Xenon Pharmaceuticals Inc.

Thank you for standing by. My name is Meg, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 2024 Sinan Pharmaceuticals, Inc. Earnings 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, Press star 1 again. Thank you. I would now like to turn the conference over to Mr. Chad Fugere, VP, IR for Sinan. Please go ahead.

Good afternoon.

Thank you for joining us on our call and webcast to discuss Zenon's second quarter 2024 financial and operating results. Joining me today are Ian Mortimer, Zenon's President and Chief Executive Officer, Dr. Chris Kenney, Zenon's Chief Medical Officer, and Sherry Allens, Zenon's Chief Financial Officer, along with Dr. Chris von Zegern, Zenon's Chief Commercial Officer, who will be available during the Q&A period. Ian will begin with a summary of our recent progress across our business, including a summary of our expanding preclinical pipeline programs. Chris Kenney will provide an overview of our ongoing clinical stage programs, including our plans in major depressive disorder, or MDD. And Sherry will close with a summary of our financial results and anticipated milestones. We will then open the call up for your questions. Please be advised that during this call, we will make a number of statements that are forward-looking, including statements regarding the timing of and potential results from clinical trials, the potential efficacy, safety profile, future development plans, and current and anticipated indications, addressable markets, regulatory success, and commercial potential of our and our partners' product candidates, the efficacy of our clinical trial design, our ability to successfully develop and achieve milestones, in our clinical development program, the timing and results of our interactions with regulators, our ability to successfully develop and obtain regulatory approvals, anticipated timing of the top-line data readout for our clinical trials of Adesu-Kellner, and our expectation that we will have sufficient cash to fund operations into 2027. Today's press release summarizing Xenon's second quarter 2024 financial results in the accompanying quarterly report on Form 10-Q will be made available under the investor section of our website at xenon-pharma.com and filed with the FCC and on CEDAR+. Now, I would like to turn the call over to Ian.

Thank you, Chad, and good afternoon, everyone, and thank you for joining us on our call today. This is an exciting time for Xenon as we expand our pipeline and further progress towards becoming a fully integrated biopharmaceutical company. We remain sharply focused on three key areas across the business, where we have continued to make significant advancements this past quarter. Number one, the continued execution across our Phase 3 Azetucalner epilepsy studies. Number two, preparation for our Azetucalner MDD program, with a focus on finalizing our Phase 3 protocol and study initiation later this year. And number three, the advancement of our portfolio of next-generation ion channel modulators. Over the last decade, epilepsy research has been a primary focus at Xenon, driven by a continued and significant unmet medical need, with many patients still struggling to control focal onset seizures and primary generalized tonic-clonic seizures, despite available medications. For that reason, the continued progress of Azetucalner in our broad Phase III epilepsy program remains core to our business. As a reminder, Azetucalner is the only KV7 potassium channel opener in development with Phase IIb efficacy and long-term safety data in epilepsy patients. No other KV7 molecules in development have efficacy and safety data in epilepsy or depression patients, and we have set an incredibly high bar for other KV drugs in development to achieve the impressive attributes of Azetucalner. Data from our Phase IIb XTOL epilepsy trial demonstrated the best placebo-adjusted clinical efficacy in the most refractory patient population ever trialed, as well as a favorable tolerability profile in adult patients with focal onset seizures. Furthermore, long-term efficacy data generated through our XTOL open-label extension support increased seizure reduction. with patients out to 30 months on IZETU calendar showing a greater than 90% reduction in median monthly seizure frequency, while approximately one in four patients on IZETU calendar for at least two years have been seizure-free for a full year or longer. In addition, we now have over 600 patient years of exposure, as well as patients on IZETU calendar for more than four years in the OLE. giving us and the epilepsy community tremendous confidence around the future potential of azetucalner to address the need for new anti-seizure medication. With that in mind, we continue to progress patient enrollment across our ongoing Phase III epilepsy studies with top-line results from XTOL2 in focal onset seizures anticipated in the second half of 2025. Positive results would enable the submission of our NDA with the goal of advancing azetucaliner towards commercialization. Overall, we are very pleased with the progress in our phase three program, and it's exciting to be in a position to develop what we believe will be the next important medicine to treat patients with focal epilepsy. Focusing now on our azetucaliner MDD program, we recently presented the phase two Exnova trial results, at the American Society of Clinical Psychopharmacology, or ASCP, the annual meeting held in Miami in May. This medical meeting was a great opportunity for us to continue to raise awareness of data supporting azetucaliner's potential differentiated profile versus standard of care agents and MDD, including a rapid onset of effect, tolerable safety profile, and a potential benefit on anhedonia. a common comorbidity with a significant unmet need. These data form the basis of our decision to advance Azetucalner into a Phase III program in MDD, which we expect to initiate in the second half of this year. We are also continuing to evaluate additional clinical development opportunities for Azetucalner, focusing specifically on other neuropsychiatric indications where a scientific rationale exists, as well as a commercial fit with epilepsy and MDD. Beyond this edge of calendar, we continue to expand Xenon's leadership in the small molecule ion channel space. Based on our extensive work in channelopathies over the past two decades, as we built out a world-class discovery team. We have recently expanded our pipeline by nominating multiple development track candidates, or DTCs, targeting potassium and sodium channel. Achieving DTC status is a critical milestone for a program, as it reflects a molecule that has met our rigorous criteria to be advanced into GLP toxicology studies, and if successful, will form the basis of an IND or IND equivalence submission. One of our key areas of focus are potassium channels, as we believe KV7 offers potential pipeline-in-a-mechanism opportunities. The breadth and depth of potential therapeutic indications for the mechanism provides a compelling strategic rationale for the development of additional KV7 product candidates that are chemically diverse from a Zetucalner and can provide additional development opportunities across a broad range of therapeutic indications, including seizure disorders, pain, and neuropsychiatric conditions. For that reason, we continue to advance multiple KV7 molecules so that we can potentially extend the reach of this promising and differentiated mechanism to more patients in need. Building on our extensive experience against the KV7 target developed over many years, we have made significant progress across several promising novel chemical series, and this past quarter, we nominated multiple KV7 development track candidates. with a lead candidate now in IND enabling studies to support our goal of filing an IND or IND equivalent in 2025. We believe these advancements in our KV7 preclinical program, combined with the promising and robust clinical data we have generated to date with azetucalin in epilepsy and MDD, set Xenon at that forefront of both drug discovery and development for this important mechanism. Turning now to our sodium channel work, as an early pioneer in the space, xenon scientists focus on identifying genetic targets associated with rare phenotypes. Through this early work, it was uncovered that individuals with complete loss-of-function mutations in the gene encoding for NAV1.7 have an inability to perceive pain, while those individuals with gain-of-function mutations have non-precipitated spontaneous severe pain. leading to the identification of NAV1.7 as an important pain-related target, offering the possibility of a new class of pain medicines without the limitations of opioids. While other sodium channels involved in the transmission of pain signals, such as NAV1.8, have recently been clinically validated, we believe NAV1.7 has by far the strongest genetic validation. To date, efforts to develop NAV1.7 inhibitors have faced a number of different challenges, And we have learned a tremendous amount from these previous molecules. We are now advancing novel NAV 1.7 inhibitors, which we believe will have the appropriate properties to evaluate the clinical potential of a selective NAV 1.7 inhibitor. In this past quarter, we nominated a lead NAV 1.7 candidate, which is expected to enter IND enabling studies in the near term with the goal of filing an IND or IND equivalent in 2025. If successful, this program has the opportunity to generate important and early de-risking human proof-of-concept data. We are also advancing potentiators of the sodium channel NAV1.1, which is based on a scientific rationale that a precision medicine therapy for Dravet syndrome should aim to restore NAV1.1 activity specifically without impacting other neuronal targets. We are pursuing brain-penetrant small molecule potentiators of NAV1.1 in an oral dosing formulation, as we believe this approach could directly address the underlying etiology of Dravet syndrome and provide a potential disease-modifying therapy. To round out our extensive CNS discovery work, we continue to make progress as part of our ongoing collaboration with Neurocrine Biosciences to develop treatments for epilepsy. In addition to the ongoing phase two study evaluating MBI 921352 in an orphaned pediatric epilepsy, the next lead candidate, a NAV 1.2 1.6 inhibitor, is now in IND enabling studies with the intent to progress into human clinical trials in 2025 as a potential treatment for epilepsy. So overall, I'm extremely proud of the continued progress across the organization and our pipeline, including both clinical and preclinical efforts And this positions Xenon with one of the most exciting CNS portfolios that exist today. So I'll now turn the call over to Chris Kenney, and Chris will provide more detail on the progress on our IZETU calendar clinical programs, as well as some near-term conferences where Xenon will have a presence. Chris, over to you.

Thanks a lot, Ian. I'll start by echoing that this is indeed an exciting time at Xenon. as we continue to receive enthusiastic feedback from opinion leaders and site investigators about the emerging clinical profile for azetucalamin. Beginning with our Phase III epilepsy program, which includes XTOL2 and XTOL3 in focal onset seizures and EXACT in primary generalized tonic-clonic seizures, our Phase III FOSS studies continue to advance with the first top-line data readout from XTOL2 anticipated in the second half of 2025. Our plan remains to submit results from XTOL2 along with the existing data package from our Phase 2b XTOL clinical trial and additional safety data from other clinical trials with the goal to meet regulatory requirements in the U.S. for approval. We also continue to highlight the robust scientific evidence generated through the XTOL open label extension study with the medical community. As Ian referred to, healthcare providers observe a high burden of illness within the epilepsy community despite current medications. So it's been important to share the long-term XTOL OLE data with the objective of gaining further insights on the potential benefits of the Zetucalmin. We will have additional opportunities to engage with the treatment community at the upcoming European Epilepsy Conference taking place in Rome, Italy, from September 7th to September 11th, where we're presenting two posters on our ongoing XTOL-OLE study, as well as participating in a scientific exhibit where we plan to showcase survey results related to quality of life measures from focal onset seizure patients. In addition to seizure burden, patients reported other symptoms that illustrate the broad burden of epilepsy and its negative impact on quality of life, such as fatigue, lack of energy, or other comorbidities, including anxiety and depression. Shifting to progress we're making toward our Phase III MDD studies, we have now finalized and filed our protocol with FDA, and clinical site planning is well underway. Our Phase III MDD program will include three Phase III trials in approximately 450 subjects each, with moderate to severe MDD, assessing the efficacy and safety of 20 milligrams of azetucalin versus placebo. The primary endpoint will be the change from baseline in HAMD17 total score at week six. Key secondary endpoints will include SHAPS total score and CGI severity at week six and HAMD17 at week one. We expect the first MDD study initiation to occur in the second half of the year, with study sites exclusively in the U.S. As Ian noted, in addition to this extensive internal planning work, our clinical and medical teams highlighted our Phase II proof-of-concept ex-NOVA trial in patients with MDD at the ASCP meeting in May. This was the first time presenting these data at a major medical meeting, which demonstrated that treatment with a ZETU counter led to a clinically meaningful reduction in MADRAS, a statistically significant reduction in HAMD17, a rapid onset of effect, a statistically significant reduction in anhedonia, and a potentially differentiated safety profile compared to standard of care agents. Feedback on the data was received with great interest by the experts in the field. There was recognition of the potential of a ZetuCalendar to be a meaningful treatment option for patients with MDD with particular interest in the novel mechanism of action and potential benefit on anhedonia and a favorable tolerability profile with no notable adverse effect on sexual dysfunction or weight gain. We're also looking forward to presenting on-core ExNova data at the upcoming Psych Congress taking place in Boston from October 29th to November 2nd. These opportunities to educate healthcare professionals on our MDD data are incredibly important and we value the insights gained as we further our Z2 calendar clinical programs. Now, rounding out my comments on MDD, we also continue to support the investigator-led MDD study conducted by Dr. James Murrow of Mount Sinai and Dr. Sanjay Mathew at the Baylor College of Medicine. This 60-patient placebo-controlled Phase II trial has a functional primary endpoint with the objective of evaluating the effect of a Z2 calendar on brain measures of reward as measured by the change in activation within the bilateral ventral striatum from baseline to end of treatment at week eight as assessed by functional MRI. The study is also evaluating secondary clinical endpoints, including the madras and chaps. It is anticipated that patient enrollment will be completed this quarter, and we look forward to providing further updates in the coming months. To summarize, our team is driven to continue advancing our ZetuCalendar late-stage clinical development programs in both epilepsy and depression, and we continue to be highly encouraged by the positive response to ZetuCalendar from physicians and key opinion leaders. I look forward to updating you on our progress. I'll now turn the call over to Sherry, who will provide an overview of our second quarter financial results and upcoming milestones. Sherry?

Great. Thank you, Chris. So, beginning briefly with our financial results, we're well-positioned with a strong balance sheet to support our plans for Zett to Kellner in both epilepsy and MDD and other earlier stage programs in our pipeline. As of June 30th, 2024, we had cash and cash equivalents and marketable securities of $850.6 million compared to $930.9 million as of December 31st, 2023. Based on our current operating plans, including the completion of the Z2 Kellner Phase 3 epilepsy studies and fully supporting late-stage clinical development of the Z2 Kellner and MDD, we anticipate having sufficient cash to fund operations into 2027. I would refer you to our news release and 10-Q report for further details around our financial results. So, in summary, as you heard from the team today, we remain focused on our goal to improve outcomes for patients in areas of high unmet medical need. We believe Azetu Kellner has the potential to be a paradigm shifting best in class medicine. The strong belief in Azetu Kellner's compelling profile is centered around its unique mechanism of action and supported by the significant body of clinical data generated to date. Looking ahead, we anticipate a number of important milestone events and goals. We will continue to advance the Rosette 2 Kellner Phase 3 epilepsy program with EXTEL 2 top-line data expected in the second half of 2025. We expect to initiate the first of three Phase 3 clinical trials in MDD in the second half of this year, and we will continue to explore other development opportunities for Rosette 2 Kellner. Lastly, we'll continue to advance our early-stage preclinical pipeline with the goal of filing multiple INDs or equivalent in 2025. Thank you all today for your attention, and we look forward to sharing more in the coming months. I'll now ask the operator to open the line for any questions.

Thank you. The floor is now open for questions. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. And your first question comes from the line of Paul Mathias with Stifel. Please go ahead.

Hey there. Good afternoon. Congrats on all the progress. As it relates to XO2, I was wondering if by now you have a good sense of how the patient demographics as it relates to baseline seizure frequency, refractoriness, et cetera, are comparing to XO1. And then just as it relates to your updated timing guidance for top line, thanks for that. Is the expectation still that you'll complete enrollment around the end of this year, early next year? Thanks so much.

Thanks, Paul.

I'll take the second one and maybe make a quick comment on the first one. Then, Chris, Kenny, if you want to add any of your perspective as well. So on the first question, just on demographics, so obviously we track that. We see it on a blinded basis. And all the things that you'd expect us to track, we're looking at on a blinded basis. You know, we haven't historically given any information publicly on what we're seeing, just because as the study is ongoing, those demographic data are changing all the time. So, but we are, we're definitely tracking it. So as we get to the end of patient screening and randomization, we can, we'd be in a position to give some of that information publicly, but Chris can add that. in a minute there also. Yeah, and then in terms of guidance, I think you've kind of nailed it. We've moved to top line data guidance now. So just to reiterate, I know we said it a few times, but XTOL2 top line guidance second half of next year. You know, just to take a step back, I think we've said it before, it's about six to eight months from last patient screened to top line data. And that's because these patients go through a screening period. And then there's a two month baseline period where they have to count seizures in an electronic diary. That's we can come up with a monthly seizure burden. Then the randomization visit happens and there's three months of the double blind period. And then there is safety follow up that safety follow up. The timing depends a little bit on whether those last patients go into open label extension or not. So, you know, just kind of back all that out, you know, where exactly screening will complete, you know, you know, is we're comfortable with our guidance of second half data, which means that you kind of back out six to eight months from that is when we expect patient screening to be completed. So hopefully that just gives a little bit more background and color on kind of the process that we're going through. Chris, anything else on the demographics that you want to comment on?

Yeah, so just as a reminder, the seizure burden in the X-pole phase 2B study was pretty high. Patients had an average of 13 and a half seizures per month at baseline. Half the population were taking three anti-seizure medications. And on average, patients had failed six anti-seizure medications even before coming into the study. And despite that, we saw really robust efficacy with the largest separation between the high dose and placebo. from the perspective of median percent change in seizure frequency compared to any other study we can find in focal onset seizures. So we're pretty pleased with that. So the spirit of the subsequent phase three program is do the best you can to not deviate from what was done in extol because that worked out pretty well. And so that's what we've tried to do. And more directly as an answer to the question, what we're seeing so far is that the population has shaped up very similarly in the Phase 3 program as it did in the Phase 2 study. And obviously, we're keeping an eye on that in real time. It gives the opportunity to make an adjustment if you had to, if you were getting something unexpected, but we're not right now.

Good to hear. All right. Thank you both very much.

Your next question comes from the line of Brian Abrahams with RBC Capital Markets. Please go ahead.

Hey, it's a late one for Brian. Thanks for taking my question. I had maybe one and then just a quick clarifying question as well. I guess on the MDD trial design, I guess as you're thinking about how Zeta Caller might position itself, and there's a number of other agents that are also potentially having effects on anhedonia, I guess How do those other competitive trials, when I think of the Caffe Opioid, start to read out? I guess, are you looking for any data there on how they perform on anhedonia to maybe inform on whether you want to change selection for anhedonia or how that might impact market positioning for Zetucalner? And then just to clarify, I think you guys said that you're not running XUS sites for the MDD. phase three program, and I think maybe before you had said that you would use both international and U.S. sites, I guess, can you maybe talk about what drove that change, if I heard you guys correctly, and maybe how that might impact many expectations on timing and how quickly you can move? Thanks.

Thanks, Leo. I can start, and then Chris, Kenny,

to add in on the MDD side. And Chris Von Segern, if you can provide perspective a little bit about the market and what we're hearing back in our market research and the importance of anhedonia and maybe how we believe Zetacaliner can differentiate with some of the other molecules, both in development, but also those that are commercially available currently. So a couple of comments. Yeah, just on clarification in terms of the ex-US, US sites, we've said that, you know, we're running three phase three clinical trials in depression. We had always, this isn't a change, we had always expected that definitely the first study, which will start in the next couple of months, would focus on U.S. sites. As we get to the second and the third studies, we may move to some ex-U.S. sites. But right now, that's where the phase two is run. I think that's where a lot of the clinical development for major depressive disorder is done in the U.S. So we'll definitely focus that for what we're calling Ex Nova 2, which is the first phase three. And then as we move into the other phase threes, there may be some difference in site selection as we move forward. So hopefully that helps. In terms of the protocol, how we may be informed by other readouts, the protocol for us in the MDD study is locked. So we, as Chris said in his prepared remarks, we have filed the phase three protocol with the FDA. We expect to hear back shortly on that and initiate that study. So in terms of the inclusion exclusion criteria, as it relates to baseline both depression and anhedonia, all of that stuff is now locked. And as we said on previous calls, I think we're very much informed by our Phase 2 program using HAMD17 as primary and also increasing the severity of the patients as we move from Phase 2 to Phase 3. So although I think additional readouts are always interesting, they're not going to change in terms of our strategy or approach. But Chris, Kenny, why don't you add to that, and then Chris von Sager on just differentiation in the marketplace.

Yeah, I would just, just zooming out from Anhedonia for a second, I think why this, why is that your calendar so interesting and MDD is really kind of a constellation of features, not just Anhedonia. So we've got the unique mechanism of action. We have the rapidity of onset, which also happened in focal onset. seizure patients, which makes you think it may be real. And then the safety. So on the safety side, from an MDD perspective, we had, you know, no notable issues with sexual side effects or weight gain. And in fact, the drug at 20 milligrams was better tolerated in the MDD population compared to the focal onset seizure population. So, you know, that safety tolerability data, no SAEs in any of the 10 or 20 milligram treatment groups in Exnova, that is, I think it's you know, is important or perhaps even more so. But I would say it's more the constellation of all those features, not one per se. And maybe I'll turn it to Chris to see if he, what his perspective is from the commercial perspective.

Yeah, thanks, Chris. So maybe just to ground everyone, when we think about the major depressive disorder treatment landscape, it's important to note that the mainstay of treatment in this space, SSRIs, SNRIs, notably do not have a benefit specifically on the anhedonia component of the disorder. And when we conduct our market research as we think ahead towards commercializing azetucalner and major depressive disorder, clinicians have very clearly identified anhedonia as one of those constellation of features that Chris Kenney mentioned, but also the fact that having a benefit in this core symptom domain or comorbidity of major depressive disorder is something that is very, very encouraging. And clinicians are actively looking for, given the fact that the SSRIs and SNRIs don't provide benefit along that dimension. So when we do our research and we do our testing of a potential is that to counter profile, it's something that clinicians absolutely latch on to and appreciating that folks are now focused on this area in large part because of the unmet medical need that exists in the marketplace today.

Thanks, Chris. Operator, we can move to the next question.

Again, if you would like to ask a question, press star 1 on your telephone keypad. Your next question comes from the line of Tessa Romero with JP Morgan. Please go ahead.

Good afternoon. Thank you for taking our question. So, Ian, you've outlined top line XL2 data in the second half of 2025 here. Picking back up on like an earlier question that was asked, maybe asked slightly differently, can you just provide a little bit of an updated view for us on how the pace of enrollment has been going? And, you know, just kind of curious, has it been pretty steady since all the sites were activated or have you observed any changes due to competitive dynamics or anything else here in the U.S. or globally across sites? And can you just remind us what the split is between US and ex-US sites, and what are the key regions outside the US? Thanks so much.

Thanks, Tess.

Yeah, I think I've got it all, but others can jump in if I've missed something. Yeah, in terms of, you know, pace of enrollment and kind of top line guidance, as you said, top line for XTOL 2, second half 25, I think that's really exciting for us, right? I mean, that's a critical path now. With the data from XTOL and with XTOL 2, we'll be ready to engage with FDA and file an NDA. So that's really exciting now to have that top line data guidance out. In terms of cadence or pace of enrollment, You know, we said on previous calls that just the number of sites that you need to complete these studies, which is kind of in, you know, 100 medical centers, give or take, in each of X-TOL2 and X-TOL3, is that you just naturally do get some ebb and flow and up and down of enrollment. So we've been comfortable with where we are, and we're comfortable with the guidance that we're giving. And, you know, obviously, we have more experience in running these types of studies than anybody else out there right now. So I think we're in really good shape. You know, in terms of competitive pressures, we haven't seen anything. So we haven't seen the pace of enrollment change from a competitive perspective. We're, you know, obviously, you know, when we were running XTOL, there's at times other studies that are being run and the same thing when you're running XTOL. when we're running X-Tool 2. And that's not just all, you know, I think your question is probably a little bit more focused on drug trials, but there's device studies as well that are ongoing. So there's always other things that are happening often at these clinical centers. But we haven't really seen any change in the last little while that has given us any pause or any concern. In terms of regions, so XTOL 2, we've really tried to use XTOL as much as our guides. We went back to a lot of the same centers from XTOL into XTOL 2 and used investigators that have experience with the molecule. As a reminder, in the XTOL Phase 2 study, we had sites, clinical sites in Europe and clinical sites in the U.S. At the end of the day, 60% of patient enrollment came from Europe and 40% came from the U.S. Again, you know, while we're partway through a study, I don't really want to comment on where we're coming from in XTOL 2, but the same jurisdictions that we used in XTOL, we're using in XTOL 2. I think I got all of your questions there, but if there's anything else, please let me know.

You did. Thanks so much, Ian. Talk to you soon.

Thank you, Tess.

Again, if you would like to ask a question, press star one on your telephone keypad. Your next question comes from the line of Jason Gerbery with Bank of America. Please go ahead.

Hi, good afternoon. This is Dina on for Jason. Thank you so much for taking our question. We just wanted to ask about the next-generation KD7 asset that's in IND-enabling studies. Could you please provide some more color on the specific drug properties that led you to advance this asset? Is your aim to improve upon, as to Kulnar's profile, or is this more of a lifecycle management play? to advance KD7 into neuropsych opportunities beyond the current, you know, epilepsy and MDD set? Thank you.

Thanks, Dina. Yeah, I think it's a really important question.

Obviously, the success we've had with azetucaliner now in late-stage clinical development, we think it's really important for us to continue to maintain and build upon what we think is really a considerable leadership position in this mechanism, which we're really excited about. So we've been working on additional molecules against the same target for quite some time. So completely diverse chemistries from a Z2 calendar. As you mentioned, and we said in our prepared remarks, multiple candidates have been identified, including the lead one is in GLP toxicology studies. So we're excited to get that into human clinical development as well. You know, we touched upon what we call our DTC or development track candidate. And you asked a question around drug properties. It's a quite a long list of things that we try to optimize all of these drugs for obviously potency and selectivity on target, but a bunch of the drug properties as well. So what's really interesting about is that you counter is there isn't any one specific attribute of is that you counter, which we're trying to improve on right now, as we've gone through the data, as we've mentioned. You know, this is best in category efficacy on a placebo-adjusted basis, the novel mechanism, the rapidity of onset. So we think we have so many of the important attributes to be successful both in epilepsy and depression that these next-generation molecules have diverse chemistries, have properties that meet our criteria, but we're not specifically trying to improve on any one attribute from a Z2 calendar. There will be an opportunity, as you mentioned, to have some therapeutic diversification. So as we move forward, you know, obviously for this mechanism, we continue to be excited about epilepsy, neuropsychiatry, pain, and other indications. So absolutely, you'll see the next molecules go into some indications that we're not going to with azetucalner as well.

Got it. Thank you so much. And I guess a quick follow-up to that. You highlighted some additional, you know, neuropsych indications. Will you be looking at data from KV7 competitor in bipolar mania and potentially migraines to kind of inform the indications you plan to assess with this next-gen molecule? Might be a little bit too mature of a question to ask. Thank you.

Yeah, and Chris Kenney and Chris Fonseca, feel free to add your perspective here. I'll start, and please add to it. Yeah, we've done a significant amount of LCM work on the mechanism. You know, we're very much informed by what we learn and the work that we do rather than anchoring to any competitive product. And we're making decisions all the time, and, you know... you know, the KV drug that you're probably referring to in development is years and years and years away from any efficacy data, and we'll be making decisions far in advance of that. So, you know, we'll make decisions based on all of the work that we've done where we think these molecules would be best suited for early clinical development. But we've done, you know, probably over the last year or more. We've done a lot of work to do commercial assessments and mechanistic assessments and a bunch of preclinical work to understand best where we can take these molecules in the future.

But Chris or Chris, anything to add to that?

I'll just say something quick. You know, in his prepared remarks, Ian talks about KB7 offering the potential for a pipeline and a mechanism opportunity. And as Chris von Sagan and I and our teams have looked at life cycle management, there are a lot of different options. This is a mechanism that really should work in all types of epilepsy, which is what gave us the confidence to go into focal onset seizures and primary generalized tonic-clonic seizures in parallel. There are a number of psychiatric indications of interest. I think we would probably put bipolar at the top of that list, but there are several others of interest, and then pain. So I think, you know, it's an interesting target, and we have lots of different options with these backup compounds. Chris?

Yeah, thanks, Chris. I think the only thing that I can add here is just reiterating that the extensive work that's been done, both from a commercial perspective, gathering input from potential prescribers in the future, as well as on the scientific side, where we've looked in depth at level of genetic validation and now emerging clinical validation based on the backbone of these etch-a-calendar profile, really just creates a a range of potential options that we're incredibly enthusiastic about, in part driving the decision for us to advance multiple products into the clinic.

Thank you so much.

Again, if you would like to ask a question, press star 1 on your telephone keypad. Your next question comes from the line of Brian Scorni with Baird. Please go ahead.

Hi, this is Luke on for Brian. Thanks for taking the question. On NAV 1.7, can you talk about your biggest learnings from legacy challenges with the mechanism in the past? And then apologies if this is something you've discussed before, but can you remind us whether you intend to conduct non-human primate studies to get a better idea of the profile before entering the clinic, given it seems there's been challenges with translation utilizing rodent models in the past?

Thank you. Sure, Luke. Yeah. And when you're talking about non-human primate models, you're talking specifically with NAV 1.7? Yeah, yeah. Okay. Sure.

Yeah, I can take this, and then others can add. Yeah, so I think what you're referring to is that, you know, NAV1.7 or the gene, which is SCN9A, was sequenced quite some time ago. And there's been a number of companies, us included, that have tried to prosecute against the target. And we just haven't made it into late stage clinical development yet. There's kind of a number of reasons. There's not one reason. I think a lot of the drugs that other companies called selective 1,7 inhibitors were not actually selective. They were much more pan-sodium channel inhibitors. And so I think selectivity matters. And we've made really great progress on a selectivity profile and therapeutic index and selectivity across the other isoforms. There were definitely some toxicity issues related to certain chemistries on the target historically. And so I think we've learned a lot there. And then, excuse me, I would say the last thing is around the pharmaceutical properties. I think we've learned a lot about the expression patterns and distribution and really where we need to get these molecules to be successful. So I think we've learned a ton from the field and our own work that we've done Over the past 15 years or so internally where you know we have molecules that meet all of our criteria that we're really excited to run the human clinical experiments. In terms of translatability, translatability is hard for this target because the human NAV17 is different than in other animal species. We do use some genetic models and human knock-in models to help us with that. But really, I think we need to run the human experiment. What we can do in animals is really understand the therapeutic index. and ensure that we have, you know, we run the appropriate tox species from a regulator point of view. But we really need to run the human clinical experiment to be able to answer that question. Nice thing, as you know, about pain is there's an opportunity to run this earlier in human clinical development. than proof of concept and some other therapeutic indications, and the early studies run quite quickly as well. So I think we've made tremendous progress on this target, and I don't think we're actually far away from being able to run the human experiment.

Awesome. Thanks. You're welcome.

Your next question comes from the line of Andrew Tsai with Jefferies. Please go ahead.

Hey, good afternoon. Congrats on the execution. Thanks for the updates. I wanted to ask on PGTCS this time, could it be possible we get data in 2025 or should we be assuming 2026 at the earliest? And I think you guys have mentioned before how the study is powered to show what other drugs show within this indication. So would it be fair to assume a 30 to 40% type placebo-adjusted separation seizure reductions could be the bar here. Thank you.

Thanks, Andrew.

I can maybe talk about timelines. Chris, Kenny, do you want to talk about power and kind of the expectations for moving from FOS to PGTCS and some of the changes there in terms of what our expectations are? And maybe actually just the baseline seizure burden coming in as well, I think would be helpful to put that into context. But Andrew, in terms of timeline, so we haven't guided yet on EXACT, which is our phase three clinical trial in primary generalized tonic-clonic seizures. I mean, if we look at the literature and the most recent studies that have been run, Sonobimate, they're still running their PGTCS study, even though that drug is approved. If you look at Lacosamide, where they had data very late in the commercial life of that product. You know, these are more challenging studies to run. They run much slower than the focal onset seizure studies. So although we haven't yet given guidance on it, I just want to set expectations that these studies are slower than what we would expect in the XTOL program, given PGTCS is less common and these studies take longer than the focal onset seizures. And at the appropriate time, we'll be able to update in terms of guidance to top line data. But Chris, maybe you can just give, because we didn't in today's prepared remarks, a little bit of background on the study design and the powering assumptions.

Yeah, sure. Thanks, Ian. I mean, one of the, you know, there are a few differences going from focal onset seizures to primary generalized tonic-clonic seizures. One is that the PGTS, PGTCS population in general has a lower seizure burden and it's difficult to find those patients. And so that's why you end up seeing the duration of the study take a little bit longer. Now, fortunately, when the drugs work, they work really well, and you need fewer patients to show efficacy. So as you look at the spectrum of what's been done in the past, on the low end, you have the study that was done with Topiramate just had about 40 patients per group, so 40 times two And I think lamotrigine had 60 patients per arm, so 60 times 2 for the total size. And then there are three examples of studies, PGTCS studies that had about 80 patients per arm, so a total of about 160 patients. Two examples include parampanil and levotirazetam, and that's what we've anchored to, sort of on the higher end of that spectrum of between 40 to 80 patients. I mean, the one exception that included even higher patients was the glucosamide study, but that was a time-to-event study with a different entry criteria. So it's sort of comparing apples to oranges. But so we're on the higher end of that. And, you know, we don't, I mean, compared to focal onset seizures, we don't have preliminary data. And so our study was simply powered over, you know, compared to those three examples of previous studies that used about 80 patients per one.

Thanks. Your next question comes from the line of Paul Sawyer with Goldman Sachs. Please go ahead. Excuse me, Mr. Sawyer, we cannot hear you. Kindly check your line, please. Thank you. Operator, we can move to the next question, and then we can come back to Paul. Sorry, can you hear me?

Oh, hey, Paul. Yep, we can hear you now.

Sorry about that. I just wanted to ask a follow-up on NAV 1.7 with regard to development and pain, and can you comment, you know, pending the animal model work, what you see as the most logical development focus for that area? Would you focus on an acute development clinical strategy or or focusing perhaps on the larger chronic opportunity first or prosecute them in parallel. Thanks, Ian.

Yeah, Pauline, it's a really good question. I would say it's probably a bit premature for us to, we haven't fully fleshed out what kind of a late stage clinical development plan would look like. Obviously, we would do healthy volunteer work initially, make sure that we believe we're getting appropriate exposure, where we can do some modeling and predictability that we have enough receptor occupancy. From an efficacy point of view, so that would be the early work. And then, as I was mentioning earlier, the nice thing about pain is we would likely run a bunionectomy study, right? And those studies can be run very quickly at reasonable size in terms of powering as well. We haven't designed a study like that yet. So there's a whole bunch of questions there in terms of number of active doses and potentially active controls and other things. And we'll get to all of that in advance. But you're really asking a question more about kind of the acute and chronic longer term studies, which I think are both on the table, at least based on the mechanism. There's nothing to suggest with the genetics or the mechanism that we should necessarily lean one way or another. But but so I would say today's both both are potentially on the table. We do want to really monitor how the NAV 1A program is doing and how they're doing in terms of accessing the commercial market in terms of the acute market to start. So I think that's going to be an interesting topic. you know, data point for to inform us as well. So I don't have a really good, you know, definitive answer for you today because I think it's just too early and too premature. But more to come on that over the next year or two.

Okay. Thanks, Ian.

You're welcome.

Your next question comes from the line of Sting Bonsack with TD Cohen. Please go ahead.

Hi, guys. Thanks for taking our questions. I guess, could you talk a little bit more about the design of the MDDD I guess in terms of just initiating studies and enrollment and then the data releases, are you planning on staggering initiation, one, two, three, or are you going to initiate them all at once? And then for the data releases, basically the same question, will it be released all at once or will it be done if the study analysis is completed? And then just secondly and real quickly, apologies if I missed this, is MATRA still being measured in these studies? Thanks.

Thank you.

Yeah, I'll take the first part on the staggering. And then, Chris, Kenny, I think it's probably helpful maybe just to go through some of the entry criteria into the study because, you know, we learned a lot from Phase 2 as we're moving into the Phase 3 program. I think we can kind of review some of that. We didn't have time to do that in the prepared remarks. And then maybe you can address this as a question on Madrist. So we'll be staggering these studies. So just naturally, they won't start at all at the same time. So our first study we filed the protocol with FDA, and that should start later this year as we've guided. And then we'd expect a natural stagger for the second and the third studies. And that would be our expectation on the release of data as well, is that when the first study is complete and we've unblinded those data, we'll provide those data publicly, and then the second study and the third study would follow suit after that so expect a stagger um not not from a perspective that we're waiting for a readout on the first one before we start the second one um but so at some point they will all be running um near about the same time but we would definitely start the first one and finish that and unblind those data and provide them um but chris maybe you can go through some more of the entry criteria because i think that's important for for this program and then answer the question around madras.

Sure. Thanks, Ian. Yeah, I would say three things about study design that should work in our favor. The first is that as we go from phase two to phase three, we'll just have one treatment group versus placebo. So that, if you look at other studies, that definitely helps in terms of placebo response. The other thing is that the size of the study, you know, in the prepared remarks, we talked about a study size of 450 patients, so 225 per arm. So that's, you know, three, four fold higher than what was used in the phase two study, Exnova. And there were some imbalances, not dramatic, but subtle imbalances that occurred in the Exnova study. So that larger study design, you know, I think is guaranteed to iron those things out. And then the other thing more specifically directed to the question, we're still going after moderate to severe depression. What we learned mirrors what other studies have learned, which is that if you have patients that slip in that are slightly on the more milder end of the spectrum, even though they meet the criteria for being moderate to severe, but if they're on the milder end of the spectrum, then they can skew the data a bit. And so we're just going to be more strict about in terms of the cutoff that we use for the HAMD. And then there are some other criteria that we're just in general going to be more strict about making sure that nobody comes in the study on the milder end of the spectrum. Those are the big changes. In terms of the Madras, I mean, one of the guiding principles in depression is keep it as simple as you can. And that worked well with ExNova. I mean, we did actually use two scales, as you know, which is fortunate because it allowed us to choose the HAMD to go into phase three. But we went back and forth about whether MADRAS should be included and ultimately decided not, that assessing depression to the least amount that still led to a successful outcome was the best approach. So we're going to focus on HAMD, which we saw in our study had dramatically less variability, and we've seen the same in other studies. So that's what we're focused on.

Great. Thank you very much.

Your next question comes from the line of Laura Chico with Webb Bush Securities. Please go ahead.

Hi, can you hear me?

Yes, we can hear you. Yes.

Thank you very much for taking my question. This is Dylan on for Laura Chico. And I'm not sure if this is a question for Chris, Kenny, or Ian, but we noticed within the SCNA Day program partnered with NERC RINP, You're also looking at a next lead candidate that's NAV1.2, NAV1.6 inhibitor for focal epilepsy. And we're wondering if you see positive outcomes with 352. Would this also have read through to the broader seizure-related indications?

Yeah, I can take that, Dylan.

Yeah, there's a little bit of history here, which is probably... helpful in going through. So 352 is the molecule that, so these are sodium channel inhibitors that came out of Xenon's laboratories and were licensed as part of a transaction with Nurocrin and Nurocrin is doing the development and paying for the development. So it's a milestone and royalty transaction for Xenon. So 352 is in the SCN8A phase two clinical trials you mentioned right now. They did run that in a focal onset seizure study. That was a small proof of concept study around 100 subjects that read out last fall. And they're not moving 352 forward in focal onset seizures yet. The molecule that we referred to today on the prepared remarks has a little bit of a different profile. So although it's highly potent on NAV1.6, it's also potent on another sodium channel called NAV1.2, whereas 352 was much more selective for 1.6. So we would consider this a dual inhibitor that has potency on both channels. Both channels are involved in excitation. in the brain, so both well-validated targets. This next molecule is still preclinical, and as it goes into clinical development, you know, Neurocrine at that point would guide in terms of what types of studies it would go into, but it would be into epilepsy studies as well. Is that background helpful?

Yes, thank you so much for taking the question. Yep, no problem.

Your next question comes from the line of Mark Goodman with Learing Partners. Please go ahead.

Hi, this is Basma on for Mark. We have a question on XACT. Could you please remind us what we should expect in terms of the efficacy of ZIN 1101 in the primary generalized seizures? Should we expect an efficacy in line with what we've seen in the focal onset seizures? We also have a question about the dose, the 25 milligram. What kind of work you've done to actually feel comfortable about the use of this dose and this indication and whether you believe this dose will be efficacious or not? Thank you.

Great. Thanks for the question. Chris Kenney, over to you.

Yeah, thanks. Thanks for the question. So as I sort of said earlier, one of the differences between the focal onset seizure population and the primary generalized is that we don't have preliminary data. And so we powered the exact study based upon a few different examples of studies that were successful with other anti-seizure medications. And we took on the higher end of the number of patients just to be cautious. I mean, in general, the drugs that do work in primary generalized tonic-clonic seizures, when they're effective, they're pretty darn effective. Judging whether it's going to be as effective in focal onset seizures, I think, is anybody's guess. I would just say that when we look at the Phase IIb data and we look at the subset of patients who had focal seizures that then generalized, the data is incredibly robust. I mean, it was well over 80% reduction in those types of seizures in the high dose. And that's what gave us confidence to run the two indications, you know, in parallel. But it remains to be seen what's going to happen. As far as the high dose, you know, why choose 25 milligrams? Again, that goes along with what's been learned in the field with the other drugs that first worked in focal onset seizures and then worked in primary generalized tonic-clonic seizures. And the path that's been laid down is that others have chosen the dose that was on the higher end of the spectrum and functional and focal onset seizures and then brought that forward. And they've been successful. And so we did the same.

Thank you. That concludes our question and answer.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.