XBiotech (XBIT) risk factors, FY2025 10-K

Risks Related to our Business, Financial Condition and Capital Requirements

1. 01New laws or regulations could impact on our ability to receive the necessary approvals to successfully market and commercialize our product candidatesNew
2. 02The regulatory approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time consuming and inherently unpredictable
3. 03Any product candidates that we commercialize may not receive coverage and adequate reimbursement from third-party payers
4. 05We have incurred significant losses since our inception and may incur significant losses in the future
5. 06the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patents, including litigation costs and the outcome of any such litigationNew
6. 07We currently have no source of product revenue and may never sustain profitability40% rewritten
7. 08attract, hire and retain qualified personnelNew
8. 09Our future success is dependent on the regulatory approval and commercialization of our product candidates
9. 10New laws or regulations may be promulgated or modified in the United States, in Europe, or other jurisdictions that could impact our ability to receive the necessary approvals to successfully market and commercialize our product candidates
10. 11Because the results of earlier clinical trials are not necessarily predictive of future results, product candidates we advance into clinical trials, may not have favorable results in later clinical trials or receive regulatory approval25% rewritten
11. 12If we are unable to enroll subjects in clinical trials, we will be unable to complete these trials on a timely basis
12. 13The regulatory approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business may fail52% rewritten
13. 14changes in the approval policies or regulations that render our preclinical and clinical data insufficient for approvalNew
14. 15Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following any marketing approval
15. 16Even if our product candidates receive regulatory approval, they may still face future challenges, including ongoing regulatory oversight and marketing challenges
16. 17The occurrence of any event or penalty described above may inhibit our ability to commercialize our product candidates and generate revenue
17. 18Failure to obtain regulatory approval in foreign jurisdictions would prevent our product candidates from being marketed in those jurisdictions
18. 19Even if we are able to commercialize our product candidates, the products may not receive coverage and adequate reimbursement from third-party payers, which could harm our business
19. 20We have never marketed a drug before, and if we are unable to establish an effective sales force and marketing infrastructure, or enter into acceptable third-party sales and marketing or licensing arrangements, we may be unable to generate any revenue
20. 21Our product candidates, if approved, may not achieve adequate market acceptance among physicians, patients, and healthcare payers and others in the medical community necessary for commercial success
21. 22unfavorable publicity relating to the product candidate or the CompanyNew
22. 23Our research programs may not succeed48% rewritten
23. 24We have experienced prior difficulties with clinical sites and patient enrollment and cannot assure that such difficulties will not occur in future clinical trialsNew
24. 25Even an effective drug candidate might not be commercially successful
25. 26We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do
26. 27Our failure to successfully identify, acquire, develop and commercialize additional product candidates or approved products could impair our ability to grow
27. 28Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop37% rewritten
28. 29the inability to commercialize our product candidatesNew
29. 30We will need to expand our operations and grow the size of our organization in the future, and we may experience difficulties in managing this growth
30. 31We may never achieve any of the potential milestone payments that were negotiated as a part of the Janssen Transaction
31. 32We depend on key personnel to operate our business. If we are unable to retain, attract and integrate qualified personnel, our ability to develop and successfully grow our business could be harmed54% rewritten
32. 33If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business
33. 34Business disruptions caused by natural disasters, infrastructure interruptions or other public health threats could seriously harm our future revenues and financial condition and increase our costs and expenses
34. 35Policy and trade decisions by government entities, including the potential use and effects of tariffs, could materially impact the macroeconomic framework in which we operateNew

Risks Related to Owning Shares of our Common Stock

1. 04Future sales, or the possibility of future sales, of a substantial number of our common stock could adversely affect the price of the shares and dilute shareholders

Risks Related to Intellectual Property

1. 36If we are unable to obtain or protect intellectual property rights, our competitive position could be harmed
2. 37Intellectual property rights do not necessarily address all potential threats to any competitive advantage we may have43% rewritten
3. 38Issued patents that we own or have exclusively licensed may not provide us with any competitive advantages, or may be held invalid or unenforceable, as a result of legal challenges by our competitorsNew
4. 39Our technology may be found to infringe upon third-party intellectual property rights
5. 40We may need to license intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms
6. 41If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed

Risks Related to Owning Shares of Our Common Stock

1. 42Our share price may be volatile, which could subject us to securities class action lawsuits and prevent you from being able to sell your shares at or above the price at which you purchased them44% rewritten
2. 43general economic and market conditionsNew
3. 44Our directors, executive officers and principal shareholders continue to have substantial control over our company and could delay or prevent a change in corporate control29% rewritten
4. 45We have broad discretion in the use of the net proceeds from the Janssen Transaction and may not use them effectively
5. 46Provisions in our charter documents under Canadian law could make an acquisition of us, which may be beneficial to our shareholders, more difficult
6. 47We may be a passive foreign investment company for US tax purposes which may negatively affect US investors
7. 48We are governed by the corporate laws in British Columbia, Canada which in some cases have a different effect on shareholders than the corporate laws in Delaware, United States
8. 49Raising additional capital may cause dilution to our existing shareholders, restrict our operations or require us to relinquish rights to our technologies or product candidates
9. 50We may have a limited ability to use some or all of our net operating loss and research tax credit carryforwards in the future
10. 51Future sales of a substantial number of our common stock, or the perception that such sales will occur, could cause a decline in the market price of our common stock. As of March 13, 2026, we had 30,487,731 common shares outstanding