Xenon Pharmaceuticals Inc.

efficacy of our clinical trial designs, our ability to successfully develop and achieve milestones in our Exxon 1101 and other development programs, the timing and results of our interactions with regulators, our ability to successfully develop and obtain regulatory approval of Exxon 1101 and our other product candidates, anticipated enrollment in our clinical trials and the timing thereof, and our expectation that we will have sufficient cash to fund operations into 2026. 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 first quarter financial results and the accompanying annual report on Form 10-Q will be made available under the investor section of our website at www.xenon-pharma.com and filed with the SEC and on CDAR. Now I would like to turn the call over to Ian.

Thanks, Sherry, and good afternoon, everyone, and thanks for joining us on our call today. We are excited about the continued progress across our broad XEN 1101 Phase III epilepsy program. including the recent initiation of XTOL3. All planned phase 3 epilepsy clinical trials are now actively recruiting patients, including XTOL2 and XTOL3 in patients with focal onset seizures, or FOS, and EXACT in patients with primary generalized tonic-clonic seizures, or PGTCS. XCN1101 is the only potassium channel modulator in late-stage clinical development, and we continue to build on our leadership position in the KV field. driving our mission to provide new therapies for patients with epilepsy and other neurological conditions. Based on our experience with our XTOL Phase 2b study, which was similar in size to both XTOL 2 and XTOL 3, and supported by our continued relationships with key investigators, many of whom already have familiarity and experience with XTN 1101, we maintain a high degree of confidence in our ability to execute on our XTN 1101 Phase 3 program And we are pleased with our progress to date. In addition to our ongoing phase three epilepsy program in adults, we recently obtained feedback from the FDA that has shaped our strategy for our pediatric development plans for XCN 1101. Progress and highlights from our XCN 1101 pediatric plans include ongoing work on a pediatric formulation of XCN 1101 for younger patients. We also expect to take advantage of the FDA's pharmacokinetic extrapolation rule for focal onset seizures, which allows us to, over time, move into cohorts of progressively younger patients with focal onset seizures with XCN1101 in an open-label setting. And finally, we're in the process of expanding the exact Phase III clinical trial to include patients as young as 12 years of age, and this was driven by feedback from FDA. We believe XCN 1101 has the profile and attributes to support broad development, including moving into younger patients with epilepsy, where there continues to be considerable need for new medicines. And so, after careful consideration, we are prioritizing our XCN 1101 pediatric epilepsy development plans and will no longer pursue the clinical development of XCN 496. We wish to extend our sincere gratitude to the patients and their families who participated in the epic clinical trial. We intend to work with study investigators to offer an option for continued access through a transition period for those patients currently on XCN496. Turning to non-epilepsy indications, our Phase II XCN1101 ex nova study in major depressive disorder, or MDD, continues to make good progress. Our decision to examine XCN1101 in MDD was based on encouraging published clinical results with azogabine as well as promising preclinical data with XCN 1101. We were further interested in gathering additional data, given that depression is a common comorbidity within the epilepsy patient population. Exnova, which as a reminder was initiated only 12 months ago, has progressed well, and we expect to screen the last patient next month in June. After the last patient goes through a screening period lasting up to four weeks and is then randomized, There is a six-week treatment period and a four-week follow-up visit, after which the database can be locked and the data analyzed. Given these steps, we are looking forward to a top-line data readout for Exnova in the fourth quarter of this year, which is a slight shift in our previous guidance of top-line data in the third quarter. These data will help guide our future plans for Exeon 1101 in MDD. In summary, we remain laser-focused on the continued advancement of our Phase 3 XEN 1101 program, including XTOL 2 and XTOL 3 clinical trials in focal onset seizures and exact clinical trial in PGTCS, as well as executing on our pediatric development plans. We are also looking forward to the important data from our Phase 2 Ex Nova study in MDD later this year. Lastly, we continue to generate important long-term data from our ongoing XTOL open-label extension study that affirms the XTOL Phase IIb results, supporting our position that XCN 1101 presents a novel, compelling product profile with the potential to address some of the currently unmet needs of patients with epilepsy. And as Chris and Sherry will highlight in their remarks later in the call, we are excited to be entering a data-rich period for Xenon. Between now and the end of the year, we will present additional XCN 1101 XTOL open label data focused on quality of life measures at the International Epilepsy Congress in September, and 30-month OLE data at the American Epilepsy Society annual meeting in December, as well as the two Phase II readouts in the fourth quarter of this year, including data from our XEN1101-XNOVA study, as well as data from our collaboration with Neurocrin. So I'd now like to turn the call over to Chris Kenney, who can provide additional details on the progress made within our Phase III XEN1101 program, as well as recent and upcoming data presentations for XCN 1101. Chris, over to you. Okay, thanks, Ian.

I would echo that we believe the clinical data generated to date support a very compelling product profile for XCN 1101, and that the efficacy data from the Phase 2b EXTOL study and the ongoing EXTOL open label extension compare favorably to medicines currently available for focal onset epilepsy patients. to briefly review the XEN1101 clinical trials within our robust phase three program. As Ian mentioned, we now have initiated XTOL3, which is running in parallel to our XTOL2 study. Each of these studies will enroll approximately 360 subjects with focal onset seizures who will be randomized one to one to one with once daily dosing of either 15 or 25 milligrams of XEN1101 or placebo. The primary efficacy endpoint is the median percent change, or MPC, in monthly seizure frequency from an eight-week baseline through the 12-week double-blind period with Exxon 1101 compared to placebo. We've also successfully executed our plans to pursue another epilepsy indication. Our phase three exact clinical trial is expected to enroll approximately 160 subjects with primary generalized tonic-clonic seizures. Subjects will be randomized one-to-one for once daily dosing of either 25 milligrams of Exxon 1101 or placebo. The primary efficacy endpoint is the MPC and monthly PGTCS frequency from an eight-week baseline to the 12-week double-blind period of Exxon 1101 compared to placebo. I've noted that this parallel approach in both focal onset seizures and primary generalized tonic-clonic seizures at this stage of development is unique. Our rationale is based on the KD mechanism and the photosensitive proof-of-concept model of generalized epilepsy, favorable data in multiple preclinical epilepsy models, and clinical data, including activity we saw across all focal seizure subtypes in the Phase IIb XTOL study. Our hope is that we're setting the groundwork for potentially broader use of exe and 1101 in both of the most common forms of epilepsy, should it be approved. We recently met with physicians and epileptologists at the annual meeting of the American Academy of Neurology, who continue to assert the need for new therapeutic options with differentiated mechanisms of action to improve upon existing anti-seizure medications. At AAN, in addition to a poster outlining our exact clinical trial design, we were thrilled that the XEN 1101 program was selected for an oral presentation at this important neurology-focused meeting. Dr. Jackie French, one of the preeminent leaders in the epilepsy field, presented data from our ongoing open-label extension study with XEN 1101. she outlined how these data build upon the strong efficacy data generated in the Phase IIb XTOL clinical trial. Importantly, she spoke about the data demonstrating continued seizure reduction and extended periods of seizure freedom experienced by patients in the open-label extension study. Her podium presentation outlined several key takeaways. During the open-label extension, there was a sustained monthly reduction in seizure frequency specifically 80% to 90% seizure reduction as measured by median percent change from the double-blind period baseline. Also, seizure freedom for greater than or equal to six months and greater than or equal to 12-month consecutive durations was achieved in 17.5% and 10.5% of patients, respectively. XEN-1101 continues to be generally well-tolerated in the open-label extension with adverse events consistent with prior results and other anti-seizure medications. Dr. French expressed that these data are encouraging for prescribing physicians who continue to seek new, differentiated therapeutics that improve upon existing options and may provide further hope for the many patients who experience the debilitating impacts of focal seizures, even while taking multiple anti-seizure medications. Looking ahead, Our team is excited to continue to showcase XEN 1101 at medical conferences later this year, including our presence at the upcoming 35th International Epilepsy Congress in Dublin in September and at the American Epilepsy Society meeting in December. At IEC in September, we have multiple podium and poster presentations highlighting our XEN 1101 Phase 3 program, as well as new quality of life data from the ongoing XTOL open label extension. In addition, we're in the process of submitting abstracts to the American Epilepsy Society meeting, including 30-month open label extension data from XTOL, supporting the long-term use of XEN-1101, as well as important seizure freedom data. We look forward to keeping you updated on our progress on the XEN-1101 Phase III Epilepsy Program as well as continuing to build the profile of XEN 1101 with physicians and the medical community. I'll now turn the call over to Sherry, who will give us a brief update on our partnered program with Neurocrin before summarizing our first quarter financial results and upcoming milestones. Sherry.

Thanks very much, Chris. So beginning with our partnered programs, our collaborators at Neurocrin are conducting two separate Phase II clinical trials evaluating NBI 921352. One study is focused on adult patients with focal onset seizures, and the other study is examining the use of NBI 921352 in pediatric patients with SCNA-related epilepsy. We're looking forward to the results from Neurocrin's adult focal study, which are anticipated in the fourth quarter of this year. I'll now touch on some highlights from the financial statements and would refer you to our news release and 10-Q report for further details. Cash and cash equivalents in marketable securities were $687.3 million as of March 31, 2023, compared to $720.8 million as of December 31, 2022. Based on current operating plans, including the completion of the planned XEN 1101 Phase III epilepsy studies, we anticipate having sufficient cash to fund operations into 2026. Before concluding our prepared remarks, I'll briefly summarize some of our goals and milestone events ahead, including, as Ian mentioned, a data-rich period for Xenon between now and the end of the year. We will focus on advancing our XTL-1101 Phase III program, including our XTL-2 and XTL-3 clinical trials in focal onset seizures and our exact clinical trial in PGTCS. We are excited to present additional Exxon 1101 Extol open-label extension clinical data at both IEC in September and AES in December. We anticipate top-line results in the fourth quarter from our Exnova clinical trial in MDD, and we expect another data readout in the fourth quarter of this year from the adult focal onset study conducted by our partner, Neurocrines. In closing, we believe that we have established an enviable leadership position in the KV field that's supported by our clinical development efforts and financial resources to help us execute on our ambitious plans. As we focus our efforts on our Phase III epilepsy program, I'm proud of the team we continue to build at Xenon. We are grateful to our employees across the business who are committed to Xenon's mission to deliver new neurology therapeutics to patients in need. I'm excited by our success to date and look forward to reporting our progress through 2023. I'll now ask the operator to open the line for any questions.

Thank you. As a reminder, to ask a question, you will need to press star 1 on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from the line of Paul Matias from Stiefel.

Great. Thanks so much and congrats on all the progress. I had one question on the focal seizure phase three program and one question on MDD. On phase three, it sounds like things are going well, but you aren't yet guiding to when you expect these results to be ultimately available. Ian, I was wondering if you could give just a little bit more color on what you're seeing on enrollment dynamics and when do you think you're going to get to a point where you'll be ready to give us more affirmative guidance? And then on the MDD study, I wanted to ask if you were willing to disclose anything about the patient population you've enrolled, specifically as it relates to baseline severity. And the reason why I was asking is I think your cutoff on HAMD is a little bit lower than some of the other contemporary MDD trials. Historically, that can have some impact on things like placebo effect. And so, again, just a little bit curious on the population. Thanks so much.

Thanks, Paul. Yeah, I'm happy to address your first one. And then, Chris, Kenny, maybe we can Let's talk a little bit about the baseline Madras scores, kind of a cutoff and then, you know, kind of where we expect the patient population probably to come in. But your first question, it's a question we get a lot about just how we're doing in phase three epilepsy and recruitment. And as I mentioned in the prepared remarks, we believe we're on track and progressing well. Maybe to give you a bit more granularity, as you asked, So we track site initiations. We track patient screening and patient randomization. We built a model based on our XTOL experience, both our experience as well as with the CRO. and we track against that model to see how we're doing. And as we've talked about before, we do use the XTOL study as a bit of a proxy. Obviously, challenges in that study, it was run during COVID, and we didn't have the profile of the drug or at least the efficacy data on the molecule at that time, which we do today. In terms of forward guidance, yes, we will be providing guidance to top line data likely later this year. I think we've been very consistent and we wanted a couple of quarters of enrollment under our belt where we get the majority of sites up and running and then we can give some guidance on top line data. So that to come. And Chris, I'll pass it to you on the baseline characteristics going into the MDD setting. Sure. Thanks, Ian.

So in terms of the inclusion criteria, patients have to have a Hamilton D at screening of at least to 20. And the idea is to capture a population of depressed patients who are at least moderate. And then based upon that, we are keeping an eye on all baseline characteristics as more patients are being randomized. And the baseline characteristics are largely following what we had expected. And we're hoping to share more details on that potentially, you know, obviously by the end of the year.

Anything you can say, Chris? on how these baseline characteristics compare to other studies that have completed in depression recently?

Very similar.

Okay. Thanks.

Thank you. One moment for our next question. Our next question comes from the line of Brian Abrahams from RBC Capital Markets.

Hi, good afternoon, and thanks so much for taking my questions. Congrats on all the progress. Two for me, I guess, first off, as we get closer to the MDD results, I'm curious your latest views on depression as a primary indication for 1101, if the data were positive, or how far behind would next-generation programs be that could take advantage of the validation of the pharmacology? And then secondarily, what learnings from Epic can you use to shape how to optimize the development of 1101 in kids? Thanks.

Thanks, Brian. Yeah, I can address the first one, and then I'm happy to make a couple of comments on Epic. And Chris Kenney, if you want to jump in as well, as we think about the pediatric development for 1101. So Brian, in terms of MDD, obviously the data is going to be a critical input. We've really talked about that there's multiple paths here. One is that we're continuing to generate data that would be important in an epilepsy call point. So we know that depression is the most common comorbidity in in epilepsy, so generating data could be important. But we are interested potentially in doing, as you say, development in the primary indication of major depressive disorder. We're doing some additional work between now and top-line data just to answer some of the commercial questions that we have internally, but we'll be in a position to, when we have top-line data, also provide next steps in that program. You asked about next-gen compounds, taking advantage of the KV pharmacology. So obviously we have significant efforts preclinically. None of those molecules have transitioned into the clinic yet. Probably the first ones would transition sometime next year. So there would be a bit of a gap between XCN 1101 and any of the backup molecules that would move into development on the kind of epic. to 1101 transition. I mean, the pediatric plans are very different. Um, you know, the, uh, XEN 496 was being developed for a very rare pediatric epilepsy or that study was looking at KCNQ2DEE, which is a very different population than, um, the pediatric population, both in focal epilepsy and primary generalized tonic-clonic seizures. And maybe actually this is a good time. We could talk a little bit about just the pediatric patients with epilepsy and, and, um, So, Chris, Kenny, I don't know if you want to talk or if you want to say anything more about just the learnings from Epic into the pediatric development of 1101, but then I think Chris von Sageren can provide some perspective on the market opportunity or at least the patient population in focal and generalized for pediatric patients.

Sure. I would say, you know, the biggest feature that's feeding into the pediatric plans for Exxon 1101 is is more about what we learned in the adult XTOL study, I would say, than necessarily in the EPICS study. You know, to the extent, so the data from the EPICS study is still blinded, and to the extent that you can assess blinded data, it was largely inconsistent with what we would expect with exogamine. So, we'll unblind that data, you know, in the near future. But I wouldn't say that there's any particular learning from that study, per se, that has illuminated the path for the pediatric development of XEN 1101. Ian, would you want to add to that?

No, I think that's really good. And, Chris, on pediatric development and the patient population?

Yeah, absolutely. Happy to share. So when we think about the current development plan focusing predominantly on the adult population, we have to remember that there are hundreds of thousands of patients who are under the age of 18 in the United States that have epilepsy. So in broad-reaching numbers, we're talking about 500,000 patients under the age of 18. And similar to the adult patient population, we see a bias towards more patients with focal onset seizures than generalized seizure disorders. However, within this patient population, what mirrors very much the adult patient population is the high unmet medical need for patients who have difficult to treat disease. And we see a similar dynamic of a large percentage of those patients progressing on to second or third line therapeutics. And just like the adult population, branded therapeutics tend to play a role in those more difficult to treat patients And as a result, we see a great opportunity for XEN-1101 in the pediatric market. Our market research has suggested that the value attributes associated with XEN-1101 are similarly positive in the pediatric patient population as what we've seen in the adult population, with actually a slight bias towards QD drugs as being even more beneficial for this audience where compliance becomes a bit more problematic than what we see with adult patients. So there's a great opportunity for XEN 1101 as we continue the development in the pediatric population.

Thanks so much for the really detailed answers. Super helpful. Thanks, Brian.

Thank you. One moment for our next question. Our next question comes from the line of Tessa Romero from JP Morgan.

Hey, guys. Thanks so much for taking our questions. So XTOL3 is off the ground now, which is really nice to see. How should we think about dynamics between enrollment for XTOL2 and XTOL3? And can you remind us how much overlap there is in the clinical trial sites there? And any color you'd provide us on with respect to competitive enrollment dynamics for XEN1101 trials and FOS and PGTCS versus other programs at your clinical trial sites? And then I have one quick follow-up.

Thanks, Tess. Yeah, so a lot there.

I'll start. Chris Kenney, feel free to jump in and add as well. So just as a reminder for everybody, XTOL2 and XTOL3 are both in focal onset seizures. They will not be at the same clinical sites. And so XTOL2 started first. And we've said that we kind of bias XTOL2 in terms of starting first. And a number of the sites that have experience with XTN1101 have gone into that study. For XTOL3, we are using some of the same sites from XTOL, but there is no overlap with the XTOL2 sites. And so each clinical site can only run one of those protocols. For EXACT, for the primary generalized tonic-clonic seizure that is a little bit different, that EXACT study can happen at either XTOL2 sites or XTOL3 sites. And we think that's where we can get leverage. It's the same investigator. It's the same contracting, the same institution. And if they have a patient that's eligible in focal epilepsy, they can go into EXTOL 2 or 3 as appropriate. And if they have primary generalized, they can go into the exact study. So that's where we get some benefit and some leverage over that. In terms of competitive drugs, obviously, we're the only drug with, to our knowledge, with compelling clinical efficacy data in a late stage clinical development program. We know there are a number, a few other molecules that are pre-efficacy, so they're just in their proof of concept phase two studies. And so we haven't seen anything that's concerning from a competitive point of view in terms of patient recruitment. Chris, anything to add there? And then I know Tess, you had a follow-up.

One thing I would add is just that You know, in speaking with investigators and epileptologists in general, there's a fair amount of enthusiasm about the data we've generated so far. So I would say that the interest to participate in our trials is pretty strong. And that, you know, when you think of all the challenges that come along with, you know, completing a phase three study, I don't see competition as a major factor.

Okay, great. And then one quick one that's helpful. Are you able to provide any further color on the ongoing pediatric formulation work you're doing there and any kind of sense of how long that might take you to land on the formulation? And I was just thinking, can you kind of leverage the learnings that you had from formulating zine 496?

Yeah, so I'll just state again what we had put in the press release and in the prepared remarks. for primary generalized tonic-clonic seizures based on a request by FDA, we're going to go down to 12 years of age today. So we'll have that as an amendment to the protocol. And so for 12 and above, we don't need a pediatric-specific formulation. We can use the same presentation that we use for adults. And then in focal epilepsy, there's this PK extrapolation rule where we can get into younger patients in an open label basis over time. And you go into progressively younger patients over time. In terms of the pediatric formulation development, I mean, we have, yes, we have experience in this area. We do have quite a significant CMC group internally that works on formulation development for our preclinical programs as well as for 1101. So that work's already underway. I think probably we'll have a good idea test later this year on how we're doing in the pediatric formulation development, which we would be required to get into much younger patients, but there's still a fair bit we can do even before that pediatric formulation is required.

Got it. Thank you so much for taking our questions.

Thank you. One moment for our next question. Our next question comes from the line of Jason Gerberry from Bank of America.

Hi, good afternoon. This is Dina Ahn for Jason. Congrats on the progress this quarter, and thank you for taking our question. So we just have a couple questions on the MDD Ex Nova readout. And so beyond demonstrating STAT-SIG on madras and good monotherapy tolerability, what else are you focusing on in this readout? And since safety is a key area of interest, was 1101's AE profile a consideration when picking the 10 milligram and 20 milligram doses, and were these chosen based on 1101's monotherapy healthy volunteer data? And then also just curious if you've looked at placebo response rates in patients that have clinically significant anhedonia and if they differ from the general MDD subjects. Thank you so much.

Great.

Thanks, Dina. Chris, why don't you tackle the last part on anhedonia? Maybe I'll talk about the totality of the data. And Chris Von Sager, I know we've done some market research of looking at the kind of epilepsy adverse event profile into depression. So maybe we can talk a little bit about that as well. But Dina, I would say in terms of kind of the go forward plan and MDD, we would be looking at the totality of the data. So you've mentioned, obviously, we need to look at efficacy and adverse events as well and kind of overall where we believe it would fit in in terms of inputting into our decision for next steps. In terms of dose selection, yeah, I mean, one of the, you know, the XTOL data was informative, as was the healthy volunteer data, as you suggest, but the XTOL data was very informative for us as we chose dose selection for MDD. So, the 20 milligram dose in XTOL was obviously an efficacious dose, and we believe well tolerated. I think the 10 milligram dose was quite interesting because we did see statistical significance on all seizure reduction endpoints at 10 milligrams in X toll, but the AE profile was quite benign. And so that was a dose that we wanted to try and test as part of our phase 2 study. And so we actually made a protocol adjustment before we had initiated the study to include a 10 milligram arm. And that's why we, we chose 10 milligrams, 20 milligrams and placebo for our study. So, maybe Chris 1 second. I know we've looked at the profile. at least in epilepsy, talking to some of the prescribers in depression. Maybe you can walk through some of those details, and then we can answer the anhedonia question.

Yeah, absolutely. And I think what's important to note, to build on what Ian said, is the data coming from XTOL are studied in a highly refractory patient population with epilepsy, with patients who are on multiple background therapies. So we do see... an AE profile in epilepsy, which is generally higher than what you would see for most MDD products, but knowing that we took the existing profile from XTOL into market research for both the 20 milligram profile and the 10 milligram profile to understand whether or not clinicians would be comfortable with a product that offered compelling efficacy with that associated AE profile. What we heard was assuming that we have compelling efficacy, that there's an opportunity for a profile that looks like XEN 1101 for patients. Remember, these are highly active CNS penetrant drugs that are going to have some level of AE associated with them. But when you look across the range of approved MDD products, there's a balance of adverse events that one is looking into. And Importantly, the major categories of drugs that are used today have both substantial sexual side effects and weight gain associated with the SSRI-SNRI class. So as physicians are looking for alternative mechanisms in later line patients, they're willing to be a bit more tolerant of the profile consistent with what we saw coming out of EXTOL, but also they're optimistic that perhaps in a monotherapy environment in a less severe patient population, that the AE profile looks a bit different or perhaps a bit less, has a bit less of an impact on some of the AEs coming from the epilepsy patient population. So the totality of the evidence suggests that there is an opportunity, again, assuming that there is compelling efficacy for the profile.

Thanks, Chris. Chris Kenney?

Yeah, so the question, as I understood it, pertained to the placebo effect and kind of trying to draw a distinction between patients in the ongoing study who are depressed versus having anhedonia. So, give us a similar, you know, we're looking at blinded data, right? So, ultimately, we don't know exactly what's going on. But similar to the answer to Paul's question about baseline characteristics of the population, you know, the scales are behaving in the manner we would have predicted, but given the caveat that, of course, it's blinded data. To your question about making a distinction between kind of patients who may be more depressed or more, you know, and have more predominant anhedonia, I would say that it's hard to make that distinction because once you use that cutoff that I mentioned earlier to enrich this population for patients who have moderate to severe depression, then most of those patients already have anhedonia. So in my mind, I wouldn't really necessarily separate those two. Those two features seem to be happening fairly consistently together. And of course, we have no idea what the placebo effect is because we haven't unblinded the study just yet.

Thanks, Chris.

Great. Thank you for the additional color and congrats on all the progress.

Thank you, Dana.

Thank you. One moment for our next question. Our next question comes from the line of Paul Choi from Goldman Sachs.

Hi, this is Cade on for Paul. Two questions for us. First, do any of the recent MDD failures from competitor data cause you to change your thinking or modeling regarding potential placebo performance for your phase two? And then secondly is how might R&D expenses, go forward R&D expenses change post 496 removal from the pipeline? Thank you.

Great. Thank you, Cade.

So, Chris, do you want to just maybe talk about the MDD and placebo rate and how we can probably walk through the powering calculations and how we're thinking about that, and then Sherry can talk about R&D expenses.

Yeah, sure. So as far as protecting from the placebo effect, we've discussed this before, but it largely has to do with choosing an experienced CRO, choosing experienced sites. We're only running the the study in the United States, making sure that there's an external evaluation of each patient so that we're enrolling appropriate patients using the safer evaluation. That's really the key focus in terms of minimizing the placebo effect in this trial. And of course, we keep an eye on the data in real time to make sure that at a patient level or at a site level, there isn't something unexpected happening that would be atypical. So we're keeping an eye on all of that. You know, another thing that's happened, you know, is that we've gone through this, we've gone through COVID, and that's had some impact on, you know, the patients who are experiencing depressive symptoms. And so we've made sure that we have patients who've had depression, you know, before COVID so that there's no strange sort of population being created. So those are all the things that we've been doing to manage the placebo effect. And I wouldn't be able to come up with anything more that we could be doing.

And Kate, just to respond to your question on R&D expenses. So over the last couple of quarters, you'll have seen that our R&D expenses are trending upwards. And that's largely driven by our initiation of our broad and ambitious phase three program with multiple phase three studies in the 1101 epilepsy program now underway. We're going to continue to see as we initiate more sites and enroll more patients that that R&D expense will continue to ramp upwards until we hit steady state later this year. You'll see that we've reiterated our cash runway guidance of into 2026, and so that remains unchanged with the recent strategic decision around 496. Got it.

Thanks so much for taking our questions. Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Andrew Tsai from Jefferies.

Hi, thanks. Good afternoon. Appreciate you taking my question. So, two on MDD. I understand it's about the totality of evidence, but is there a minimum Madras Delta that you want to see for you to continue pursuing depression in general? Obviously, the higher the better. but for instance, is three points sufficient, or should we be thinking something to where you actually power to four, so maybe like four points? And then secondly, what specifically in the phase two data will drive your decision to continue on with 1101 for depression, and what in the data will make you instead pursue a new KB7 compound for depression? Thanks.

Thanks, Andrew. Yeah, we're We've said this a number of times. We're really looking at the entire data package when we unblind later this year. And as we've mentioned, we continue to do work on the commercial side as well to inform ourselves and provide input. So there isn't a single madras cutoff that if we hit X, we're going to go ahead, and If we don't, we're not going to go ahead. So, you know, it is a more complex question, and we'll be looking at multiple inputs in making that decision. And that's really related to your second question as well. I mean, I think we need to look at the data in its entirety to make that decision on whether 1101 makes sense for continued development in MDD, or as you mentioned, whether we, you know, the nice thing at Xenon is we do have some of that optionality in terms of other molecules. And we talked about that earlier in the Q&A as well. So there isn't one specific answer I can give you. We really need to unblind the data, see everything in its entirety, and then we can have that conversation. As I mentioned earlier in this call, we'll be ready to have that conversation and communicate that at the time of top line data.

Makes sense. Very clear. Thank you.

Yeah.

Thank you. One moment for our next question. Our next question comes from the line of Joseph Thome from TD Cowan.

Hi there. Good afternoon and thank you for taking our questions. Maybe first one as it relates to the pediatric FOS plans. I guess as you go into younger patients, do you need to adjust or consider any sort of dose titration before getting into the max dose given the age there? And then maybe second on MDD, obviously the payer landscape here is changing a little bit. It seems like payers want demonstrated failure of one or two generic SSRIs or SNRIs. When you think about development strategy, do you think the FDA wants to see demonstrated activity in treatment-resistant depression patients, or is MDD kind of sufficient still? Thank you.

Thanks, Joe. Chris, Kenny, why don't we start with you just in terms of dose, probably not maybe specifically around titration per se, but obviously dose will be adjusted as we get into younger patients. But maybe you can provide a bit more context there. And then, Chris von Zegern, let's talk a bit about the payer environment in terms of kind of the previous generic drugs and where branded agents are used in depression. And then lastly, we can get to the TRD question.

Sure. So, you know, just briefly on titration, the programs right now using XEN-1101 with a fairly long half-life, you know, we are not using titration. And so there's no intention to use titration. We don't have – the data we've taken a look at suggests that there's no obvious upside to titrating titration. And, you know, one of the benefits of not titrating is that we're seeing efficacy really quickly. Nearly the full extent of the efficacy that we see is present within one week. So no intention to treat the pediatric population differently than the adult from the standpoint of titration. Now, obviously, as you go down in age, the body weight changes substantially right from the adult population. Chris Vaughn, Down to the adolescence and then further into the the younger kids. And so that will have to be taken into account. And we've proposed specific Chris Vaughn, Things to the agency and seem to have their agreement for that for that taking that sort of the testing into account.

Thanks, Chris. Chris one second on MDD and the parent environment.

Yeah, absolutely. We have spent time and actually done quite a bit of work to better understand the payer landscape within the MDD space. And as Ian had mentioned, this is a space that is largely dominated in first and second line by generics and the availability of multiple SSRIs and SNRIs. It results in fairly heavy payer management upstream, not dissimilar to what we expect to see in the epilepsy space as well with early line treatment for established therapies before moving into the branded environment. And we've seen that in the MDD space, and that's been well established now for quite some time. What we are seeing, though, is more management in the MDD space than what we see in the epilepsy space. And with the new entrants, we do expect to see a slightly tighter management approach within the MDD category as patients need to document failure and different approaches from pair management tools. That being said, there still is a substantial refractory patient population that is accessible to branded therapies after the early line failures. We haven't heard from our payer research the need necessarily to have demonstrated evidence in quote-unquote treatment-resistant depression patient populations. So we have not heard the necessity for that for access for drugs in later lines. It's really based on the clinical profile that payers are thinking about how to approach payer management and what tools they might use to manage a product that looks like XEN-1101 in the future.

And your last question on kind of other populations within depression. So our expectation is that we're not going to have to do specific work in TRD. I will say that, you know, post this is a phase two study, the current Ex Nova study, we have not had regulatory engagement in terms of what the late stage clinical development plan would look like. So post-data, if we're to move ahead, our expectation is that we would engage with FDA and get better clarity on what late-stage development would look like. Perfect. Thank you very much.

Thank you. One moment for our next question. Our next question comes from the line of Mark Goodman from SVB.

Thanks for taking my question. This is really on the line for Mark. For the pediatric formulation, you mentioned that QD may be more beneficial in those patients. Can you maybe provide more color on the key considerations for the development of this pediatric formulation? What are the key differences between the pediatric formulation and your current formulation? Thanks.

Thanks, Rudy. Yeah, I can address that. So it's really about as we get into younger patients, we need to have a dosage form that they can take. So it needs to be something, especially as we get into very young kids, that they can either, it can be mixed into solution, or it can be a solution, or it can be used in soft foods. So today, the formulation development is focused on the adult population. And as I mentioned, we can get into adolescence with that with that presentation. But as we get into younger children, we'll be coming up with a pediatric-specific formulation. So that work is ongoing. As we progress on that work, we're happy to provide future updates. Got it. Thanks for the updates.

Thank you. Thank you. One moment. Thank you. One moment for our next question. Our next question comes from the line of Danielle Brill from Raymond James.

Hi, guys. Good afternoon. Thanks for the questions. Two quick ones from me. I'm just curious if you could provide more color on the factors attributing to the slight delay in expected timing of MDD data. And then with exact recruitment expansion down to 12 years of age, do you anticipate that this will accelerate your recruitment timeline? Thank you.

Thanks, Danielle. Yeah, I think the delay in MDD is really, really minor. The study just got up and running last summer. Screening and randomization has been really consistent throughout. We gave our best estimate when we put the guidance in place. This was a few quarters ago. It was our best estimate at that time. And now just getting towards the end of screening, we've just refined that a little bit. So last patient's going to be screened next month, and then you kind of just do the math forward from there in terms of the screening period. The treatment period, the follow up and all the steps that need to be done before we can get to top line data. So instead of the data being available towards the end of Q3, it's just it's it's being delayed ever so slightly into Q4 on on exact. I think it's too early to tell. Obviously, the opportunity, you could make the argument that as we amend that protocol into younger children, that opens it up. But I think it's a little early to tell on whether that's going to accelerate timelines overall. But as we move forward and we get some experience, we're happy to share that information as we go ahead.

Great. Thanks so much. Thanks, Ian.

Yep.

Thank you. One moment for our next question. Our next question comes from the line of Laura Chico from Wedbush Securities.

Good afternoon. Thanks very much for taking the question. I just have two. So first, do you have any data indicating kind of the split on the use of azogabine in pediatric versus adult patients while it was still on the market? Any idea about pediatric uptake? And then second, within the COSTI study of izogamine in depression, do you have a sense as to how adherent patients were in that study? And realizing it was a smaller study, but the reason I ask is they were using 300 milligram PID and they had to titrate patients up initially. So trying to understand what impact that might have had when we're thinking about contrasting it versus something like 1101 that's administered daily. Thanks very much.

Thanks, Laura.

I'll make a comment on izogamine. Chris Von Segern, I don't know if you have additional information. I mean, izogamine was approved in adult focal epilepsy, and that's what the label was in. They would have been moving into younger patients, likely under agreed upon pediatric plan with regulators. But to my knowledge, I think it was removed from the market for commercial reasons. prior to getting into a younger population. But Chris, one second, I don't know if you have any different perspective on that.

Yeah, the only thing I would add, Ian, is what we did see from actual scripts from Mazogaby was that there was some pediatric use while they were executing against that pediatric plan, but it was minor. So as Ian had mentioned, it was overwhelming majority of patients were adults.

Thanks, Chris. And then, Chris, Kenny, I know we've spoken with with Dr. Murrow a fair bit about his azogabine study. So just the question about tolerability and adherence, azogabine 300 milligrams TID in that population.

Well, I can only be sort of vague and speculate with limited information. But, I mean, obviously, you know, the study was pretty positive. I mean, with a relatively small number of patients, they hit on basically every efficacy endpoint that they looked at. And then, you know, so that's one of the reasons that gives us some optimism and the reason why we're going forward. You know, just I don't know for sure what the adherence was in that study because I don't think they captured it, you know, beyond sort of pill counting and so forth. But I would just speculate that, you know, if you're doing a study like that three times a day, you're going to have as good or better results adherence with a drug once a day. So I think we're in, you know, I think it's, you know, less of a concern with once a day than three times a day. But of course, there's nothing in that publication that really kind of quantifies adherence that I can remember.

Laura, does that address your question?

Yeah, it does. Thanks very much, guys.

Thanks, Laura.

Thank you. One moment for our next question. Our next question comes from the line of Charles Duncan from Cancer Fitzgerald.

Hi, this is Elaine Kim on for Charles Duncan. Thanks for taking our questions. In the XTOL OLE study, what can you tell us about treatment persistence seen thus far? And are you continuing to see similar levels of seizure freedom? Additionally, have there been any safety factors, you know, including changes in body weight?

Great, thank you.

Chris, do you want to comment on, obviously we're communicating on the 18-month cut of the data from last September, and then we'll do an additional cut of the data for 30 months, as we mentioned, later this year. But Chris, maybe a few comments on the XTOL Open Label Extension?

Yeah, so we'll update all this information at the American Epilepsy Society at the end of the year. The data cut that we've done so far showed that over the course of one calendar year, patients gained about one kilo on average. And so that's fairly modest if you look at the publications that have talked about weight gain in the context of anti-seizure medications. To the point about seizure freedom, you know, the... The open label is still ongoing. And if you think about it in terms of patient years for the XTOL study, we still have a ways to go. I mean, we're sort of just past the halfway mark. And so as patients have a longer opportunity to be on the drug, the seizure freedom numbers can only go up, right? I mean, if you have a patient who's experienced one year of seizure freedom, you can't take that away. You can only add to it. So we're optimistic about where it's heading, and I'll have to leave it at that until we share details at the end of the year.

That's helpful. Thank you. Thank you. One moment for our next question. Our next question comes from the line of Mohit Bansal from Wells Fargo.

Great. Thank you for taking my question, and congrats on the progress. Maybe a couple of questions from my side. I think one of your peers is talking about a little bit of challenge in terms of enrolling epilepsy trials at this point, given the competition for those patients, and then obviously a couple of geographies like Ukraine and Russia are not available anymore. So are you seeing any challenges like that in terms of initiating those centers or enrolling the trial at this point? And my second question is, Regarding the uptake of Excopri, I mean, it seems quite interesting and fascinating that how well this drug is doing despite the safety burden and complications, because our conversation with Coyol said that they like drugs which are less complicated, but this is definitely not the one. So does it make you more comfortable around the launch, or has this launch surprised you as well?

Thanks, Mohit. Yeah, I'm happy to address your first one, and then Chris von Segern can talk a little bit about the SanovaMate launch and how we're thinking about it and how that may inform as well in terms of the attributes that we have for 1101. So, in terms of epilepsy clinical development and recruitment and enrollment, as we mentioned earlier, we are progressing as we would expect, and we're not seeing those headwinds that maybe others are. I mean, obviously, we have the benefit when we compare at least our clinical trial currently ongoing with some of the other clinical trials that are ongoing, is we do have a molecule with very strong attributes and compelling efficacy, and that's the conversation that we can have with investigators and sites. The other ongoing epilepsy studies are just at a different stage of development, much earlier, that haven't shown any proof-of-concept efficacy yet. So, so far, we're tracking where we would expect in terms of enrollment and not seeing those recruitment headwinds. Chris Von Tegern, a comment on Sonobamate?

Yeah. So, Sonobamate is obviously doing a great job early in their launch, and we'd agree that they've done very well despite some of the limitations of the products. From our perspective, there is ample room for multiple branded products in this marketplace, and we wish them well along their trajectory in the early days. I think you highlighted, though, something that's quite important, which is that we hear from our market research that the titration profile and the burden associated with the titration is actually quite cumbersome for physicians. And it does both limit the ability for the drug to be used more broadly, And we hear quite clearly that physicians in general are not getting to the top dose of X-Copri because of safety or tolerability issues during the titration schedule. And that just creates an opportunity for us when we think about the positioning of our product to move upstream. Our ease of use attributes we commonly hear are much better than the other available products. And that gives us an encouraging view on where XEN 1101 will be positioned, really fighting upstream of a product like X-COPRI, which today, despite its strong start, is still really used for last-line patients. And we believe that 1101 will play sufficiently upstream in the future.

Helpful. Thank you.

Thank you. This concludes the Q&A portion of the call. This concludes today's call. Thank you for joining, and you may now disconnect.