Xenon Pharmaceuticals Inc.

and welcome to the Xenon Pharmaceuticals reports second quarter results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Thank you. Sherry Ahlen, Chief Financial Officer, you may begin your conference.

Thank you. Good afternoon, everyone. Thank you for joining us on our call and webcast to discuss Zenon's second quarter 2022 financial and operating results. Joining me are Ian Mortimer, Zenon's President and Chief Executive Officer, Dr. Chris Kenney, Zenon's Chief Medical Officer, and Dr. Chris Von Segern, Zenon's Chief Commercial Officer. Please be advised that during this call, we will make a number of statements that are forward-looking, including statements regarding our and our collaborators' development plans, anticipated regulatory interactions and submissions, anticipated results and related timelines, the potential efficacy, safety profile, addressable market, and commercial potential of our proprietary and partner product candidates, the efficacy of our clinical trial designs and anticipated enrollment, the potential receipt of milestone payments and royalties from our collaborators, our expectation of having sufficient cash to fund operations into 2026, and the timing of potential release of future clinical data. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time to time in our SEC filings. Our results may differ materially from those projected on today's call. We undertake no obligation to publicly update any forward-looking statement. Today's press release summarizing Xenon's second quarter 2022 financial results and the accompanying quarterly report on Form 10-Q will be made available under the investor section of our website at www.zenon-pharma.com and filed with the SEC and on CDAR. Now I'd like to turn the call over to Ian.

Thanks, Sherry. Good afternoon, everyone, and thanks for joining our call. I'll start today's call with a high-level summary of our recent progress. I'll then turn the call over to Chris Kenney, who will provide additional color around our XEN 1101 and the Phase 2 meeting with the FDA and our next steps within our Phase 3 program, including our expansion into the additional epilepsy indication of primary generalized tonic-clonic seizures, or PGTCS. Chris will also provide his perspective on the additional XTOL data, which we recently released. Chris Von Sagan will then share some market research insights shaping our clinical plans in PGTCS, and the commercial opportunity for developing XEN 1101 within this indication, where there remains a significant unmet medical need. Sherry will conclude our call by briefly summarizing our partner programs, financial results, and events ahead. We look forward to taking your questions during the Q&A session at the end of the call. I am pleased to report several important achievements within our XEN 1101 program this past quarter, along with continued progress across the rest of our pipeline. Within XCN 1101, the clinical data generated to date, along with feedback from KOLs and primary market research findings, support our belief that XCN 1101 could play a particularly important role in treating epilepsy. With a differentiated profile and desirable attributes, such as an only-in-class potassium channel mechanism, and a dosing regimen of one pill once a day with no titration, providing meaningful seizure reduction after only one week of dosing. In addition to its robust efficacy in focal onset seizures, the XCN1101-AE profile is in line with other anti-seizure medications. Following a positive end of Phase II meeting with the FDA, we're excited to advance our XCN1101 Phase III program, starting with the initiation of XTOL-2 in the second half of this year. Additionally, we have strong scientific rationale supporting the use of XCN1101 to address primary generalized tonic-clonic seizures and we're looking forward to initiating our Phase 3 exact clinical trial in PGTCS. Ultimately, our goal is to deliver a new, differentiated therapeutic option for a broad population of epilepsy patients. Our team recently completed additional analyses of efficacy data from our Phase 2 BXTOL trial, and these further support our Phase 3 development plans for XEN1101. including a time course to efficacy analysis demonstrating that all doses of XCN1101 rapidly reduced the frequency of focal onset seizures within one week compared to placebo. Chris Kenney will provide some more details on these data, as well as our first cut of open-label extension efficacy data from EXTEL and our Phase III plan. In addition, our Phase II ex-nova study is underway examining XCN1101 in major depressive disorder, or MDD, in parallel with an investigator-led Phase II MDD study being conducted by our collaborators at Mount Sinai. Our decision to examine XCN1101 in MDD was based in part on promising clinical results with izogabine, dose 300 milligrams TID, as a treatment for MDD and anhedonia, as well as encouraging preclinical data with XCN1101. It is also important to note that depression is one of the most common comorbidities within the epilepsy patient population. Popline results from the Ex Nova study are anticipated in 2023. Turning to another program within our proprietary pipeline, we continue to support our ongoing XCN496 Phase III EPIC pediatric clinical trial evaluating XCN496 in patients aged one month to less than six years with KCNQ2-DEE. There is significant interest from caregivers and physicians to provide a precision medicine to address this important unmet medical need, which has the potential to positively impact the lives of these young patients. Our clinical development plans are supported by published physician case studies with azogabing and XEN496's KV7 mechanism of action. We expect completion of EPIC in 2023. So overall, we continue to make meaningful progress across the pipeline, and we're excited to move XTN 1101 into a broad phase three program in the near term. So I'll pause here and ask Chris Kenney to provide some more detailed comments on our end of phase two meeting with FDA, our phase three clinical trial designs, as well as some additional supporting data from XTOL and the XTOL OLE, which continues to support our high level of confidence and conviction in our XTN 1101 program. Chris, over to you.

Okay, thanks Ian. We're pleased with our end of phase two meeting with FDA this past quarter. This meeting was supported by non-clinical and clinical data, including results from our previously completed phase one trials and the positive phase two B XTOL clinical trial, evaluating XEN 1101 in adult patients with focal onset seizures. As a reminder, the XTOL top line efficacy data demonstrated that the primary and secondary seizure reduction endpoints were statistically significant across all three dose groups, with p-values of less than .001 for the 20 and 25 milligram groups, and XEN 1101 was generally well tolerated. We aligned with the FDA on key elements of the Phase III program to support a new drug application or NDA submission. We plan to submit an NDA upon completion of the first XEN 1101 Phase 3 clinical trial, XTOL 2, if successful.

Chris, we just lost you on our side. Are you still there?

Okay, I'll carry on with Chris's section.

I know for those on the line, there was a storm going through where Chris Kenny was based and so he may have lost lost connection or lost power. So, as Chris was mentioning, we've aligned with the FDA on key elements of the phase three program to support our submission. And we plan to submit the NDA upon completion of the first XCN 1101 Phase 3 clinical trial, XTOL 2, if successful, and we'll use the existing data package from the Phase 2b XTOL clinical trial, along with additional safety data from other clinical trials to meet regulatory requirements. We've also had alignment with FDA was obtained on key elements of a single Phase 3 clinical trial to pursue the epilepsy indication of primary generalized tonic-clonic seizures. So we'll give a little bit more background and outline for the designs of the planned XEN-1101 Phase III clinical trial. So designed closely after the Phase IIb XTOL study, we plan to initiate two identical Phase III clinical trials called XTOL-2 and XTOL-3. Each study will enroll approximately 360 patients who will be randomized one-to-one-to-one for once-daily dosing of either 15 or 25 milligrams of XEN-1101 or placebo. Our dose selection for the phase three studies was informed by the safety and efficacy data in XTOL, as well as by additional PKPD modeling that we completed earlier this year. The primary efficacy endpoint is the median percent change, or MPC, in monthly seizure frequency from an eight-week baseline through a 12-week double-blind period with XEN-1101 compared to placebo. And we have greater than 90% power for the primary endpoint at both doses using modeling from our XTOL data. On completion of the double-blind period in both EXTOL-2 and EXTOL-3, eligible patients may enter an open-label extension study for up to three years. EXTOL-2 is expected to be initiated in the second half of the year, followed by the initiation of EXTOL-3, so both studies will run in parallel. Following the initiation of EXTOL-2, we also plan to initiate a single Phase III clinical trial called EXACT to support a regulatory submission in PGTCS, if successful. EXACT will enroll approximately 160 subjects who will be randomized one-to-one for once daily dosing of either 25 milligrams of XCN1101 or placebo. The primary efficacy endpoint is the MPC in monthly PGTCS frequency from an eight-week baseline through a 12-week double-blind period of XCN1101 compared to placebo. And on the completion of the double-blind period in EXACT, eligible patients may also enter an open-label extension study for up to three years. Our plans for pursuing this additional epilepsy indication of PGTCS within our phase three program are supported by a strong rationale. Specifically, XCN 1101 shows anti-seizure activity in two preclinical models, both the MES and PTZ preclinical models, both of which are known to predict efficacy for primary generalized seizures. Further, other ASMs, such as levotiracetam, valproic acid, and lamotrigine, suppressed photosensitivity in generalized epilepsy patients, thereby predicting efficacy in PGTCS. And another KV potassium channel opener previously in development was also shown to suppress photosensitivity in patients with generalized epilepsy in a clinical study. Additionally, in our Phase 2b EXTOL clinical trial, ExCN 1101 demonstrated broad impact across all focal seizure subtypes, including focal seizures that progress to generalized seizures. As I noted earlier, we have recently generated additional efficacy data from subgroup analyses from our Phase 2b EXTOL clinical trial, and these further support our Phase 3 development plans for ExCN 1101. And they suggest that Exxon 1101 may offer a compelling and differentiated option for patients seeking to quickly reduce seizure frequency. In June, we issued a news release summarizing these results. And more recently, we presented the time course to efficacy data at the 14th European Epilepsy Congress in Geneva. Our analyses show that all doses of Exxon 1101 rapidly reduced the frequency of focal onset seizures within one week compared to placebo. At week one, the median percent change, percent reduction in monthly focal seizure frequency was 55.4% in the 25 milligram group. This is a p-value of less than 001. 41.5% in the 20 milligram group, p-value of 0.039. and 39.1% in the 10-milligram group for a p-value of 0.002. And this compares to 20.2% in the placebo group. So based on these strong phase 2B efficacy data, we are including a secondary endpoint of week 1 median percent change in seizure frequency within the statistical hierarchy of the phase 3 focal onset seizure studies to build upon this differentiated profile of XEN1101. Additionally, within our analysis of the open-label extension population, we are seeing seizure frequency continuing to improve after the double-blind period, along with increased periods of seizure freedom. Subjects remaining in the XTOL OLE for at least three months and 12 months experience a greater than 70% and 80% reduction, respectively, in median monthly seizure frequency when compared to baseline. And of the 275 patients who entered OLE, 19.6% and 9.5% experienced six and 12 months of seizure freedom respectively. This is significant considering how difficult these patients were to treat given the number of previous ASMs they had failed, the number of con-ASM meds that they were on at baseline, as well as their baseline seizure burden. So based on these data and at the request of study investigators, and based on the potential to continue to provide significant benefit to patients, we're extending the open-label extension from the EXTEL study from three to five years. The ongoing EXTEL OLE continues to generate important long-term safety data for Exxon 1101 and FOS, and we expect to present additional long-term OLE data at the American Epilepsy Society meeting later this year in December. So in summary, the clinical team is committed and focused on executing our XCN 1101 phase three plans. We are further driven by our belief that there is a significant medical need for new therapeutics to treat epilepsy, and XCN 1101 has the potential to significantly improve the lives of these patients. I'll now turn the call over to Chris Von Seggern, who will share some market research insights shaping our plans for XCN 1101 in PGTCS. Chris?

Thanks, Ian. By way of background, Seizures are generally described in two major groups, generalized onset seizures and focal onset seizures, or FOS. Primary generalized seizures initiate in both hemispheres of the brain simultaneously and are comprised of tonic and chronic phases, are the second most common type of seizure experienced by people with epilepsy. PGTCS, also known as grand mal seizures or convulsions, are the most severe form of seizures and are generally considered more dangerous than focal onset seizures. PGTCS can be life-threatening due to seizure injury resulting from falls or accidents in the chronic phase, or from SUDEP, sudden unexpected death in epilepsy. Approximately 30% of patients with epilepsy have generalized seizures, which results in a total adult generalized seizure patient population of approximately 900,000 patients in the U.S., of which approximately 700,000 patients experience primary generalized tonic-clonic seizures. Despite the more severe seizure phenotype, Fewer ASMs are currently approved to treat PGTCS compared to FOS, and approximately 30% of PGTCS patients are considered inadequately managed with initial lines of therapy, warranting additional treatment options. In our primary research and our KOL discussions, physicians have indicated the need for new treatments with alternative mechanisms of action for patients inadequately managed with current anti-seizure medications. An opportunity remains for a broad spectrum agent with activity across seizure types. For these reasons, we believe that XEN-1101 with potentially broad seizure coverage and a unique KV7 mechanism of action may offer a compelling clinical alternative for these epilepsy patients. In addition to its novel mechanism of action and potential broad seizure coverage, we believe that XEN-1101's once daily dosing with no need for titration are differentiating attributes given the importance of compliance and the need for rapid seizure control in this patient population. Our hope is that XEN111 may provide an effective treatment for these patients, and we are excited to pursue PGTCS alongside our clinical trials in FOS and MDD. I would now like to turn the call over to Sherry, who will summarize our partner programs, financial position, and upcoming milestones.

Thanks, Chris. Before I make a few comments on our Q2 financials, I'd like to turn the call briefly to our partner programs. Neurocrin currently has two separate phase two clinical trials underway. One study is evaluating NBI 921352 in adult patients with vocal onset seizures with data expected in 2023. And another study is examining its use in pediatric patients with STNA-related epilepsy. Our other collaborator, Pacira Biosciences, is conducting a Phase 1B proof-of-concept trial that is evaluating the safety and tolerability of PCRX301 administered as a single dose in patients undergoing bunionectomy. We look forward to keeping you updated as these partnered programs reach important milestones. Next, I will focus on some highlights from this quarter's financial statements, and I would refer you to our news release and 10Q report for further details. Cash and cash equivalents and marketable securities were $788.2 million as of June 30, 2022, compared to $551.8 million as of December 31, 2021. This increase is a result of the additional proceeds raised in our public offering in June, totaling approximately $287.5 million before underwriting discounts and commissions and other offering expenses. Based on current assumptions, which include fully supporting our XEN 1101 clinical development program, which includes the completion of our planned Phase III epilepsy studies, XEN 496, and preclinical and discovery programs, we anticipate having sufficient cash to fund operations into 2026, excluding any revenue generated from existing partnerships or potential new partnering arrangements. Looking ahead, we have several key milestone opportunities, including... We expect to initiate XTOL-2, our first Phase III clinical trial in FOS, in the second half of this year, followed by the initiation of XTOL-3 and the exact clinical trial in PGTCS. Our ExNova trial in MDD is ongoing, and we expect to have top-line results in 2023, while in parallel, we are supporting the Mount Sinai IST in MDD. And we continue to advance our epic phase three clinical trial in pediatric patients with KCNQ2-DEE with study completion anticipated in 2023. In summary, this is an incredibly exciting time at Xenon with a number of late stage clinical trials in our pipeline. We intend to continue to build upon our positive momentum and execute on our clinical development plans. With a strong balance sheet and prudent management of capital, we believe Xenon's well positioned to support our business objectives across our proprietary programs. On behalf of the entire team, we look forward to keeping you posted on our progress in the quarters ahead. I'll now ask the operator to open the line for any questions. Operator?

Thank you. As a reminder, if you would like to ask a question, press star, then the number one on your telephone keypad. We ask today that you limit yourself to one question and one follow-up. Thank you. Your first question comes from the line of Paul Matias, with Stiefel. Your line is now open.

Hi, this is James on for Paul. Thanks for taking our question. Maybe just a quick one on MDD. Could you remind us the dosing there for the study in your trial? And then, too, is there any reason to believe that the extrapolation of exogabine to 1101 in MDD would be different than it would be or than it was in epilepsy? Just wondering how you're thinking about that. Thanks.

Thanks, James. Chris, can you maybe just come off mute and just make sure that you're back on and we can hear you again? I'm here. Can you hear me? Okay, perfect. Yeah, just for Q&A, it's great that I know you got cut off there, but it's that you're back on. I can address this for James. So just as a reminder, there's two MDD studies ongoing, one which is an IST that we're supplying drug for. That's through Mount Sinai, and they have a second site at Baylor. And then we have our company sponsored. The Mount Sinai study, they're looking at one active dose, which is 20 milligrams, and placebo. And ours is a three-arm study. It's a little bit larger, so we have a bit more power. And we're looking at two active doses in placebo, 10 milligrams, 20 milligrams. and placebo, and then your follow-up question just on the extrapolation of the azogabine data. So, azogabine, the randomized study that they ran through the same collaborators that we're working with at Mount Sinai, that data was published last year, they used what we consider their mid-dose in epilepsy, which is 900 milligrams a day or 300 milligrams TID. And when we look at their efficacy data in epilepsy, obviously, we've seen superior efficacy in our XTOL study. So there's nothing that we would believe that we're going in with a dose that would be less active than the azogabine dose. Obviously, we're doing cross-trial comparisons here, but we feel very comfortable in terms of the dose range in the MDD studies.

Great. Thanks so much.

Your next question comes from the line of Brian Abrams with RBC Capital Markets. Your line is now open.

Hi, good afternoon and thanks for taking my questions. On PGTCS, you've mentioned that you've run several different preclinical models that are supportive of activity. I'm curious, based on the magnitude of benefit that you're observing in these models and their predictability, can you give us a sense of how you might benchmark potential efficacy with the 25-meg go-forward dose in the generalized setting, I guess relative to other drugs that are out there and then relative to what you've observed in the focal onset setting. And then I guess as a corollary to that is on the epidemiological side, what would your expectation be based on, I guess, the preclinical data as well as some of your market research as to where within that 30 percent of patients who've failed to anti-seizure medications would you expect this to be used? Would the goal be for this to be used sort of as the first agent in that in that refractory population? Is there a potential for combinability? How do you expect it to be used in that one-third of patients? Thanks.

Great. Thanks, Brian. I think super comprehensive questions that we can tackle. And so maybe Chris Kenney can go first and then Chris von Segern on the epi and kind of maybe the treatment algorithm and how these patients move through different therapies. But Chris Kenney probably gets just to talk a little bit about the efficacy that drugs that work in focal, the type of efficacy they see in primary generalized as well as those placebo rates, and that'll maybe kind of help answer Brian's question just around the extrapolation from focal to primary generalized.

Yeah, I mean, the question was largely focused on the preclinical signal with XCN1101, which is incredibly robust, and To my knowledge, there wasn't a single preclinical experiment using an epilepsy model that didn't show benefit. But I'm actually, and that's great, that's compelling, but it's really the clinical data that I think is more compelling. And, you know, you have a compound, one of the icogen compounds that has the same mechanism of action that was used in a clinical trial with patients who have generalized epilepsy, and it was shown to suppress photosensitivity. And that model has been incredibly predictive of drugs that work in primary generalized, like the ones we mentioned, levotirazetam, valproic acid, and also doesn't show any significant suppression with drugs that don't work in primary generalized, like carbamazepine. So I think that's compelling. And then, of course, you know, the fact that we're looking at our own clinical data and seeing that there's a fairly significant, greater than 80% reduction in type 4 seizures, the seizures that start focal and then generalize after that. I think that clinical data set is actually more compelling in my mind than the preclinical data set that you asked in the question. And then as far as dose response, what we've seen with other anti-seizure medications is that the dose response that occurs in focal onset seizures is very similar to what happens in primary generalized tonic-clonic seizures. So using multiple precedents from the epilepsy world And then taking a look at our XTOL data in focal onset seizures where the 25 milligram dose clearly showed the best benefit, we've decided to bring that as our primary dose forward into primary generalized tonic-clonic seizures. So all of that makes us feel about as confident as we can in that study, but it'll remain to be seen what happens.

And on the treatment paradigm side, What we see in PGTCS is actually quite similar to what we see in FOS. Patients are typically initiated on an individual agent. Levotiracetam is frequently used given its broad-spectrum nature. And then they progress through multiple lines of therapy if they don't achieve a sufficient benefit. Where we expect XEN-1101 to play is early in the branded lines of treatment, and that's with the expectation that we're offering an in-line efficacy profile. similar to what we've seen on the FOS side. An important distinction in crispness is that the carbamazepine category, which is quite frequently used in FOS, is not used in this disease space, which creates an even greater opportunity for a novel mechanism of action that offers a really potent benefit. And what we've seen from our research is real excitement around that opportunity. KB7 mechanism, all of the other ease-of-use attributes, key opinion leaders are very, very interested in seeing the benefit we can potentially provide to that patient population.

This is super helpful. Thanks.

Your next question comes from the line of Tessa Romero with J.P. Morgan. Your line is now open.

Hey, guys. Thanks so much for taking the question here. I think in the past you've talked about presenting some additional open label data from extol at the American Epilepsy Society meeting later this year in December. Can you please talk about the size and the scope of the data we will see at the conference and are there any additional analyses we should have an eye on and what would be considered a win there? Thanks so much.

Thanks, Tessa. I can address that. Yeah, if you looked at, so the open label extension, as you know, is ongoing. And so every day we're getting more mature data. We did cut the data earlier this year, both as part of our preparation for end of phase two meeting with FDA to share with some longer term safety data with them. And then we also had shown some of the efficacy data more recently in June of this year. So we have submitted abstracts for AES, including to follow up, as you say, on more mature open-label extension data. So in August of this year, so this month, all of the patients will have gone through 12 months. So we'll now at least have a data set where every patient in open-label extension will have been, all those remaining will have been on drugs for at least 12 months. We'll choose later this fall kind of where that cutoff point is in terms of analyzing the data and getting ready for AES. But we'll likely have a data point that's more mature than the 12-month data that we showed in June of this year. So it'll just be more mature follow-up where we will show both the MPC over time as well as looking at these intervals of seizure freedom for the patients, which are obviously really important. So it'll be similar data that you've seen in the past from us. It'll be just a more mature data set as we move forward.

Yeah, maybe I'll just add a couple things if you don't mind, Ian. So in addition to that, you know, the first patient will reach three years this fall, and so you're starting to get some patients who've been exposed for quite a while. And then, you know, as far as, like, defining a when, I mean, what we've seen so far is that XEN-1101 is well-tolerated, and so we want to see that persist. We haven't had any... you know, idiosyncratic toxic reactions like we've seen with other anti-seizure medications. So we hope that that remains the same. And then we've seen a beautiful maintenance of effect, you know, over a prolonged period of time. And so we'd like to see that continue and then see if that has any other impact on other skills like quality of life.

Great. Thanks so much for taking our question.

Your next question comes from the line of Mark Goodman with SVB. Your line is now open.

Yes, I was wondering if you could give us a flavor for how you think Inexcopri is doing out there in the marketplace and if there's been any, you know, major dynamic changes in the epilepsy, you know, kind of commercial space. Thanks.

Yeah, Chris, do you want to go first or do you want to, yeah, why don't you go ahead and I'm happy to add any other comments from my side also.

Yeah, absolutely. So we track XCOPRI uptake in the U.S. quite carefully as it's the most recently launched product in the category. And what we hear from both our research and just tracking the scripts and the data, XCOPRI is off to a nice launch. It does have uptake later in lines of therapy. And what we hear from at least our market research is that patients do experience a good benefit late in lines of therapy. So patients who are trending towards surgery, ex-copy represents a great opportunity. What we have heard though from our research is that not all of the patients get all the way to the maximum dose that was used in the clinical trial, and as a result, the efficacy might not translate in the same way as what we've seen from a clinical experience, at least in the controlled clinical setting. That being said, it's off to a good start, trending ahead of what we've seen for a number of other products, at least on a scripts basis over time. And it does represent a bit of a shift in dynamic, creating another key player that can hopefully help bolster all commercial products in this space. as this category hasn't had really a giant player since the Kepper days and VIMPAD, as everyone knows, recently lost exclusivity. So there is room for both that product and others to come in and replenish the commercial sales potential in this category.

Thanks, Chris. Yeah, I've got nothing else to add. Mark, do you have a follow-up?

No, thanks, Chris.

Okay, thanks, Mark. Operator, we can move to the next question.

Your next question comes from the line of Yatin Sunenja with Guggenheim. Your line is now open.

Hi, this is Delma for Yatin. Thanks for taking our question. So I have a quick one on the MDD study, and we would like to know what type of profile you would like to see, and if there are subsets of patients that you would expect to respond better to 1101. Thank you.

Chris, do you want to talk about the profile in MDD?

Yeah, I mean, so as far as the profile goes, I mean, these study designs for these MDD POCs are fairly consistent with one another. One of the differences that you'll see is that some include treatment-resistant depression and others don't. Ours doesn't. And so we expect a profile that would be quite similar to those studies, you know, designed in that manner. So if you're familiar with the azogabine proof of concept trial, we expect a population that will be consistent with that. As far as subsets of patients, I mean, the data was fairly robust in the azogabine trial across the board. And I don't remember that publication talking about subgroups where there was a better response or a less favorable response. So I think we'll just have to kind of go into it with open eyes.

Yeah, and the only thing I would add to Chris's comment is we've talked about we're looking to a primary endpoint in our study. We're looking at Madras clinical scale of depression. These patients will have anhedonia, and so we are looking at the key secondary endpoint is the SHAP scale, which will measure changes in anhedonia.

Okay, perfect.

Thank you.

Your next question comes from the line of Andrew Tai with Jefferies. Your line is now open.

Very good. Thank you and congratulations on all the progress recently. So maybe I guess one on MDD first since we just spoke on it. Just curious, did you happen to design ExNova such that if it were a positive study that it would be perhaps large enough to be considered by the FDA as a a potentially pivotal study, or should we view this more as an exploratory study? And, you know, if they're positive, you would need two more placebo-controlled studies thereafter.

Thanks. Thanks, Andrew. Yeah, I mean, we've really been thinking about The this study is a proof of concept, so it's designed as a proof of concept. We're looking at 2 different doses. We actually made an adjustment in the trial design post X tool to include a lower dose based on the efficacy and next tool. At 10 milligrams, but yeah, we're really viewing this as a proof of concept study to start generating. some data in depression, and I think we'll really be driven by those data in terms of next steps for 1101 in that population.

And then just a couple things on that, if you don't mind. So the azogabine trial, the proof of concept, had about half the number of patients per treatment group, and so it demonstrated an effect size of about 0.75, which is fairly high. Our study's powered for 0.5, and as Ian said, we've chosen a dose that was similar to the equivalent dose for azogabine. And also we've seen efficacy in focal onset seizures at a dose that was also seen, you know, with that similar dose equivalent in focal onset seizures for azogabine. So, yeah, but just to reiterate what Ian has said, even though the study has about twice as many patients per treatment group, I don't think that this has a good chance of being considered pivotal.

Thanks, makes sense. And then as a follow-up then, shifting gears to actually just the focal epilepsy program, you know, as you start the pivotal phase three studies, maybe a high-level question is just how are you thinking about, you know, maximizing the success? Are there any, like, findings or learnings from the phase two that you would apply in phase three? Yeah, thanks.

Yeah, the guiding – go ahead.

So, yeah, I'll start and then you jump in, Chris.

Given the success of XTOL, we're really not changing much for XTOL 3. Obviously, or sorry, XTOL 2 and XTOL 3, the phase 3 trials. Obviously, the studies are a little bit larger than XTOL, so we do have more power than we did in the XTOL study. But in terms of inclusion-exclusion criteria, it's going to be the same as the XTOL study. So we're really trying to replicate the XTOL study in a little bit of a larger study with a 12-week endpoint. And we know, as you've seen from the open label data, we have very good signal at 12 weeks. It looks like the signal may be a little bit stronger than over eight weeks in XTOL. But really, we're trying to keep as much the same as possible, including leveraging a lot of the same sites that we use to great success in the XTOL study. Chris, anything else to add?

Yeah, I mean, to complement those comments, we're going to try to avoid regions that are known to have a high placebo effect. We're going to make sure that we're getting good quality patients by having them, you know, reviewed by epileptologists before they're randomized. And then, you know, Ian's comment is our guiding principle, which is XTOL worked really well, so let's not deviate much from that plan. Use as many same sites as we can, et cetera.

Right. Thank you, guys. Thanks.

Your next question comes from the line of David Hong with SMBC. Your line is now open.

Okay. Thanks for taking the questions. So my first one, I had one on generalized epilepsy and PGTCS. So could you just tell us a little bit about what are the major branded products that are, you know, the branded 80s are being used for PGTCS now? And is there any off-label usage of drugs that do not have the generalized label?

Yeah, so I can take that. So what we've heard from our research is that products that are known to be broad spectrum are used typically in advance of products having the labeled indication, and I bring that up because VIMPAT didn't get the PGTCS indication until very late in its life cycle, and we didn't see a material increase in its sales at that time, in part probably because it was being used in advance of the indication. From our research, we've heard both Braviact and ex-copri being used in PGTCS despite neither yet having a label, although both products are known to be broad spectrum, and therefore, opinion leaders have been extrapolating into that setting. Other branded products that remain in this space have two distinct stories. So, Ficampa is used in convulsant seizures, and we do see and we hear that from our research aptium being in the carbamazepine category doesn't have the indication and is not used here. So it's the same branded set minus aptium today with, you know, reasonable use for those products that don't yet have the indication but are expected to.

Got it. That's really helpful. And then just a follow-up. I'm looking at some of the slides you had posted related to PGTCS and It shows there is a population, it looks like, of about 300,000 or so patients in this market-sizing figure that have, I guess, undefined or combination epilepsy. And so if you have both focal and generalized labels, would you be able to access that population?

Yeah, practically speaking, the answer is probably yes. But that patient population, from a coding standpoint... We've looked into this actually quite in detail, and in fact remains coded as an unknown cause of epilepsy. So they're having both focal and generalized seizures in all likelihood, and what we've heard is that they are traditionally treated like a PGTCS patient. So clinicians could imagine using the product in that space, but from a strict coding standpoint, they don't have the definitive diagnosis, and that could create an impediment from payers who have very strict prior authorization criteria for select plans in the US.

Okay, great. Thanks for taking the questions.

Your next question comes from the line of Lachlan Hanbury with William Blair. Your line is now open.

Hey, guys. This is Lachlan. I'm with Tim. Thanks for taking the question. So I was wondering, you obviously have or will have a lot of long-term data from the XTOL open label extension by the time you file, but that's going to be at the 20-mig dose, and the higher dose you'll be testing is 25-mig. So did you sort of talk to the agency about what kind of long-term data you'll need at the 25-mig dose, and can you just discuss what the plans are for that? Is that all going to come from the XTOL 2 and 3 open label extension?

Chris Kenney, do you want to tackle that?

Yeah, sure. Yeah, so you're right. The EXTOL open label study, the target dose was 20 milligrams. That dose was chosen in advance of the data that we have right now. So we're going to have an enormous amount of data on 20 milligrams. But also keep in mind that we're going to have three phase three studies going with like that 25 milligram dose, along with an open label extension at 25 milligrams. And so, you know, we're going to have an enormous amount of data for that dose as well. And so when we interacted with the agency, we broke it all down. We showed them exactly what we expected each dose, and we tried to make a case that we think that the drug should be approved at multiple different doses. And, you know, it will be a review issue, but, you know, they were, you know, reading between the tea leaves, they seemed to be very open to the plan.

And Lachlan, if you look at the ICH guidelines of kind of unique exposures required in the long term, exposures of 6 and 12 months, we feel really comfortable, as Chris has mentioned, just in the totality of the safety database that we'll provide to FDA and other regulators and the long-term dosing we'll have, as Chris mentioned, because we're doing the open-label extension. For all of the studies in Phase 3, we're going to have a lot of data at both 20 and 25.

Got it. Thanks. And if I could have a follow-up. you know, placebo responses in MDD have typically been an issue, and I know you guys sort of did pretty well at controlling them in XTOL. Is there anything you can sort of transfer to MDD, or is there anything that, I guess, can you maybe just discuss what you are doing to try to minimize placebo responses in the MDD trial?

Sure, sure, yeah. So, I mean, we covered that earlier. Yeah, so this will be a largely repeat of the last quarterly call, but happy to go through that again. So, first of all, I mean, we've chosen the best sites that we can to minimize the chance of a large placebo effect. They're all U.S. sites. We've also, we're using the Mass General Group to train the sites, and then also to make sure that we're getting patients who truly have major depression into the trial. We're doing absolutely everything we can to mitigate the risk of a placebo effect in that trial. Do you want to add anything to that, Ian?

No, no. As Chris mentioned, there's a lot of similarities, right? We kind of use, you know, the quality of the sites that you choose, the investigators, and kind of some more oversight where both in epilepsy and diabetes. With epilepsy and depression, we can kind of have this third-party kind of adjudication that can kind of sit over top of the studies and help out to make sure that we're getting the right patients.

Thanks.

Your next question comes from the line of Rohit Basin with Needham. Your line is now open.

Hi, this is Rohit on First Search. Thanks for taking our questions. Can you share any feedback you've received from providers with the expansion to PGTCS? And then, when can we expect an update from the partnered FX301 program with Becerra?

Thanks. Chris von Zegern, do you want to talk about some of the feedback we've had on primary generalized and then Sherry can address the partner milestone?

Yeah, absolutely. So the research we conducted specifically thinking about the opportunity in PGTCS leveraged the profile that emerged from XTOL with respect to safety. And then we've put forward estimates around what an inline product could be from an efficacy standpoint. And what we saw in that research was actually significant enthusiasm based on the safety and tolerability profile in the space as well as the ease of use attributes. And in primary generalized tonic-clonic seizures, you can make the argument that some of our ease of use attributes are even more important than they are in FOS. And that hinges on the importance of the lack of titration, the ability to achieve efficacy very rapidly. Remember, these seizures tend to cluster, and they are considered more dangerous than an FOS seizure with a greater likelihood of SUDEP as well as death resulting from accidents. So, the use of use attributes were really encouraging in the eyes of the clinicians with which we spoke. And the other components, ability to potentially miss a dose, a novel mechanism of action to be used in combination, all of those components resonate really well with, from the market research that we've seen. And as a result, we think this is going to be a very compelling offering for patients in this category.

Great, and then on the PACIRA side, so we really look to our collaborators with respect to updating the market. So at this time, we don't have, PACIRA hasn't updated their guidance in Q2, but we do expect to get more information in the coming months, and we'll take the lead from them and update accordingly.

Great, thank you.

Seeing no other questions in the queue, I will turn the call back over to Sherry Ahlen.

Great. Well, thanks, everyone, for joining us today on our Q2 call. Operator, we will now end the call.

This concludes today's call. Thank you for attending. You may now disconnect.