Q1 2020 Earnings Call

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Oh dollar to hand, the conference over to your speaker today Ms. Jodi Regts. Thank you. Please go ahead.

Thank you. Good afternoon. Thank you for joining us on or cold and wet chose to discuss our first quarter 2020 financial and operating results. Joining me on today's call. Our Dr. Simon Pimstone Xenon, Chief Executive Officer, and Ian Mortimer scenes, President and Chief Financial Officer. Following this introduction Simon will give an overview as you know it's kinda.

Oh programs and that he will provide some high level financial commentary after that we will open up the cold to your question. Please.

Please be advised that during this call we will make a number statements that are forward looking including statements regarding the anticipated impact and timing of the covert 19 pandemic on her business research and clinical development plans and timelines and results of operations, the timing of and results from <unk> clinical trials and preclinical development activities.

Proprietary unpartnered product candidate the potential efficacy safety profiles future development plans addressable market regulatory success and commercial potential of proprietary and partnered product candidates. The anticipated timing of I into your eye, India equivalent submissions and the industry initiation of future clinical trials for <unk>.

Criteria in partner candidates the efficacy ever clinical trial designs, our ability to successfully develop and achieved milestones in the XC and 496 X yen 11, new wind an ex the yen 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 were later stage clinical trials anticipated enrollment in our clinical trials and the timing thereof, the progress and potential other ongoing development programs the potential receipt of milestone payments and royalties from our collaborators our expectation 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 inner FCC filings. Our results may differ materially from those projected on today's call. We undertake no obligation to publicly update any forward looking statement.

Today's press release summarizing the results as seen on first quarter of 2020, and the accompanying quarterly report on form 10-Q will be made available under the investors section of our website at www dot seen on Josh pharma Dotcom and filed with the FCC and on feet are no I would like.

Turn the call over to Simon Thank you Jody and good afternoon, everyone and thank you [laughter] joining us today.

At the end of March we issued a statement to outlining our response to the carbon 19 pandemic xenon continues to put the safety and well being of people first including the clinicians and patients involved in clinical trials as well design employees and their families.

We're fortunate that we have the cash runway to support drop business objectives into whether this unprecedented health and economic crisis.

Despite the global impacts of the Cobot 19 pandemic I'm pleased to report exciting progress in both our proprietary and talk to neurology programs over the last quarter.

We anticipate several important clinical and regulatory milestone events from a pipeline of innovative epilepsy treatments over the next 12 months.

Today I'll provide a status update on each of our clinical stage products as well as an apartment programs.

I'll start with actually any 11, a one which is a differentiated next generation Kb seven potassium channel modulator being developed for the treatment of adult focal epilepsy and potentially other neurological disorders.

Patient enrollment Fry exceed 11, or one phase Twob clinical trial is currently underway 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, a big C. N 11, or one administered as adjunctive treatment and approximately 300 adult patients with focal epilepsy.

Primary endpoint is the median percent change in monthly focal seizure frequency from baseline compared to treatment period of activists is placebo.

In order to assess safety Tolerability and Discontinuations in this extolled trial, we continue to review blinded data from patients who have been treated to date exceeding 11, or one is being well tolerated and the range of discontinuing discontinuations from the study or below what was models.

In addition, more than 90% of subjects to date from the double blind portion of the trial it rolled over into the open label extension phase.

Therefore based on analysis of the blinded safety data today, we have made a decision that we do not believe an interim analysis is required as a reminder, this option would have allowed for re sizing of lower dose groups or other changes to the study if tolerability was different than modeled which is not the case yeah.

In the context of the carpet 19 pandemic and its impact on ongoing clinical studies, where we are in close collaboration with each of the exceeding 11 or one clinical sites in North America, and Europe, taking specific direction from their respective clinical guidelines as they relate to new patient screening and randomization.

I efforts remain focused on patients currently enrolled in the study using the double blind portion or in open label extension portion of the study, while making other necessary amendments in the study, including minimizing any inpatient person patient visits and making provisions for adequate drug supplies to patients we have a possible to ensure the data integrity is meant.

Change.

We also taking the steps to expand the extolled clinical trial to include new sites in both existing is what is new jurisdictions to support enhanced patient screening as soon as the individual clinical trial sites deem it takes to do so.

We are seeing some clinical sites resume patient screening and patients entering baseline and being randomized. We believe this will continue to pick up over the coming months.

Topline data is anticipated in the first off of 2021 dependent upon feedback from the clinical sites in patient enrollment rates, which may be impacted by the cobot 19 pandemic.

Given its unique mechanism of action. We also continue to explore potential indications for a phase two proof of concept trial with exceeding 11, a one outside of epilepsy.

We look forward to going into more detail as these plans developed over the coming months.

Also within our portfolio of proprietary epilepsy products exceeded 496 is the Kb seven potassium channel modulator that contains the active pharmaceutical ingredient is all going to be in also known as the ticket being that we have now reformulated and not developing as a treatment for rare pediatric neurodevelopmental disorder caused the KC in Q2 did.

Mental and epileptic encephalopathy, okay see in Q2 D.E.

Severe pediatric condition for which no medicine has been approved and which is characterized by multiple daily refractory seizures presenting with within the first week of life.

Most recent recent epidemiology sites the incidence at approximately one in 17000 lives beds.

There is a strong genetic rational to suggest that exceeded 496, maybe efficacious as a treatment for case in Q2, D.E., which is further supported by non controlled clinical case reports in surveys as well as anecdotal parental and physician feedback.

These data suggest is all gibian, maybe well tolerated.

And may reduce seizure bid with potential to improve development and cognition in this rate pediatric population.

The FDA has granted orphan drug designation and in the first quarter. We were also granted fast track designation for the investigation of exceeding 496 for the treatment of Caesars related to Casey in Q2 D. over the past few months, we have made considerable progress and exceed 496 program, which I'll outline for you.

Just to support a planned phase three clinical trial of exceeding 496 in patients with case in Q2, D.. We recently completed a pharmacokinetic or PK study testing our proprietary pediatric formulation in 24 healthy adult volunteers.

Subjects were given a single 400 milligram dose of exceeding 496 in either the federal the fastest states.

Well. This study was not designed to determine by equivalence given its all going to be in is not available to use as a comparison.

The PK profile observed for exceed 496 supports our phase three bands and appears to be comparable to historical PK data for immediate release is all going tablets.

The next handful ninesix, showing some under absorption and elimination curves.

Second then importantly, we recently received additional feedback from our second interaction with the FDA related to the phase three program for exceeding 496.

And we are confident we now have a clear path to initiate a single phase three study this year.

I propose safety monitoring plans, including long term follow up to monitor potential side effects were acceptable to the FDA.

It will say indicated that it is acceptable to study exceeded 496 in infants and children up to six years old.

Based on the entirety of the FDA feedback, we anticipate initiating a randomized double blind placebo controlled phase III clinical trial to evaluate the clinical efficacy safety and tolerability of exceeding four ninesix in pediatric patients with Casey in Q2 D.

The primary endpoint is expected to be the median percent change in seizure frequency from baseline compared to treatment period of activity versus placebo.

It is anticipated that approximately 40 patients will be randomized blinded manner to either an active treatment group or placebo.

After the initial screening patients will enter a baseline period to assist the frequency of Caesars followed by a titration and then a maintenance treatment period, and then a post treatment follow up period. It is expected that there will be an open label extension period. After the double blind portion of the trial. In addition.

In preparation for the phase three trial, we have now selected the sciarra and we've named a global steering committee as what does the principal investigator for the study Dr. John Millichap with site selection also well underway.

In addition, our clinical development team is planning for regulatory submissions outside of the U.S. to support the broader clinical development to MXN 496.

We expect to submit our phase three protocols around mid year as previously guided and initiate Dixie and 496 phase III clinical trial this year in 2020.

We believe this is the first study of its kind ever in case, you in Q2 D.E.

The first time that monogenic epilepsy trial will include infants as young as one month of age and the first precision medicine treatment in a monogenic epilepsy, using a drug with none pharmacology and some prior experience in this patient population.

With the recent feedback from the FDA, we do not foresee any hurdles to initiating the phase three trial in 22 any other than the potential impact of cobot 19.

We they will find ourselves at an exciting John Chuck and we are eager and highly motivated to bring significant innovation to a severe and hard to treat neurological disorder were higher medical needs still exists.

We are presenting three eat poster presentations related to this exceeded 496 program using the virtual platform hosted by the American Academy of Neurology, which is in lieu of its annual conference. The first posters summarizes the recent results from our PK study examining the PK and food effect of Ixia and phone I'd say.

The second poster summarizes the online survey of caregivers and patients with Casey in Q D E.

And the third posted examines literature and survey results to evaluate the use of diaries versus video Electroencephalography or video E. G for accounting Caesars in patients with case in Q2 D.

All three of these posters have been added to the xenon websites as well as the individual platform. So I encourage you to review them.

Turning now to axiom 007, with the active ingredient generic seen.

This is a CNS acting calcium channel modulator that modulators CA be 2.1, as well as teatime calcium channels. As a reminder, physician led proof of concept study is now ongoing to examine the potential clinical efficacy safety and Tolerability a vaccine 007 as an adjunctive.

Treatment in pediatric patients diagnosed with treatment resistance childhood absence epilepsy.

It is anticipated that the study will enroll approximately 20 patients with C. In an open label Manoj patients, who have failed standard of care because of lack of efficacy or because of adverse events.

Results from this phase two study are expected in 2020 dependent ultimately upon patient enrollment rates given the ongoing cobot 19 pandemic.

Depending on our analysis of the final results from the study CA you of course made represents a potential orphan indication for future development of vaccine 007.

Before turning to our partnered programs I should also note that our early stage drug discovery efforts continue to build upon our robust pipeline of early stage preclinical candidates encompassing our work related to a number of sodium and potassium channel targets.

We look forward to highlighting this exciting and novel preclinical work as it matures.

We have an ongoing collaboration with Neurocrine biosciences to develop treatments for epilepsy.

American has an exclusive license to ixia and I know one now known as in beyond nine to 1352 clinical stage selective and maybe 1.6 sodium channel inhibitor with potential in its see an H.A. developmental and epileptic encephalopathy, you I see an H.A.D. and other forms of epilepsy.

Neurocrine Biosciences has indicated that it anticipates filing and I'd application with the FDA in mid 2020 in order to start a phase two clinical trial in its CNH a D E patients in the second half of this year.

This important milestone would trigger a 25 million dollar milestone payment to xenon upon the FDA acceptance of an eye in D. fan beyond nine to 135% to 55% of that amount in the form of an equity investment into you know.

Prior to our collaboration with Nomura Kraton Xenon clinical team conducted a survey of can't give as of May see an eight A.D.E. patients. These days had been summarized in an E opposed to that will also be presented on the virtual a and platform and posted on the xenon website. In addition, we are presenting to other posts.

It is relating to exceed nine or one way and be a nine to 135 to one summarizes the relative bioavailability pharmacokinetic and food effect assessment of two immediate release formulations, including both pediatric granules and adult tablets Vixia nine one.

The other summarizes the study of 18 healthy adult subjects and provides an assessment of the potential pharmacokinetic and pharmacodynamic interactions between Ixia and I know one infinity Cohen nonselective sodium channel blocker with the attention of providing useful safety information regarding the co administration of Ixia and I know one with drugs.

For future clinical trials with Ixia, and I know, one way and beyond nine to 135 too.

Moving now to our partnership Affliction Therapeutics, you acquired the global rights to develop and commercialize ixia and for up to an F 1.7 inhibitor.

Flexions preclinical product candidate known as X 301 consists of exceeding four zero to formulated for extended release from a service sensitive hydro Joel.

The initial development of FX 301 is intended to support administration as a peripheral nerve block full control of postoperative pain.

In April of this year affliction presented new animal data in an E poster presentation on the American Society of regional anesthesia and acute pain website that showed FX 301 provided sustained post operative analgesic effect with no impairment in motor function compared to like this.

It will be put mccain and placebo.

In addition, hi, local concentrations of exceeding four or to the active ingredient in FX in FX 301 were measured at the size of administration for the duration of the study which is consistent with the creation of a depot providing control drug release, the start of a GLP Tox study with FX zero is FX.

301 triggered a 500000 dollar milestone payment to us in April.

Fiction anticipates initiating human clinical trials in 2021, and we look forward to updating you on this exciting partnered program.

Operator: BF-WATCH TV 2021 Ladies and gentlemen, thank you for standing by, and welcome to the Q1 2020 Xenon Pharmaceuticals Earnings Conference Call. At this time, all participants' lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero.

I'm so proud of the xenon team as we support one another and adapt to find ways to stay focused on our work through the covered 19 public health crisis. So you don't has what we believed to be the most exciting epilepsy pipeline currently in development and we continue to strive to bring novel much needed new therapies to patients in need.

Operator: I would now like to hand the conference over to your speaker today, Mr. Jody Reitz. Thank you. Please go ahead, madam. Thank you. Good afternoon.

We also showing great community leadership during the Cobot 19 pandemic, leading numerous initiatives that we believe could assist businesses transitioning employees back and managing the workplace in the face of what will likely be near to medium term future that includes cobot positive employees or close contacts in our plus.

Jody Reitz: Thank you for joining us on our call and webcast to discuss our first quarter 2020 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 provide some high-level financial commentary. After that, we will open up the call to your questions.

Jody Reitz: Please be advised that during this call, we will make a number of statements that are forward-looking, including statements regarding the anticipated impact and timing of the COVID-19 pandemic on our business, research and clinical development plans and timelines, and results of operations, the timing of and results from clinical trials and preclinical development activities of proprietary and partnered product candidates, the potential efficacy, safety profile, future development plans, addressable market, regulatory success, and commercial potential of proprietary and partnered product candidates, the anticipated timing of IND or IND-equivalent submissions, and the initiation of future clinical trials for proprietary and partnered candidates, the efficacy of our clinical trial designs, our ability to successfully develop and achieve milestones in the XEN-496, XEN-1101, and 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 2 or later stage clinical trials, anticipated enrollment in our clinical trials and the timing thereof, the progress and potential of our 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 SEC filings.

At this point I lost yen to recap our financial position and to provide some closing commentary before opening up the call to your questions yet.

Thanks, Simon and good afternoon, everyone.

Specific details within our financial statements are covered in today's press release and in our 10-Q filing, but I will provide an overview and conclude with a summary of our upcoming milestones in the first quarter. We reported total revenue of $7.1 million related to the recognition of $5.8 million of deferred revenue as well as $1.2 million for real.

Jody Reitz: 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 the results of Xenon's first quarter of 2020 and the accompanying quarterly report on Form 10-Q will be made available under the Investor section of our website at www.xenon-pharma.com and filed with the SEC and on CDAR.

Okay and development services from the license and collaboration agreement with Neurocrine Biosciences. There was no revenue recognized for the same period and 29 team.

R&D expenses for the quarter were $11.8 million. This compares to $9.1 million for the same period in 2019, the increase of $2.7 million was primarily attributable to increased spending on xenon clinical development product candidates Oxiana 11 to one and axiom for nine sex and to a lesser extent.

<unk> increased spending on preclinical discovery and other internal program expenses. This was partially offset by decreased spending on M.B. I nine to 135 too that's clinical development costs are now borne by now.

Gn expenses for the quarter were $3.3 million compared to $2.6 million for the same period and 29 team and this increase primarily is attributable to increased stock based compensation expense salaries and benefits insurance premiums and business development expenses, partially offset by a decrease in legal fees for intellectual property protection protect.

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This gives us a net loss for the quarter of $7.5 million compared to $11.3 million for the same period in 2019, the change primarily attributable to revenue recognized during the first quarter of 2020, and partially offset by an increase in R&D and GNS expenses as compared to the same period in 2019.

Cash and cash equivalents and marketable securities as of March 30, Onest 2020 were $229.7 million and this compares to $141.4 million as of December 31st 29 team.

I should also mentioned that subsequent to quarter end, we paid our outstanding loan with Silicon Valley Bank.

The $15.5 million and that was put in place in 2017 in 2018 and provided a meaningful bridge, enabling our current epilepsy pipeline to mature.

Simon N. Pimstone: Thank you, Jody, and good afternoon, everyone, and thank you all for joining us today. At the end of March, we issued a statement outlining our response to the COVID-19 pandemic. Xenon continues to put the safety and well-being of people first, including the clinicians and patients involved in our clinical trials, as well as our employees and their families. We are fortunate that we have the cash runway to support our business objectives and to weather this unprecedented health and economic crisis.

It is now prudent to repay the loan as the repayment today is accretive from a cash flow perspective, Gary given our current cash runway [laughter] based on current assumptions, which include fully supporting the planned clinical development of vaccine 11, no one axiom for nine sex and extenders are a seven we anticipate having cash sufficient.

Cash to fund operations into 2022, excluding any revenue generating from existing partnerships or potential new partnering arrangements.

Simon N. Pimstone: Despite the global impacts of the COVID-19 pandemic, I'm pleased to report exciting progress in both our proprietary and partnered neurology programs over the last quarter. And we anticipate several important clinical and regulatory milestone events from our pipeline of innovative epilepsy treatments over the next 12 months. Today I'll provide a status update on each of our clinical stage products, as well as on our partner programs. I'll start 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.

Importantly, we believe we have a cash runway to support the because our business objectives that we have outlined today and we continue to make prudent business and spending decisions to manage through these unprecedented times.

And I'd also like to Echo Simon's comments and commend the xenon team for their diligent efforts and their flexibility that have enabled us to stay on track for important clinical milestones over the next 12 to 18 months briefly we expect topline data in the first half of 2021 from the axiom 11, no one fees to be exports.

I'd currently underway in our local epilepsy and continue to explore other potential indications for this novel kv seven potassium channel modulator.

Simon N. Pimstone: Patient enrollment for our XEN 1101 Phase IIb clinical trial is currently underway 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 XEN1101 administered as adjunctive 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 the treatment period of active versus placebo. In order to assess safety, tolerability, and discontinuations in this ex-told trial, we continue to review blinded data from patients who have been treated. To date, Exxon 1101 has been well tolerated, and the rate of discontinuations from the study is below what was modeled.

Simon N. Pimstone: In addition, more than 90% of subjects to date from the double-blind portion of the trial have rolled over into the open-label extension phase. Therefore, based on analysis of the blinded safety data to date, we have made a decision that we do not believe an interim analysis is required. As a reminder, this option would have allowed for resizing of lower dose groups or for other changes to the study if tolerability was different than predicted, which is not the case here.

We expect you initiated in 2020, a phase three clinical trial to examine FXCM for nine six efficacy in case you in Q2 do you.

Expect results from the physician led phase two open label study in treatment resistant childhood absence epilepsy with Akcea, there or is there a seven.

And we expect to 25 million dollar milestone payment upon the FDA acceptance of an eye Andy that our partner Neurocrine intends to file in mid 2020 to start phase two clinical trial for M.B. I nine to 1352 in SDN eight A.D. pediatric patients.

And we expect flexion to continue the development of excess FX 301, supporting the initiation of human clinical trials in 2021, and xenon eligible for various regulatory and development milestone payments up to $9 million through the initiation of a phase two proof of concept clinical trial.

With these important milestone opportunities ahead, we look forward to updating you on our progress at this point operator, we can open the call up for questions.

As a reminder to ask a question you will need a press star one on your telephone.

Simon N. Pimstone: In the context of the COVID-19 pandemic and its impact on ongoing clinical studies, we are in close collaboration with each of the XEN 1101 clinical sites in North America and Europe, taking specific direction from their respective clinical guidelines as they relate to new patient screening and randomization. Our efforts remain focused on patients currently enrolled in the study, either in the double-blind portion or in the open-label extension portion of the study, while making other necessary amendments to the study, including minimizing any in-person patient visits and making provisions for adequate drug supplies to patients wherever possible to ensure that data integrity is maintained. We are also taking the step to expand the XTOL clinical trial to include new sites in both existing as well as new jurisdictions to support enhanced patient screening as soon as the individual clinical trial sites deem it safe to do so. We are seeing some clinical sites resume patient screening, and patients entering baseline and being randomized. We believe this will continue to pick up in the coming months.

Withdraw your question press the pound key.

Please standby well, we compile the Q and a roster.

And our first question comes from Paul Matteis with Stifel. Your line is now.

Great Congrats on the progress thanks for taking my questions.

If you if you don't mind, one on Elevena one Simon.

Clarify some of the numbers you put around retention rates and the study so where exactly you are discontinuation rate tracking and when you say 90 page, 90% have rolled over to the I'll leave that 90% of patients who finished the double blind portion or 90% a total and that just separate on for 962 quick question.

No. One can you give clarified seizure tied you're using for the primary endpoint and your confidence that that's an easily countable seizure across eastern age and to how are you thinking about the statistical hurdle for success for that study you need a P value 0.05, and if so are you powercore. Thanks, so much.

I'll work backwards, so yes in the current.

Simon N. Pimstone: Top-line data is anticipated in the first half of 2021, dependent upon feedback from the clinical sites and patient enrollment rates, which may be impacted by the COVID-19 pandemic. Given its unique mechanism of action, we also continue to explore potential indications for a Phase II proof-of-concept trial with XCN1101 outside of epilepsy, and we look forward to going into more detail as these plans develop over the coming months. Also within our portfolio of proprietary epilepsy products, XEN496 is a KB7 potassium channel modulator that contains the active pharmaceutical ingredient azogavine, also known as ritigavine, that we have now reformulated and are developing as a treatment for a rare pediatric neurodevelopmental disorder called KCNQ2 developmental and epileptic encephalopathy, or KCNQ2DEE, a severe pediatric condition for which Most recent epidemiology cites the incidence at approximately 1 in 17,000 live births.

Dropped.

Protocol, we not going to go into all the details today pull the plan is as we launch that study would be too to have a call an update on sort of the details of the study specifically, but just at a higher level. This is going to be a P value driven study, we all college based on what we.

I think all reasonable assumptions and of course building into that is a studies that others have done in rare pediatric monogenic epilepsies as well as what we know and kaolin steering committee input into the protocol about the disease itself and natural history. So I think we've made we've given a ton of.

So to the assumptions that go in.

And I think have been reasonably conservative and believe that and in of about 40 as I said divided at this point between active and placebo arms.

We would would suffice to meet a P value.

So so that's that's the first question the second question on seizure types.

Yes, I think we're looking at.

Simon N. Pimstone: There is a strong genetic rationale to suggest that XEN-496 may be efficacious as a treatment for casein Q2-DEE, which is further supported by non-controlled clinical case reports and surveys, as well as anecdotal parental and physician feedback. These data suggest Isogabine may be well-tolerated, and may reduce seizure burden with potential to improve development and cognition in this rare pediatric population. The FDA has granted orphan drug designation, and in the first quarter, we were also granted fast-track designation for the investigation of XEN496 for the treatment of seizures related to KCNQ2DEE. Over the past few months, we have made considerable progress in our XEN-496 program, which I'll outline for you.

Tonic and focal tonic seizures.

As you'll end points and this would be captured by diary.

Just as is done has been done in other pediatric epilepsies.

You May recall, there was some discussion early on where the video EG would be required I will be looking at video UGI as part of screening, but it's not requirement based on the interaction we've had a full measurement for the endpoint, which we think is is a big win for us and we think makes sense.

We feel very confident that the can't give as Ken.

Determine these focal tonic seizures.

Which would be counted in diary form.

And then Youre. Your first question was on 11, no one yeah. The 90% rollover is of those that complete the double blind period, because those are the individuals that rollover. So you know.

Simon N. Pimstone: First, to support a planned Phase III clinical trial of XEN-496 in patients with KCNQ2-DEE, we recently completed a pharmacokinetic, or PK, study testing our proprietary pediatric formulation in 24 healthy adult volunteers. Subjects were given a single 400mg dose of XEN-496 in either the fed or the fasted states. While the study was not designed to determine equivalence given Isogabine is not available to use as a comparator, the PK profile observed for XEN496 supports our Phase III plans and appears to be comparable to historical PK data for immediate-release Isogabine tablets, with XEN496 showing similar absorption and elimination curves. Additionally, and importantly, we recently received additional feedback from our second interaction with the FDA related to the And we are confident we now have a clear path to initiate a single phase 3 study this year. Our proposed safety monitoring plans, including long-term follow-up to monitor potential side effects, were acceptable to the FDA.

We can't say to this date that 90% of those randomized rolled over because not everyone is completed the double blind. So the portion of subjects that have completed the doubled line have rolled over and as I said, it's over 90% of those within those that.

That have into.

Randomization phase of the study.

Dropout to date and again patients are a different segments of the study.

From a few weeks to many weeks to beyond so.

Those rates defer to pull but to date the dropout rates has been lower than what we've modeled.

And so that's what we could say at this point in time, Yeah. Yeah. I was just going to go back to Paul one of your earlier question.

Point, you and others on the call.

We had a nice poster it's actually in slide presentation for the virtual and.

Meeting on on the video E. G. The types of seizures, and we've actually collaborated with academics and with the advocacy group to ensure the caregivers can be trained and then you can correlate that back to EG the to the to the video UGI. So we feel very comfortable that the caregivers can do that.

Simon N. Pimstone: We also indicated that it is acceptable to study XEN496 in infants and children up to 6 years old. Based on the entirety of the FDA's feedback, we anticipate initiating a randomized, double-blind, placebo-controlled phase 3 clinical trial to evaluate the clinical efficacy, safety, and tolerability of XEN496 in pediatric patients with KCNQ2DEE. The primary endpoint is expected to be the median percent change in seizure frequency from baseline compared to the treatment period of active versus placebo. It is anticipated that approximately 40 patients will be randomized in a blinded manner to either an active treatment group or placebo. After initial screening, patients will enter a baseline period to assess the frequency of seizures, followed by a titration and then a maintenance treatment period, and then a post-treatment follow-up period.

That was our presentation to the to the FDA via a white paper, we presented data at a and in this virtual format and that will be the subject of a future publication as well. So some really nice work to feel comfortable in using caregivers.

To to look at the seizure numbers in the in the upcoming for Ninesix study.

That's great. Thanks have a detailed answers appreciate it.

Thanks, Paul.

Thank you.

And our next question.

Comes from Tim Lugo with William Blair. Your line is now open.

Hey, this is local Tim thanks for taking the questions.

Just wondering how the screen failure rate.

Cold study than 11, along sort of compared to your expectations going again.

Simon N. Pimstone: It is expected that there will be an open-label extension period after the double-blind portion of the trial in addition. In preparation for the Phase 3 trial, we have now selected a CRO, and we've named a Global Steering Committee, as well as a Principal Investigator for the study, Dr. John Miller-Chapp, with site selection also well underway. In addition, our clinical development team is planning regulatory submissions outside of the U.S. to support the broader clinical development of XEN496. We expect to submit our Phase 3 protocol around mid-year as previously guided and initiate the XEN496 Phase 3 clinical trial this year in 2020. We believe this is the first study of its kind ever in KCNQ2-DEE.

If that.

Terrific. Thanks to layer that so yes, it Tim the screen failure rates are about what what we had models. So so pretty standard we again, we're not giving percentages the numbers for the full rights of this and that but it's what we had although we had expected. So we're not seeing again. This is let's say pre co that we haven't seen screen.

Failure as as a major impediment.

What happens post cobot I can't say, you know where the with the that's that's going to change from a percentage standpoint, I don't know.

You know, we're hopeful based on what we seeing particularly in Europe that side saw starting to kind of emerge from cobot again.

Simon N. Pimstone: This will be the first time a monogenic epilepsy trial will include infants as young as one month of age and the first precision medicine treatment for monogenic epilepsy using a drug with known pharmacology and some prior experience in this patient population. With the recent feedback from the FDA, we do not foresee any hurdles to initiating the Phase 3 trial in 2020 other than the potential impacts of COVID-19. We therefore find ourselves at an exciting juncture, and we are eager and highly motivated to bring significant innovation to a severe and hard-to-treat neurological disorder where high medical needs still exist. We are presenting three e-poster presentations related to this XEN496 program on the virtual platform hosted by the American Academy of Neurology, which is in lieu of its annual conference. The first poster summarizes the recent results from our PK study examining the PK and food effect of XEN496. The second poster summarizes our online survey of caregivers of patients with KCNQ-DEE, and the third poster examines literature and survey results to evaluate the use of diaries versus video electroencephalography or video EEG for counting seizures in patients with KCNQ2DE.

We'll see what the next month or two holes in that regard, but I.

I don't expect screen failure rate, so going to go up.

But I, certainly we haven't seen ohio failure rates than than than modeled all anticipated.

Okay, great and.

This call up on that.

The potential introduction of Sunoco.

Idle partial onset epilepsy.

Do you expect patients.

Enrolling could be.

Failing that.

Okay. That's on the model I think that's going to be a very small.

Impact if any you know by the time that gets out yeah, I remember again.

Coming out of covert this is not a drug that is easy to initiate it requires about this I mean this an overnight drug it does require very very careful dose titration of because of this dress is an affiliate syndrome, which.

As can be quite severe in some patients.

And so I think we really have to be a pretty back to normal clinical environment I think before a drug like that is going to be easily rolled out at specialty centers.

This is not a drug that is going to be used by you average neurologist, it's going to be at epilepsy centers.

Simon N. Pimstone: All three of these posters have been added to the Xenon website, as well as the AAN virtual platform, so I encourage you to review them. Now, we are talking about XEN007 with the active ingredient fenarazine. This is a CNS-acting calcium channel modulator that modulates CAV 2.1 as well as T-type calcium channels. As a reminder, a physician-led 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 approximately 20 patients with CAE in an open-label manner, patients who have failed standard of care because of lack of efficacy or because of adverse events.

Still most specialty centers are doing virtual consults most visual concepts are not starting patients on drugs that have difficult tetration.

Simon N. Pimstone: Results from this phase two study are expected in 2020, dependent ultimately upon patient enrollment rates given the ongoing COVID-19 pandemic. Depending on our analysis of the final results from the study, CAE, of course, may represent a potential orphan indication for future development of XEN007. Before turning to our partner programs, I should also note that our early-stage drug discovery efforts continue to build upon our robust pipeline of early-stage preclinical candidates, encompassing our work related to a number of sodium and potassium channel targets. We look forward to highlighting this exciting and novel preclinical work as it matures. We have an ongoing collaboration with Neurocrine Biosciences to develop treatments for epilepsy. Neurocrine has an exclusive license to XCN901, now known as NBI-921352, a clinical-stage selective NAB1.6 sodium channel inhibitor with potential for SCN8A developmental and epileptic encephalopathy (SCN8A-DEE) and other forms of epilepsy.

Strategy so.

I don't think this is going to have a major impact on trial recruitment.

What impact that has from a commercial standpoint over the next number of years, we can talk about at length, but wasn't the purpose of your question, but I think that should that suffices in terms of how I see sonova made risk over the next six to 12 months.

Great. Thank you and if I could squeeze in one more on the one on trial have you outlined what sort of standard of care.

The control.

That trial, yeah, it's going to be.

We believe just a local santa decision on standardized treatment.

Now you know again centers the on standardized guidelines for these patients but centers I would say in general would likely be using sodium channel blocking drugs.

So these kids often present very young as you know they put often on Valproate Angel Pheno, Bob and then all transition generally onto drugs like the motor gene, let khoza might oxcarbazepine Cub amazed repeat those are generally you'll you'll agents used and so while I don't think it'll be space.

Defied I think we'll we'll definitely see a an aggregation of drugs probably within the sodium channel blocking Clos as youll baseline use.

Simon N. Pimstone: Neurocrine Biosciences has indicated that it anticipates filing an IND application with the FDA in mid-2020 in order to start a Phase II clinical trial in SVN8A-DEE patients in the second half of this year. This important milestone would trigger a $25 million milestone payment to Xenon upon the FDA acceptance of an IND for NBI-921352, with 55% of that amount in the form of an equity investment in X Prior to our collaboration with Neurocrin, the Xenon clinical team conducted a survey of caregivers of SCN8A-DEE patients. These data have been summarized in an e-poster that will also be presented on the virtual AAN platform and posted on the Xenon website.

Okay, great. Thank you not at all.

Thank you. Our next question comes from your team names with Guggenheim. Your line is no.

Hey, guys. This is Eddie on forgot thanks for taking the question just a couple on the four ninesix you'd previously guided that you thought you need about 20 to 30 patients than your age group is look one month two years old and I are saying, they're in about 40 patients needed and you're going to go up to six years old. So can you give us any other details.

But the regulator stall or what your meeting minutes said about where those requirements changed and does that change your estimated time for enrollment or site number.

And then the follow up what's the current gating factor for initiating this trial like what are you still waiting on from the regulators right. So we owned waiting on anything from the regulators other than we have to submit the final protocol. So that's sort of the gating item.

As I said, we expect to submit in and around the middle of the so we don't see anything gating between now and then in terms of drug supply, but we're we have to finish everything up finished the protocol out and submit the island and submit the protocol. So we expect that to happen in the in the pretty near term.

Simon N. Pimstone: In addition, we are presenting two other posters relating to XEN901 or NBI921352. One summarizes the relative bioavailability, pharmacokinetic, and food effect assessment of two immediate release formulations, including both pediatric granules and adult tablets of XEN901. The other summarizes a study of 18 healthy adult subjects and provides an assessment of the potential pharmacokinetic and pharmacodynamic interactions between XEN901 and phenytoin, a non-selective sodium channel blocker, with the intention of providing useful safety information regarding the co-administration of XEN901 with drugs for future clinical trials with XEN901 or NBI921352.

In terms of some of your other questions.

The age adjustment was put forward by us.

Not by the FDA say that was.

With the recognition that.

The age, which you study you will patient is important in many many ways. One is a label impact number two.

It may give us.

A bit benefits of the drug outside of the traditional sort of high seizure bid and when it comes to some of the other endpoints. We are going to be looking at is obviously, a secondary endpoints in development and remember that.

Simon N. Pimstone: Moving now to our partnership with Flexion Therapeutics, who acquired the global rights to develop and commercialize Xen-402, a NAV1.7 inhibitor. Flexion's preclinical product candidate, known as FX301, consists of XEN402 formulated for extended release from a thermosensitive hydrogel. The initial development of Apex 301 is intended to support administration as a peripheral nerve block for control of post-operative pain. In April of this year, Flexion presented new animal data in an e-poster presentation on the American Society of Regional Anesthesia and Acute Pain website that showed FX301 provided sustained post-operative analgesic effects with no impairment in motor function compared to liposomal bupivacaine and placebo. In addition, high local concentrations of XEN-402, the active ingredient in FX-301, were measured at the site of administration for the duration of the study, which is consistent with the creation of a depot providing controlled drug release.

Independent of the age kids can only get into the study if they meet the inclusion criteria, which is a certain seizure frequency at baseline so.

The fact that they're up to six years of age they will still have to meet the certain number of weekly seizures to be allowed into the study. So I don't I think the age going beyond six is only a benefit to us from a label perspective, there is no downside.

Your other question was the the patient number yes.

And that really just came down to the ultimate design that we've we've landed on then we'll be going forward on its just a matter of numbers of patients in one group versus another.

Time of patients in placebo and crossing over this is not crossing over so.

It really just came down to the fact that we think the cleanest design will be a parallel placebo controlled study.

And based on the assumptions we've built into it.

We feel that number is going to be about right for the statistical significance.

Simon N. Pimstone: The start of a GLP tox study with FX301 triggered a $500,000 milestone payment to us in April. Flexion anticipates initiating human clinical trials in 2021, and we look forward to updating you on this exciting partnered program. I'm so proud of the Xenon team as we support one another and adapt to find ways to stay focused on our work during the COVID-19 public health crisis. Xenon has what we believe to be the most exciting epilepsy pipeline currently in development, and we continue to strive to bring novel, much needed new therapies to patients in need. We're also showing great community leadership during the COVID-19 pandemic, leading numerous initiatives that we believe could assist businesses transitioning employees back and managing the workplace in the face of what will likely be a near to medium-term future that includes COVID-positive employees or close contacts in our workplace. 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.

We don't think it's going to impact enrollments in a meaningful way.

Yes, you all right, we will probably need more sites.

To keep timelines as aggressive as we would have it was 24 to 30 subjects. So another channel 15 subjects as we will need for this study.

It will require some more sites, we really have had an unbelievable response from sites in terms of participating. This is a really unique study and I actually think will be a pretty high profile study given its kind of precision medicine nature, and so I don't think our challenge is identifying sites to participate and as I mentioned in.

In my remarks.

We all going to look to submit in Europe and conduct the study both in the U.S. and in Europe. So site number again shouldn't be a limitation, but we may land up certainly needing more most sites open to recruit for 40 than we would have at 24, but it's not going to hold us back go add another year in terms of timeline.

Ian C. Mortimer: Thanks, Simon, and good afternoon, everyone. The specific details of our financial statements are covered in today's press release and in our 10-Q filing, but I will provide an overview and conclude with a summary of our upcoming milestones. In the first quarter, we reported total revenue of $7.1 million related to the recognition of $5.8 million of deferred revenue, as well as $1.2 million for research and development services under the License and Collaboration Agreement with Neurocrine Bioscience. There was no revenue recognized for the same period in 2019.

I appreciate the detail thanks, guys okay.

Ian C. Mortimer: R&D expenses for the quarter were $11.8 million. This compares to $9.1 million for the same period in 2019. The increase of $2.7 million was primarily attributable to increased spending on Xenon's clinical development product candidates, Xenon 1101 and Xenon 496, and to a lesser extent, increased spending on preclinical, discovery, and other internal program expenses. However, this was partially offset by decreased spending on MBI-921352, as clinical development costs are now borne by nurses. G&A expenses for the quarter were $3.3 million, compared to $2.6 million for the same period in 2019, and this increase primarily is attributable to increased stock-based compensation expense, salaries, and benefits, insurance premiums, and business development expenses, partially offset by a decrease in legal fees for intellectual property protection.

Thank you.

Our next question comes from Laura Chico with Wedbush Securities. Your line is no.

Ian C. Mortimer: This gives us a net loss for the quarter of $7.5 million compared to $11.3 million for the same period in 2019, the change primarily attributable to revenue recognized during the first quarter of 2020 and partially offset by an increase in R&D and G&A expenses as compared to the same period in 2019. Cash and cash equivalents and marketable securities as of March 31, 2020, were $229.7 million, and this compares to $141.4 million as of December 31, 2020.

Good afternoon, and thanks for taking my question I guess one question on 11, a one I think I heard you say that you were starting to have some sites reopened I was just curious if you could kind of put a percentage number on that or frame it a little bit more relative to the the overall side or the majority now reopening and if not.

Do you have a better estimate as to when.

The remaining sites will open and then for 96 is there any additional color you might be able to provide in terms of.

The titration scheme, and how long the maintenance period might laugh.

Yes, so on 11 to one.

Sites are starting to reopen.

It's not the majority of sites at this point and is this isn't just out trial I think this is the majority of trials out there.

The next few months, obviously going to be very important to see how that how that builds as I mentioned in my remarks, we all.

Looking to open up other jurisdictions as well as new sites in existing jurisdictions and Weve purposefully looks at other jurisdictions that we think we'll be opening sooner. So.

This is not the majority, but they all starting to open and I think over the next few months, we expect there'll be more meaningful recruitment.

In the study for sure.

But just to early Laura to give you kind of any estimates in terms of impacts we still think the should.

Allow us and Weve built in a bit of cushion to hit up guided guidance that we've provided which is.

Topline pissed off of 2021 so.

That's that question for nine six in terms of touch duration, yes, there will be a titration, we've talked about that previously it will be a few weeks.

Ian C. Mortimer: I should also mention that, subsequent to quarter end, we paid our outstanding loan with Silicon Valley Bank. The $15.5 million in debt was put in place in 2017 and 2018 and provided a meaningful bridge enabling our current epilepsy pipeline to mature. It is now prudent to repay the loan, as the repayment today is accretive from a cash flow perspective, given our current cash runway. Based on current assumptions, which include fully supporting the planned clinical development of XCN 1101, XCN 496, and XCN 007, we anticipate having sufficient cash to fund operations into 2022, excluding any revenue generated from existing partnerships or potential new partnering arrangements. Importantly, we believe we have the cash runway to support our business objectives that we have outlined today, and we continue to make prudent business and spending decisions to manage through these unprecedented times.

And patients will get to a maximum dose or maximum tolerated dose we haven't disclosed at this point what the maintenance period is.

But it's going to be fairly standard it's going to be fairly standard. This isn't to a two week mentioned in space. So this is this is going to be.

A couple of months and are likely to have a few weeks of titration to get there.

Lara, maybe just I can add a little bit to Simon as well and Omnia on 11 or one we didnt just to be clear, we didnt close any sites right. We were we made the decision that we really wanted to be guided by the individual clinicians at those sites when they were comfortable.

And that enabled us to continue all of the patients on study to got Dragan and make adjustments there and so we even had some patients that went longer and baseline before they are randomized control physicians were comfortable randomizing. So again, we've never shut anything down.

Ian C. Mortimer: And I'd also like to echo Simon's comments and commend the Xenon team for their diligent efforts and their flexibility, which have enabled us to stay on track for important clinical milestones over the next 12 to 18 months. Briefly, we expect top-line data in the first half of 2021 from the XEN 1101 Phase IIb X-Toll Study currently underway in adult focal epilepsy, and we continue to explore other potential indications for this novel KV7 potassium channel module. We expect to initiate a Phase III clinical trial to examine XCN496 efficacy in KCNQ2DEE in 2020. We expect results from the physician-led Phase 2 open-label study in treatment-resistant childhood absence epilepsy with XEN007. And we expect a $25 million milestone payment upon the FDA acceptance of an IND that our partner, Neurocrin, intends to file in mid-2020 to start a phase two clinical trial for NBI-921352 in SCN8A-DEE pediatric patients. And we expect Flexion to continue the development of FX-301, supporting the initiation of human clinical trials in 2021, and Xenon to be eligible for various regulatory and development milestone payments up to $9 million through the initiation of a Phase II proof of concept clinical trial.

Quote unquote need to reopen it's really more and we're talking a clinicians every day that are getting comfortable doing a randomization of as a and and so we're seeing that come online as Simon Simon mentioned.

On for nine six on the titration.

So as auger being was tied traded as a drug. So again this isn't specific to the to the trial design or to the patient population. It's really specific to the drug we don't have titration and 11 or one based on the drug in kind of Celta trades, but for four nine sex based on the active ingredient being as AGA being you do titrate that drug up to.

To a certain level and we'll be doing PK drives and then and then after that they would go onto the maintenance phase.

Thanks very much.

Thank you. Our next question comes from Maury Raycroft with Jefferies. Your line is now.

Hi, everyone. Thanks for taking my questions.

Or the decision not to do the 11 to one interim.

Just wondering if you could say if that means there were no notable differences and tolerability across the different doses and can you talk more about what specific blinded data you had access to that.

Because its blinded we've done a about tolerated total body differences across doses mores, so that our current onset, but if you look at the overall.

Operator: With these important milestone opportunities ahead, we look forward to updating you on our progress. At this point, operator, we can open the call up for questions. As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. And our first question comes from Paul Matteis on Stiefel. Your line is now open. Great, congrats on the progress, and thanks for taking my questions. I have a few if you don't mind.

Tolerability the overall a he is in the cohort.

We were very comfortable with what we see very happy with what we've seen today.

You know obviously still go to finish the study, but so far we're comfortable.

So we don't have specific rates to disclose or to discuss at this point, but I'd say that the incidence of a he is.

Lower than what we had expected at this point.

The study.

Was there another so the question.

Simon N. Pimstone: One on 1101 Simon, I was wondering if you could clarify some of the numbers you put around retention rates in the study. So, where exactly is your discontinuation rate tracking? And when you say 90 percent...

Yes, I think so basically it was based on just the that Youre seeing across the group and then also the dropout rate if we're going to the too.

Yeah, not so much the ease but remember the whole reason to have built in the option to do an interim was due to know whether if we had high dropout rates because if tolerability was put.

Operator: https://www.fema.gov

Simon N. Pimstone: that 90% of patients who finish the double-blind portion, or 90% of total? And then just separate, on 496, two quick questions.

And I dropout rates for various reasons, we may need to upsize to ensure we get sufficient numbers to hit.

Simon N. Pimstone: One, can you just clarify the seizure type you're using for the primary endpoint and your confidence that that's an easily countable seizure across patient age? And two, how are you thinking about the statistical hurdle for success for that study? Do you need a p-value of 0.05, and if so, are you powered for it?

Statistical significance and.

And so we both assistant dropout model into the statistical plan.

We are well below that in terms of numbers of people actually you have dropped out of the double blind.

Simon N. Pimstone: Thanks so much.

Simon N. Pimstone: Yeah, I'll work backwards. So, yes, in the current draft protocol, we're not going to go into all the details today, Paul. The plan is, as we launch that study, would be to have a call and update on sort of the details of the study specifically, but just at a higher level. This is going to be a p-value driven study. We are powered based on what we think are reasonable assumptions, and of course, building into that are studies that others have done in rare pediatric monogenic epilepsies, as well as what we know and KOL and Steering Committee input into the protocol about the disease itself and natural history. So, I think we've made a ton of thought to the assumptions that go in, and I think dividing at this point between active and placebo arms would suffice So that's the first question.

Portion of the study so what that means is that we should have a.

At least equivalent if not higher power then what was initially models to observe the effect we've projected.

Based on based on the numbers will get so with fewer people dropping out.

Our power it goes up to determine that just means the chances of this happening.

Randomly overseas jealous of the chances of the of seeing us Vivia fake Ids is higher.

With higher numbers and so we're.

We feel very confident based on what we've seen.

I said, we don't think there is a need to do an interim.

Full for this point in the study.

Got it okay. That's helpful.

For the 496 phase three just wondering if you could say how many sites you think you're going to need for this study if we can provide a range.

I don't know, it's going to be probably north of 20, but I can tell you exactly how many at this point I think it's probably looking at or about around one to two patients per site.

Simon N. Pimstone: The second question on seizure type... Yeah, I think we're looking at tonic and focal tonic seizures as your endpoint, and this would be captured by a diary, just as has been done in other pediatric epilepsies. You may recall there was some discussion early on whether video EEG would be required. We'll be looking at video EEG as part of screening, but it's not a requirement based on the interaction we've had for measurement of the endpoint, which we think is a big win for us and which we think makes sense. We feel very confident that the caregivers can determine these focal tonic seizures, which would be counted in diary form.

Is the initial expectation over.

Over the course of the study but.

We already know some sites at more patients than that we just we haven't done obviously prescreening and that needs to will happen to see available patients whether they what proportion fit the criteria just a bit premature at this point to know exactly but we'll we'll be aggressive on on sites initiation.

To make sure that we can recruits as quickly as possible.

Got it Okay and then last quick question for the Phase three with 496 can you say, how long the running periods going to be and what the frequency seizures per week is that baseline.

Pardon Evan we haven't disclosed that our plan is to give you know this kind of detail over the near term once we submit the protocol and be ready to go so we'd like to hold off those types of details until the study.

Simon N. Pimstone: And then your first question was on 11.01, yeah, the 90% rollover is for those that complete the double-blind period because those are the individuals that rollover. So we can't say to this date that 90% of those randomized have rolled over because not everyone has completed the double-blind. So the portion of subjects that have completed the double-blind trial have rolled over, and as I said, it's over 90% of those. Within those that have entered the randomization phase of the study, the dropout rate to date, and again, patients are at different stages of the study, from a few weeks to many weeks to beyond, so those rates differ, Paul, but to date, the dropout rate has been lower than what we've modeled, and so, you know, that's all we can say at this point in time, yeah?

Since she finally and its protocol than we can discuss all elements of it together.

Understood. Okay. Thanks for taking questions started all thank you.

Thank you as a reminder, ladies and gentlemen that Star then one question.

Our next question comes from David Martin with Bloom Burton Your line is now open.

Hi, good afternoon, thanks for taking the questions.

The first question is not the pediatric formulation for 96.

You had talked about one point that maybe it would eliminate the blue and possibly the urinary retention I think the blue wing is impart stability in the vial and part of it.

I would actually my body, sorry, Im wondering now you're through the phase one have you seen a reduction in the blue or.

Simon N. Pimstone: Yeah, I was just going to go back to one of your earlier questions and just point you and others on the call. We had a nice poster, it's actually a slide presentation for the virtual AAN meeting on the video EEG, the types of seizures, and we've actually collaborated with academics and with the advocacy group to ensure that caregivers can be trained and that you can correlate that back to EEG, to the video EEG, so we feel very comfortable that the caregivers can do that. That was our presentation to the FDA via a white paper. We presented that data at AAN in this virtual format, and that will be the subject of a future publication as well, so some really nice work to feel comfortable using caregivers to look at the seizure numbers in the upcoming 4966. That's great! Thanks for the detailed answers. I appreciate it.

No I remember, Dave the pigmentation freeze on good being was seen very late infected wasn't observes actually in the clinical studies of the drug which included.

For the long term phase three studies in adults. So it started to get reported post launch.

In post market work and.

As it was used commercially so we don't expect to see pigmentation changes in a phase one setting.

Like this of course Weve submitted as part of the.

The meeting we've just had with the FDA, we submitted our monitoring plans, which they're an agreement.

So we are going to monitor for this over time.

You know the formulation itself.

I think I've said before.

We don't expect urinary effects based on the formulation, but we do note.

He has only been does have a degree of urinary retention and but all reported cases that was we'll manage and there is no data toxicity that has been reported in a in a patient.

Simon N. Pimstone: Thanks, Paul.

Operator: Thank you. And our next question comes from Tim Lugo with William Blair. Your line is now open.

In terms of the pigmentation itself.

Operator: Hey, this is Lachlan on behalf of Tim. Thanks for taking the question.

We will monitor for it I don't believe given this appears to be cosmetic.

Simon N. Pimstone: I was just wondering how the screen failure rate was in the EXTOL study.

That.

As I've said before even if we do observe its.

Operator: http://TheBusinessProfessor.com

It has not been a case to the based about knowledge. There is not being the case described of visual toxicity.

Simon N. Pimstone: Thanks. Thanks, Sherry.

Simon N. Pimstone: Tim, the screen failure rates are about what we had modelled, so pretty standard. Again, we're not giving percentages and numbers for all our rates of this and that, but it's what we had modelled, what we had expected. So we're not seeing, again, this is, let's say, pre-COVID. We haven't seen screen failure as a major impediment. What happens post-COVID, I can't say whether that's going to change from a percentage standpoint. I don't know. You know, we're hopeful, based on what we're seeing, particularly in Europe, that sites are starting to emerge from COVID again, and we'll see what the next month or two holds in that regard. But I don't expect screen failure rates are going to go up, but certainly we haven't seen a higher failure rate than projected or anticipated.

Associated with this retinal pigmentation.

So even if we were to observe its which it hasn't yet been observed in any patient used off label right. This is of course in the early days of fatigue or the drug was used in a number of these patients not described and in some patients for a number of years, it's being used.

That's just maybe a cumulative effect. So I don't think we'll likely see anything Dave one way or the other in a shorter term study, but even if we wanted to see pigmentation. The nature of this disease. I believe is such that I don't think this is going to impact the commercial opportunity of this drug it appears to be just a cosmetic.

Finding at this point.

Okay.

Second question also on axiom for nine six.

Is it going to be.

The drug added to standard of care versus standard of care or buying or is that the drug alone versus standard of care no no drug drug on top of so these are again going to be refractory patients who have a suit the seeds account over and above what that currently on so all of these kids will have been started.

Simon N. Pimstone: Okay, great. And to sort of follow up on that, you know, with the potential introduction of Sinovamate in the adult partial-onset epilepsy field, would you expect patients... to be enrolled in it?

On something and depending on the age in which they.

Simon N. Pimstone: I think that's going to be a very small impact, if any, by the time that gets out. Remember, again, coming out of COVID, this is not a drug that is easy to initiate. It requires, by this I mean the Sinovimate drug; it does require a very, very careful dose titration because of this DRESS eosinophilic syndrome, which, you know, can be quite severe in some patients.

Good recruited into the trial. They may have been on one drug to drugs with 10 drugs before but usually these drugs.

These kids have a spectrum of of.

Drugs on.

At baseline that generally on two to three drugs in the first month or so the life. So we do expect.

This will be on top of probably one to two to three other agents.

Andy in the standard of care arm, if they move on to another drug because they're feeling what they were on.

Simon N. Pimstone: And so, you know, I think we really have to be in a pretty back-to-normal clinical environment before a drug like that is going to be easily rolled out at specialty centers. This is not a drug that's going to be used by, you know, your average neurologist. It's going to be at epilepsy centers. Still, most specialty centers are doing virtual consults. Most virtual consults are not starting patients on drugs that have difficult titration strategies. So, I don't think this is going to have a major impact on trial recruitment. What impact that has from a commercial standpoint over the next number of years, we can talk about at length, but that wasn't the purpose of your question, but I think that that should suffice in terms of how I see Sanova making risk over the next 6 to 12 months.

Will that be counted as a failure. It will you no longer be countering their seizure right sorry in this in the in the quote unquote placebo group that's on top of standard of care Yeah. Yeah.

Christian as.

So right now the way. The study is designed is they are not crossing over to the active on.

No no I mean in the placebo group placebo on top of standard of care, if if they're feeling in the physicians as well I have to move from onto the next drug not not to 496.2 another drug.

How will those patients be treated well the failures what are the trial about points or will you continue to.

Measure their seizure rate.

So.

Simon N. Pimstone: Thank you. And if I could squeeze in one more on those,

Very standard in these studies and similar to 11.1, there they have to be unstable background standard of care right and that can change from individual to individual site to site. So they'll be on a background Stan set of anti epileptic drugs, they'll still be having a baseline number of seizures.

Simon N. Pimstone: The 496 trial, have you outlined what the...

Simon N. Pimstone: The standard of care is in the control group for that trial.

Simon N. Pimstone: Yeah, it's going to be, we believe, just a local center decision on standardized treatment. Now, you know, again, centers haven't standardized guidelines for these patients, but centers, I would say, in general, would likely be using sodium channel blocking drugs. So these kids often present very young, as you know. They put off a non-valproate or phenobarb and then are transitioned, generally, onto drugs like lamotrigine, lacosamide, oxcarbazepine, and carbamazepine. Those are generally your agents used, and so while I don't think it will be specified, I think we'll definitely see an aggregation of drugs, probably within the sodium channel blocking class, as your baseline use.

Which will meet the entry criteria and then in study they they'll be blinded as we well to whether they are on placebo our active.

If they are breaking through and having a significant number of Cds or is there is always an ability to rescue.

And if they if they rescue than that obviously, that's going to impact.

And not all of their seizures are going to be taking into consideration, obviously, if thats in the placebo arm versus the drug treatment is going to have an impact on on the outcome of the study, but there'll always be an ability for patients in a study to rescue.

Okay.

Last question I know in the 11 or one trial that you are blinded as to which arm. The drop outs are coming from but do you know that caused the dropouts. If it's the tolerability issue or if it's something else and are you seeing low tolerability.

Simon N. Pimstone: Thank you. Not at all.

Simon N. Pimstone: Not at all.

Operator: Thank you. Our next question comes from Yatim Suningja with Guggenheim. Your line is now open. Hey guys, this is Eddie from Forgotten.

Rates and that's why you're comfortable.

Simon N. Pimstone: Thanks for taking the question. Just a couple on the 496. You had previously said that you thought you'd need about 20 to 30 patients and your age group was like one month to two years old. And now you're saying that there are about 40 patients needed, and you're going to go up to six years old. So can you give us any other details on what the regulator saw or what your meeting minutes said about where those requirements changed, and does that change your estimated time for enrollment or site number? And then, as a follow-up, what's the current gating factor for initiating this trial? What are you still waiting on from the regulators?

We seeing good tolerability, so low low dropout rates for Tolerability is I guess, what you're asking yes and up dropout saw generally in the study for all has to reasons patients move cities just decide that I want to be units.

They are all has to reasons and we seem to the dropout that we see no across all of those reasons. So there's nothing that looks consistently drug related full for the majority of dropouts.

So that's that's probably about what I can say they are we done see anything that stands out as a drug related costs for dropouts, but yes, there will always be some patients who for tolerability reasons, we will slip out of a study and others for a host of other reasons and we said we've seen it across the across the.

Simon N. Pimstone: Right, so we aren't waiting on anything from the regulators other than we have to submit the final protocol, so that's sort of the gating item. You know, as I said, we expect to submit in and around the middle of the year, so we don't see anything gating between now and then in terms of drug supply, but, you know, we have to finish everything up, finish the protocol, and submit the protocol, so we expect that to happen in the pretty near future. In terms of some of the other questions, you know, the age adjustment was put forward by us, not by the FDA, with the recognition that, you know, the age at which you study your patient is important in many, many ways. One is that there is a label impact.

All of these.

Possibilities.

Okay, great. Thank you.

Thank you.

Ladies and gentlemen, this concludes our question and answer session.

I would now like turn the call back over to Jody rates for any closing remarks.

Thank you thanks for joining us today, operator, we will now end the call.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.

[music].

Simon N. Pimstone: Number two, it may give us benefits of the drug outside of the traditional sort of high seizure burden when it comes to some of the other endpoints we're going to be looking at, obviously, are secondary endpoints in development. You know, independent of the age, kids can only get into the study if they meet the inclusion criteria, which is a certain seizure frequency at baseline. So, you know, the fact that they're up to six years of age, they will still have to meet a certain number of weekly seizures to be allowed into the study. So I think the age going beyond six is only a benefit to us from a label perspective. There's no downside.

Simon N. Pimstone: Your other question was the patient number. Yeah, and that really just came down to the ultimate design that we've landed on and will be going forward with. It's just a matter of numbers of patients in one group versus another, time of patients on placebo, and crossing over versus not crossing over. So it really just came down to the fact that we think the cleanest design will be a parallel placebo-controlled study. And based on the assumptions we've built into it, we feel that number is going to be about right for statistical significance. We don't think it's going to impact enrollment in a meaningful way. Yes, you are right.

Simon N. Pimstone: We will probably need more sites to keep timelines as aggressive as we would have with 24 to 30 subjects. So another 10 or 15 subjects, as we will need for the study, will require some more sites. We really have had an unbelievable response from sites in terms of participating. This is a really unique study, and I actually think it will be a pretty high-profile study given its kind of precision meds in nature. And so I don't think our challenge is identifying sites to participate in. As I mentioned in my remarks, we are going to look to submit in Europe and conduct the study both in the U.S. and in Europe. So site number, again, shouldn't be a limitation, but we may land up certainly needing more sites open to recruit for 40 than we would have at 24. But it's not going to hold us back or add another year in terms of timeline.

Simon N. Pimstone: I appreciate the details, thanks guys. Thank you. Our next question comes from Laura Chico with Wedbush Securities. Your line is now open. Good afternoon, and thanks for taking the question.

Operator: I guess one question on 1101. I think I heard you say that you were starting to have some sites reopen. I was just curious if you could kind of put a percentage number on that or frame it a little bit more relative to the overall sites. Are the majority now reopening? And if not, do you have a better estimate as to when the remaining sites will open? And then, on 496, is there any additional color you might be able to provide in terms of the titration scheme and how long the maintenance period might last?

Simon N. Pimstone: Yeah, so on 11.01, you know, sites are starting to reopen, it's not the majority of sites at this point, you know, and this isn't just our trial; I think this is the majority of trials out there. I think the next few months are obviously going to be very important to see how that builds. As I mentioned in my remarks, we are looking to open up other jurisdictions as well as new sites in existing jurisdictions, and we've purposefully, you know, looked at other jurisdictions that we think will be opening sooner. So the answer is not the majority, but they are starting to open, and I think over the next few months, we expect there'll be more meaningful recruitment in the study for sure.

Simon N. Pimstone: But it's just too early, Laura, to give you kind of an estimate in terms of impact. We still think this should allow us, and we've built in a bit of a cushion to hit up, you know, the guidance that we've provided, which is, you know, top line, first half of 2021. So that's that question, 496 in terms of titration. Yeah, there will be a titration. We've talked about that previously, it'll be a few weeks, and patients will get to a maximum dose or maximum tolerated dose. We haven't disclosed at this point what the maintenance period is, you know, but it's going to be fairly standard. This isn't a two-week maintenance phase. So this is going to be, you know, a couple of months and likely to have a few weeks of titration to get there.

Ian C. Mortimer: Laura, maybe just I can add a little bit to Simon as well and on the on 1101 we didn't just to be clear we didn't close any sites right we were we made the decision that we really wanted to be guided by the individual clinicians at those sites when they were comfortable and that enabled us to continue all of the patients on study to get drug and and make adjustments there so we even had some patients that went longer in baseline before they were randomized until physicians were comfortable randomizing so again we've never shut anything down and quote-unquote need to reopen it's really more and we're talking to clinicians every day that are getting comfortable doing a randomization visit and and so we're seeing that come online as Simon as Simon mentioned on 496 on the titration So azogabine was titrated as a drug, so again, this isn't specific to the trial design or to the patient population, it's really specific to the drug. You know, we don't have titration in 1101 based on the drug, it kind of self-titrates, but for 496 based on the active ingredient being azogabine, you do titrate that drug up to a certain level and we'll be doing PK draws and then after that they would go on to the maintenance.

Operator: Our next question comes from Maury Raycroft with Jefferies. Your line is now open. Hi everyone, thanks for taking my questions. For the decision not to do the 1101 interim, I'm just wondering if that means there were no notable differences in tolerability across the different doses, and can you talk more about what specific blinded data you had access to for that?

Simon N. Pimstone: So because it's blinded, we don't know about tolerability differences across doses, Maury, so that I can't answer that. But if you look at the overall tolerability, and the overall adverse events in the cohort, we're very comfortable with what we've seen, very happy with what we've seen to date. Obviously, we've still got to finish the study, but so far, we're comfortable. So we don't have specific rates to disclose or to discuss at this point, but I'd say that the incidence of AEs is lower than what we had expected at this point in the study. Was there another one?

Simon N. Pimstone: Yeah, I think so. It was basically based on just the AEs that you're seeing across the group, and then also the

Simon N. Pimstone: Yeah, not so much the AEs, but remember the whole reason to have built in the option to do an interim was to know whether if we had high dropout rates, if tolerability was poor, and high dropout rates for various reasons, we may need to upsize to ensure we get sufficient numbers to hit our statistical significance. And so we built a certain dropout model into the statistical plan. We're well below that in terms of the number of people actually who have dropped out of the double-blind portion of the study. So what that means is that we should have at least equivalent if not higher power than what was initially modeled to observe the effect we've projected based on the numbers we'll get.

Simon N. Pimstone: So with fewer people dropping out, our power goes up to determine whether or not this is random. That just means the chances of this happening randomly are higher, or should I say the chances of seeing a significant effect are higher with higher numbers. And so we feel very confident based on what we've seen, such that we don't think there is a need to do an interim for this point in time.

Simon N. Pimstone: Got it. Okay. That's helpful.

Operator: for the 496 Phase 3 test. Just wondering if you could say...

Simon N. Pimstone: I don't know. It's probably going to be north of 20, but I can't tell you exactly how many at this point. I think it's probably, you know, looking at around one to two patients per site is the initial expectation over the course of the study. But, you know, we already know some sites have more patients than that. We just – we haven't done, obviously, pre-screening, and that needs to all happen to see available patients, whether they – you know, what proportion fit the criteria. It's just a bit premature at this point to know exactly. But we'll be aggressive on sites' initiation to make sure that we can recruit as quickly as possible.

Simon N. Pimstone: Thank you. Okay.

Simon N. Pimstone: Okay.

Simon N. Pimstone: Question For phase 3 with 496, can you say how long the run-in period is going to be and what the frequency of seizures per week is at baseline?

Simon N. Pimstone: Brian, we haven't disclosed that. Our plan is to give this kind of detail in the near term once we submit the protocol and we're ready to go. So we'd like to hold off those types of details until the study is essentially final in its protocol and we can disclose all elements of it together.

Simon N. Pimstone: I understand. Okay.

Simon N. Pimstone: Not at all. Thank you.

Operator: Thank you. As a reminder, ladies and gentlemen, that's star then one to ask a question. Our next question comes from David Martin with Bloom Burton. Your line is now open. Good afternoon.

Simon N. Pimstone: Thanks for taking the questions. The first question is, the pediatric formulation of 496; you had thought at one point that maybe it would eliminate the blueing and possibly the urinary retention. I think the blueing is part of stability in the vial and part of it, how it acts in the body. So I'm wondering, now that you're through phase one, have you seen a reduction in the blueing?

Simon N. Pimstone: You know, remember Dave, the pigmentation for Isogabine was seen very late. In fact, it wasn't observed at all in the clinical studies of the drug, which included, you know, fairly long-term phase three studies in adults. So it started to get reported post-launch in post-market work and, you know, as it was used commercially.

Simon N. Pimstone: So we don't expect to see pigmentation changes in a phase one setting like this. Of course, as part of the meeting we've just had with the FDA, we submitted our monitoring plans, which they are in agreement with. So we are going to monitor for this over time.

Simon N. Pimstone: You know, the formulation itself, I don't think I've said before that we don't expect urinary effects based on the formulation, but we do know Isogabine does have a degree of urinary retention, but, you know, in all reported cases that were well-managed, and there's no bladder toxicity that has been reported in a patient. In terms of the pigmentation itself, you know, we'll monitor for it I don't believe, given this appears to be cosmetic, that, as I've said before, even if we do observe it, there has not been, to the best of our knowledge, any case described of visual toxicity associated with this retinal pigmentation. So even if we were to observe it, which hasn't yet been observed in any patient used off-label, right?

Simon N. Pimstone: This is, of course, in the earlier days of Pitiga; the drug was used in a number of these patients, not described, and in some patients, for a number of years. That just may be a cumulative effect. So I don't think we'll likely see anything, Dave, one way or the other in a shorter-term study, but even if we were to see pigmentation, the nature of this disease, I believe, is such that I don't think this is gonna impact the commercial opportunity of this drug. It appears to be just a cosmetic. Finding them at this point.

Simon N. Pimstone: Okay, second question on XEN496. Is it going to be the drug added to standard of care versus standard of care alone, or is it the drug alone versus standard of care?

Simon N. Pimstone: No, no, drug on top of it, so these are, again, going to be refractory patients who have a certain seizure count over and above what they're currently on. So all of these kids will have been started on something, and depending on the age at which they get recruited into the trial, They may have been on one drug, two drugs, or 10 drugs before. But usually, these kids have a spectrum of drugs on them. At baseline, they generally are on two to three drugs in the first month or so of their life. So we do expect this will be on top of probably one to two or two to three other agents.

Simon N. Pimstone: And in the standard of care arm, if they move on to another drug because they're failing what they're on, will that be counted as a failure? Will you no longer be counting their seizure rate?

Simon N. Pimstone: Sorry, in the quote-unquote placebo group, that's on top of standard of care.

Simon N. Pimstone: Yeah. Yeah.

Simon N. Pimstone: Your question is... So right now, the way the study is designed, they are not crossing over to the active arm.

Simon N. Pimstone: No, no, I mean in the placebo group, placebo on top of standard of care.

Simon N. Pimstone: Yeah.

Simon N. Pimstone: If they're failing and the physician says, well, I have to move them on to the next drug, not to 496, but to another drug, how will those patients be treated? Will they be failures and out of the trial at that point, or will you continue to measure their seizure rate?

Simon N. Pimstone: Very standard in these studies, and similar to 1101, they have to be on a stable background standard of care, right? And that can change from individual to individual, site to site. So they'll be on a background set of anti-epileptic drugs. And they'll still be having a baseline number of seizures, which will meet the entry criteria. And then in the study, they'll be blinded, as we will, to whether they're on placebo or active. And if they are breaking through and having a significant number of seizures, there's always the ability to rescue them. And if they rescue, then obviously that's going to impact the outcome and all of their seizures are going to be taken into consideration. Obviously, if that's in the placebo arm versus the drug arm, it's going to have an impact on the outcome of the study.

Simon N. Pimstone: But there'll always be an ability for patients in a study to rescue. Okay, last question. I know in the 1101 trial that you're blinded as to which arm the dropouts are coming from, but do you know the cause of the dropouts, if it's a tolerability issue or if it's something else, and are you seeing low tolerability rates and that's why you're comfortable?

Simon N. Pimstone: We've seen good tolerability, so low dropout rates for tolerability are, I guess, what you're asking. Yeah, and dropouts are generally in a study for a whole host of reasons. Patients move cities, just decide they don't want to be in them. There are a whole host of reasons. And we've seen the dropouts that we've seen are across all of those reasons. So there's nothing that looks consistently drug-related for the majority of dropouts. So that's probably about what I can say there. We don't see anything that stands out as a drug-related cause for dropouts. But yeah, there will always be some patients who, for tolerability reasons, will step out of a study, and others for a host of other reasons. And we've said we've seen it across the..., all of these possibilities.

Operator: Okay, great. Thank you. Thank you. Ladies and gentlemen, this concludes our question and answer session. I would now like to turn the call back over to Jody Rates for any closing remarks. Thank you. Thanks for joining us today. Operator, we will now end the call. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

Operator: [inaudible]