Annexon, Inc. Earnings Per Share Disclosure
The Company calculates basic net loss per share by dividing net loss by the weighted-average number of shares of common stock outstanding. The weighted-average number of shares of common stock used in the basic and diluted net loss per share calculation include pre-funded warrants to purchase up to 38,543,577 and 40,492,923 shares of common stock for the years ended December 31, 2024 and 2023, respectively, as the pre-funded warrants are exercisable at any time for nominal cash consideration. The Company has generated a net loss in all periods presented, so the basic and diluted net loss per share are the same, as the inclusion of the potentially dilutive securities would be anti-dilutive.
The following outstanding potentially dilutive shares have been excluded from the calculation of diluted net loss per share due to their anti-dilutive effect:
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Year Ended |
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2024 |
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2023 |
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Stock options to purchase common stock |
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14,594,720 |
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9,208,970 |
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Shares subject to Employee Stock Purchase Plan |
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15,922 |
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17,200 |
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Unvested restricted stock units |
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770,028 |
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495,579 |
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Common warrants |
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8,104,615 |
|
|
|
8,427,508 |
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Total |
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23,485,285 |
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18,149,257 |
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About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.