Q4 2019 Earnings Call
Operator: Thank you for standing by, and welcome to the Xenon Pharmaceuticals 2019 Financial Results Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. As a reminder, today's program is being recorded. I would now like to introduce your host for today's program, Jody Rates. Please go ahead.
Ladies and gentlemen, thank you for standing by welcome to the Xenon Pharmaceuticals 2019 financial results earnings call. At this time all participants are in listen only mode. After the speakers presentation. There will be a question and answer session to ask a question during the session you'll need to press star one on your telephone as a reminder, today's program.
He is being recorded I would now like to introduce your host for todays program Jodi Regts. Please go ahead.
Jody Rates: Thank you. Good afternoon.
Jody Rates: Thanks for joining us on our call and webcast to discuss our 2019 Financial and Operating Results. Joining me on today's call are Dr. Simon Pimstone, Xenon's Chief Executive Officer, and Ian Mortimer, Xenon's President and Chief Financial Officer. Following this introduction, Simon will give an overview of Xenon's clinical programs and then Ian will review our financial results. After that, we will open up the call to 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 results from clinical trials and preclinical development activities, including those related to our proprietary product and partnered product candidates, the potential efficacy, safety profile, future development plans, addressable market, regulatory success, and commercial potential of XEN-496, XEN-1101, XEN-007, and other proprietary and partnered product candidates, the anticipated timing of IND or IND-equivalent submissions, and the initiation of future clinical trials for XEN-496, XEN-1101, XEN-007, and other proprietary products, and those related to NBI-921352, FX-301, and other partnered candidates.
Thank you good afternoon, thanks for joining us on our call and webcast to discuss our 2019 financial and operating results. Joining me on today's call are Dr., Simon Pimstone, Xenon, Chief Executive Officer, and Ian Mortimer, Xenon, President and Chief Financial Officer.
Following this introduction Simon will give an overview as seen on clinical programs and then he will review our financial results. After that we will open up the called to your question.
Please be advised that during this call we will make a number statements that are forward looking including statements regarding the timing of in results from clinical trials in preclinical development activities, including those related to our proprietary products and partnered product candidates the potential efficacy safety profile future development plans addressable.
Addressable market regulatory success and commercial potential of X C. N for nine fix X C. N 11, a wine X C. N 007, and other proprietary and partnered product candidates the anticipated timing of I N D or I, India equivalent submissions and the initiation of future clinical trials for XC and four.
Nine six exceeding 11, no one X C N 007, and other proprietary products and those related to N.B. I nine to 135 to FX 301, and other partnered candidates the efficacy of our clinical trial designs, our ability to successfully develop and achieved milestones and the execution.
Jody Rates: The efficacy of our clinical trial designs, our ability to successfully develop and achieve milestones in the XEN-496, XEN-1101, XEN-007, and other proprietary development programs, the timing and results of our interactions with regulators, the potential to advance certain of our product candidates directly into Phase II or later stage clinical trials, anticipated enrollment in our clinical trials and the timing thereof, the progress and potential of our other ongoing development programs, the potential 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.
For nine fixed X C N 11 to one X the N. 007, and other proprietary development programs, the timing and results of our interactions with regulators the potential to advance certain of our product candidates directly into phase two or later stage clinical trials anticipated enrollment in our clinical trials and the timing there of the progress.
Potential of our other ongoing development programs, the potential receipt of milestone payments and royalties from our collaborators our expectation of having sufficient cash to fund operations into 2022, and the timing of potential publication or presentation of future clinical data forward looking statements are subject to numerous.
Risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time to time in our FCC filings. Our results may differ materially from those projected on today's call. We undertake no obligation to publicly update any forward looking statements.
Jody Rates: 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 our 2019 year-end results and the accompanying annual report on Form 10-K 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'd like to turn the call over to
Today's press release summarizing our 2019 yearend results and the accompanying annual report on form 10-K will be made available under the Investor section of our website at www dot seen on dash pharma Dot com and filed with the FCC and on feet are now I'd like to turn the call over to Simon. Thank you.
Simon N. Pimstone: Thank you, Jody, and good afternoon, everyone. 2019 was an exciting and transformative year for Xenon. We made significant progress within our clinical stage programs and entered into important collaborations. As a result, we have a strong balance sheet to support the development plans for our proprietary programs driving them towards critical data inflection points and resources devoted to furthering our preclinical innovative R&D efforts. Today I'll provide an overview of each of our proprietary clinical stage programs, including XCN 1101, 496 and 007, as well as our earlier stage discovery work and partnered programs, in order to highlight some of the important milestone events anticipated this year. Obviously, top of mind for businesses is the current uncertainty related to the potential impact of COVID-19.
Yes, good afternoon, everyone [noise].
2019 was an exciting and transformative year for xenon [noise].
We made significant progress within our clinical stage programs and entered into important collaborations as a result, we have a strong balance sheet to support the development plans for our proprietary programs driving them towards critical data inflection points and resources devoted to furthering our preclinical innovative R&D efforts.
Yes.
Today I'll provide an overview of each of our proprietary clinical stage programs, including ICSI any 11 or 1496 in 007 as well as our earliest stage discovery work can pop in programs in order to highlight some of the important milestone events anticipated. This yeah.
Obviously top of mind for businesses is the current uncertainty related to the potential impact of coated 19.
Simon N. Pimstone: Depending upon the locations of outbreaks, recruitment in clinical trials, transportation of drug products, patients' travel to sites, physicians' participation in investigator meetings, medical meetings, and additional factors in our business could all be affected. It's too early to predict the scope or nature of the impact from COVID-19, but we will continue to monitor the issue closely, and we will communicate any material changes in our business should these occur.
Depending upon the locations of outbreaks recruitment in clinical trials transportation of drug products patients traveled to sites physicians participation in investigator meetings medical meetings and additional factors in our business could all be affected.
It's too early to predict the scope for nature of the impact from Cobot 19, but we'll continue to monitor the issue closely and we will communicate any material changes in our business should these occur.
Simon N. Pimstone: I will start my update with XEN11-01, which is a differentiated next-generation KV7 potassium channel modulator being developed for the treatment of adult focal epilepsy and potentially other neurological disorders. Patient enrollment for our XEN 1101 Phase IIb clinical trial is ongoing in the United States, Canada, and Europe. The trial is a randomized, double-blind, placebo-controlled, multi-center study to evaluate the clinical efficacy, safety, and tolerability of XCN 1101 administered as adjuvantive treatment in approximately 300 adult patients with focal epilepsy. The primary end point is the median percent change in monthly focal seizure frequency from baseline compared to the treatment period of active versus placebo. The long-term six- to nine-month toxicology studies, which were recently completed, support the ongoing advancement of patients into the 12-month open-label extension stage of the ongoing Phase 2b clinical trial.
I will start my update with exceeding 11, no one which is a differentiated next generation kv seven potassium channel modulator being developed for the treatment of adult focal epilepsy and potentially other neurological disorders.
Patient enrollment for I exceeding 11, no one phase Twob clinical trial is ongoing in the United States, Canada and Europe.
The trial is a randomized double blind placebo controlled multicenter study to evaluate the clinical efficacy safety and tolerability of exceed 11, I want to administered as edge of active treatment in approximately 300 adult patients with focal epilepsy.
The primary endpoint is the median percent change in monthly focal seizure frequency from baseline compared to treatment period of activists is placebo.
The long term six to nine months toxicology studies, which we recently completed support the ongoing advancement of patients into the 12 month open label extension stage of the ongoing phase Twob clinical trial.
Simon N. Pimstone: Key opinion leaders and investigators are supportive of the KV7 mechanism of action in epilepsy, and feedback from sites to date has been positive. If approved, XEN1101 could represent the only drug in class and support refractory epilepsy patients who are seeking effective anti-seizure medications. As we've guided previously, depending upon the rates of enrollment, topline results are anticipated in the second half of 2020.
Key opinion leaders and investigators are supportive of the kv seven mechanism of action in epilepsy.
And feedback from sites to date has been positive.
If approved exceeding 11, no one could represent an only drug in Clos and support refractory epilepsy patients who are seeking effective anti seizure medications.
As we've guided previously depending upon the rates of enrollment topline results anticipated in the second half of 2020.
Simon N. Pimstone: One pending decision is whether or not we will opt to conduct an interim analysis. By way of background, we have made certain statistical modeling assumptions on tolerability and potential dropouts from the study. Depending on the dropout rate data, which we have access to on a blinded basis, we can choose to have a third-party statistician review unblinded data and provide guidance on resizing or reallocating to different treatment arms or doses to ensure power is maintained. We expect to make a decision on the interim analysis in the near term. Given its unique mechanism of action, we also continue to explore potential indications for Xen 1101 outside of epilepsy, and there are a number of indications which we are actively exploring. We look forward to keeping you updated as these plans develop in the coming months.
One pending decision is whether or not we opt to conduct an interim analysis.
By way of background, we have made certain statistical modeling assumptions on tolerability and potential dropouts from the study.
Depending on the dropout rate data, which we have access to on a blended basis. We can choose to have a third party statistician review unblinded data and provide guidance on recycling or reallocating to different treatment arms or doses to ensure power is maintained we expect to make a decision on the interim analysis.
In the near term.
Given its unique mechanism of action. We also continue to explore potential indications for exceed 11 or one outside of epilepsy and there are a number of indications, which we are actively exploring.
We look forward to keeping you updated as these plans develop in the coming months.
Simon N. Pimstone: Also within our portfolio of proprietary epilepsy products, XEN496 is a KV7 potassium channel modulator that contains the active pharmaceutical ingredient isogabine, also known as ritigabine, that we have reformulated and are developing as a treatment for a rare pediatric neurodevelopmental disorder called KCNQ2 developmental and epileptic encephalopathy, or KCNQ2DEE, which is characterized by multiple daily refractory A recent epidemiological study from Europe examining the incidence and phenotypes of childhood-onset genetic epilepsies reports the incidence of KCNQ2-DEE as approximately 1 in 17,000 live births, which can be compared to the 1 in 12,200 live births estimated for Dravet syndrome. There is a strong genetic rationale to suggest that Isogabine may be efficacious as a treatment for KCNQ2-DEE.
Also within our portfolio of proprietary epilepsy product exceeding 496 is the kv seven potassium channel modulator that contains the active pharmaceutical ingredient is auger been also known as were tigger being that we have reformulated and on developing as a treatment for a rare pediatric neurodevelopmental disorder.
Casey in Q2 developmental and epileptic in cephalon apathy, Okay see in Q2 D, which is characterized by multiple daily refractory seizures presenting within the first week of life.
A recent epidemiological study from Europe, examining the incidence and phenotypes of childhood onset genetic epilepsies reports the incidence of Casey in Q2, D. as approximately one passivity in thousand lives, which can be compared to the one bit 12200, libellous estimated for Dravet syndrome.
There is a strong genetic rationale to suggest that is all going to be in may be efficacious as a treatment for case in Q2 D.
Simon N. Pimstone: This is further supported by non-controlled clinical studies, as well as anecdotal parental and physician feedback, suggesting that XEN496 may be well tolerated and reduce seizure burden, with potential to improve development and cognition in this rare pediatric population. We recently presented data in December at the AES meeting, a survey of patients and caregivers in the KCNQ2DE community, which provided feedback consistent with the Miller-Chap and Olsen clinical case reports and added further strong support for our rationale to develop XEN496 for this rare pediatric developmental epilepsy disorder. The FDA has granted Xenon Orphan Drug Designation for XEN496 as a treatment for KCNQ2DE. In response to our pre-IND briefing package that included our proposal to study XEN496 in infants and children with KCNQ2DEE, the FDA supported our proposed safety monitoring plans, including long-term follow-up to monitor potential side effects, and indicated that a single, small pivotal trial could be sufficient provided the study shows evidence of a clinically meaningful benefit in patients with KCNQ2DEE.
This is further supported by non controlled clinical studies as well as anecdotal parental then physician feedback, suggesting that exceed 496, maybe well tolerated and reduce cesar burden with potential to improve developments and cognition in this rare pediatric population.
We recently presented data in December the ABS meeting.
Survey of patients and caregivers in the case in Q2, D. community, which provided feedback consistent with the Millichap and Olson clinical case reports and added further strong support for our rationale to develop ixia and 496 for this rare pediatric developmental epilepsy disorder.
The FDA has granted xenon orphan drug designation for Ixia and 496 as a treatment for case in Q2 D.
In response to our pre IB briefing package that included our proposal to study Ixia and 496 in infants and children with Casey in Q2, D. FDIC supported our proposed safety monitoring plans, including long term follow up to monitor potential side effects and indicated that a single small pivotal trial could be some.
Efficient provided the study shows evidence of a clinically meaningful benefits in patients with case in Q2 D.
Simon N. Pimstone: The in vitro and in vivo testing done to date demonstrates that XEN496 acts as an immediate release drug, similar pharmacokinetics to what was observed with exogamine tablets and as compatibility with common feeding devices used in pediatric dosing, such as baby bottles and NG tubes. We presented all of the significant CMC advances at the AES meeting in December. Stability studies for Xenon 496 are ongoing, and no issues have been encountered to date.
The in vitro and in vivo testing down to date demonstrates that exceed 496 axis an immediate release drug has similar pharmacokinetics to what was observed with Exalgo mean tablets and as compatibility with common feeding devices used in pediatric dosing such as baby bottles in LNG tubes.
We presented all of these significant CMC advances at the ABS meeting in December stability studies vaccine for nine six are ongoing and no issues have been encountered today.
Simon N. Pimstone: Late last year, we filed an IND application with the FDA related to a pharmacokinetic or PK study testing XEN496, our proprietary pediatric formulation of Isogabine, in healthy adult volunteers. In January this year, we received permission to proceed with the study, which is now ongoing. All subjects have completed dosing in the PK study, and we expect to have these PK data later this quarter. In parallel, feedback from correspondents with the FDA regarding the Phase III clinical design is expected early in the second quarter of this year, with the anticipated start of a Phase III clinical trial in KCNQ2-DEE in 2020. Although the protocol is still being finalized, at a high level, the trial design includes a randomized placebo-controlled trial using seizure frequency as the primary endpoint, with both dose titration and maintenance phases. We have selected a CRO and begun work in preparation for the Phase 3 trial, with site selection underway.
Late last year, we filed an island the application with the FDA related to a pharmacokinetic or PK study testing XC and 496, our proprietary pediatric formulation of is already been in healthy adult volunteers.
In January this year, we received permission to proceed with the study which is now ongoing.
All subjects have completed dosing in the PK study and we expect to have these PK data later this quarter.
In parallel feedback from correspondence with the FDA regarding the phase III clinical design is expected early in the second quarter of this year with the anticipated starting the phase III clinical trial in Casey in Q2 D. in 2020.
Although the protocol is still being finalized at a high level. The trial design includes a randomized placebo controlled trial using seizure frequency as the primary endpoint with both dose titration and maintenance phases. We have selected a CR ROE and began work in preparation for the phase III trial with site selection.
Simon N. Pimstone: In addition, our clinical development team is planning for regulatory submissions outside of the U.S. in select European jurisdictions following the receipt of FDA feedback in order to support the broader clinical development of XEN496. Turning now to XEN007, the active ingredient of which is flunarazine, which is a CNS actin calcium channel modulator that modulates CAV2.1 and T-type calcium channels. Other reported mechanisms include dopamine, histamine, and serotonin inhibition.
Underway.
In addition, our clinical development team is planning for regulatory submissions outside of the us in select European jurisdictions. Following the receipt of the FDA feedback in order to support the broader clinical development of exceeded 496.
Turning now to exceed 10, 007 active ingredient of which is financing which is the CNS acting calcium channel modulator that modulators CA be 2.1, NT type calcium channels.
Other reported mechanisms include domain histamine and serotonin inhibition.
Simon N. Pimstone: We are considering various development strategies for XEN007 and have entered into key exclusive licensing agreements in order to access regulatory files and drug product manufacturing, both of which may enable advanced clinical development of XEN007 for the treatment of hemiplegic migraine. The FDA granted orphan drug designation for the treatment of hemiplegic migraine with XEN007 and granted ODD and a rare pediatric disease or RPD designation for the treatment of During our analysis of potential neurological indications, we identified childhood absence epilepsy, or CAE, as a potential indication for XEN007. 007 has demonstrated efficacy in preclinical models of acute seizures, and flunarazine has been shown to be well tolerated clinically. To provide a bit more background on CAE, approximately 10% of seizures in children with epilepsy are typical absence seizures. The age of onset ranges from 3 to 13 years, with a peak at 6 to 7 years. Absence seizures can have a significant impact on quality of life. Episodes of unconsciousness may occur at any time and usually without warning.
We are considering various development strategies fix in 007 and have entered into key exclusive licensing agreements in order to excess regulatory files and drug product manufacturing both of which may enable advanced clinical development of axiom 007.
The FDA granted orphan drug designation for the treatment of Hemiplegic migraine with axiom 007, and granted Odidi and array pediatric disease RPD designation for the treatment of alternating hemiplegia of childhood with exceeding 007.
During our analysis of potential neurological indications, we identified childhood absence epilepsy or Cie as a potential indication for X in 007.
007 as demonstrated efficacy in preclinical models of apps on seizures and scenarios in has been shown to be well tolerated clinically.
To provide a bit more background on c., approximately 10% of seizures in children with epilepsy typical absent seizures.
Age of onset ranges from three to 13 years, where the peak at six to seven years.
So on seizures can have a significant impact on quality of life episodes of unconsciousness may occur at any time and usually without warning.
Simon N. Pimstone: Affected children need to take precautions to prevent injury during absence periods and should refrain from activities that would put them at risk if seizures occurred. Often, school staff members are the first to notice the recurrent episodes of absent seizures, and treatment is generally initiated because of the adverse impact on learning. A physician-led Phase II proof-of-concept study is now ongoing to examine the potential clinical efficacy, safety, and tolerability of XEN007 as an adjunctive treatment in pediatric patients diagnosed with treatment-resistant childhood absence epilepsy. It is anticipated that the study will enroll up to approximately 20 patients with CAE in an open-label manner after failing standard of care because of lack of efficacy or because of adverse events. Results from this Phase II study are expected in 2020.
Effective children need to take precautions to prevent injury during absence periods and should refrain from activities that we put them at risk of seizures occurred.
Often school soft members of the first to notice the recurrent episodes of EPS on seizures and treatment is generally initiated because of the adverse impact on learning.
The physician led phase two proof of concept study is now ongoing to examine the potential clinical efficacy safety and Tolerability of axiom 007, as an adjunctive treatment in pediatric patients diagnosed with treatment resistant childhood absence epilepsy.
It is anticipated that the study will enroll up to approximately 20 patients with C. In an open label manner. After failing standard of care because of lack of efficacy or because of adverse events.
Results from this phase two study are expected in 2020.
Simon N. Pimstone: Results from the CAE study will help shape our development strategy for XEN007 and may represent a potential orphan indication for future development of XEN007. Just briefly, I would also like to also highlight that we continue to make exciting progress in our early stage discovery work. Our deep knowledge of the genetics of channelopathies, combined with our proprietary biology and medicinal chemistry know-how, has positioned Xenon as a leader in small molecule ion channel drug discovery. A robust pipeline of early stage preclinical candidates encompasses our work related to a number of sodium and potassium channel targets. For example, our preclinical data suggests that a highly selective small molecule potentiator of NAB1.1 could potentially address the underlying cause of Dravet syndrome using a precision medicine approach and may have utility in other neurological indications where interneuron excitability is impaired. We intend to build upon this promising work and expect to highlight this exciting and novel preclinical work as it matures. We also presented some of our preclinical NAV1-1 potentiator data at AES in December, and the poster is on our website.
Results from the Cie study will help shape, our development strategy for X in 007 and May represent a potential orphan indication indication for future development, our vaccine 007.
Just briefly like to US a highlight that we continue to make an exciting progress in our early stage discovery work.
Our deep knowledge of the genetics of channel up at these combined with our proprietary biology and medicinal chemistry know how have physician xenon as a leader in small molecule Lion channel drug discovery.
A robust pipeline of early stage preclinical candidates encompasses our work related to a number of sodium and potassium channel targets.
For example, our preclinical data suggests that a highly selective small molecule potentiator of any maybe 1.1 could potentially address the underlying cause of dravet syndrome, using a precision medicine approach and may have utility and other neurological indications were into near on excite ability is impaired.
We intend to build upon this promising work and expect to highlight this exciting and novel preclinical work as it matures. We also presented some of our preclinical NAV one one potentiator data and EPS in December and the poster is on our web sites.
Simon N. Pimstone: Turning now to our partnered programs, we have an ongoing collaboration with Neurocrine Biosciences to develop novel sodium channel inhibitors as treatments for epilepsy. As announced in December last year, Neurocrin has an exclusive license to XEN901, now known as NBI921352, a clinical stage selective NAV1.6 sodium channel inhibitor, as well as novel selective NAV1.6 inhibitors and dual NAV1.2 and 1.6 inhibitors that are in pre The agreement also included a multi-year research collaboration to discover, identify, and develop additional novel NAV1.6 and NAV1.2 1.6 inhibitors. We believe that this collaboration with Neurocrin was a thoughtful and strategic decision, allowing us to invest in and maximize the potential of the later stage potassium channel assets in our pipeline, while still ensuring there is significant investment in the XEN901 and Next Generation Selective Sodium Channel Program.
Turning now to our partnered programs, we have an ongoing collaboration with Neurocrine biosciences to develop novel sodium channel inhibitors as treatments for epilepsy.
As announced in December last year, Neurocrine has an exclusive license to exceed 901 now known as in beyond nine to 135 to a clinical stage selective in every 1.6 sodium channel inhibitor as well as novel selective in Abbey Onesix inhibitors and jewel in every 1.2 and one six inhibitors that are in preclinical.
Development.
The agreement also included a multi a research collaboration to discover identify and develop additional novel NAV 1.6, and that 1.21 0.6 inhibitors.
We believe that this collaboration with Neurocrine was a thoughtful and strategic decision, allowing us to invest in and maximize the potential of the latest stage potassium channel assets in our pipeline, while still ensuring there is significant investment in the Akcea nine Hawaiian and next generation selective sodium channel programs.
Simon N. Pimstone: Both Xenon and Neurocrine have a keen interest in precision medicine therapies, and our combined expertise in neuroscience and ion channel modulation represents a powerful partnership. Neurocrine has indicated a strong interest in addressing the unmet medical needs of patients with SCN8A-DEE, a rare, extremely severe single-gene epilepsy caused by mutations in the SCN8A gene that result in a gain of function in the SCN8A-DEE typically presents with seizure onset between birth and 18 months of age. Most children diagnosed with SCN8A-DEE have seizures that can occur multiple times a day and are often difficult to treat.
Both xenon and Neurocrine have a keen interest in precision medicine therapies, and our combined expertise in neuroscience and ion channel modulation represents a powerful partnership.
Neurocrine has indicated a strong interest in addressing the unmet medical needs of patients with SGN eight A.D. a rare extremely severe single gene epilepsy caused by mutations in the Cneighty gene that result in a gain a function in the NAV 1.7, sorry, the NAV 1.6 sodium channels.
As Cneighty GE typically presents with seizure onset between birth in 18 months of age most children diagnosed with less DNA to each of seizures that can occur multiple times, a day and often difficult to treat.
Ian C. Mortimer: Neurocrin plans to conduct a placebo-controlled study with NBI 921352 and anticipates filing an IND application with the FDA in mid-2020 in order to start a Phase II clinical trial in SCN88-DEE patients in the second half of 2020. Neurocrin is eligible to receive up to $25 million upon the FDA's acceptance of an IND. In addition, Neurocrin has also indicated that NBI N21352 may have potential in a range of seizure disorders, including adult focal epilepsy. Moving now to our partnership with Flexion Therapeutics, which has global rights to develop and commercialize FX-301, formerly XEN-402, and NAV1.7 inhibitors. Flexion's preclinical FX-301 program consists of XEN-402 formulated for extended release from a thermosensitive hydrogel. The initial development of FX-301 is intended to support administration as a peripheral nerve block for control of post-operative pain.
Your current plans to conduct a placebo controlled study with end beyond nine to 1352 and anticipates filing a 90 application with the FDA mid 2020 in order to start a phase two clinical trial and SDN H.A.D. patients in the second half of 2020.
We are eligible to receive up to $25 million upon the FDA acceptance of a 90.
In addition, neurocrine as also indicated that NB into 135 to may have potential in a range of seizure disorders, including at old focal epilepsy.
Moving now to our partnership with Flexion Therapeutics, which has global rights to develop and commercialize FX Threeo, one formally XE and for a two and NAV 1.7 inhibitor.
Collections preclinical FX 301 program consists of ixia and for a two formulated for extended release from a semi sensitive hydrogels.
The initial development of FX three or one is intended to support administration as the peripheral nerve block for control of postoperative pain.
Flexion has indicated that it anticipates initiating if FX three or one clinical trials in 2021.
I believe that xenon currently as one of the most exciting epilepsy pipelines currently in development and strong relationships with our valued collaborators bolstered by a healthy balance sheet. We are entering a data rich period with the expectation that a number of our product candidates will into mid to late stage clinical trials will generate imports.
Ian C. Mortimer: Flexion has indicated that it anticipates initiating FX-301 clinical trials in 2021. I believe that Xenon currently has one of the most exciting epilepsy pipelines currently in development and strong relationships with our valued collaborators. Bolstered by a healthy balance sheet, we are entering a data-rich period with the expectation that a number of our product candidates will enter mid- to late-stage clinical trials or generate important clinical data in 2020. At this point, I'll ask Ian to recap our financial position and to provide some closing commentary before opening up the call to your questions.
And clinical data in 2020.
At this point a loss in to recap our financial position and to provide some closing commentary before opening up the call to your questions. Yes.
Thanks, Simon and good afternoon, everyone. The specific details within our financial statements are covered in today's press release and also in our 10-K filing so I'll provide an overview and conclude with a summary of our upcoming milestones.
In addition to the advancement of our clinical development programs, where Simon conveyed 29 team margin important euro for us in the capital markets. The progress made within our proprietary programs as well as the upfront and deal terms from our partnership with Neurocrine. We're extremely well received this positive momentum carried through into early this year.
Ian C. Mortimer: Ian? Thanks, Simon, and good afternoon, everyone. The specific details within our financial statements are covered in today's press release and also in our 10-K filing, so I'll provide an overview and conclude with a summary of our upcoming milestones. In addition to the advancement of our clinical development programs, which Simon conveyed, 2019 marked an important year for us in the capital markets. The progress made within our proprietary programs, as well as the upfront and deal terms from our partnership with Neurocrin, were extremely well received.
When we raised over $100 million from an underwritten public offering and from sales under our aftermarket equity or ATM offering.
These efforts resulted in an extension of our cash runway and a strong balance sheet.
Based on current assumptions, which include fully supporting the planned clinical development of vaccine 11, or 149 sex and 007 as well as providing support to our preclinical programs, we anticipate having sufficient cash to fund operations into 2022, excluding any revenue generated from existing.
Ian C. Mortimer: This positive momentum carried through into early this year when we raised over $100 million from an underwritten public offering and from sales under our at-the-market equity, or ATM, offering. These efforts resulted in an extension of our cash runway and a strong balance sheet. Based on current assumptions, which include fully supporting the planned clinical development of XCN 1101, 496, and 007, as well as providing support to our preclinical programs, we anticipate having sufficient cash to fund operations into 2022, excluding any revenue generated from existing partnerships or potential new partnering arrangements. On the call today, I'll briefly summarize our financial position. I'll refer you to our news release and our 10-K filing for additional detail, especially on revenue and operating expenses.
Partnerships or potential new partnering arrangements.
On the call today, I'll briefly summarize our financial position I'll refer to you to our news release, and our 10-K filing for additional detail, especially on revenue and operating expenses.
Cash and cash equivalents and marketable securities as of December 30, Onest 2019 were $141.4 million and this compares to $119.3 million as of December 30, Onest 2018.
As of December 30, Onest 2019, there were approximately 28.1 million common shares outstanding and approximately 1 million series, one preferred shares outstanding which are convertible into common shares on a one for one basis at the option to the holder subject to certain limitations.
As I noted subsequent to December 30, Onest 2019, we raised additional net process. The proceeds of approximately $102.8 million net of underwriting discounts and commissions, but before offering offering expenses from the sale of common shares under our ATM agreement and an underwritten public offering.
Ian C. Mortimer: Cash and cash equivalents and marketable securities as of December 31st, 2019 were $141.4 million, and this compares to $119.3 million as of December 31st, 2018. As of December 31, 2019, there were approximately 28.1 million common shares outstanding and approximately 1 million Series 1 preferred shares outstanding, which are convertible into common shares on a one-for-one basis at the option of the holder, subject to certain limitations.
Therefore, raising over $160 million in December and January through equity offerings, and the Neurocrine transaction places xenon and a strong financial position to execute on our business over the coming years.
Im extremely proud of the progress we made last year and our team is committed to strategically and prudently managing our business to support anticipated milestone events, including expected topline data from the ongoing axiom 11, Elwen phase Twob clinical trial in adult focal epilepsy in the second half of 20 to 20.
Ian C. Mortimer: As I noted, subsequent to December 31, 2019, we raised additional net proceeds of approximately $102.8 million, net of underwriting discounts and commissions but before offering expenses, from the sale of common shares under our ATM agreement and an underwritten public offer. Therefore, raising over $160 million in December and January through equity offerings and the Neurocrin transaction places Xenon in a strong financial position to execute on its business over the coming year. I'm extremely proud of the progress we made last year, and our team is committed to strategically and prudently managing our business to support anticipated milestone events, including expected top-line data from the ongoing XCN 1101 Phase IIb clinical trial in adult focal epilepsy in the second half of 2020, and further exploration of other potential clinical indications for this novel KV7 potassium channel modulator.
Okay and further exploration of other potential clinical indications for this novel kv seven potassium channel modulator.
Completion of the ongoing Xsix hundred 496, PK study this quarter, followed by anticipated FDA feedback on our phase III protocol early within the second quarter, placing us in a position to initiate a phase three pivotal trial with axiom for nine six in patients with KC 10-Q, two d. in 2020.
And results from the physician led phase two open label study in treatment resistant fee AG was ex CN 007.
We also anticipate important milestone events from our collaborators, which provide opportunities for us to earn milestone payments as they advance through development, our collaborator Neurocrine expects to file an iron D. in mid 2020 in order to start a phase two clinical trial for and MBI nine to 1352 in.
Ian C. Mortimer: Completion of the ongoing XEN-496 PK study this quarter, followed by anticipated FDA feedback on our Phase III protocol early in the second quarter, placing us in a position to initiate a Phase III pivotal trial with XEN-496 in patients with KCNQ2DEE in 2020, and results from the Physician-Led Phase II Open Label Study in Treatment-Resistant CAE with XCN007. We also anticipate important milestones from our collaborators, which provide opportunities for us to earn milestone payments as they advance through development. Our collaborator, Neurocrin, expects to file an IND in mid-2020 in order to start a Phase II clinical trial for NBI-921352 in SCN8A-DEE pediatric patients. Acceptance of this IND would provide a meaningful $25 million milestone payment in cash and equity. And lastly, Flexion continues its development planning for FX301 and anticipates initiating clinical trials in 2021. We expect that 2020 will be another important year for Xenon, and we're excited about keeping you informed of our progress. Operator, we can now open the call up for questions.
CN eight A.D. pediatric patients acceptance of this I, Andy would provide a meaningful $25 million milestone payment in cash and equity and lastly, flexion continues its development planning for FX three there are one and anticipates initiating clinical trials in 2021.
We expect the 2020, we will be another important near for xenon and we're excited about keeping you informed of our progress operator, and we can now open the call up for questions.
Certainly ladies and gentlemen, if you have a question at this time. Please press Star then one on your Touchtone telephone. If your question has been answered if you'd like to move we sell from the Q. Please press the pound key our first question comes from the line of Palma teams from Stifel. Your question. Please.
Great. Thanks for taking my questions and congratulations on all the progress.
I have a couple one on a level worn.
Couple others on on other programs are looking to one word downside to conducting an interim analysis that you were thinking through whether or not you will do that obviously the upside is good morning.
3100 design it.
Operator: Certainly. Ladies and gentlemen, if you have a question at this time, please press star, then 1 on your touchtone telephone. If your question has been answered, and you'd like to remove yourself from the queue, please press the pound key. Our first question comes from the line of Paul Matteis from Stiefel.
Is there any downside like are you spending any albarn it brought that and I forgot or couple of quick follow that.
Paul Simon yen in May want to provide any additional color.
Look there is a small alpha hits.
If we if we were to do it.
I think that is going to be the driver of the decision.
But that would really be.
Some some downside to the interim.
Paul Andrew Matteis: Your question, please? Great, thanks for taking my questions and congratulations on all the progress. I have a couple, one on 11.01 and a couple others on other programs.
As we've said and we've we've talked about on todays call. We are seeing data on a blinded basis and so.
The reality is the study is pretty well powered close to 90%.
Paul Andrew Matteis: On 11.01, what's the downside to conducting an interim analysis? You said you were thinking through whether or not you'd do that. Obviously, the upside is you get more information about the study and how to design it. Is there any downside, like are you spending any alpha or anything like that? And I have a couple of quick follow-ups. Thank you.
You know two to see a 15% difference and if we if we meet that will meets a statistical significance.
Obviously with certain dropouts assumptions modeled in and and certain standard deviation assumptions modeled in and if dropouts.
Substantially lower than what we've modeled we just don't see.
Simon N. Pimstone: Paul, Simon here, and Ian may want to provide any additional color. Yeah, I mean, look, there is a small alpha hit if we were to do it. I don't think that is going to be the driver of the decision, but that would really be, you know, some downside to the interim. You know, as we've said and we've talked about on today's call, we are seeing data on a blinded basis. You know, the reality is, the study is pretty well powered, close to 90%, you know, to see a 15% difference, and if we meet that, we'll meet statistical significance. Obviously, with certain dropout assumptions modeled in and certain standard deviation assumptions modeled in, and, you know, if dropouts are, you know, substantially lower than what we've modeled, we just don't see a significant need to run that Ian, anything to add?
The significant need to two to run that study.
And it's not really so much a major positive major downside liability and does not show we need to take any alpha hits, if we don't needed in anything too right.
Yes, I mean.
The other just kind of practical part of this is.
To do a real interim analysis, you have to have essentially the database complete.
At that at that kind of data and so by the time you have those patients enrolled with all of the baseline maintenance and then follow up and then you actually make sure that you have clean data and you do and analysis, you're essentially complete enrollment in the study anyway, there's just a practical consideration here.
Simon mentioned, if we go through the analysis and we believe this is a well our phase two study if there is not going to be a lot of benefit we get to we likely get to topline data a little bit quicker. If we don't do the interim analysis.
Okay is there a futility analysis as part of what you consider it.
Ian C. Mortimer: Uh, yeah, I mean, uh... The other kind of practical part of this is that to do a real interim analysis, you have to have essentially the database complete at that cut of data. And so by the time you have those patients enrolled with all of the baseline maintenance and then follow-up, and then you actually make sure that you have clean data and you do that analysis, you're essentially complete enrollment in the study anyway. So there's just a practical consideration here. As Simon mentioned, if we go through the analysis, and we believe this is a well-powered Phase 2 study, if there's not going to be a lot of benefit, we likely get to top-line data a little bit quicker if we don't do the interim analysis.
No we I mean, we havent formally.
You know.
Model the futility into that so no. It was really just a re sizing too.
Any of the additional dose or active almost full.
Yes, I mean, all I'd add is Simon's crack this wasn't designed as futility. It was really more design that would you reallocate.
And re size if you if you look at the.
You'll know the details of the trial design on a two to one to one to two basis going from the 25 milligram.
There will be a 100 patients to 50 patients in the 20 and 10 milligram arms, and then 100 and placebo so of Tolerability wasn't good and your top dose there the trial isn't divine that youre drop down.
Simon N. Pimstone: Okay. Is there a futility analysis as part of...
Simon N. Pimstone: No, I mean, we haven't formally, you know, modelled futility into that, so no, it was really just a resizing to avoid any of the additional dose or active arms pull.
During the study to a lower dose and so you would want to increase some of those other arms if thats what concerns. So that's really why the interim analysis.
As was identified a priority.
Ian C. Mortimer: Yeah, I mean, all I'd add is Simon's correct. This wasn't designed as futility. It was really more designed to see how would you reallocate and resize? If you look at the, you'll know the details of the trial design on a two to one to one to two basis going from the 25 milligram, which will be 100 patients, to 50 patients in the 20 and 10 milligram arms and then 100 in placebo. So if tolerability wasn't good at your top dose, the trial isn't designed so that you drop down during the study to a lower dose. And so you would want to increase some of those other arms if that's a concern. So that's really why the interim analysis was identified a priori. That said, if we do go ahead with the interim analysis and the study is futile, then obviously, we would have that feedback. We wouldn't want to expose patients to a drug that doesn't have a chance of working, but that's really not, that wasn't the purpose going in.
That said if the if the if we do go ahead with the interim analysis and.
And the study is few tile then obviously, we would have that feedback we wouldn't want to expose patients to a drug that doesn't have a chance of working but thats really not that wasn't the purpose going on.
Okay Fair enough and then one more clinical questions. One quick quick financial question on 406.
In the past Simon you've talked about a pivotal study that because of the sample size might not have a statistical hurdle at 0.05.
Might even be more of a kind of numerical comparison or a certain seizure reduction threshold for drug over placebo.
I don't know how much you want to get ahead of the FDA meeting or feedback, but I'd be curious, where we're headed that there and then.
Just quickly we'd be curious how you guys are planning on accounting for different milestone payments in the near current agreement. It looks like the one that was received in Fourq you wasn't recognized upfront and how that might work going forward with different things like R&D filings would be helpful. Thank you.
Paul Andrew Matteis: Okay, fair enough. And then there's one more clinical question and one quick financial question. On 496. In the past, Simon, you've talked about a pivotal study that, because of the sample size, might not have a statistical hurdle at 0.05, might even be more of a kind of numerical comparison or a certain seizure reduction threshold for the drug over placebo. I don't know how much you wanna get ahead of the FDA meeting or FDA feedback, but I'd be curious where your head is at there. And then, Ian, if you don't mind, just quickly, we'd be curious how you guys are planning on accounting for different milestone payments in the Nuroquin agreement. It looks like the one that was received in 4Q wasn't recognized up front, and how that might work going forward with different things like IND filings would be helpful. Thank you.
Yes, Paul Thanks, Simon I'll tackle the first and then we'll tackle the second yeah, I look I don't want to get too much ahead of obviously the FDA given we do expect as has been guided today, we expect feedback early in Q2, which isn't too far away.
We do we will be looking in Sydney have proposed.
Protocol that we'll have a P value, meaning statistical significance.
Endpoint.
And with the is modeled assumptions both in believe we can achieve this with a few dozen patients pool.
A lot depends obviously on the endpoint being measured the frequency of that endpoint and so.
Simon N. Pimstone: Yeah, Paul, thanks. Simon, I'll tackle the first, and Ian will tackle the second.
We clearly are orienting this more towards.
Simon N. Pimstone: Yeah, look, I don't want to get too much ahead of, obviously, the FDA, given we do expect, as has been guided today, we expect feedback early in Q2, which isn't too far away. We will be looking and certainly have proposed a protocol that will have a p-value, meaning a statistically significant endpoint, and with the modeled assumptions built in, believe we can achieve this with a few dozen patients, Paul You know, a lot depends, obviously, on the endpoint being measured, the frequency of that endpoint, and so we clearly are orienting this more towards kids that have a higher frequency or burden of seizures to allow a meaningful reduction, both clinically as well as statistically, in a reasonable period of time. So that is currently contemplated.
Kids that have a higher frequency or burden of seizures to allow.
Meaningful reduction both clinically as well as statistically in a reasonable period of time.
So.
That is currently contemplated yes, we are expecting the FDA will likely want to see.
P value hits and we are expecting.
We would want to as the community would want to see a clinically meaningful.
Difference in seizures, Mitch both of those are important and we believe the model currently incorporates both of those elements satisfactorily. We have had extensive dialogue with a number of kao wells with the patient advocacy group in coming up with the final proposed approach.
Simon N. Pimstone: Yes, we are expecting the FDA will likely want to see a p-value hit, and we are expecting we would want to, as the community would want to see a clinically meaningful difference in seizures. Both of those are important, and we believe the model currently incorporates both of those elements satisfactorily. We have had extensive dialogue with a number of KOLs, and with the patient advocacy group, in coming up with a final proposed protocol for the FDA. As I said, we expect to get feedback soon, and depending, obviously, on the substance of that feedback, and we may or may not require a couple of rounds with the agency, we do expect to obviously communicate what will be the accepted protocol once that is available. But I hope that answers your question at a high level. Ian, the second was just regarding accounting.
Nicole to the FDA as I said, we expect to get feedback soon and depending obviously on material that feedback and we may or may not require a couple of rounds with the agency, we do expect to obviously communicates.
The what would have what will be the excepted protocol once that is available so but I hope that answers. Your question at a high level in the second was just regard accounting for yes. So.
Not to go into a lot of detailed right now on the call and we can follow up afterwards, so obviously, the accounting and revenue recognition with any collaborative agreement is quite complex and we just posted at.
Within the last half hour, our 10-K on the website. So I do encourage you to take a look at the notes the financial statements that walks through the accounting for newer Curran.
Just at a high level.
For the upfront payment obviously, that's recognized and this is often the case and collaborative agreements about upfront payment is recognized over a period of time and there's a number of performance obligations under that and the details are in the financial statements and then I can answer any more follow up questions specifically as it relates to your question around milestone payments again it depends on.
Ian C. Mortimer: Not to go into a lot of detail right now on the call, and we can follow up afterwards. So, obviously, the accounting and revenue recognition for any collaborative agreement is quite complex. And we just posted it, you know, within the last half hour, on our 10K on the website.
Ian C. Mortimer: So I do encourage you to take a look at the notes to the financial statements that walk through the accounting for Nurocrin. You know, just at a high level, for the upfront payment, obviously, that's recognized, and this is often the case in collaborative agreements, that that upfront payment is recognized over a period of time. And there are a number of performance obligations under that, and the details are in the financial statements. And then I can answer any more follow-up questions. Specifically, as it relates to your question around milestone payments, again, it depends on the nature of the milestone payment. I'll make a very general comment. Often, milestone payments are recognized in the period in which they're earned, but that is just a general comment, and we would have to look under all of our collaborative agreements at any milestone payment in terms of how it was achieved and if there are any additional performance obligations under that milestone.
On the nature of the milestone payment I'll make it very general comment often milestone payments are recognized in the period in which in which there earned.
But that is just a general comment and we would have to look under all of our collaborative agreements any milestone payment in and how it was achieved and and if there's any additional performance obligations under that milestone.
Alright fair enough. Thank you book appreciate it yes, thanks Paul.
Thank you and as a reminder, ladies and gentlemen, if you have a question at this time. Please press Star then one our next question comes from Milan, Tim from well William Blair. Your question. Please.
Hey, this is laughlin on to Tim Thanks for taking the questions.
First of all just wondering you said you're expecting feedback from the FDA early second quarter.
That is positive and fine with what you proposed are there any other gating factors to us getting that trial performed on six no not at the moment.
Paul Andrew Matteis: All right, fair enough. Thank you both. I appreciate it.
Operator: Yeah, thanks, Paul. Thank you, and as a reminder, ladies and gentlemen, if you have a question at this time, please press star, then one. Our next question comes from Tim Lugo from, well, William Blair. Your question, please. Hey, this is Lachlan on to Tim.
We believe that our drug substance and drug product supply is safe, but of course, that's always something depending on how supply chain is affected with with covert.
But we have.
We have the drug available.
We expect.
As we begin we've we've just updated to have the final PK data from the adult volunteers study this quarter as we've previously guided we would that is on track that data is obviously important in helping to finalize the protocol in terms of dosages.
Operator: Thanks for taking the questions. First of all, I was just wondering if you're expecting feedback from the FDA early in the second quarter. If that is positive, and they're fine with what you've proposed, are there any other gating factors?
Simon N. Pimstone: Not at the moment. You know, we believe that our drug substance and drug product supply is safe. But, of course, that's always something depending on how the supply chain is affected by COVID. But we have, you know, we have the drug available. We expect, as again, we've just updated to have the final PK data from the adult volunteer study this quarter, as we've previously guided. We would. That is on track.
As and titration phase.
We're making certain assumptions based on the Nonclinical in vitro and PK data, we have in terms of the performance of the drug.
So those are some of the issues will have to build in but we don't see any other gating items per se.
Simon N. Pimstone: That data is obviously important in helping to finalize the protocol in terms of dosages and the titration phase. We're making certain assumptions based on the non-clinical in vitro and PK data we have in terms of the performance of the drug. So those are some of the issues we'll have to build in. But we don't see any other gating issues per se. Sites that can participate that may be affected by COVID will obviously have to be understood and monitored, and we'd have to select sites accordingly.
Sites that can participate that may be affected by covert we'll we'll obviously have to be understood and monitored and we'd have to select sites. Accordingly, so as I'm sure you and others have heard on on a number of.
These types of.
Report so updates.
I think just a bit early to know what the impact might be on the full supply chain for our clinical studies, but none of the gating items that were aware of Weve.
Simon N. Pimstone: So as I'm sure you and others have heard on a number of these types of reports or updates, you know, I think it's just a bit early to know what the impact might be on the full supply chain for our clinical studies. But now the gating items that we're aware of, we've previously, for example, asked the FDA whether they believed any additional non-clinical toxic work for 496 would be required. They said no. So again, things may change at the FDA, but we're acting on the basis of previous guidance that we've been given. So there's nothing else that I can think of other than what I've outlined today.
Previously for example, last the FDA.
Whether they believed any additional nonclinical tox work for 496 would be required they sit note.
So again things may change at the FDA, but we were acting on on on the basis of previous guidance that we've been given so nothing else that I can think of other than what I've outlined today.
Okay, great. Thank you and and in terms of 11, one enrollment could you just talked through sort of how thats been trending and if there's been any changes.
Simon N. Pimstone: Okay, great. Thank you. And in terms of 1101 enrollment, could you just talk through sort of how that's been trending and if there have been any changes?
Yes, no we as we always say every quarter and with investors. We don't give guidance mid study in any of our trials in terms of enrollment.
Simon N. Pimstone: Yeah, no, as we always say every quarter and with investors, we don't give guidance mid-study in terms of enrollment for any of our trials. We're expecting data by the second half of this year, as we've continued to guide, and we're on track for that currently. So you know, again, what the future holds in terms of COVID, I can't speak to, but so far, guidance remains.
We are expecting data above by the second after this years. We've continued to guide we're on track for that currently.
So again, what the future holds in terms of covert I can speak to but so far guidance remains.
Great. Thank you very much a little.
Thank you once again, if you have a question. Please press Star then one our next question comes on line of gets in nature from Guggenheim Partners. Your question. Please.
Operator: Great, thank you very much. Not at all.
Operator: Thank you. Once again, if you have a question, please press star then 1. Our next question comes from the line of Yatin Zinoja from Guggenheim Partners. Hey guys, thank you for taking my question. A couple questions on 11.01. With regard to the interim analysis, if that were to happen, what would be the triggering factor? Like, what are you waiting for to decide whether you'll take that look or not? And then how will you communicate with us? Will we just get a PR once it has happened, and at what level of enrollment will that be conducted?
Hey, guys. Thank you for taking my question couple of question on 11, no one, but they've got to be interim analysis that want to happen there what would be the triggering factor like what are you waiting for to decide whether you take that.
Look or not.
And then how will you communicate to US who will be just want a peak once it does not bolt on up all what level of them Goldman will that be conducted.
Ian C. Mortimer: So, yeah, and Ian, the interim analysis was initially planned after about 60% of the trial had been enrolled, but as Simon mentioned previously, we see blinded safety data on an ongoing basis. So, again, if we believe that, as we answered in the first question, if we believe that the trend is well within how the study was modeled up front, then we can make that determination at any time, and, you know, for us, this is going to be in the near term. We'll make this decision, and once the decision's made, yeah, we've had a number of questions from investors and analysts on the interim analysis, and so once we make a definitive decision one way or another internally, then we will communicate that broadly.
So yet and it's in the interim analysis initially was planned.
After about 60% of the trial had been enrolled but as Simon mentioned previously we see blinded safety data.
On an ongoing basis, so again, if we believe.
That said as we answered the first question if we believe that.
The trend as well within how the study was modeled upfront and then we can make that determination at any time and.
Good for US this is going to be in the near term will make this decision.
Once the decisions made yes, we've had we've had a number of questions from investors and analysts on the interim analysis and so once we make a definitive decision one way or than other internally than we would communicate that Broadway.
Simon N. Pimstone: Okay, that's good. And then maybe just talk about the placebo. What are your expectations for a placebo arm in that trial? Is there a change in how the placebo response has evolved over the last, let's say, you know, 5 to 10 years in adults with epilepsy? How should we think about that?
Okay. That's good among let me just talk about the placebo what are your expectation.
For a placebo on in that trial is there a change in how the placebo.
With sponsors Waldo what are the loss I'd say five to 10 working adults will collapse.
Simon N. Pimstone: Yeah, so there are two questions there. Maybe I'll answer the last part of your question first.
About that.
Yes.
Two questions there maybe I'll answer the last part of your question first yes, I mean, I think as with a number of diseases epilepsies not immune we've seen.
Simon N. Pimstone: Yes, I mean, I think as with a number of diseases, epilepsy is not immune. We've seen an increase in placebo response rates, certainly for focal epilepsy in adults, over the last decade or so. You know, the Isogabine pivotal trials saw placebo rates in and around the mid-teens to high-teens. We have modeled essentially blindly the placebo response rate in the sense that the study is powered to detect a 15% difference between the active and the placebo seizure frequency. So if active has a 40% reduction and placebo has a 25% reduction, assuming your dropout numbers are fine and assuming your standard deliation is as modeled or better, you'll meet your p-value even with a 25% placebo. So we've set what we term a floating placebo because of that.
An increase in the placebo response rates it needful focal epilepsy in adults over the last decade also you know the is all going been pivotal trials.
Sole placebo rates in and around the mid teens to high teens.
We have models essentially.
Blindly the placebo response rate yet in in the sense that this study is.
Powered to detect a 15% difference between the active and the placebo frequency seizure frequency so.
If active.
Has a.
40% reduction and placebo has a 25% reduction assuming youre dropout numbers are fine and assuming your standard deviation is.
His as models or beta you'll meet your P value, even with a 25% placebo. So we've we've said for what we term a floating placebo because of that.
Simon N. Pimstone: I think if you had to ask people today, what would they typically model as a placebo rate? Today, for focal epilepsy, it's probably in and around 20%. Now, it can be a bit higher, it can be a bit lower; it may depend on jurisdiction. But, you know, again, we're going to sites that are well-versed in these trials. We don't expect surprises, but the fact that we've modeled this difference with a floating rather than a fixed placebo rate, I think, helps us, you know, and as I said, if we see that 15% difference between the numbers and standard deviations within what's assumed, we'll meet our p-value.
I think probably have yet to ask.
People today, what would they typically model as a placebo rage today for focal epilepsy, it's probably in and around 20% now can be a bit higher can be a bit lower.
It may depend on jurisdiction.
But again, we going to sites that are well versed in these trials.
We don't expect surprises, but the fact that we've modeled this difference it with a floating rather than a fixed placebo rates I think helps us.
As I said, if we see that 15% difference with the numbers and standard deviations within whats assumed we'll we'll meet how P value.
Ian C. Mortimer: One final question for Ian. Could you maybe help us with the P&L? How should we model R&D and DNA going forward? Is it more going to be back-end oriented, or should we sort of incrementally increase it quarter over quarter?
Got it very helpful. Just one final question.
Could you maybe help us.
The plan and how should we model R&D and going forward.
More going to be back then.
Oriented or.
The sort of incremental.
Quarter over quarter.
Ian C. Mortimer: Yeah, so if you look at our OPEX for 2019, OPEX was about $50 million, so that's a breakdown of 39, you know, in rough terms, 39 million in R&D and about 11 million in GNA. Although we don't give specific guidance on OPEX, when you just look at the business in terms of 1101, so obviously that was a big line item of spend in 2019, that'll continue in 2020 and likely increase as more patients roll over into open-label extension because that's another part of that study, and so as we get all the patients enrolled and move over to OLE, those expenses will continue to increase, and then obviously, the other big change So overall, I do expect OPEX to increase in 2020 over 2019, but I still think the kind of key message is when you look at our balance sheet, even with that increase in OPEX, we comfortably have more than two years of cash well into 2022.
Yes. So if you look at our Opex for 2019, Opex is about $50 million. That's a breakdown of 39 in rough terms 30 mine 39 million in R&D and about 11 million in Gionee, Although we don't give specific.
Guidance on our Opex when you just look at that business.
In terms of 11 are ones, obviously that was a big line item of spend in 2019 that'll continue in 2020 and likely increases as more patients roll over into open label extension.
Because thats another part of that study and so as we get all the patients enrolled in move over to allow the those expenses will continue to increase and obviously the other big change in our business from 29 team to 2020 is moving for nine sex.
Into the pivotal program. So overall I I do expect Opex to increase.
In 2020 over 29 team, but I still think the kind of key message is when you look at our balance sheet, even with that increase in opex, we comfortably have more than the two years of cash well into 2022.
Operator: Great. Thank you very much. Thank you once again. If you have a question at this time, please press star then 1. Our next question comes from the line at Marey Raycroft from Jefferies. Your question, please. Hey everyone, congrats on the progress and thanks for taking my questions. For the 1101 phase 2b, I'm just wondering if you can comment on what you're seeing for safety and dropout rates and whether you're seeing anything different across the different doses. And then, is it possible to stop the study early if you succeed on efficacy in the interim?
Great. Thank you very much.
Thank you once again if you have question at this time. Please press Star then one our next question comes on line them right Reycraft from Jefferies. Your question. Please.
Everyone. Congrats on the progress and thanks for taking my questions.
For the 11, no one phase to be I. Just wondering if you can comment on what you're seeing for safety and dropout rates and whether you're seeing anything different across the different doses and then is it possible to start to stop the study early if you succeed on efficacy at the interim.
Simon N. Pimstone: Yeah, look, Maury, again, we don't typically comment on mid-studies for this or any other trial. It's just been our policy.
Yes look Marguerite again, we don't typically comments mid studies for this or any other trial, we assist our policy I mean, we're encouraged by what we seeing but we don't give any specifics around dropout rates.
Simon N. Pimstone: I mean, we're encouraged by what we're seeing, but we don't give any specifics around dropout rates, conversion to OLE, or safety tolerability, but we do remain very encouraged by what we're observing. Of course, it's all on a blinded basis, so I've no ability to make or infer any association with safety tolerability or dropout, but based on dose groups. You know, we have not made any decisions on stopping the study early. We don't expect to. The interim, as we had designed it, was really for resizing, you know, should we need to add numbers to some of the lower dose arms based on tolerability. It really wasn't to perform an efficacy review today or when it's done, so I don't think you'll see us stopping the study early, no matter what, whether or not an interim is done. I don't think you'll see that happen, so that's really, I think, the best way I can answer this today.
Conversion totally safety Tolerability, but we do remain very encouraged by what we're observing of course, it's all on a blinded basis. So I have no ability to make going to.
Any.
Association, with safety, tolerability, or dropout or or but based on dosage dose groups.
We have not.
Made any decisions on stopping study. This study early we don't expect too.
The interim as we had designed it was really for re sizing.
Should we need to add numbers to some of the lower dose arms based on Tolerability, It really wasn't to perform a.
In the efficacy.
Review today, when it's done so I don't think you'll see us stopping the study early no matter what.
Whether an interim is done I don't think you'll see that happened. So thats really I think the best way I can answer this today.
Simon N. Pimstone: I didn't know that was helpful, and then for the 007 trial, just wondering if that study is posted online anywhere, and then if you can just remind me generally what the design is for that one and provide any general update on how the study is going if you've actually dosed anybody for that study yet.
Got it.
Helpful and then for the double of seven trial, just wondering if that studies posted online anywhere and then if you can just to remind generally what the design is for that one and provide any general update on how the studies going if you've actually goes to anybody for that study up. So we are dosing we have patients.
Simon N. Pimstone: So, we are dosing. We have patients randomized for a few months already. You know, the study is not posted, but, you know, as we have, I think, in our last quarter, we provided a bit more color on that. But we certainly will do that again.
Randomized for a few months already.
You know the studies not posted but as we have I think in our last quarter, we provided a bit more color on that but we certainly will do that again.
Simon N. Pimstone: It really is – these are – it's open label, so it's not controls. These are not randomized to placebo. These are patients who have either failed the current gold standards, which include sodium valproate and ethosuxamide as the current gold standard for absence epilepsy. Thus, patients have either failed and remain refractory, having daily to weekly seizures, or are intolerant of one or both of those agents. So, these are refractory patients and – or intolerant. They are started at a lower dose and titrated to an upper dose level based on tolerability. Maintenance, I believe, is for – I think that's probably sufficient on the study design at this point.
It really is these all its open label. So it's not controls. These are not randomized to placebo. These are patients who have either failed current gold standards, which includes sodium valproate rates and Ito suck semis as the current gold standard full epsilons epilepsy.
So patients have either failed and remain refractory.
Having.
Daily to weekly seizures, or intolerant of one or both of those agents. So these are refractory patients and or intolerant. They are started at a lower dose and titrated up a dose level based on tolerability.
Maintenance I believe is for.
12 weeks.
And and with a follow up visits one month after.
Operator: Got it. That's helpful. Thanks for taking my questions. Thank you. And this does conclude the question and answer session for today's program. I'd like to hand the program back to Jody Rates for any further remarks.
So.
Again, we haven't guided on numbers and recruitment, but we expect topline data readout this year.
I think thats, probably sufficient on this study design at this point.
Got it that's helpful. Thanks for taking my questions a little.
Thank you.
Jody Rates: Thank you everyone for joining us today. We look forward to keeping you updated on our progress. Operator, we will now end the call.
This concludes the question and answer session of today's program I'd like to and the program back to Jodi rates for any further remarks.
Thanks, everyone for joining us today, we look forward to keeping you updated on our progress operator, we will now and the call.
Operator: Thank you and thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.
Thank you and thank you ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.
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