Q2 2020 Xenon Pharmaceuticals Inc Earnings Call

[music].

I would now like to turn the call of duty, Joe do weights NIM was yours.

Operator: I turn the call over to Ms. Jodi Reitzman. The floor is yours. Thank you. Good afternoon.

Thank you. Good afternoon. Thanks, everyone for joining us on are calling webcast to discuss our second quarter 2020 financial and operating results. Joining me on today's call are Dr., Simon Pimstone Xenon, Chief Executive Officer, and Ian Mortimer seen ons, President and Chief Financial Officer. Following this introduction Simon will give an overview seen ons clinics.

Jodi Reitzman: Thanks, everyone, for joining us on our call and webcast to discuss our second 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.

Oh programs and then Iain will provide some high level financial commentary after that we will open up the call to your questions.

Jodi Reitzman: 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, including those related to XEN-496, XEN-1101, XEN-007, and other proprietary products, and those related to NBI-921352, FX-301, and other partnered product candidates, the potential efficacy, safety profile, future development plans, addressable market, regulatory success, and commercial potential of our proprietary and partnered product candidates, the anticipated timing of IND or IND-equivalent submissions, and the initiation of future clinical trials for our proprietary products and those related to other partnered candidates, the efficacy of our clinical trial designs, our ability to successfully develop and achieve milestones in our proprietary development programs, the timing and results of our interactions with regulators, the potential to advance certain of our product candidates directly into Phase II or later stage clinical trials, the timing and anticipated enrollment in our clinical trials, the progress and potential of our other ongoing development programs, the potential receipt of milestone payments and royalties from our collaborators, our expectation of having sufficient cash to fund operations into 2022, and the timing of potential publication or presentation of future clinical data. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time to time in our SEC filings. Our results may differ materially from those projected on today's call. We undertake no obligation to publicly update any forward-looking statement. Today's press release summarizing the results of Xenon's second quarter of 2020 and the accompanying quarterly report on Form 10-Q are available under the Investor section of our website at www.xenon-pharma.com and filed with the SEC and on CDAR.

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 covert 19 pandemic on our business research and clinical development plans and timelines and results of operations the timing of in results from clinical trials and preclinical development activities, including those related to axiom.

For nine six acting in 11, no one X again, 007, and other proprietary products and those related to N.B. I nine to 135 to FX three a wine and other partnered product candidates the potential efficacy safety profile future development plans addressable market regulatory success and commercial potential.

Our proprietary and partnered product candidates the anticipated timing as I, Andy or I, India equivalents submissions and the initiation of future clinical trials for proprietary products and those related to other partnered candidates the efficacy of our clinical trial designs, our ability to successfully developing achieved milestones in our proprietary development programs the time.

Turning and results of our interactions with regulators the potential to advance certain of our product candidates directly into phase two or later stage clinical trials, the timing and anticipated enrollment in our clinical trials, the progress and potential of or other ongoing development programs the potential receipt of milestone payments and royalties from our collaborators our expectation.

Of having sufficient cash to fund operations into 2022, and the timing of potential publication or presentation of future clinical data.

Forward looking statements are subject to numerous risks and uncertainties many of which are beyond our control, including the risks and uncertainties described from time to time in our SEC filings. Our results may differ materially from those projected on today's call. We undertake no obligation to publicly update any forward looking statement today's press release summarize.

Yes, as seen on second quarter 2020, and the accompanying quarterly report on form 10-Q are available under the Investor section of our website at Www Dot xenon Dash pharma dotcom and filed with the FCC and on SEDAR now I would like to turn the call over to Simon.

Simon N. Pimstone: Thank you, Jody, and good afternoon, everyone, and thanks for joining us today. I hope everyone is staying well. Here at Xenon, we continue to manage well as we respond to the global impacts of the COVID-19 pandemic. And importantly, we also have the cash runway to support our near-term business objectives.

Thank you Jody and good afternoon, everyone. Thanks for joining us today.

Everyone is staying wells here as you know we continue to manage well as we respond to the global impacts of the coated 19 pandemic.

Certainly also have the cash runway to support our near term business objectives.

Looking forward to several key milestone events over the next 12 months, including topline data from our exceeding 11, IL one phase Twob clinical trial anticipated starts of a phase III clinical trial was ixia and 496 data from our phase two proof of concept trial with axiom 007.

Simon N. Pimstone: We're looking forward to several key milestone events over the next 12 months, including top-line data from our XEN 1101 Phase IIb clinical trial, and the anticipated start of a Phase III clinical trial with XEN 496 and data from our Phase 2 proof-of-concept trial with XEN007. The expected initiation of a Phase II trial in our partnered program with Neurocrin and the expected initiation of clinical development with FX301 under our agreement with Flexion. Today, I'll provide a brief status report on each of our proprietary and partnered programs.

The expected initiation of a phase two trial in apartment program its neuro correct.

And the expected initiation of clinical development with FX three zero on under our agreement with flexion.

Today I'll provide a brief status report on each of our proprietary and partnered programs.

Simon N. Pimstone: The first XEN1101, which is a differentiated next-generation KV7 potassium channel modulator that's currently in our Phase IIb XTOL clinical trial in the U.S., Canada, and Europe. In brief, this trial is a randomized, double-blind, placebo-controlled, multi-center study to evaluate the clinical efficacy, safety, and tolerability of XEN1101 administration as adjunctive treatment in The primary endpoint is the median percent change in monthly focal seizure frequency from baseline compared to the treatment period of active versus placebo.

First exceed 11, no one which is a differentiated next generation Kb seven potassium channel modulator. That's currently in our phase to be extolled clinical trial in the Us Canada and Europe.

Refi. This trial is a randomized double blind placebo controlled multicenter study to evaluate the clinical efficacy safety and Tolerability of exceed 11, I want administration as adjunctive treatment.

Approximately 300 adult patients with focal epilepsy.

The primary endpoint is the medium bus and change in monthly focal seizure frequency from baseline compared to treatment period of active versus placebo.

Simon N. Pimstone: In the context of the COVID-19 pandemic and its impact on ongoing clinical studies, we're 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 it relates to new patient screening and randomization. To support increased patient screening, we're expanding the XTOL clinical trial to include new sites, in both existing and new jurisdictions. Although new patient screening and randomization were significantly impacted in the spring due to COVID-19, we have seen a recent increase in screening over the past number of weeks. And while screening is not yet back to where it was pre-COVID, we believe our presence in multiple jurisdictions with new sites opening is helping to mitigate risks of delay presented by COVID-19.

In the context of the covered 19 pandemic and its impact on ongoing clinical studies were in close collaboration with each of the exceed 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.

To support increased patient screening we are expanding the extolled clinical trial to include new sites in both existing and new jurisdictions.

Although new patient screening and randomization were significantly impacted in the spring due to covert 19.

We have seen a recent increase in screening over the past number of weeks and while screening is not get back to where it was pre covered we believe our presence in multiple jurisdictions with new sites opening is helping to mitigate risks of delay presented by coded 19.

We continue to be on track for expected topline data in the first off of 2021 of course dependent on ongoing impact of the cobot 19 pandemic on patient enrollment rates in the coming months.

Simon N. Pimstone: We continue to be on track for expected top-line data in the first half of 2021, of course, dependent on the ongoing impact of the COVID-19 pandemic on patient enrollment rates in the coming months. In the EXTOL trials, dropout rates continue to be low, with good tolerability continuing to be reported, and rollover into the open-label extension portion of the study continuing to be very high in over 90% of subjects that have completed the double-blind portion of the trial. We also continue to explore potential indications outside of epilepsy that may be well suited to the unique mechanism of action of XCN 1101. And we do intend to outline our plans for a Phase II proof of concept trial as details are firmed up in the coming months.

In the actual trials dropout rates continue to be low with good tolerability continuing to be reported and rollover into the open label extension portion of the study continuing to be very high at over 90% of subjects that have completed the double blind portion of the trial.

We also continue to explore potential indications outside of epilepsy that may be well suited for the unique mechanism of action of exceeding 11, Taiwan.

And we do intend to outline our plans for a phase two proof of concept trial as details of firmed up in the coming months.

Next I'd like to turn to exceed 496, which is a kb seven potassium channel modulator that contains the active pharmaceutical ingredient is also being also known as a ticket being that we have now reformulated and are developing as a treatment for a rare pediatric neurodevelopmental disorder Casey in Q2 developmental.

And epileptic instead philosophy, okay see in Q2 D.E.

This is a severe pediatric condition for which no medicine has been approved today.

Casey in Q2, D. is characterized by multiple daily refractory seizures, presenting within the first week of life with significant Neurodevelopmental neurodevelopmental impairment that follows.

Simon N. Pimstone: Next, I'd like to turn to XEN-496, which is a KB7 potassium channel modulator that contains the active pharmaceutical ingredient azogabine, also known as ritigabine, 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. This is a severe pediatric condition for KCNQ2-DEE is characterized by multiple daily refractory seizures presenting within the first week of life with significant neurodevelopmental impairment that follows. Recent epidemiological statistics indicate the incidence is approximately 1 in 17,000 live births compared to approximately 1 in 12,000 for Dravet syndrome.

Recent epidemiology statistics indicate the incidence is approximately 117000 live births compared to approximately one in 12000 for Dravet syndrome.

We have developed I exceeded 406 program based on a strong genetic fresh and all the mechanism of action of axiom for nine six enhancing the inhibitory muscular any current through the case in Q2 channel suggest that is AGA being maybe efficacious as a treatment for Casey in Q2 D, which is caused by loss of function mutations.

In this very channel.

This genetic validation is further supported by data from clinical case reports and surveys as well as from anecdotal parental and physician feedback that have suggested is August been may reduce seizure bid and with the potential to improve development and cognition in this rare pediatric population.

Simon N. Pimstone: We have developed our XEN496 program based on a strong genetic rationale. The mechanism of action of XEN496 enhancing the inhibitory muscarinic current through the KCNQ2 channel suggests that Isogabine may be efficacious as a treatment for KCNQ2-DEE, which is caused by loss of function mutations in this very channel. This genetic validation is further supported by data from clinical case reports and surveys, as well as from anecdotal parental and physician feedback that has suggested Isogabine may reduce seizure burden with the potential to improve development and cognition in this rare pediatric population. We have made considerable progress towards our goal to initiate a Phase III clinical trial examining XEN496 in patients with KCNQ2-DEE. On the regulatory front, the FDA has granted Xenon Fast-Track designation for the investigation of Xenon-496 for the treatment of seizures associated with KCNQ2-DEE and Orphan Drug designation for the treatment of KCNQ2-DEE. The results from our recent Pharmacokinetic, or PK, study of Xenon 496 in 24 healthy adult volunteers support our Phase III development plan. These PK data are comparable to historical PK data for immediate-release argamine tablets, with XEN496 showing similar absorption and elimination curves.

We have made considerable progress towards our goal to initiate a phase III clinical trial examining exceeding 406 in patients with case in Q2 D.

On the regulatory from the FDA granted xenon fast track designation for the investigation of exceeded 406 for the treatment of seizures associated with Casey in Q2, D. and orphan drug designation for the treatment of case in Q2 D.

The results from our recent pharmacokinetic or PK study of axiom for nine six in 24 healthy adult volunteers supports our phase three development plans.

These PK data on comparable to Startco PK data for immediate release has already been tablets with exceeded 496, showing similar absorption and elimination curves.

We achieved another important milestone recently with the filing of axiom for nine six phase III protocol with the FDA, having implemented recommendations made by the agency in previous interactions.

Based on the entirety of the FDA feedback to date, we anticipate initiating a randomized double blind placebo controlled phase III clinical trial to evaluate the clinical efficacy safety and tolerability of exceed 496 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 active versus placebo.

It is anticipated that approximately 40 patients will be randomized in a blinded man up.

To either an active treatment group or two placebo.

After screening patients will enter a baseline period to assist the frequency of seizures, followed by a tighter ration and then a maintenance treatment period, and then a post treatment follow up period.

It is expected that there will also be an open label extension period after the double blind portion of the trial.

Simon N. Pimstone: We achieved another important milestone recently with the filing of our XEN-496 Phase III protocol with the FDA, having implemented recommendations made by the agency in previous interactions. Based on the entirety of the FDA's feedback to date, we anticipate initiating a randomized, double-blind, placebo-controlled Phase III clinical trial to evaluate the clinical efficacy, safety, and tolerability of XEN496 in pediatric patients with KCNQ2DE. 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 to placebo. After 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. It is expected that there will also be an open-label extension period after the double-blind portion of the trial. Site selection is well underway.

With site selection well underway, we have completed a number of the steps necessary to prepare for the phase three clinical trial, including the selection of a CR ROE establishment of a global steering committee determining the principal investigator for the study is Dr. John Millichap. We're also planning regulatory submissions outside of the.

US to support the broader clinical development of X in 496.

This is an exciting points in they exceed 496 program as we anticipate initiating in the near term.

First phase three precision medicine program in a pediatric epilepsy in the case in Q D. The population.

Before turning from our Kb seven programs I would note that we continue to be present in a virtual format at the premier epilepsy related conferences and meetings I presented an overview of our exceed 11, one in 406 programs at the recent they love conference on new anti epileptic drugs and devices and xenon will present, a similar overview on August.

27th at the upcoming 2020 epilepsy pipeline conference presented by the Epilepsy Foundation.

Turning now to axiom 007, with the active ingredient genericizing, which is a CNS acting calcium channel modulator that modulates Caf 2.1, and T. talked calcium channel.

Physician led single site phase two proof of concept study is examining the potential clinical efficacy safety and Tolerability of FXCM 007, as an adjunctive treatment in pediatric patients diagnosed with treatment resistant childhood absence epilepsy or see a eat.

Simon N. Pimstone: We have completed a number of the steps necessary to prepare for the phase three clinical trial, including the selection of a CRO, the establishment of a global steering committee, and determining the principal investigator for the study will be Dr. John Milichap. We're also planning regulatory submissions outside of the U.S. to support the broader clinical development of XEN496. This is an exciting point in the XEN 496 program as we anticipate initiating in the near term the first phase 3 precision medicine program in pediatric epilepsy in the KCNQDE population. Before turning from our KB7 programs, I would note that we continue to be present in a virtual format at the premier epilepsy-related conferences and meetings.

Due to the impact of covered 19 on clinical trial enrollments and in particular, the multi month closure of our clinical sites. The topline results from this study are now expected in the first half of 2021.

Depending on the final results Cie may represent an exciting potential orphan indication for future development of axiom 007.

We also proud of the progress made by our collaborators we have an ongoing collaboration with Neurocrine biosciences to develop treatments for epilepsy.

Your credit as an exclusive license to exceed 901 now known as in beyond nine to 135 too.

Clinical stage selective and maybe 1.6 sodium channel inhibitor with potential in SCM H, a developmental and epileptic encephalopathy, you'll see an eight A.D. as well as other forms of epilepsy.

Your credit as an indicator that anticipates filing an idea application with the FDA in the very near term in order to start a phase two clinical trial in SDN HIV patients in the second half of 2020.

Simon N. Pimstone: I presented an overview of our XTN 1101 and 496 programs at the recent ALUT conference on new anti-epileptic drugs and devices, and Xenon will present a similar overview on August 27th at the upcoming 2020 Epilepsy Pipeline Conference presented by the Epilepsy Foundation. Now, turning now to XEN007 with the active ingredient funarazine, which is a CNS-acting calcium channel modulator that A physician-led, single-site, phase 2 proof of concept study is examining the potential clinical efficacy, safety, and tolerability of XEN007 as an adjunctive treatment in pediatric patients diagnosed with treatment-resistant childhood absence epilepsy (CAE). Due to the impact of COVID-19 on clinical trial enrollments and, in particular, the multi-month closure of our clinical sites, the top-line results from the study are now expected in Depending on the final results, CAE may represent an exciting potential orphan indication for future development of Xenon 007. We're also proud of the progress made by our collaborators.

This important milestone would trigger a 25 million dollar milestone payment to xenon upon the FDA acceptance of the R&D for NB Iot nine to 135% to 55% of the amount in the form of an equity investment in xenon at a 15% premium to the 30 day trailing average share price and 45%.

Of the amount in cash.

Moving now to our partnership with flexion therapeutics to acquire the global rights to develop and commercialize ixia and four zero to than any 1.7 inhibitor also known as feud apart.

Flexions preclinical product candidates, which saved termed FX 301 consists of it exceeding four to formulated for extended release from a third most sensitive hydrogels.

The initial development of FX 301 is intended to support administration as a peripheral nerve block for control of post operative pain.

Flexion anticipates initiating human clinical trials next year in 2021, and we look forward to keeping informed about this partner program.

Before turning the call over the yen I'd also like to take a moment to welcome a new member to the xenon leadership team earlier. This week Sheila Grant joined US as our senior Vice President of R&D operations reporting to Dr. Aniston, Cody, our Chief Medical Officer.

Well as more than 20 years of senior level experience in the pharmaceutical industry. Most recently at Korea pharma cope with responsibilities that encompass global regulatory manufacturing and supply chain operations for multiple commercial stage drugs registered in numerous countries.

Simon N. Pimstone: We have an ongoing collaboration with Neurocrine Biosciences to develop treatments for epilepsy. Neurocrine is an exclusive licensee to XCM 901, now known as NBI 921352, a clinical stage selective NAB 1.6 Sodium Channel Inhibitor with potential for SCN8A Developmental and Epileptic Encephalopathy or SCN8A-DEE as well as other forms of epilepsy.

I am confident cheetahs expertise will support xenon growth and maturation as we advance on urology programs into late stage clinical development and increase our commercialization efforts chiller joins us at a time when I truly believe xenon as one of the most exciting epilepsy pipelines currently in development.

Screaming proud of our team as we have rallied to adapt to the impacts of cobot 19, and continue to make substantial progress.

I believe we had xenon also have an opportunity to provide leadership by example, within our community as we continue to help employers and employees planful transitions back to the workplace, while safely managing the risks associated with covert 19.

Simon N. Pimstone: Neurocrin has indicated that it anticipates filing an IND application with the FDA in the very near term in order to start a phase 2 clinical trial in SCN8ADE patients in the second half of 2020. This important milestone would trigger a $25 million milestone payment to Xenon upon the FDA acceptance of the IND for NBI 921352, with 55% of the amount in the form of an equity investment in Xenon at a 15% premium to the 30-day trailing average share price, and 45% of the amount in cash. Moving now to our partnership with Flexion Therapeutics, who acquired the global rights to develop and commercialize XEN402, an NAV1.7 inhibitor also known as Funapide. Flexion's preclinical product candidate, which they've termed FX301, consists of XEN402 formulated for extended release from a thermosensitive hydrogel. The initial development of FX-301 is intended to support its administration as a peripheral nerve block for the control of postoperative pain.

At this point I lost into recap, our financial position and to provide some posing commentary before opening up the cool to your questions in.

Simon and good afternoon, everyone.

Specific details within our financial statements are covered in today's press release, and our 10-Q filing, but I will provide an overview and conclude with a summary of upcoming milestones.

In the second quarter, we reported total revenue of $13.4 million related to the recognition of $11.9 million of deferred revenue as well as $1.5 million for research and development services from the license and collaboration agreement we have with Americrown. There was no revenue recognized for the same period in 2019.

R&D expenses for the quarter were $10.7 million compared to $8.2 million for the same period in 2019.

The increase of $2.5 million is primarily attributable to increased spending on xenon clinical development product candidates axiom for nine six and axiom 11, one and to a lesser extent increased spending on preclinical discovery and other internal program expenses.

This was partially offset by decreased spending on Akcea nine one that's now known as MBS by nine to 135 to our clinical development costs are now foreign by Neurocrine.

Simon N. Pimstone: Flexion anticipates initiating human clinical trials next year in 2021, and we look forward to keeping you informed about this partnered program. Before turning the call over to Ian, I'd also like to take a moment to welcome a new member to the Xenon leadership team. Earlier this week, Sheila Grant joined us as our Senior Vice President of R&D Operations, reporting to Dr. Ernesto Arcadi, our Chief Medical Officer. Sheila has more than 20 years of senior-level experience in the pharmaceutical industry, most recently at Carivio Pharmacorp, with responsibilities that have encompassed global regulatory, manufacturing, and supply chain operations for multiple commercial stage drugs registered in numerous countries. I'm confident Sheila's expertise will support Xenon's growth and maturation as we advance our neurology programs into late-stage clinical development and increase our commercialization efforts.

DNA expenses for the quarter were $3.3 million compared to $2.3 million for the same period and 29 team. The increased primarily 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.

This provides a net loss for the quarter of point $2 million compared to $10 million for the same period in 2019, the changes primarily attributable to revenue recognized in the quarter ended June Thirtyth 2020 pursuant to the agreement with Neurocrine, partially offset by an increase in R&D and DNA expenses as compared to the same period in 2019.

Cash cash equivalents and marketable securities as of June Thirtyth, 2020 were $202.8 million compared to $141.4 million as of December 30, Onest 2019.

Based on our current assumptions, which include fully supporting the planned clinical development of vaccine 11, no one axiom for nine sex and axiom 007, we anticipate having sufficient cash to fund operations into 2022, excluding any revenue generated from existing partnerships or potential new partnering.

Simon N. Pimstone: Sheila joins us at a time when I truly believe Xenon is one of the most exciting epilepsy pipelines currently in development. I'm extremely proud of our team as we have rallied to adapt to the impacts of COVID-19 and continue to make substantial progress. I believe we at Xenon also have an opportunity to provide leadership by example within our community as we continue to help employers and employees plan for transitions back to the workplace while safely managing the risks associated with COVID-19. 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. Ian said:

Arrangement.

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

In summary, we look forward to achieving several important clinical milestone events, we expect to initiate a phase three clinical trial for axiom for nine six in case the in Q2 D. later this year.

We anticipate a $25 million milestone payment upon FDA acceptance of an eye Andy to be followed by our partner Neurocrine in the near term in order to start a phase two clinical trial for MB nine to 1352 in SDN eight A.D. pediatric patients in the first half of 20 or 21.

Ian C. Mortimer: Thanks, Simon, and good afternoon, everyone. The specific details of our financial statements are covered in today's press release and our 10-Q filing, but I will provide an overview and conclude with a summary of upcoming milestones. In the second quarter, we reported total revenue of $13.4 million, related to the recognition of $11.9 million of deferred revenue, as well as $1.5 million for research and development services from the license and collaboration agreement we have with NeuroCrim. There was no revenue recognized for the same period in 2019. R&D expenses for the quarter were $10.7 million compared to $8.2 million for the same period in 2019. The increase of $2.5 million is primarily attributable to increased spending on Xenon's clinical development product candidates, XEN496 and XEN1101, and to a lesser extent, increased spending on preclinical discovery and other internal program expenses.

We anticipate results from our phase to be X tool clinical trial examining axiom elevena, one and how to fulfill epilepsy we.

We look forward to the results from the physician led phase two open label study and treatment resistant childhood absence epilepsy was axiom 007 anticipated in the first half of 2021 and.

And we anticipate Flexions continued development of FX threes or a one to support the initiation of human clinical trials in 2021 was the non eligible for various regulatory and development milestone payments of up to $9 million through the initiation of a phase two proof of concept clinical trial.

Behalf of the entire being on team, we look forward to updating you over the coming months at this point, we can now open the call up for questions operator.

Ladies and gentlemen, you have one question Brian. Please press Star then the number one thats gone telephone.

Okay. Thank you Mr. barbecue.

Right.

Well I guess the moment.

Okay.

Ian C. Mortimer: This was partially offset by decreased spending on XEN901 that is now known as MBI-921352 as clinical development costs are now borne by Neurocrine. G&A expenses for the quarter were $3.3 million compared to $2.3 million for the same period in 2019, the increase primarily 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 This provides a net loss for the quarter of $0.2 million compared to $10 million for the same period in 2019. The changes are primarily attributable to revenue recognized in the quarter ended June 30, 2020, pursuant to the agreement with Neurocrin, partially offset by an increase in R&D and G&A expenses as compared to the same period in 2019.

Yes, Great question Mr., Paul Matt from BMO. Your line is open.

Hey, Paul.

Paul Thanks for taking my question a couple from us.

I guess first on.

You mentioned that you're exploring the potential of 11 no one in other neurological indications TBD just curious if you could.

Give us any more detail, there and that sort of signals a.

Strategic shift or just some strategic.

Looking into outside of epilepsy, moving forward and then on double a seven.

I'm curious if you could give us an idea what the bar is what you're looking for out of the phase two proof of concept related to sort of standard of care and what you're looking for there on the order to move forward. Thanks.

Sure.

Ill take a stab at this and in Peace commented Simon.

Yes, I think in terms of the first question I know we've been communicating for sometime now we're exploring indications.

Outside of the focal epilepsy indication, which remains our primary indication for this drug.

Ian C. Mortimer: Cash equivalents and marketable securities as of June 30, 2020, were $202.8 million compared to $141.4 million as of December 31, 2019. Based on our current assumptions, which include fully supporting the planned clinical development of XEN 11-01, XEN 4-9-6, and XEN 0-0-7, 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 the business objectives we have outlined today, and we continue to make prudent business and spending decisions to manage through these unprecedented times.

But there's a tremendous amount of literature, that's building in the role of the kv seven two and all three channel.

In neuronal hyperexcitability that underlies the number of.

Interesting neurological disorders, where hyperexcitability appears to perhaps drives for example, a book ptosis in motor neuron disease.

In.

Hyperexcitability through this channel mediating pain signaling.

Operating side ability through this channel so to have potentially a role in Indonesia and major depressive disorder.

And we know these channels also expressed in the yen the hair cells in particular and and the potential for treatment using kv seven to modulate fortuitous is also interest. So we're looking at a number of these types of disorders. We've been talking about this for some time, it's been an extremely active.

Activity at the company and we expect pretty soon I think to be able to communicate what that plan is.

It doesn't detract from the focus being in focal epilepsy thats the primary.

Ian C. Mortimer: In summary, we look forward to achieving several important clinical milestones this year. For example, we expect to initiate a Phase III clinical trial for XCN496 in KCNQ2DE later this year. We anticipate a $25 million milestone payment upon FDA acceptance of an IND to be filed by our partner, Neurocrin, in the near term in order to start a Phase II clinical trial for MBI-921352 in SCN8A-DEE pediatric patients. In the first half of 2021, we anticipate results from our Phase IIb XTOL clinical trial examining XCN1101 in adult focal epilepsy. We look forward to the results from the physician-led Phase 2 open-label study in treatment-resistant childhood absence epilepsy with XCN007 expected in the first half of 2021. And we anticipate Flexion's continued development of FX301 to support the initiation of human clinical trials in 2021, with Xenon eligible for various regulatory and development milestone payments of up to $9 million through the initiation of a Phase 2 proof-of- On behalf of the entire Xenon team, we look forward to updating you over the coming... At this point, we can now open the call up for questions, Operator.

Opportunity it remains so.

The trial continues to progress well.

As was updated Tolerability seems very good we get a high rollover rates are low dropout rates of course, everything's blinded, but data seems.

Consistent with the hypothesis going in the preclinical data the Tms data very supportive of a.

Epilepsy as an important indication and of course this precedent for these auger being being that the first generation drug.

Very well in focal epilepsy, so no the strategy hasn't changed but we do see.

Some very exciting opportunities outside of focal epilepsy, including by the way within epilepsy, but outside of epilepsy.

How that may impact long term from a commercial standpoint, obviously, that's something we would discuss publicly at the right time, but we certainly don't see any shift in our plan today in developing the structural focal epilepsy, primarily the for this to hit in that indication as well.

In terms of.

007.

Yes look it's a this is a single investigator led studies single side study it isn't.

It's a non controlled study in the sense that there isn't a.

Placebo, but this is a open label study compared to baseline.

These are highly refractory patients.

So there really is.

Operator: Ladies and gentlemen, if you have any questions at this time, please press star then the number 1 on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key.

Two drugs that are primarily used in these patients with child Amazon's epilepsy Isa suck some iden sodium vault provides these would be children and adolescence in which those drugs either I have not worked to suppress apps on seizures or are not tolerated which is.

Operator: We'll pause for just a moment to compile the Q&A roster. We have your first question from Mr. Paul Matteis from CESAW. Your line is open. Hey, this is Alex.

Generally thought to be the case in about a third of these kids remember this is a condition thats actually quite prevalent fix about 40 45000 kids in the us and its deemed about.

Alex: I'm from Paul. Thanks for taking our questions. A couple from us.

25% to 30% either refractory all have talked tolerability concerns with the non drug so I.

Alex: I guess the first is that you mentioned that you're exploring the potential of 1101 in other neurological indications, TBD. Just curious if you could give us any more detail there and if this sort of signals a, you know, a strategic shift or just some strategic, you know, looking into things outside of epilepsy moving forward. And then on 007, curious if you could just give us an idea of what the bar is, what you're looking for in the Phase II proof of concept related to the standard of care and what you're looking for there in order to move forward. Thanks.

I think overcoming the refractory nature of this disease given the highly refractory nature of these children. I think is important I think the question really goes down to will what are we deeming to be potentially clinically meaningful and I think thats Thats you know.

I think we'll we'll certainly have.

More detailed updates over time, but I would say I think in general for disorders like this and similar certainly full.

Focal epilepsy as well in our clinical meeting meaningful effect is generally one that's deemed to be more than 30% in terms of seizure frequency reduction.

Simon N. Pimstone: Sure. I'll take a stab at this, and Ian, please comment. It's Simon.

Simon N. Pimstone: Yeah, I think in terms of the first question, no, we've been communicating for some time now. We're exploring indications outside of the focal epilepsy indication, which remains our primary indication for this drug. But there's a tremendous amount of literature that's building on the role of the KEV7-2 and or 3-channel in neuronal hyperexcitability that underlies a number of interesting neurological disorders where hyperexcitability appears to perhaps drive, for example, apoptosis in motor neuron disease. In hyperexcitability through this channel mediating pain signaling, hyperexcitability through this channel is thought to have potentially And we know these channels are also expressed in the inner ear and the hair cells in particular, and the potential for treatment using a KEV7-2 modulator for tinnitus is also of interest. So we're looking at a number of these types of disorders. We've been talking about this for some time.

And certainly with focal epilepsy that spread we see and in addition with Cie.

This bridge, we see in terms of seizure frequency reduction is.

Median is generally in that city, 40% range and so seeing a reduction in seizures in that range. In this refractory population I think we'd be deemed to be clinically meaningful of course seizure freedom rates is important but this is a relatively small study as we've talked about with about 20 subjects. So we're very.

Excited by this we think the preclinical study data is supportive fall through an acquisition in this condition.

And we really look forward to do to data coming out of this study as I noted in my updates.

They will be a bit of a delay. This again single side study multi month closure with Covance just coming back online.

And starting to see patients and.

Just these types of studies, Unfortunately will be impacted in the setting, but I don't think it's going to be a major delay to the program.

Great. Thanks, so much okay.

Your next question comes from the line.

Simon N. Pimstone: It's been an extremely active activity at the company, and we expect pretty soon, I think, to be able to communicate what that plan is. It doesn't detract from the focus being on focal epilepsy. That's the primary opportunity.

Hi.

Your line is open.

Hi, good afternoon. Thank you.

Congrats on the progress.

Two questions. The first one is on 11, Elwen and I'm curious can you remind us about that the patient visits required for safety assessments.

Simon N. Pimstone: It remains so, and the trial continues to progress well. As was updated, tolerability seems very good. We get a high rollover rate, and a low dropout rate, so of course, everything's blinded. But the data seems consistent with the hypothesis going in. The preclinical data, the TMS data, are very supportive of epilepsy as an important indication. Of course, there's precedent with ezogavine being the first generation drug working very well in focal epilepsy. So no, the strategy hasn't changed, but we do see some very exciting opportunities outside of focal epilepsy, including, by the way, within epilepsy, but outside of epilepsy. How that may impact long-term from a commercial standpoint, obviously that's something we would discuss publicly at the right time, but we certainly don't see any shift in our plan today in developing the drug for focal epilepsy, clearly the furthest ahead in that indication as well. In terms of 007, look, this is a single investigator-led study, a single-site study. It's a non-controlled study in the sense that there isn't a placebo, but this is an open-label study compared to baseline.

How frequently patients are coming in part of the protocol.

And maybe can you talk about what kind of safety assessments are being done eye exams that urinary retention so for.

Any color here would be helpful.

Knowledge, where we're in a kind of environment Charlotte.

Another follow up.

I'll I'll take a stab at this and bring in.

It's a tough question I don't have.

As a an exact answer for you, but certainly off line can come back and happy to discuss this further but we are where we've essentially and the reason I say that is different sites have different requirements and so as you can imagine.

We're not able to implement sort of standard protocols across every site because side. Some open some are partially open somewhat not opened some are seeing patients back in the clinic, others are seeing them remotely and so.

And of course.

Related to that is the fact that I think.

Said earlier was within on a call with an investor.

Really never seen actually a clinical study with such incredible gymnastics and the clinical team has done an incredible job in such a short period of time.

Simon N. Pimstone: These are highly refractory patients, so there really are two drugs that are primarily used in these patients with childhood absence of epilepsy, ethosuxamide and sodium valproate. These would be children and adolescents for whom those drugs either have not worked to suppress absence seizures or are not tolerated, which is generally thought to be the case in about a third of these kids. Remember, this is a condition that's actually quite prevalent.

If you think about all the elements here you mentioned a few obviously.

Questionnaires need to be done patients need to be examined blood needs to be taken your needs to be taken E. Kgs blood pressures need to be done I, just need to be examined and drug needs to arrive to patients now all of that in the context of sites, having different openings closings and different protocols. So we've had to really adapts on.

I'd say, not just country by country, but sort of site by site basis and so.

Simon N. Pimstone: It affects about 40,000, 45,000 kids in the U.S., and it's deemed about... 25-30% are either refractory or have tolerability concerns with known drugs. So you know, I think overcoming the refractory nature of this disease, given the highly refractory nature of these children, I think is important. I think the question really goes down to, well, what are we deeming to be potentially clinically meaningful? And I think that's, you know, I think we'll certainly have more detailed updates over time, but I would say I think in general for disorders like this, and it's similar certainly for focal epilepsy as well, a clinical meaningful effect is generally one that's deemed to be more than 30% in terms of seizure frequency reduction, and certainly with focal epilepsy, that spread we see, and in addition with CAE, the spread we see in terms of seizure frequency reduction is you know, median is generally in that 30-40% range.

I can't give you an exact breakdown of exactly what's being done where and how but what we feel is that we've maintained the integrity of data in the study.

Such that we don't believe there's any material impact in the clinical trial from an outcome standpoint or numbers outcome based on mentioned, it's a bit integrity and so we've been able to question subjects, we've been able to examine as needed we've got nurses coming into homes, we needed to measure blood pressure.

To do.

Mobile E kgs to take glad to take your and we've got drug being delivered by Korea from sites into patients homes.

But I think in general the integrity of the data we feel the sound they will be obviously, a few gaps here and there we get that in every study let alone in a cobot environment, but none that we believe we're going to be materially impacting the outcome integrity to study in those comments, yes, I mean, Andrew I can provide you a little bit of the detail.

Now.

Simon N. Pimstone: And so, seeing a reduction in seizures in that range in this refractory population, I think would be deemed to be clinically meaningful. Of course, seizure freedom rates are important, but this is a relatively small study, as we've talked about with about 20 subjects. So, we're very excited by this. We think the preclinical study data is supportive for flunarazine in this condition.

On what the way the protocol was designed and then as Simon mentioned Theres, a number of adjustments, but none of the adjustments do we believe our have any impact on the integrity of the data or what the results going to be at the end of the day.

So I think really important is that we do have patient visits and screening and baseline because we do need those baseline characteristics than during the study there would have been normally weekly weekly that's a number of those visits we've moved to the telemedicine.

Simon N. Pimstone: And, you know, we really look forward to data coming out of this study. As I noted in my update, there will be a bit of a delay. This, again, is a single-site study, multi-month closure with COVID, just coming back online and starting to see patients. And, you know, it's just these types of studies, unfortunately, will be impacted in this setting. But I don't think it's going to be a major delay in the program.

Visits, but we do want those baseline characteristics and Thats why we saw very few patients kind of going through screening and remember after your last baseline vote vivid as when you get into the randomization. That's a very important visit to do and so during that they have to be examine because actually so during kind of March April.

Alex: Great, thanks so much. The next question comes from the line of Andrew Chai from Jefferies.

Our may that's where we saw a significant.

Kind of reduction on that and Thats, where thats starting to pick up a little bit as sites reopened and then and so we have the detailed examination, including an eye exam at that time. So we have those baseline characteristics and the randomization visit and then the other ones during the study.

Andrew Chai: Hi, good afternoon. Thank you. Congratulations on the progress. Two questions. The first one is at 1101. Can you remind us about the inpatient visits required for safety assessments and how frequently patients are coming in per the protocol? And maybe you can talk about what kind of safety assessments are being done, eye exams, urinary retention, so forth? Any color here would be helpful given I acknowledge we're in a COVID environment. And I have a follow-up.

Lot of those can be done.

Remotely and don't all have to be done on site.

Yes, and then the the final visits of course, we we will be getting eye exams done and and so.

Simon N. Pimstone: Yeah, I'll take a stab at this and bring you in. You know, it's a tough question.

There may be some instances, where they might be a few weeks off again, just because of sites opening and closing, but again, we're not aware of.

Simon N. Pimstone: I don't have an exact answer for you, but certainly offline can come back, and I'm happy to discuss this further. But we're, we've essentially, and the reason I say that is, you know, different sites have different requirements. And so, as you can imagine, we're not able to implement sort of standard protocols across every site because sites, some are open, some are partially open, some are not open, some are seeing patients back in the clinic, others are seeing them remotely. And so, and of course, you know. Related to that is the fact that, as I said earlier on a call with Ian about a potential investor, I've really never seen a clinical study with such incredible gymnastics, and the clinical team has done an incredible job in such a short period of time.

Of cases with Immaterially measurement so of in from a timing standpoint in such that we think they won't be there'll be lots of data integrity. It's it's actually been remarkably well managed so look when when sites, we closed which all sites where for a few months.

Focus of the trial shifted from screening and randomization to.

Exactly what we've discussed remote monitoring and drug supply and men mountains of data integrity now as the instead, we are seeing sites open I actually think Europe is probably going to do better than the us in the next few months I think we've got more of a concern in the us in the in the development landscape broadly not not just from xenon.

Simon N. Pimstone: If you think about all the elements here, you mention a few, obviously, questionnaires need to be done, patients need to be examined, blood needs to be taken, urine needs to be taken, EKGs, blood pressures need to be done, eyes need to be examined, and drugs need to arrive at patients. Now all of that in the context of sites having different openings, closings, and different protocols. So we've had to really adapt on a, I'd say, not just country by country but sort of site by site basis, and so I can't give you an exact breakdown of exactly what's being done where and how, but what we feel is that we've maintained the integrity of data in the study such that we don't believe there's any material impact on the clinical trial from an outcome standpoint or number outcome based on maintaining data integrity.

But I think Europe is certainly and so as we focus new sites a lot of that new site activity was actually in Europe.

That's great to hear that sounds like you had a great handle on on the situation. So probably on you guys.

Maybe if I can ask a follow up.

Sure.

In your press in your prepared remarks I. Thank you said.

Dropout rates continually allow tolerability.

Good rollover good so thats, great that let that led us to think.

Im curious how often can you guys monitor the blinded safety data is it on.

Can you do that whenever you want or is it just like once per quarter.

I mean that the team the team has access to blinded data obviously for safety monitoring its very important.

Simon N. Pimstone: And so we've been able to question subjects, we've been able to examine as needed, we've got nurses coming into homes where needed to measure blood pressure, do mobile EKGs, take blood, take urine, we've got drugs being delivered by courier from sites into patients' homes. But I think in general, the integrity of the data we feel is sound. There will be, obviously, a few gaps here and there; we get that in every study, let alone in a COVID environment, but none that we believe are gonna be materially impacting the outcome.

We need to know sort of once patients drug than once.

Once bloodiest drone do they have any lab abnormalities, one CK jeans or Don you don't wait till the end of the study done wait six months. So this kind of data is available real time, it's not that we initially check every minute of everyday but no. It's real time. The team is very much on top of this as is the CRM providing oversight so.

Ian C. Mortimer: Yeah, I mean, Andrew, I can provide you with a little bit of the detail on the way the protocol was designed, and then, as Simon mentioned, there's a number of adjustments, but none of the adjustments, we believe, have any impact on the integrity of the data or what the result's going to be at the end of the day. So, I think it is really important that we do have patient visits and screening and baseline characteristics because we do need those baseline characteristics. Then during the study, there would normally have been weekly visits. A number of those visits we've moved to telemedicine visits, but we do want those baseline characteristics, and that's why we saw very few patients kind of going through screening.

Great Great to hear okay. Thank you vision.

Your next question comes from the line of Laura Chico from Wedbush. Your line is open.

Good afternoon. Thanks for taking my question I have one with regards to coordinate sick.

Now that the portables been submitted could you just reaffirmed your powering assumptions that you've incorporated here.

I think also said.

Could you talk a little about your assumptions subject recruitment and perhaps the paid.

Ian C. Mortimer: Remember, after your last baseline visit is when you get into the randomization. That's a very important visit to do. They have to be examined exactly. So, during kind of March, April, May, that's where we saw a significant kind of reduction in that, and that's where it's starting to pick up a little bit as sites reopen. And so, we have the detailed examination, including an eye exam at that time, so we have those baseline characteristics and the randomization visit. And then the other ones during the study; a lot of those can be done remotely and don't all have to be done on-site.

I think Theres also some early stage gene therapy efforts that are starting to progress towards the clinic, but curious on how you think about the potential impact the recruitment specific to the Kate Spade and then I have one follow up for you.

All right I think.

We're pretty close we think in terms of getting kind of final if FDA feedback and ill preferences as being from the get goes to really.

Set up a coal and go through the study in a lot more detailed once we've got a final protocol again I always just don't like being in a position where I'm, giving you a perspectives that may or may not change based on the FDA feedback. So I I would just given this is not like month to month and months away I would.

Ian C. Mortimer: And then the final visits, of course, we will be getting eye exams done and, you know, there may be some instances where there might be a few weeks off, again, just because of sites opening and closing. But we, again, we're not aware of cases where they're materially, measurements are off from a timing standpoint such that we think there won't be, there'll be loss of data integrity.

Preferred to hold off on discussions around stats and discussions around design until we've got that feedback.

We're optimistic that what we've submitted should be given the go ahead, but we need to see that and we need to see minutes. So we not far from that we will definitely communicates in a way that I think we'll be satisfactory to you and others.

Simon N. Pimstone: It's actually been remarkably well-managed. So, you know, look, when sites were closed, which all sites were for a few months, the focus of the trial shifted from screening and randomization to exactly what we've discussed, remote monitoring and drug supply and maintenance of data integrity. Now, as Ian said, we are seeing sites open. You know, I actually think Europe is probably going to do better than the U.S. in the next few months. We've got more of a concern in the U.S. in the development landscape broadly, not just from Xenon. You know, but I think Europe is certainly, and so as we focus on new sites, a lot of that new site activity was actually in Europe.

In terms of the competitive environment, Yes look I mean, I think every of these monogenic epilepsies is going to face multiple.

Administrative modes in multiple modes of treatments.

So, yes, there's going to be competition, there's going to be competition in eight day and in case in Q in driveway, we see only go antisense work gene therapy work I think the way I think about the.

Let's call it the direct injectable route where whether it's a antisense oligo intrathecal low.

I think about those modalities, probably with two two points in mind, one is I think they're going to be pretty long term development programs.

Andrew Chai: That's great to hear. It sounds like you have a great handle on the situation, so props to you guys. Maybe I can ask a follow-up?

Meeting I think they gonna have to be very very cautiously.

Tested in very sort of select patients and they'll have to build a data set over quite a long period of time, I mean, remember you're giving a single dose of drug can you you don't have a reversal agent and so we know and I've said this publicly many times, we know that most if not all nbcs limits.

Andrew Chai: Sure.

Andrew Chai: In your prepared remarks, I think you said dropout rates, continual low, tolerability good, rollover good, so that's great. So that led us to think, you know, I'm curious, how often can you guys monitor the blinded safety data? Is it on a, you know, can you do it whenever you want?

If given at high enough doses courses, we know that they are dose limiting toxicities that observed in animals and so when we think particularly about I am channels and ion channel biology.

Simon N. Pimstone: I mean, the team has access to blinded data. Obviously, for safety monitoring, it's very important. We need to know sort of once a patient is drugged and once blood is drawn, do they have any lab abnormalities. Once EKGs are done, you don't wait until the end of the study; you don't wait six months.

We speak about the so called Goldilocks phenomenon, you've got to get adjusts writes the partridge has to be warm, but not too hard to not too cold and I think thats very important as we think about.

Being able to modulate these channels with small molecules we believe.

Simon N. Pimstone: So this kind of data is available in real time. It's not that we necessarily check every minute of every day, but no, it's real time. The team is very much on top of this, as is the CRO providing oversight. So yeah, I mean this is current. As we disclosed to you our observations today, this is current.

At least it's the approach we've taken thats not to say only goes and gene therapy is done in place I'm sure. They do and I think it's going to take a bit of time.

But I think the other point to make is that they probably at least initially for some time will be reserved for the very severe very refractory patients I cannot imagine.

Patients who are have not tried.

Drugs that are designed for this these indications I cannot imagine these patients will be going into that type of therapeutic approach early in their epilepsy I have to believe just like the surgery auction for very refractory patients. This is probably going to be a later stage offer.

Andrew Chai: Great, great to hear. Okay, thank you. Pleasure. Your next question comes from the line of Larris. Wetbush Philanthropies. Good afternoon, thanks for taking the question.

Larris: I have one with regard to 496. So now that the protocol has been submitted, could you just reaffirm the powering assumptions that you've incorporated here? I think also, could you talk a little about your assumptions on subject recruitment and perhaps the pace? I think there are also some early stage gene therapy efforts that are starting to progress towards the clinic, but curious about how you think about the potential impact on recruitment specific to the KCNQ2 space. And then I have one follow up for you.

Now over time. These modalities may show to have a remarkable effect. They may cure the disease. They may do all sorts of things that are positive we don't know and if they do this will be a great outcome for patients.

But I think for at least the foreseeable future.

There is a place I think it's limited I think is going to be limited a very very very severe most refractory and certainly when we used for a second to third line.

And then Loren maybe to add to that.

You know so thats good contacts and background and then what we're doing to I would call. It may be more control our own destiny is.

Simon N. Pimstone: Laura, I think, you know, we're pretty close, we think, in terms of getting kind of final FDA feedback, and, you know, our preference has been from the get-go to really set up a call and go through the study in a lot more detail once we've got a final protocol. You know, again, I always just don't like being in a position where I'm giving you a perspective that may or may not change based on FDA feedback. So I would, you know, and given this is not like months and months and months away, I would just prefer to hold off on discussions around stats and discussions around design until we've got that feedback. We're optimistic that what we've submitted, you know, should be given the go-ahead, but we need to see it, and we need to see it within minutes. So we're not far from that. We will definitely communicate in a way that I think will be satisfactory to you and others.

I have a very close will close relationship with the advocacy group with key care wells in this space. We've identified a number of sites probably more sites been will need.

You have a relationship within retail on the testing side Theres a number of databases, both within the advocacy group and with some academics that are tracking these children. So we've got multiple angles to identify.

Children insights to be able to to get the study and.

Everything goes according to plan, which should be up and running by the end of the year.

That's great.

I guess, maybe one follow up the 11 one.

Study could you maybe walk us through the timeframe in which the subject enter for screening.

The last time it takes for them to reach their final visit if there except in the study and I guess, what I'm trying to get added.

Simon N. Pimstone: In terms of the competitive environment, yeah, look, I think every one of these monogenic epilepsies is going to face multiple administrative modes and multiple modes of treatment. You know, so yes, there's going to be competition. There's going to be competition for ATA, for KCNQ, for DRAVE.

Maybe what's your confidence in hitting that target for first half 21 readout. Thank you.

Yes, the 100 and all that if yes.

So all I'll walk you through kind of schematic that a patient goes through what that funnel looks like and then.

Simon N. Pimstone: We see oligo-antisense work, gene therapy work. I think, you know, let's call it the direct injectable route, whether it's an antisense oligo, intrathecal, or, you know, I think about those modalities probably with two points in mind. One is I think they're gonna be pretty long-term development programs, meaning I think they're gonna have to be very, very cautiously tested in very sort of select patients, and they'll have to build a data set over quite a long period of time. I mean, remember, you give a single dose of a drug and you don't have a reversal agent. And so we know, and I've said If given at high enough doses, it causes seizures. We know that.

Your last question on confidence is really I think it's less about the schematic and more about the pandemic and how enrollment is going to be.

Over the next number of months as we kind of can narrow those confidence intervals on one topline data is going to be.

The patients are our screened obviously sites that we've identified I'll go through their patient records and identify patients from a screening perspective, if patients meat essentially all of the criteria in screening then we'll go into baseline and the baseline mirrors the double blind.

Portion so it's an eight week baseline and really one of the main things were looking out in the baseline period is the number of seizures, so their need a minimum of.

For seizures in 28 days and they can't be seizure free for more than three weeks of any given period. So we're just making sure that anything that is from their charts are in the screening actually shows through in the baseline because that's what our statistics are based off of.

Simon N. Pimstone: They're dose-limiting toxins that are observed in animals. And so when we think particularly about ion channels and ion channel biology, you know, we speak about the so-called Goldilocks phenomenon. You've got to get it just right. The porridge has to be warm, but not too hot and not too cold.

And then once they go to a randomization visit the randomized to active one of the three active arms or placebo and then there's eight weeks of treatment and then they have an option at the end of the double blind period. They can either roll directly into open label extension and that would happen immediately or if they choose not to but we're seeing very high percentage.

Simon N. Pimstone: And I think that's very important as we think about it. Being able to modulate these channels with small molecules, we believe, at least that's the approach we've taken. That's not to say oligos and gene therapies don't have a place. I'm sure they do, and I think it's going to take a bit of time. But I think the other point to make is that they probably, at least initially, for some time, will be reserved for the very severe, very refractory patient. I cannot imagine. Patients who have not tried drugs that are designed for these indications. I cannot imagine these patients will be going into that type of therapeutic approach early in their epilepsy. I have to believe, just like the surgery option for very refractory patients, this is probably gonna be a later stage option.

Assignment as mentioned previously if they don't then there is a six week follow up as I would just kind of the last.

As of.

Data that we need in order to to complete the study I think one of the benefits of the study is we are using an electronic diary to capture the efficacy endpoints and so.

Much more so than in the paper diary World. We can track when there is missing data points real time. So we do expect kind of that cleaning up of the data.

Scrubbing and locking the database and getting to topline should be more efficient than maybe other studies because we should be doing a lot of that are we are doing a lot of that real time throughout the study and not waiting to the and to see where we are from a quality of data perspective.

Simon N. Pimstone: Now, over time, these modalities may show to have a remarkable effect. They may cure the disease, they may do all sorts of things that are positive. We don't know, but if they do, this will be a great outcome for patients. But I think for at least the foreseeable future, there is a place, I think it's limited. I think it's gonna be limited to very, very, very severe, most refractory, and certainly won't be used for a second or third line.

Thank you guys.

Your next question comes from the line of Yep Yep Mohawk from Guggenheim Partners. Your line is open.

Hey, guys. This is any on free option.

Just a follow up on a previous question about sort of collecting.

Metrics and pointed out in the quarantine and teleworking, who are telemedicine environment do you have an agreement on how your accounting for this data points.

In.

In the study.

Ian C. Mortimer: Yeah, and then, Laura, maybe to add to that, you know, so that's good context and background, and then what we're doing to, I would call it, maybe more control our own destiny, is, you know, we have a very close relationship with the advocacy group, with key KOLs in the space. We've identified a number of sites, probably more sites than we'll need. We have a relationship with Invitae on the testing side. There are a number of databases, both within the advocacy group and with some academics that are tracking these children, so we've got multiple angles to identify children and sites to be able to do the study, and, you know, if everything goes according to plan, we should be up and running by the end of the year.

And then do you do you think you'll be able to give more updated or granular guidance before the end of the year on progress as you get a sense of.

How many enrollments going and then I've a question for non SEC.

Yeah. So to your second question, yes, we probably will be able to give.

Updated guidance by into the US it because again said you know I think what's really going to be key for us and everyone else. In this industry is is what's going to happen.

Over the next six months in terms of sites and.

We are certainly on track in terms of out predicted curves.

We've been conservative we think in those curves, but it's not start closing all over the world again, we and others or obviously going to be impacted so.

Larris: That's great. And I guess maybe one follow-up to the 1101 study, could you just maybe walk us through this time frame in which subjects enter for screening and the elapsed time it takes for them to reach their final visit if they're accepted in the study? And I guess what I'm trying to get at is, you know, maybe your confidence in hitting that target for the first F21 readout. Thank you.

I think by the end of the year, we'll probably have the kind of visibility would need on based on numbers of recruited subjects and.

And guidance I think can be narrowed.

So in terms of your first.

Question I do not believe we have a formal regulatory agreement on as I'll, just turn the data gaps.

But I think we spent a ton of time on this internally and with regulatory advisors and we feel very very confident including with the CR Road.

Ian C. Mortimer: Yeah, the one and two and all that.

Ian C. Mortimer: So, I'll walk you through kind of the schematic that a patient goes through, what that funnel looks like, and then, you know, your last question on confidence is really, I think it's less about the schematic and more about the pandemic and how enrollment is going to be, you know, over the next number of months as we kind of can narrow those confidence intervals on when top-line data's going to be. But patients are screened, obviously. Sites that we've identified will go through their patient records and identify patients from a screening perspective. If patients meet, you know, essentially all of the criteria in the screening, then they'll go into baseline. And the baseline mirrors the double-blind portion, so it's an eight-week baseline. And really, one of the main things we're looking at in the baseline period is the number of seizures. So, they need a minimum of four seizures in 28 days, and they can't be seizure-free for more than three weeks at any given period.

We have actually to see our rose involved.

One in Europe, and one in the U.S., we feel very confident based on all of this review that.

We don't believe the is going to be any material that immateriality concerns in the in terms of adequacy of data again, they will be some data gaps I mean, the data gaps in every clinical trial.

But we don't believe the data gaps are going to be.

Meaningful to impact regulatory decision being able to be made on the endpoint or the safety assessments for this drug.

Yes.

To add to that I mean, as I said on the last question, because we Havent E diary to measure the efficacy endpoints. It's it's it's kind of.

Cove, it hasn't hasnt been relevant there. So we don't expect any gaps from so when you think about our primary endpoint of and efficacy endpoint. We don't expect a GAAP other than a Simon mentioned any gaps that you just having a normal study that someone for guests to fill it out wildfires down them again load up the direct then that'll be caught out later.

So really any of the.

Moving in person visits to telemedicine, you're going to Miss some safety assessments. There right. You. If you do a telemedicine or that you're not going to drop blood unless we have a home health as it. So we may be missing a couple some safety points, along the way, but I, but I don't again. This is where we have always been clear on.

Ian C. Mortimer: And so, we're just making sure that anything that is from their charts or in the screening actually shows through in the baseline because that's what our statistics are based on. And then, once they go to a randomization visit, they're randomized to active treatment, one of the three active arms is placebo, and then there are eight weeks of treatment. And then, at the end of the double-blind period, they can either roll directly into open-label extension, and that would happen immediately, or if they choose not to, but we're seeing a very high percentage, as Simon had mentioned previously, if they don't, then there's a six-week follow-up visit, which is kind of the last piece of data that we need in order to complete the study.

The integrity of the efficacy readout, we don't believe that's going to be affected by Copel interim its if it's a phase two clinical trial as well. So the study is is really the significance is built around and the statistics built around the endpoints as he and his described which is I think.

Extremely low if any risk because of its electronic capability and so while they might be some gaps in the safety analyses of blood pressure here or there that may not be done and time will I missed I exam and the patient.

Ian C. Mortimer: I think one of the benefits of this study is that we are using an electronic diary to capture the efficacy endpoints. And so, much more so than in the paper diary world, we can track when there are missing data points in real-time. So, we do expect kind of that cleaning up of the data and scrubbing and locking the database and getting to the top line should be more efficient than maybe other studies because we should be doing a lot of that, or we are doing a lot of that real-time throughout the study and not waiting to the end to see where we are from a quality-of-data perspective. Thank you.

Those in the context of the study the size.

Again 50, they're always observed and I don't think we going to have.

Much different from coated and Sydney, it's not going to impact the ability to read the study and determine sort of safety parameters of the drug to allow us to make a decision to proceed or not to proceed to phase three.

Great. Thanks, and just quickly on for nine six if the FDA does come back with additional suggestions on more on the final protocol what does the timing look like there is that sort of reset the clock and then you have to go back to the drawing board or.

Is there a chance that you could still get started.

Ian C. Mortimer: Thank you, guys. Your next question comes from the line of Yati and Shaneha from Guggenheim Partners. Your line is open. Hey, guys. This is Eddie Yon for Yotkin.

Look I don't know I don't want to sort of I don't get specific on this duston no look we do have listened drug designation and Weve.

We've got fast tracking these of course provide opportunities to go back without necessarily having two way to every time for 30 or 60 day cycle. So they are advantages that's where the key advantages all of those designation is really.

Eddie Yon: So just a follow-up on a previous question about sorting out collecting metrics and endpoint data in this sort of quarantine teleworking or telemedicine environment. Do you have an agreement on how you're accounting for missed data points in the study? And then do you think you'll be able to give more updated or granular guidance before the end of the year on the progress as you get a sense of how the enrollment's going? And then I have a question for 496.

Of course will use them.

Look we we've we've tried to actually implement in the sub in the submission.

What the FDA guidance has been to us in two prime meetings, we had a pre R&D meeting we had a type C meeting and.

And I believe it type B meeting and I think those gave us.

Simon N. Pimstone: So to your second question, yeah, we probably will be able to give updated guidance by the end of the year. I think, as Ian said, you know, I think what's really going to be key for us and everyone else in this industry is what's going to happen over the next six months in terms of sites. You know, we are certainly on track in terms of our predicted curves, you know, we've been conservative, we think in those curves, but you know, if sites start closing all over the world again, you know, we and others are obviously going to be impacted. So you know, I think by the end of the year we'll probably have the kind of visibility we need based on the numbers of recruited subjects and guidance, which I think can be narrowed.

Good feedback, which we felt was the relevant feedback we needed. So I think I think the the risk of there being sort of a really material difference in and what we've submitted to what the if theyve asked us for I think is quite low.

Okay.

There may be nuances, but.

Often those can be amended in the final protocol without the study being on halt. So we'll have to just wait and see I don't think.

This is a high risk there is some risk boys, but remember we havent to prime meetings with the agency.

Great. Thank you so much wells, yes, and we are planning in terms of the operations of the study we are planning to initiate that study at least stops in during the second off of this year. So as is as we've guided.

It could be accommodates a month so to delay, possibly I just don't know.

Simon N. Pimstone: So in terms of your first question, I do not believe we have a formal regulatory agreement on data gaps, I'll just term them data gaps, but you know, I think we've spent a ton of time on this internally and with regulatory advisors and we feel very, very confident, including with the CROs, we have actually two CROs involved, one in Europe and one in the U.S., we feel very confident based on all Again, there will be some data gaps. I mean, there are data gaps in every clinical trial, but we don't believe the data gaps are going to be meaningful to impact regulatory decisions being able to be made on the endpoint or the safety assessments for this drug.

It's going to depend.

Thanks, Yeah.

Operator any more questions.

Yes, we have your next question from him.

From.

Bloomberg and your line is open.

Hi, there just two questions for me.

The new sites that you opened for 11 one.

Okay.

Most of the site there in Europe I'm, just wondering if you could specify what territory.

You open you sites, then and also how confident are you that the baseline standard of care patient outcomes will be consistent.

Between site.

And then.

My second question I don't know if you want to disclose at this time, but I'm just wondering for the 496 study. In addition to see her reduction are you looking at and secondary end point on that May indicate an improvement in developmental delay in these patients or will that help you looked at in that study.

Ian C. Mortimer: Yeah, to add to that, as I said in the last question, because we have an e-diary to measure the efficacy endpoints, it's kind of, you know, COVID hasn't been relevant there. So we don't expect any gap. When you think about our primary endpoint as an efficacy endpoint, we don't expect a gap other than, as Simon mentioned, any gaps that you just have in a normal study that someone forgets to fill out. The Wi-Fi is down, and they can't load the diary entry.

Yeah.

So Antonio.

You in terms of territories, we haven't disclosed kind of way, but I will say.

Due to these territories are well known jurisdictions for epilepsy trials.

As I said some of those new sites will be in the U.S., but there are some in in Europe, and probably the majority on Europe as I said.

Ian C. Mortimer: I'll be caught up later.

Operator: Please see the complete disclaimer at https://sites.google.com

Operator: And remember, it's a phase two clinical trial as well, so the study is really, the significance is built around, and the statistics are built around the end point, as Ian has described, which is, I think, an extremely low, if any, risk because of its electronic capability. And so while there might be some gaps in the safety analyses, the blood pressure error there that may not have been done in time, or a missed eye exam in the patient, those, in the context of a study this size, again, firstly, they're always observed, and I don't think we're going to have anything much different from COVID. And certainly, it's not going to impact the ability to read the study and determine the sort of safety parameters of the drug to allow us to make a decision to proceed or not to proceed to phase three.

But we're very comfortable with the site selected the region selected there was a lot of thought that went into it also based on covert.

And how sites are doing in those countries.

So the team I think again was very thoughtful in the approach as to what to select.

We will probably be adding ultimately 10 to 20, new sites, probably 15 to 20 at the end of the day, which is going to be a good number based on our initial targets.

In an above that.

In terms of and so we comfortable that baseline.

Exams and ability to follow protocol et cetera will be.

We will be maintained I mean, the again these on on sites that have this is the first focal epilepsy trial, that's part about screening criteria.

Is the.

The not just the quantity of studies, but the quality of studies, obviously, we look at Auditz regulatory audits before we look at deviations.

Simon N. Pimstone: Great, thanks. And just quickly on 496, if the FDA does come back with additional suggestions on the final protocol, what does the timing look like there? Does that sort of reset the clock, and then you have to go back to the drawing board, or is there a chance that you could still get started? Yeah, look, I don't know. I don't want to sort of...

From a regulatory standpoint to decide so we have a.

That's a pretty comprehensive checklist as we go into this with our Q a.

Clinical group in site selection.

In terms of 406, yes, we are interested in secondary endpoints outside of seizure frequency. The study itself I think to sit expectations is.

Simon N. Pimstone: I don't want to get specific on this; I just don't know. Look, we do have awesome drug designation, and we've got fast-track, and these, of course, provide opportunities to go back without necessarily having to wait every time for a 30 or 60-day cycle. So, there are advantages. That's where the key advantages of those designations are, really. And, of course, we'll use them. Look, you know, we've actually tried to implement in the submission what the FDA guidance has been to us in two prior meetings. We had a pre-IND meeting, we had a Type C meeting, and I believe we had a Type B meeting. And I think those gave us good feedback, which we felt was the relevant feedback we needed, so I think the risk of there being sort of a really material difference in what we've submitted to what the FDA has asked us for is quite low, you know, because there may be nuances, but you know, often those can be amended in So, we'll have to just wait and see. I don't think... This is a high risk, there's always some risk, but remember we have had two prior meetings with the agency.

Relatively short study over a few months and we're unlikely Sydney, our expectation is unlikely to see an impact in the development cognition intellectual behavior in in a three or four months clinical setting.

But as we talked about earlier there is this.

Hi, likelihood and certainly we are hoping to have an open label extension as part of the protocol and we we will certainly be continuing to follow developmental outcomes not just throughout this trial, but through the open label extension. So again, yes, we are monitoring a number of outcomes. So it will come morbidities not just seizures.

Yes.

Impression of change in the parents behavior.

Intellects et cetera, developmental milestones, but I think probably the relevance of those redoubts will only be.

Beta understood.

Through and throughout the open label extension period of the trial.

Okay. Thanks.

Yes.

That concludes today's question ill now turn the call over to Joe.

Mike.

Thanks, everyone for joining us today, operator, we'll now end the call.

Simon N. Pimstone: Yeah, and we are planning, in terms of the operations of the study, you know, we are planning to initiate that study, at least start it, in the second half of this year. So, as we've guided, could we accommodate a month or two delay, possibly? I just don't know. It's going to depend.

This concludes today's conference call. Thank everyone for joining you may now disconnect have a great.

[music].

Simon N. Pimstone: Thanks. Yeah.

Operator: Operator, any more questions?

Operator: Yes, we have your next question from Antonia Borovino from... Bloomberg and Yerlina Dope. Hi there, just two questions for me.

Antonia Borovino: For the new sites that you've opened for 1101, you mentioned that most of the new sites are in Europe. I'm just wondering if you could specify what territories you've opened new sites in, and also how confident are you that the baseline standard of care and patient outcomes will be consistent between sites? And then my second question, I don't know if you want to disclose at this time, but I'm just wondering for the 496 study, in addition to seizure reduction, are you looking at any secondary endpoints that may indicate an improvement in developmental delay in these patients, or will that not be looked at in this study?

Simon N. Pimstone: Yeah, so Antonio, in terms of territories, we haven't disclosed kind of where, but I will say... You know, these territories are well-known jurisdictions for epilepsy trials. As I said, some of those new sites will be in the U.S., but there are some in Europe, and probably the majority are in Europe, as I said.

Simon N. Pimstone: But we're very comfortable with the site selected, and the region selected. There was a lot of thought that went into it also based on COVID and how sites are doing in those countries. So the team, I think, again, was very thoughtful in their approach here as to what to select. You know, we'll probably be adding ultimately 10 to 20 new sites, probably 15 to 20 at the end of the day, which is going to be a good number based on our initial target and above that.

Simon N. Pimstone: In terms of, and so we're comfortable that baseline exams and ability to follow protocol, etc., will be maintained. I mean, again, these are not sites that have, this is their first focal epilepsy trial. That's part of our screening criteria, you know, is not just the quantity of studies, but the quality of studies. Obviously, we look at audits, regulatory audits before we look at deviations, you know, from a regulatory standpoint at these sites.

Simon N. Pimstone: So we have a pretty comprehensive checklist as we go into this with our QA, and clinical group in site selection. In terms of 496 patients, you know, yes, we are interested in secondary endpoints outside of seizure frequency. The study itself, I think, to set expectations is... You know, a relatively short study over a few months, and we're unlikely, certainly our expectation is it's unlikely to see an impact in development, cognition, and intellectual behavior in a three or four month clinical setting. But, as we talked about earlier, there is this high likelihood, and certainly we are hoping to have an open-label extension as part of the protocol, and we will certainly So, again, yes, we are monitoring a number of other outcomes, so what we call comorbidities, not just seizures, impression of change in the parents, behavior, intellect, et cetera, developmental milestones, but I think probably the relevance of those readouts will only be better understood through and throughout the open-label extension period of the trial.

Oh.

[music].

Operator: That concludes the Q&A session. I will now turn the call over to Jody Raitt for questions.

Jody Raitt: Thanks everyone for joining us today. Operator, we will now end the call. This concludes today's conference call. Thank you everyone for joining. You may now disconnect. Have a great day. ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ???