Q4 2022 Xenon Pharmaceuticals Inc Earnings Call

Speaker 2: Ladies and gentlemen, thank you for standing by and welcome to the Q4 2022 Xenon Pharmaceuticals Inc. Earnings Conference call. I would now like to turn the call over to Sherry Olin, CFO . Please go ahead.

Speaker 3: Good afternoon. Thank you for joining us on our call and webcast to discuss the fourth quarter and full year, twenty, twenty two financial and operating results. Joining me are Ian Mortimer, the president and chief executive officer. Dr Chris Kenny, the chief medical officer and Dr Chris, the chief commercial officer.

Speaker 3: Ian will open today's call with a summary of progress across your pipeline. Chris Kenny will provide an overview of our Xeon 1101 Phase 3 Eplep Seat Program, as well as a brief summary of additional supporting X-Tool data we released in December , and I will summarize our financial results.

Speaker 3: progress within our partnered programs and our anticipated company milestone events. Crisp on Seggern will be available during our Q&A session to address questions about our commercialization strategies. Please be advised that during this call, we will make a number of statements that are forward looking, including statements regarding the timing of and potential results from clinical trials.

Speaker 3: The potential efficacy, safety profile, future development plans, addressable market, regulatory success and commercial potential of our and our partners product candidates, the efficacy of our clinical trial designs, our ability to successfully develop and achieve milestones in our XCN 1101 and other development programs.

Speaker 3: thereof and our expectation that we will have sufficient cash to fund operations into 2026. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time to time in our SEC filings.

Speaker 3: 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 ZENON's fourth quarter and full year 2022 financial results and the accompanying annual report on Form 10-K will be made available under the investor section of our website.

Speaker 3: at www.xenon-pharma.com and filed with the FCC and on CDAR. Now I'd like to turn the call over to Ian.

Speaker 4: Thanks, Sheri. Good afternoon, everyone, and thanks for joining us on our call today.

Speaker 4: As I reflect on our progress in 2022, I'm extremely proud of reaching a number of key milestone events for Xenon and building significant momentum in our XEN 1101 program. In particular, we had a successful end of Phase II meeting with FDA and gained alignment on our XEN 1101 Phase III program.

Speaker 4: as well as the key regulatory elements required for an NDA submission.

Speaker 4: This was followed by another critical milestone in Q4 with the initiation of our first XEN 1101 Phase 3 epilepsy trial. Furthermore, throughout 2022, we presented additional XEN 1101 clinical data from XTOL and from the XTOL Open Label extension, supporting our continued confidence that we could be

Speaker 4: in what we believe is a compelling profile for XCN1101, including a novel mechanism of action in what we believe would be the only potassium channel modulator available on the market if approved.

Speaker 4: efficacy data generated in our Phase IIb X-TOL trial, which demonstrated statistically significant reduction in all seizure reduction endpoints at all doses tested.

Speaker 4: QD dosing requiring no titration, supporting early onset and statistically significant efficacy at week one, and even greater seizure reduction in the open label extension with greater periods of seizure freedom.

Speaker 4: Overall, we believe our XEN1101 efficacy data to date compares favorably to medicines currently available for focal onset epilepsy patients.

Speaker 4: Our market research strongly suggests that prescribing physicians are seeking new differentiated therapeutic options that approve upon the existing anti-seasure medications and we remain committed to improving the lives of patients with epilepsy.

Speaker 4: We entered 2023 in an enviable and clear leadership position in the KV field.

Speaker 4: with XEN 1101 in a broad Phase III program supported by our clinical development and existing cash resources required to execute on our ambitious plans. This year, we are sharply focused on advancing XEN 1101 in our Phase III X-TOL II and X-TOL III clinical trials and focal onset seizures.

Speaker 4: while in parallel evaluating the efficacy of XEN-1101 in primary generalized tonic-clonic seizures, or PGTCS, in our Phase 3 EXACT clinical trial, as well as generating important data from our Phase 2 X-Nova study in major depressive disorder.

Speaker 4: Later in the call today, Chris Kenny will outline some of the highlights of the data we presented at AES 2022 in December that continue to support our belief in XEN 1101's highly promising product profile.

Speaker 4: We have recently received some questions about the slower than anticipated patient enrollment and other headwinds faced by company sponsors of other clinical trials, including studies ongoing in focal onset epilepsy.

Speaker 4: Although we acknowledge that the current environment for clinical development can still be challenging, we remain confident in our ability to execute on our X-TN1101 Phase 3 program.

Speaker 4: This high level of confidence is based on our experience with our X-TOL Phase IIB study, which was similar in size to our Phase III FOS studies.

Speaker 4: along with our continued relationships with key investigators, many of whom already have familiarity and experience with XCN 1101.

Speaker 4: Given that we are still in the initial stages of our Phase 3 trials, we have not yet given specific guidance on enrollment or timing of top-line data. However, in terms of site initiation and patient screening, we are tracking as expected and consistent with our development plan.

Speaker 4: Turning briefly to our ongoing Phase II X-NOVA clinical trial, you will recall that this study is examining XEN1101 in major depressive disorder, in parallel with an investigator-led Phase II MDD study being conducted by our collaborators at Mount Sinai.

Speaker 4: Our decision to examine XEN1101 in MDD was based on encouraging published clinical results via evaluated azogabene at a 300 mg TID dose as a treatment for MDD and anhedonia, as well as promising preclinical data with XEN1101.

Speaker 4: It is also important to note that depression is a common comorbidity within the epilepsy patient population.

Speaker 4: We are anticipating top-line results from our XNOVA study in the third quarter of this year, and this will help guide our future plans for XEN 1101 and MDD.

Speaker 4: While I am proud of the great progress made by our team in 2022, we are determined to continue to build upon the momentum generated in our XEN-1101 program, and we look forward to additional clinical inflection points in 2023.

Speaker 4: I'll now ask Chris to provide some more detailed comments on our XEN 1101 Phase III EPL-FC program and additional supportive data that we have generated. Chris, over to you.

Speaker 5: Okay, thanks a lot, Ian. Today I'll briefly review our plans for our Ex-In 1101 Phase 3 clinical trials in epilepsy and highlight some of the data that was presented at the American Epilepsy Society.

Speaker 5: or AES in December . Our X-Tool II study, which is now underway, will run in parallel with an identical study called X-Tool III, which we expect to initiate in the near term.

Speaker 5: Each of these studies will enroll approximately 360 patients who will be randomized one to one to one with once daily dosing of either 15 or 25 milligrams of ExiEN 1101 or placebo. Our dose selection for the phase three studies was informed by the safety and efficacy data in Xbox tool in place at the green flip side.

Speaker 5: as well as by PK-PD modeling we completed last year. The primary efficacy endpoint is the median percent change, or MPC, in monthly seizure frequency from an eight-week baseline through the 12-week double-blind period with Exxion 1101 compared to placebo.

Speaker 5: Using X-TOL data to support our model, we have greater than 90% power for the primary endpoint of both doses.

Speaker 5: To support our plans to pursue another epilepsy indication, we've also initiated our phase 3 exact clinical trial, which will enroll approximately 160 subjects with primary generalized toniconic seizures or PGTCS. Subjects will be randomized one-to-one.

Speaker 5: with once daily dosing of either 25 milligrams of Exxion 1101 or placebo. The primary efficacy endpoint is the MPC and monthly primary generalized tonic-clonic seizure frequency from an eight-week baseline to the 12-week double-blind period of Exxion 1101 compared to placebo.

Speaker 5: We're excited by the opportunity to study XEN 1101 and PGTCS in parallel with our trials focused on patients with focal onset seizures. In our Phase IIb X-TOL clinical trial, XEN 1101 demonstrated broad activity across all focal seizure types, including focal seizures that progress to bilateral generalized seizures.

Speaker 5: We believe that this parallel path approach to both focal onset seizures and primary generalized tonic-clonic seizures at this stage of clinical development is unique to XEN 1101 and may potentially lead to broader use of XEN 1101 should it be approved.

Speaker 5: Our team connected with many physicians and key opinion leaders at the American Epilepsy Society meeting, where we presented the growing body of supportive evidence gathered to date for advancing X-E-N-E-L-E-L-1 in the clinic, including additional subanalysis of the X-TOLD data, as well as additional interim data from the ongoing X-TOLD, open label extension in focal onset seizures.

Speaker 5: These data suggest that the rapid onset of efficacy for Exxion 1101 was associated with starting at an effective therapeutic and well-tolerated dose. There was a statistically significant reduction in median focal onset seizure frequency within one week for all doses compared with placebo with a dose-dependent reduction from baseline in median focal...

Speaker 5: and median weekly focal onset seizure frequency. Analysis of the interim open-label extension data shows Exeone 1101 continues to be generally well tolerated, yielding long-term efficacy at the 20-mg once daily dose, with patients experiencing continued seizure reduction during the open-label extension.

Speaker 5: and extended periods of seizure freedom. During the open label extension, there was a sustained 80 to 90% monthly reduction in seizure frequency.

Speaker 5: at 12 to 18 months as measured by MPC.

Speaker 5: from the double-blind period baseline using a data cutoff of September 2022.

Speaker 5: Cesar freedom for greater than equal to six months and greater than or equal to 12 months consecutive durations was achieved in 17.5% and 10.5% of patients respectively.

Speaker 5: Importantly, Xe-N1101 continues to be generally well tolerated in the open-label extension, with adverse events consistent with prior results.

Speaker 5: Importantly, XEN 1101 continues to be generally well tolerated in the open label extension with adverse events consistent with prior results and other anti-seizure medications.

Speaker 5: To date, two adverse events of urinary retention occurred in the open-label extension, possibly related to study drug, and both patients continued in the study without requiring any intervention. Although not seen to date, we continue to monitor for the emergence of the tissue discoloration that was associated with long-term exposure to azogabene.

Speaker 5: We continue to hear about the significant need for anti-seizure medications and we are driven by our belief that Exxion 1101 has the potential to significantly improve the lives of patients living with epilepsy.

Speaker 5: I'll now turn the call over to Sherry, who will give us a brief update on our partnered program with Neurocran before summarizing our 2022 financial results and upcoming 2023 milestones. Sherry. Great. Thanks, Chris. Within our partnered program with Neurocran, there are currently two separate Phase II clinical trials underway.

Speaker 3: One study is evaluating NBI 921352 in adult patients with vocal onset seizures, and another study is examining its use in pediatric patients with SCNA-D related epilepsy. We're excited about neurocringe progress and look forward to the data readout from the full full study anticipated in the second half of this year.

Speaker 3: I'll touch on some highlights from the financial statements and would refer you to our news release and 10K report for further details. Cash-in-cash equivalents and marketable securities were $720.8 million as of December 31, 2022 compared to $551.8 million as of December 31, 2021. The increase was primarily the result of our public offering in June last year.

Speaker 3: Our strong cash position supported by prudent fiscal management allows us to fund operations, including the completion of our ExCEN 1101 Phase III Epilepsy studies into 2026.

Speaker 3: Before concluding our prepared remarks, I'll briefly summarize some important milestone events ahead.

Speaker 3: With our Phase 3, X-TOL2 and exact clinical trials underway, we expect to initiate X-TOL3 in the near term. Our X-NOVA trial in MDD is ongoing and we expect to have top-line results in the third quarter of this year, while in parallel we're supporting an investigator-led study at Mount Sinai.

Speaker 3: In the second half of this year, our collaborators at Neurocure and EXPECT to have a data readout from their phase 2 study in adult patients with vocal onset seizures. We continue to advance our EPIC phase 3 clinical trial in pediatric patients with KCNQ2-DEE with study completion anticipated in 2024.

Speaker 3: In closing, we're grateful to all our employees who are committed to Zenon's mission to deliver new neurology therapeutics to patients in need. I'm excited about her success to date and look forward to reporting our progress through 2023. I'll now ask the operator to open the line for any questions. Operator floor is now open for your.

Speaker 2: To ask a question at this time, please press star 1 on your telephone keypad. If at any point you withdraw from the queue, please press star 1 again. You will be provided the opportunity to ask one question in one further follow-up question.

Speaker 2: We'll take a moment to render our roster. Our first question comes from the line of Paul Matus.

Speaker 4: from Steve, please proceed. Hi, this is James on for Paul. Thanks for taking our question. Just as it relates to the recruitment challenges, some others are facing in the focal epilepsy space, as you mentioned. You previously guided for trial completion around 2 1 3 years from initiation based on the Phase IIB, which would put data around mid-2025.

Speaker 4: I guess if that's how you're thinking about it, and can you speak to the possibility of data coming sooner if possible? Thanks.

Speaker 4: Thanks James. So we haven't, as I mentioned in the prepared remarks, we haven't given formal guidance on when we expect top-line data for Phase 3 and specifically for the X-Tool II clinical trial. You know, the data point that you're referring to is we often talk about the X-Tool study, the Phase II II II study. So for the X-Tool II BCL I would judge the moment of mark. This is for 45th and while I am following or madam's offer, I read the research.appy.

Speaker 4: It took approximately two and a half years from initiation to top line data. When we compare and contrast that to the X-Tool II study, the X-Tool study was a little bit smaller, 325 subjects. As Chris mentioned in his remarks, the Phase III studies are 360. And it's a 12-week double blind period in Phase III versus an 8-week double blind period in Phase II.

Speaker 4: When we put all that together, as I mentioned earlier, I think we feel confident in the phase three program and executing on the phase three program, but we really need to get a couple of quarters of enrollment under our belt before we'd be in a position where we can provide more specific guidance on timelines, top line data. Makes sense, thanks.

Speaker 4: Our next question comes from the line of Brian Abrahams from RBC Capital Markets. Please proceed. Hi there. Thanks so much for taking our question. I'm curious your latest thoughts on further expansion of the 1101 program and in particular, I guess your latest thoughts on...

Speaker 4: I'll give maybe a few high-level comments and then jump in specifically on some of the pediatric plans. So, Brian , as you mentioned, obviously we've got a broad Phase 3 program going on in focal epilepsy and primary generalized tonic-clonic seizures and a Phase 2 study in major depressive disorder.

Speaker 4: I think when we think more broadly, there is literature to suggest that the potassium channel mechanism may be broadly applicable to other therapeutic areas, but I would still say epilepsy and depression are the best validated and that's why we've started there. In the future as we generate additional data, we may go into other

Speaker 4: therapeutic areas, but I would say the priority and where we're focused on is really on epilepsy and depression right now. As we're in a Phase 3 program, we do have obligations to do pediatric work, both in focal epilepsy and primary generalized tonic-clonic seizures. And Chris can kind of walk you through the extrapolation rule and how we get into younger patients in both of those indications.

Speaker 5: Sure, sure, thanks Ian. So just kind of high level before I do that. I mean, I think, you know, if we're already doing, we're sort of already embarking on our fairly ambitious program, right? I mean, typically doing focal onset seizures in primary generalized toniconic seizures is usually done in series, not in parallel, so we're doing that. And then plus we also have the proof of concept going on in MDD. So there's that would say more.

Speaker 4: reason to think that XEN1101 wouldn't work in the pediatric population if it gets approved in the adult population. So all those plans are well underway and adhering to regulatory guidance. Brian , maybe lastly, Chris, if I can just give a little bit of perspective, at least as it relates to focal epilepsy and primary generalized tonic-clonic seizure, the commercial opportunity.

Speaker 4: As Chris mentioned, we'll be moving as agreed upon with regulators, we'll be moving into adolescence and then into younger populations as we move ahead with the development. But there are patients that are that are diagnosed with focal epilepsy and generalized seizures much younger. So Chris can comment about some of the commercial dynamics. Yeah, absolutely. So when you think about the total epilepsy opportunity, you always start with 3M.

Speaker 6: we've heard from our market research in the pediatric populations is those same attributes are actually just as compelling in the pediatric population. So we're very excited about that opportunity in both focal onset as well as primary generalized tonic-clonic seizures with the opportunity to move the product into those patients when appropriate.

Speaker 7: Very helpful. Thanks again. Our next question comes from a line of Tessa Romero from JP Morgan. Please proceed. Yeah, good afternoon Ian and team. Thanks so much for taking our questions. So one from us on the Phase II ex-NOVA data that we're expecting here in the third quarter.

Speaker 7: more important to a go or no-go decision here. Thanks so much.

Speaker 4: Thanks, Tess. Yeah, I think it's an important question because I think we've used language similar that we believe the totality of not just the data, but the analysis of moving into major depressive disorder is multifactorial, and we're doing a lot of that work right now. So obviously, we're running the ex-Nova study to generate important clinical data.

Speaker 4: 50% of epilepsy patients have the lifetime comorbidity of depression. And so generating data through X-Nova could be really important as we continue to think about 1101 also as an epilepsy drug. So there's lots of inputs, and I think we've been clear that there's plenty on that.

Speaker 4: There's a number of different ways that we'd like to think about this and the data just being part of the entire analysis as we think about next steps when we unblind data in Q3 of this year. Thanks, Ian. I just have a quick follow-up. Would you lay out for us kind of what the key scenarios, bigger picture are for depression?

Speaker 4: following X-NOVA and kind of what those might be for X-NOVA? There's a couple of big scenarios in terms of where we may take it. I think the one is the work that we do in the data support additional development in the primary indication of MDD. And so then the next steps after this would be additional clinical development in the primary indication of depression. Another option, as I spoke about, is that we're generating important information.

Speaker 4: in the epilepsy space. I talked about in the prepare remarks, we think there's a number of properties of 1101 that are clearly differentiating from other ASMs. This could be another one if we had an ability to show differentiation on MOOG. So as we think about the prescriber in epilepsy.

Speaker 4: and the population that could be important. And then obviously the last one that we have spoken to investors about is as a drug discovery organization and deep experience in drugging ion channels in the CNS, we do have other molecules that target KV that have different chemistries and have some different properties than 1101. And those are moving through preclinical studies right now. And so we also have the opportunity to differentiate and maybe a little bit to the earlier question.

Speaker 4: from Brian is I think we're going to have a number of distinct chemistry as we think about how we may want to differentiate therapeutically moving forward. Thanks so much for taking your questions.

Speaker 2: Our next question comes from the line of Paul Toy from Goldman Sachs. Please proceed. Your line is open, sir. Thank you. Good afternoon, team, and thanks for taking our questions.

Speaker 4: potential for 1101. And then my second question is, pending your partner neurocrans readout in the second half of this year, from your perspective, what is the bar, I guess, that you would look for to opt in potentially into that program versus allocating additional resources to 1101 development.

Speaker 4: Thank you very much. Great. Thanks, Paul. I'll take your second question just on the NERQN data, and then, Chris Kenny, if you want to just talk about clinician feedback. I know we had a lot of interaction. We had over 50 one-on-one meetings at AES. Maybe you can just talk about some of the feedback you're hearing from the community on open-label extension. And then, Chris von Seggern, obviously, from a market point of view, the importance of us continuing to generate data.

Speaker 4: as that program is successful. This is a drug, a selective inhibitor of NAV 1.6 that we invented and then we licensed to Nurocran in 2019 after phase one. We have the ability to opt in to the phase three program where we can co-fund the phase three program for an increase in royalties for five percentage points at each tier.

Speaker 4: of the royalty. And so, Paul, to answer your question, you know, I think obviously we've got to see the data that they're generating. It's a smaller Phase 2 study that they're running, and so we'd like to see what the future development plan looks like, if they're going to go directly to Phase 3 or if there's any other work that they'd like to do.

Speaker 4: opt-in or not.

Speaker 5: Chris Kenny, over to you on the OLE data. Sure, thanks Ian. I would say that the response has been in keeping with the data that was relayed in the prepared remarks. In the open label we're seeing pretty substantial reduction in MPC for subjects who are still in the open label. So it will be a lot of effort with MPC

Speaker 5: on the order of greater than 80% after a year, and really nice seizure freedom data. So the feedback that we're getting as we interact with physicians, either at investigator meetings or medical conferences, ad boards, steering committees, et cetera, is consistent with that, which is that there's a fair amount of enthusiasm about how those patients are doing on an individual level, and then the numbers that we're seeing for the overall population are fairly compelling.

Speaker 6: open label, you have to consider that they're still very difficult to treat and very difficult to control. What we hear from our research is that the rates of seizure freedom either as measured at the six-month time point or the 12-month time point are actually quite compelling data in light of the patient population. This only reinforces the other value attributes that exist with XEN-1101, both the potent efficacy and quality of work. This results in a few few visits. The main impact is that the patient may react to the therapy or exercise or some people

Speaker 6: the lack of titration as well as the rapidity of onset. The open label data, from what we're hearing from a market research standpoint, just reinforce that value proposition, just as Chris had mentioned. Great, thanks for taking our questions.

Speaker 2: Our next question comes from a line of Joseph Thome from TV Cowan. Please proceed. Hi there, good afternoon and thank you for taking our questions. Maybe the first one, I know historically you mentioned that potentially we're seeing some increase use of Breviac in the field.

Speaker 4: as the generic landscape change is a little bit, and obviously we're continuing to see increased penetration of excovere. So can you comment a little bit maybe on how this might change the baseline population of the pivotal program versus what you saw in the phase two and if you're making any adjustments based on that? And then second, just on a zero-nary retention of eight years in the randomized portion and the open label, were these real zero-nary retention side effects? And I'm talking to KOL.

Speaker 4: This seems to be a little bit tricky to characterize sometimes. So, any thoughts around that would be helpful. Thank you. Great. Thank you. So, Chris, maybe I can start a little bit on the phase three patient population and then add in. And then specifically, why don't we get into a few details on urinary retention and at least what we're seeing with those two patients.

Speaker 4: in open label extension, which I think is maybe the more relevant data just because they've been on the drug a lot longer. So on the phase three patient population, actually, if we look at phase two and we've published this data, we published it initially at the ASCENT Neurotherapeutic Conference about a year ago, where we published tables of the anti-seizure medicines that these patients had either failed or that they were on on study. And you'll see it's a really long list.

Speaker 4: So I don't think there's any kind of standard of care of these types of patients that are coming into our study. And so I think we will see similar in phase three that patients will be on a wide variety of drugs coming into the study and there'll be a wide variety that they would have failed prior to coming into study. But Chris, I don't know if you have any specific comments around Briviac or X-copri and then if you want to move to the urinary retention comments.

Speaker 5: Did you reference Chris for the Brivioactor excopria? No, I was passing it to you, Chris. As far as predicting whether that will cause a change in the phase 3, it is early days with the phase 3, so I think it would be too early to say. I would not be surprised if there is somewhat of an uptick in excopria in our phase 3 program relative.

Speaker 5: then obviously that would have to be fixed, right, with catheterization or some kind of permanent procedure. And none of these patients had any issue to the extent that it required catheterization. So it's obviously not complete urinary retention. But that's how it was coded in Phase 2. Now, going forward into Phase 3, here's your

Speaker 5: We have, we're going to be following this adverse event very closely and in kind of, you know, in a very systematic way so that there's, if something like this is reported there's an immediate feedback between the sponsor and a site to kind of get to the bottom of well is this really urinary retention or not? Is it urinary hesitancy instead?

Speaker 4: So yeah, we have, we're actively approaching phase three, more systematic than we did phase two for that very reason that you brought up. And just add to Chris's comment, I mean, with the two patients that we saw that were coded to urinary retention in the double blind and then two different patients in open label. Obviously, those two patients at open label, we had talked about those patients quite some time ago and we haven't seen any additional coding to urinary retention when we've done additional cuts of the data.

Speaker 4: And just to re-emphasize Chris's point, none of these patients have needed any intervention whatsoever. So, you know, we think that it's definitely not, you know, even if they have some urinary symptoms, it's definitely not retention in the sense of not being able to void at all.

Speaker 7: Perfect. Thank you very much. Yep. Our next question comes from the line of Jason Gerber from the Bank of America. Please proceed. Good afternoon. Hi, this is Dina Ahn for Jason. Congrats on the progress this quarter, and thank you guys for taking our questions. So our first question is on the progress of the fiscal year 2020.

Speaker 8: later expiring 2039 to 40 patents covering polymorph and method of enhancing food effect. Can you explain why using generics will need to copy the patented polymorph and secondarily the extent to which food effect patent cleans may intertwine with desired product labeling and then our second question is

Speaker 8: Have your thoughts on the competitiveness of BioHaven's KV7 changed at all after seeing the phase one data BioHaven presented? Does the safety data cast any doubt on BioHaven's ability to differentiate on dialing out GABA-related AEs? Thank you.

Speaker 7: Thank you, Tina. I'm Sherry, I'll tackle the IP question, and then I'm happy to provide some commentary on your last question around the competitiveness in KV. Sure. Thanks, Tina. So maybe just by way of background, just to let everybody know on the call. So yes, we had two important patents that were granted to us or issued in late 2021. The first one that you reference is our polymorph patent. So we discovered...

Speaker 3: several novel polymorphs of X-CN1101, which were successfully patented, and that patent expires in 2040. So importantly, there a generic entrant would have to essentially discover a new novel polymorph that doesn't have any trace of our patented polymorphs to be successful. In addition, the second patent that was issued or granted to us in late 21 is the Food Effect, which you referenced. And there, the important point is that 1101 has, there's a multi-fold increase in in C-Max and A-U-C when the drug is taken with food, so there's a positive food effect. And that, um,

Speaker 3: 11-01 has been taken or is taken with food and we do expect that that will be included within the label. Obviously that's pending label negotiations with the FDA, but given that we have been dosing the drug within our clinical studies with food, we do expect that that will be on label and is an important part of the dosing.

Speaker 3: for the drug to be both safe and effective. So a generic entrant would need to work around both of those patents, and I think that's a really important point. And for that reason, we feel very confident in our IP strategy. And maybe last we all just mentioned the Food Effect patent expires in 2039. Thanks, Sherry. And then just.

Speaker 4: Your question on the competitive space. So we're not surprised that the competitive space is heating up and it's increasing given just the strength of our data in phase 2B and our X-Tool study. I mean, as we've mentioned a number of times, I think we have a clear leadership position. You know, obviously this is known pharmacology, but I think we also have a molecule that has properties that are performing extremely well clinically. And we haven't seen that from any other drug yet. So there hasn't been any efficacy generated with any of the competitive molecules. So I think from just the leadership position in a time perspective, we feel very comfortable.

Speaker 4: You know, maybe another comment we do to get some questions just around adverse events as we think about phase one data for these types of molecules. And, you know, every anti-seizure medicine that's being developed that has activity and is active in the CNS has CNS-related adverse events. And we see that with all of these drugs that the drugs that are very active have dose-dependent adverse events in the CNS things like dizziness, and assonal and fatigue and headache. So that's fully expected. And then when we specifically look at...

Speaker 4: The KV mechanism, when we look at drugs like slubertine as agabane in 1101, we see dose dependence in dizziness. And as you push these drugs higher and see significant activity in the CNS, you see the adverse events associated with that. So those are the some of the things that we would be looking for as we're evaluating competitive molecules. And then obviously the efficacy data, when we think about the patient population that we've treated, we believe that we potentially have best in category efficacy for this molecule. And obviously nobody else has generated efficacy data today.

Speaker 5: You know, this is Chris. Just to quickly add to that, I mean, one thing we're definitely confident with XEN 1101 is that it's penetrating the central nervous system. There's no doubt about that, right? Preclinical experiments, we have clinical data. We know for sure there's penetration of the CNS.

Speaker 9: Thanks, Chris. Great. Thank you. Our next question comes from the line of Andrew Sy from Jeffries. Please proceed. Good afternoon. Thanks for our congrats on the progress. So I wanted to ask more on the MDD program because you have data in Q3. We generally have a good understanding of what we want to see on the primary endpoint. You've shared some details about it earlier, but...

Speaker 9: I did want to ask about, you know, how you're thinking about kinetics in terms of the efficacy curve over time. I mean, my question is, do you think 1101 could show a rapid acting effect within weeks one or two, for instance, similar to what the drug has shown in epilepsy? I don't believe azogavine has shown it in depression nor epilepsy, but you've seen an epilepsy, so thought I'd ask for depression. Thanks. Thank you.

Speaker 4: Thanks, Andrew. Yeah, I'm happy to start and then Chris Kenny, please add in. So yeah, I mean, what we, I think you actually, you did a really nice job, Andrew, kind of summarizing what we know. We know that 1101 has early onset to efficacy and stat sick and epilepsy in terms of seizure reduction at week one. So we do know that we are getting enough drug into the CNS and to target.

Speaker 4: We will be looking at that, so it's a week six endpoint, but we will look at all of, we do have weekly, we will have madras data throughout all of the weeks up to week six, so we'll be able to at least see those curves, Andrew, when we unblind data and be able to answer your question.

Speaker 5: more directly when the data are available. Press any additional comments? I think you covered it. There was a little bit of separation with the azogamine MDD Pock early on, but it was certainly more pronounced later on, so it remains to be seen whether what we're seeing in epilepsy will translate into depression. We're certainly looking at that information at weeks one and two.

Speaker 9: Very good. And so a second follow-up would be, it's more of an open-ended question. And only to the extent you're willing to share is in terms of the operational execution of the ongoing study, again, to the extent you can share, can kind of discuss what goes into ensuring, for instance, the quality of sites, the quality of patients, and so forth. For instance, are you using safer interviews? Are you seeing high-screen failure rates, or maybe even a balanced distribution of patients across your sites?

Speaker 4: Thanks. Chris, do you want to go through kind of CRO and sites and safer and all the things that we've added to the study? I just want to be clear, the question pertaining to MDD, not epilepsy, correct? Correct. MDD, yes. Yes, yes. I mean, the key steps to...

Speaker 5: Try to maintain the quality to the best extent that we can in that trial is severalfold. You mentioned one we're using the the safer evaluation so that there's an external group ensuring that we're enrolling appropriate patients. We have sites that are solely based in the US and in general the quality of that data tends to be more reliable trying to keep the number of sites limited so that there isn't a huge number that it contributes to the variability of the data. And then we're keeping an eye on the data and the sites in real time to ensure that there isn't anything.

Speaker 5: unexpected ongoing at those sites. To your point about performance, I mean, is with all clinical studies, I think there are some sites that are lagging in recruitment and others that are excelling. It's sort of a typical kind of distribution that I think one would expect. Do you want to add anything to that, Ian?

The only other thing Andrew you asked is just about screen failure rate. We see a screen failure rate that's higher obviously in the depression studies than we see in the epilepsy studies. Very helpful, thank you guys. Yeah, and very much in keeping with what we expected and hope for right that we wouldn't, we don't want to have a screen failure rate that's too low. Yeah, thanks Chris.

Our next question comes from the line of Mark Goodman from SBB Securities. Please proceed. I sense not taking a question. It's really on a line for Mark. So I want to ask a question about the market dynamics for focal and size seizures. So specifically, can you provide more color or your size on the uptake of S copper? What feedback you've been hearing recently regarding...

that drop profile versus 11 to 1. Thanks. Thanks, Rudy. Over to you, Chris, one second? Yeah, absolutely. So, you know, from a market dynamic, X-Cope Reef, obviously, the most recent to launch into this space. And they've done quite well, I would say, from an observation standpoint. They're seeing continued uptake in the marketplace and growth that is expected with a profile that is offering some level of efficacy in the marketplace. What we hear from our research is that there is a place for X-Cope Reef and...

For the profile, it tends to be a ladder line agent in current clinical practice. And this is based on the fact that it does have a quite difficult and lengthy titration period. And as a result, that does limit some earlier adoption, and particularly where we've heard the primary positioning for Xeon 11-1 being in the mix for that first branded agent that's pulled for. That's the primary area where we see some level of drawback for the product. They do offer meaningful efficacy, and they hang their hat on seizure-freedom data that have been well received in the marketplace. But again, placing the product later in the treatment paradigm.

What we hear from our research is both the rapidity of onset, which simply can't be seen with a product that requires lengthy titration, as well as the other attributes and user views associated with 1101 and compelling efficacy, as mentioned before, reinforce the open label experience with the data we're seeing for six months and 12 months, so your freedom data. That pushes 1101 earlier in the treatment paradigm. And often it's compared to VIMPA in its positioning prior to loss of exclusivity, which was really that first product you pull for after you have one or two failures of generic medicine.

And that's really the primary distinction between what we're hearing from the profile for X-copyri as well as what we're hearing for X-Anne-Elevitat1. Got it. Very helpful. Our next question comes from a line of Laura Tico from Wedbush. Please proceed. Hey, thanks very much and good afternoon. Just two quick ones for me. First on X-Cole 4.

Can you remind us the rationale here for this study? And I know the data submission package is going to be focused on X-Tool and X-Tool-2, but how does X-Tool-4 actually fit into a regulatory submission for X-TN-1101? And then just one question for Sherry on operating expense trajectory into 2023. Quite a heavy clinical trial load.

So how should we think about the cadence of spend versus 2022? Any further headcount expansion? Thanks very much, guys. Laura, just a point of clarification. X-Toll 4 or X-Toll 3, do you want us to comment on? X-Toll 4. OK. Yeah. So maybe I'll just take a quick step back and make sure we're all aligned on the NUM&C culture. So our phase 2 study that we've completed, we call X-Toll, are two phase 3 clinical trials in focal onset seizures, are X-Toll 2 and X-Toll 3. Those are identical and very similar to the design of the X-Toll study.

And then we've got the exact study, which is our primary generalized tonoponic seizure. So Laura, you're asking about X-Tool IV. X-Tool IV is open label extension for the phase 3 program. So patients that complete the double blind period for X-Tool II, X-Tool III or X-ACT can all go into open label extensions starting at 25 milligrams, and that's what we call X-Tool IV. So as you mentioned, we believe this critical path to regulatory filing in the US is the actual data that we've already generated and the data from X-Tool II.

And then the data that we generate in X-TOL 3 and X-TOL 4, including all of that open-label data, will be important for the safety database as part of the filing. Can I...? Oh, sorry. Yeah, yeah, go ahead, Chris, and then we'll pass to Trey. Well, I just wanted to... I mean, that's purely from the regulatory perspective, which is obviously important, but, you know, these patients, based upon the open-label extension in X-TOL, they're doing really well, and we didn't feel comfortable, you know, removing them from study drug. The other thing I'll add is more back to kind of the regulatory question. The development program for XEN1101 was extremely efficient, right? Go from phase 1 to this...

The X-Tool II is gaining for that point in time.

The X-TOL-2 is gaining for that point in time. Got it. Thank you.

Laura, just to touch on your question about OPEX for 23. So as you know, we don't give specific OPEX guidance, but I'm happy to provide some color directionally. I mean, obviously, we're going to see an increase in 2023 relative to 2022 and overall spend. And in particular, on the R&D side, we're going to see an increase, and that's largely driven by the fact that we...

are now well underway with our phase 3 1101 epilepsy program and we're going to have 3 studies running in parallel as well as the open label extension for the phase 3. And then remember as well that the ex-tol open label extension is also ongoing because that continues for a five-year period from start to finish.

With respect to GNA costs, I think you can expect that GNA costs will stay relatively flat relative to what we saw for Q4 of 22. So you can roll forward the Q4 costs and that's roughly what we'll plan to spend in 2023. And on the R&D side, maybe another piece to add is that we do continue to see probably an increase in our personnel costs as we...

Continue to to expand our resources internally to support our, our ambitious development plans and the rest of our pipeline. Thanks very much guys. Our next question comes from the line of beat from Wells Fargo. Please.

Hi, this is Serena on for MoHit. Thanks so much for taking our question. I wanted to go back to the development path and MDD. Since you guys have talked about having other potassium modulators and pre-channel development, potentially entering phase 1 in early 2024, was just wondering, what would give you guys the confidence that CEDA 11? No one is worth developing for MDD versus...

now. But if we made a decision based on a whole bunch of factors that we were going to move ahead with 1101 in additional clinical development MDD, then I think obviously the backup molecule or another KV molecule, we may still bring into the clinic. I think that's just, you know, we have a very valuable asset and to continue to build out our development in KV I think is important.

But I think it would be less about taking another molecule necessarily into running major depressive disorder and not having two KV drugs being developed in MDD. I think if we made a decision that we wanted some therapeutic differentiation based on chemistry, then that would be a situation where we may want to take one of the molecules that we have preclinically into depression or into other therapeutic areas. would have beenoops of being aqueducted.

Thank you. Our next question comes from a line of Rholy Bossa from Needham Company. Our questions. He just talks us about your expectations from the trial with Derek Crenn that's going to read out later this year. Can you also talk about any remaining milestones payments from the collaboration? Sure. I can take the first part of the show if you want to, if you can answer on some of the upcoming milestones. So I think that's...

You know, a better question for for NERAPRIN than for us. It, I think I mentioned earlier, the Phase II study in focal onset seizures that they're running as a smaller study than we ran in our Phase II BX toll study quite significantly smaller. So I think it's more of a proof of concept study where they're going to be generating important data over a dose range. But I'm not, you know, where we sit today, I'm not sure there's a specific kind of go-no criteria or how we think about success. Again, I think it's good we're going to have to let NERAPRIN unblind that data, obviously share it publicly and then then to describe what they think the next steps are for the drug.

Yeah, and then on this specific study, if it reads out positive, we'd be eligible for a $15 million milestone payment. We are eligible for additional milestone payments through the remainder of clinical development and then obviously upon certain regulatory based milestones and sales based milestones and royalties.

Thank you. I would now like to turn the call over to Sherry Olin for closing remarks. Thank you everyone for joining us on the call today operator you may now end the call. Thank you.

Thank you, ladies and gentlemen. This does conclude today's call. Thank you for your participation. You may now disconnect.

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