Share Capital

12 Months Ended

Dec. 31, 2021

Stockholders Equity Note [Abstract]

Share Capital

10. 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, through an “at-the-market” equity offering program under which Jefferies and Stifel would act as sales agents. 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 paid and transaction expenses. In January 2020, the Company sold an additional 2,446,687 common shares for proceeds of approximately $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 sold by the Company at a public offering price of $16.00 per common share, and granted the underwriters an option for a period of 30 days to purchase up to an additional 562,500 common shares. The public offering was completed in January 2020, and the Company received proceeds of $56,265, net of underwriting discounts, commissions and offering expenses. The underwriters exercised their option in full in February 2020 and the Company received additional proceeds of $8,395, net of underwriting discounts, commissions and offering expenses.

In August 2020, the Company entered into an at-the-market equity offering sales agreement with Jefferies and Stifel to sell common shares of the Company having aggregate gross proceeds of up to $100,000, from time to time, through an “at-the-market” equity offering program under which Jefferies and Stifel would act as sales agents . As of December 31, 2021, the Company had sold 733,000 common shares for proceeds of $10,693, net of commissions and transaction expenses.

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 10e), 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. 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 12a.  

In October 2021, the Company entered into an underwriting agreement with Jefferies, SVB Leerink LLC 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 10e), 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.

(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 (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 replaced in June 2020 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 connection with the shareholder approval of the Amended and Restated 2014 Plan. No further options will be granted under the 2019 Inducement Plan, and the 2019 Inducement Plan will continue to govern the options granted thereunder.

In June 2020, the shareholders of the Company approved the Amended and Restated 2014 Plan, 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 4,000,000 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, 2021, a total of 2,416,591 common shares remain available for issuance pursuant to the Amended and Restated 2014 Plan.  

Summary of stock option activity is as follows: 

	Number of			Weighted Average		Aggregate
	Options			Exercise 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
Exercisable, December 31, 2021		2,966,643			8.85		66,418

(1) Canadian dollar denominated stock options have been translated into U.S. dollars at a foreign exchange rate of 0.79 as of December 31, 2021.

(2) During the year ended December 31, 2021, 66,215 (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 412,940 (2020 – 87,197) common shares for the cashless exercise of 624,069 (2020 – 145,299) stock options.

The following table summarizes the stock options outstanding and exercisable at December 31, 2021:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number of Options Outstanding		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number of Options Exercisable		Weighted Average Exercise Price
U.S. $			(years)		($)(1)				($)(1)
$2.11 - $8.32		1,095,052		4.69		5.23		1,089,630		5.22
$8.33 - $9.52		1,315,749		6.54		9.12		1,066,587		9.05
$9.53 - $11.72		1,137,981		8.27		11.50		502,634		11.52
$11.73 - $20.40		1,006,250		7.75		17.14		307,792		16.66
$20.41 - $31.68		1,083,200		9.22		20.93		—		—
		5,638,232		7.26		12.55		2,966,643		8.85

(1) Canadian dollar denominated stock options have been translated into U.S. dollars at a foreign exchange rate of 0.79 as of December 31, 2021.

At December 31, 2021, stock options outstanding and exercisable had a weighted average remaining contractual life of 7.26 years and 5.79 years, respectively.

A summary of the Company’s non-vested stock option activity and related information for the year ended December 31, 2021 is as follows:

	Number of Options			Weighted Average Grant Date Fair Value ($)
Non-vested, January 1, 2021		2,336,437			6.78
Granted		1,775,450			12.54
Vested		(1,235,867	)		6.69
Forfeited or cancelled		(204,431	)		8.36
Non-vested, December 31, 2021		2,671,589			10.56

The aggregate fair value of options vested during the year ended December 31, 2021 was $8,271 (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,
	2021			2020
Average risk-free interest rate		1.16	%		0.72	%
Expected volatility		68	%		68	%
Average expected term (in years)		6.66			6.79
Expected dividend yield		0.00	%		0.00	%
Weighted average fair value of options granted	$	12.54		$	7.46

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

	Year Ended December 31,
	2021		2020
Research and development expenses	$	3,734	$	1,936
General and administrative expenses		6,283		3,741
	$	10,017	$	5,677

As of December 31, 2021, the unrecognized stock-based compensation expense related to the non-vested stock options was $24,210, which is expected to be recognized over a weighted-average period of 2.78 years.

(d) Series 1 Preferred Shares:

In March 2018, the Company filed articles of amendment creating an unlimited number of Series 1 Preferred Shares. The Series 1 Preferred Shares are convertible into common shares on a one-for-one basis subject to the holder, together with its affiliates, beneficially owning no more than 9.99% of the total number of common shares issued and outstanding immediately after giving effect to such conversion (the “Beneficial Ownership Limitation”). The holder may reset the Beneficial Ownership Limitation to a higher or lower number, not to exceed 19.99% of the total number of common shares issued and outstanding immediately after giving effect to such conversion, upon providing written notice to the Company which will be effective 61 days after delivery of such notice. Each Series 1 Preferred Share is also convertible into one common share at any time at the Company’s option without payment of additional consideration, provided that prior to any such conversion, the holder, together with its affiliates, beneficially owns less than 5.00% of the total number of common shares issued and outstanding and such conversion will not result in the holder, together with its affiliates, beneficially holding more than 5.00% of the total number of common shares issued and outstanding immediately after giving effect to such conversion. In the event of a change of control, holders of Series 1 Preferred Shares shall be issued one common share for each outstanding Series 1 Preferred Share held immediately prior to the change of control (without regard to the Beneficial Ownership Limitation), and following such conversion, will be entitled to receive the same kind and amount of securities, cash or property that a holder of common shares is entitled to receive in connection with such change of control.

The Series 1 Preferred Shares rank 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 are entitled to vote together with the common shares on an as-converted basis and as a single class, subject in the case of each holder of the Series 1 Preferred Shares to the Beneficial Ownership Limitation. Any Series 1 Preferred Shares that are ineligible to be converted into common shares due to the Beneficial Ownership Limitation, measured as of a given record date that applies for a shareholder meeting or ability to act by written consent, shall be deemed to be non-voting securities of the Company. Holders of Series 1 Preferred Shares are entitled to receive dividends (without regard to the Beneficial Ownership Limitation) on the same basis as the holders of common shares. The Company may not redeem the Series 1 Preferred Shares.

 The Series 1 Preferred Shares are 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.

As of December 31, 2021 and 2020, the Series 1 Preferred Shares were held by certain funds affiliated with BVF Partners L.P. (“BVF”). BVF is a related party of the Company as of December 31, 2021 and 2020.

(e) Pre-funded warrants:

In connection with the underwritten public offerings completed in March and October 2021, the Company issued 1,081,081 pre-funded warrants at a price of $18.4999 per pre-funded warrant which grants the holder the right to purchase up to 1,081,081 common shares at an exercise price of $0.0001 per share and 1,694,915 pre-funded warrants at a price of $29.4999 per pre-funded warrant which grants the holder the right to purchase up to 1,694,915 common shares at an exercise price of $0.0001 per share, respectively (together, the “Pre-Funded Warrants”).

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 $65,716, 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 holder will be recorded in common shares. As of December 31, 2021, no Pre-Funded Warrants have been exercised. Pre-funded warrants to purchase 2,775,996 common shares are not included in the number of issued and outstanding common shares as of December 31, 2021.