			9.10		30,464
Granted		1,775,450			19.82
Exercised(2)		(690,284	)		7.34		11,306
Forfeited, cancelled or expired		(205,931	)		13.01
Outstanding, December 31, 2021		5,638,232			12.55		105,405
Granted		2,315,645			30.90
Exercised(2)		(780,725	)		9.47		19,651
Forfeited, cancelled or expired		(55,370	)		24.50
Outstanding, December 31, 2022		7,117,782			18.75		147,214
Exercisable, December 31, 2022		3,530,408			11.40		98,944

(1)Canadian dollar denominated stock options have been translated into U.S. dollars at a foreign exchange rate of 0.74 as of December 31, 2022.

(2)During the year ended December 31, 2022, 68,930 (2021 – 66,215 and 2020 – 26,513) stock options were exercised for the same number of common shares in exchange for cash. In the same period, the Company issued 510,671 (2021 – 412,940 and 2020 – 87,197) common shares for the cashless exercise of 711,795 (2021 – 624,069 and 2020 – 145,299) stock options.

At December 31, 2022, stock options outstanding and exercisable had a weighted average remaining contractual life of 7.4 years and 5.9 years, respectively.

A summary of the Company’s non-vested stock option activity and related information for the year ended December 31, 2022 is as follows:

	Number of Options			Weighted Average Grant Date Fair Value ($)
Non-vested, January 1, 2022		2,671,589			10.56
Granted		2,315,645			19.78
Vested		(1,344,490	)		10.23
Forfeited or cancelled		(55,370	)		14.43
Non-vested, December 31, 2022		3,587,374			16.60

The aggregate fair value of options vested during the year ended December 31, 2022 was $13,752 (2021 – $8,271 and 2020 – $3,698).

The fair value of stock options at the date of grant is estimated using the Black-Scholes option-pricing model which requires multiple subjective inputs. The risk-free interest rate of the options is based on the U.S. Treasury yield curve in effect at the date of grant for a term similar to the expected term of the option. The expected volatility is based on the historical volatility of the Company’s common shares calculated based on a period of time commensurate with the expected term assumption. Expected life assumptions are based on the Company’s historical data. The dividend yield is based on the fact that the Company has never paid cash dividends and has no present intention to pay cash dividends. Forfeitures are recognized as they occur.

The weighted-average option pricing assumptions are as follows:

	Year Ended December 31,
	2022			2021			2020
Average risk-free interest rate		2.39	%		1.16	%		0.72	%
Expected volatility		70	%		68	%		68	%
Average expected term (in years)		6.16			6.66			6.79
Expected dividend yield		0.00	%		0.00	%		0.00	%
Weighted average fair value of options granted	$	19.78		$	12.54		$	7.46

Stock-based compensation expense is classified in the consolidated statements of operations and comprehensive income (loss) as follows:

	Year Ended December 31,
	2022		2021		2020
Research and development expenses	$	7,766	$	3,734	$	1,936
General and administrative expenses		12,610		6,283		3,741
	$	20,376	$	10,017	$	5,677

As of December 31, 2022, the unrecognized stock-based compensation expense related to the non-vested stock options was $49,105, which is expected to be recognized over a weighted-average period of 2.78 years.

(d)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.

(e)Pre-funded warrants:

The following table summarizes the pre-funded warrants outstanding as of December 31, 2022:

Date of Issuance	Pre-Funded Warrants to Purchase Common Shares		Price per Pre-Funded Warrant		Exercise Price
March 2021		1,081,081	$	18.4999	$	0.0001
October 2021		1,694,915	$	29.4999	$	0.0001
June 2022		327,868	$	30.4999	$	0.0001
Total		3,103,864

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, proceeds from issuances of the pre-funded warrants of $75,103, net of underwriting discounts, commissions and offering expenses, 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 the holder will be recorded in common shares. As of December 31, 2022, no pre-funded warrants were exercised. Pre-funded warrants to purchase 3,103,864 common shares (2021 – 2,775,996) are not included in the number of issued and outstanding common shares as of December 31, 2022.