Xenon Pharmaceuticals Inc. Q1 2023 Earnings Call

Hello, and thank you for standing by my name is Gigi and I'll be your conference operator today at this time I would like to welcome everyone to the Q1 2023 Xenon Pharmaceuticals, Inc. Earnings Conference call. All lines have been placed on mute to prevent any background noise.

After the Speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad.

If you would like to withdraw your question Press Star One again I would now like to turn the conference over to Sherry Olson Chief Financial Officer. Please go ahead.

Thank you and good afternoon, everyone. Thank you for joining us on our call and webcast to discuss the announced first quarter 2023 financial and operating results. Joining me are Ian Mortimer, Dina President and Chief Executive Officer, Dr. Chris Kenny <unk>, Chief Medical Officer, and Dr. Crisp on Sanger and seen him as Chief commercial officer.

Sir Ian will open today's call with a summary of our proprietary pipeline programs, Chris Kenny will provide an overview of our Exeunt 11 O. One phase III epilepsy program as well as a brief summary of the recent oral presentation supporting data from the actual open label study that was presented at the American Academy of.

<unk> annual meeting or a N I will summarize our financial results progress within our partnered programs and our anticipated company milestone events crisp answer here and will be available during our Q&A session to address questions about commercialization strategies. Please be advised that during this call we will make a number.

Statements that are forward looking including statements regarding the timing of and potential results from clinical trials.

The anticipated presentation of data from clinical trials, 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 miles.

Jones, and our axial 11 O one and other development programs, the timing and results of our interactions with regulators our ability to successfully develop and obtain regulatory approval a vaccine or a loved 101, and our other product candidates anticipated enrollment in our clinical trials and the timing 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. Our results may differ materially from those projected on today's call we undertake no.

Legations to publicly update any forward looking statement today's press release summarizing xenon as first quarter financial results and the accompanying annual report on Form 10-Q will be made available under the investors section of our website at Www Dot xenon Dash farm, a dot com and filed with the SEC and on SEDAR.

Now I would like to turn the call over to Ian.

Thanks, Sherry and good afternoon, everyone and thanks for joining us on our call today.

We are excited about the continued progress across our broad <unk> 11 O. One phase III epilepsy program, including the recent initiation of X Tole III all planned phase III epilepsy clinical trials are now actively recruiting patients, including ex told two and X tole three in patients with focal onset seizures are fos and exact and.

Patients with primary generalized tonic clonic seizures were P. G Tcs.

<unk> 11 O. One is the only potassium channel modulator in late stage clinical development and we continue to build on our leadership position in the kv field driving our mission to provide new therapies for patients with epilepsy and other neurological conditions.

Based on our experience with our X Tole Phase <unk> study, which was similar in size to both ex told to Amdocs told three and supported by our continued relationships with key investigators many of whom already have familiarity and experience with <unk> 11 O. One we maintain a high degree of confidence in our ability to execute.

On our <unk> 11 O one phase III program and we are pleased with our progress to date.

In addition to our ongoing phase III epilepsy program in adults. We recently obtained feedback from the FDA that has shaped our strategy for our pediatric development plans for <unk> 11 O. One progress on highlights from our <unk> 11 O. One pediatric plans include ongoing work on a pediatric formulation of <unk> 11 or <unk>.

For younger patients.

We also expect to take advantage of the Fda's pharmacokinetic extrapolation rule for focal onset seizures, which allows us to over time move into cohorts are progressively younger patients with focal onset seizures with axion 11 O. One in an open label setting.

And finally, we're in the process of expanding the exact phase III clinical trial to include patients as young as 12 years of age and this was driven by feedback from FDA.

We believe <unk> hundred 11 O. One has the profile and attributes to support broad development, including moving into younger patients with epilepsy, where there continues to be considerable need for new medicines.

And so after careful consideration we are prioritizing our <unk> 11 O. One pediatric epilepsy development plans and we will no longer pursue the clinical development of Axion four nine sex, we wish to extend our sincere gratitude to the patients and their families who participated in the clinical trial, we intend to work with study investigators to offer in <unk>.

<unk> for continued access through a transition period for those patients currently on axiom 496.

Turning to non epilepsy indications our phase two <unk> 11 O. One ex Nova study in major depressive disorder or M. D. D continues to make good progress on.

Our decision to examine <unk> 11 O. One an M. D. D was based on encouraging published clinical results with <unk> as well as promising preclinical data was actually an 11 O one.

We were further interested in gathering additional data given the depression is a common comorbidity within the epilepsy patient population.

Ex Nova which as a reminder was initiated only 12 months ago has progressed well and we expect to screen. The last patient next month in June .

After the last patient goes through a screening period lasting up to four weeks and has been randomized there is a six week treatment period and a four week follow up desert after which the database can be locked and the data analyzed given the steps. We are looking forward to a topline data readout for <unk> in the fourth quarter of this year, which is a slight shift in our preview.

Guidance of topline data in the third quarter. These data will help guide our future plans for <unk> 11 O. One M D D.

In summary, we remain laser focused on the continued advancement of our phase III <unk> 11, O One program, including X talk to an X 12, three clinical trials and focal onset seizures and exact clinical trial in PG Tcs as well as executing on our pediatric development plans.

We are also looking forward to the important data from our phase II <unk> study an M. D. D. Later this year.

Lastly, we continue to generate important long term data from our ongoing X Tole open label extension study that affirms that the X tole affirms the X tole phase two b results supporting our position that <unk> 11 O. One presents a novel compelling product profile with the potential to address some of the currently unmet need.

Needs of patients with epilepsy.

And as Christian Sherry will highlight in their remarks later in the car and later in the call. We are excited to be entering a data rich period for xenon between now and the end of the year. We will present additional exon 11 O. One X Tole open label data focused on quality of life measures at the international Epilepsy Congress in September and 30.

<unk> <unk> data at the American Epilepsy Society annual meeting in December as well as the two phase II readouts in the fourth quarter of this year, including data from our <unk> 11 O. One ex Nova study as well as data from our collaboration with Neurocrine. So I'd now like to turn the call over to Chris Kenny who can provide additional details on the progress made within our.

Our phase III <unk> 11, O one program as well as recent and upcoming data presentations for <unk> 11 O one Chris over to you.

Okay. Thanks, Dan.

Echo that we believe the clinical data generated to date supported very compelling product profile for <unk> 11 O one and.

And that the efficacy data from the phase two B X Tole study and the ongoing external open label extension compare favorably to medicines currently available for focal onset epilepsy patients to.

To briefly review the Axion 11 O one clinical trials within our robust phase III program.

As Ian mentioned, we now have.

Initiated ex told three which is running in parallel to our ex told you. This study each of these studies will enroll approximately 360 subjects with focal onset seizures.

Who will be randomized one to one to one with once daily dosing of either 15, or 25 milligrams of <unk> 11, O one or placebo. The primary efficacy endpoint is the median percent change or MPC and monthly seizure frequency from an eight week baseline through the 12.

Week double blind period, with <unk> 11, O one compared to placebo.

We've also successfully executed on our plans to pursue another epilepsy indication our phase III exact clinical trial is expected to enroll approximately 160 subjects with primary generalized tonic clonic seizures subjects will be randomized one to one for once daily dosing of either 20.

Five milligrams of <unk> 11, O one or placebo. The primary efficacy endpoint is the MPC and monthly PGE Tcs frequency from an eight week baseline to the 12 week double blind period of exon 11 O one compared to placebo.

Noted that this parallel approach in both focal onset seizures and primary generalized tonic clonic seizures at this stage of development is unique.

Our rationale is based on the cadence mechanism in the photo sensitive proof of concept model of generalized epilepsy phase.

Favorable data in multiple preclinical epilepsy models and clinical data, including activity, we saw across all focal seizure subtypes and the phase <unk> study.

Our hope is that we are setting the groundwork for potentially broader use of <unk> 11 O. One.

And both of the most common forms of epilepsy should it be approved.

We recently met with physicians in epilepsy.

Annual meeting of the American Academy of Neurology, who continue to assert the need for new therapeutic options with differentiated mechanisms of action to improve upon existing anti seizure medications.

At AAN in addition to our poster outlining our exact clinical trial design, we were thrilled that the accident at 11 O. One program was selected for an oral presentation at this important neurology focused meeting.

Dr. Jackie French one of the preeminent meters in the epilepsy field presented data.

From our ongoing open label extension study with <unk> 11 O one.

She outlined how these data build upon the strong efficacy data generated in the phase II B X tole clinical trial.

Importantly, she spoke about the data demonstrating continued seizure reduction and extended periods of seizure freedom experienced by patients in the open label extension study.

Her podium presentation outlines several key takeaways.

During the open label extension there was a sustained monthly reduction in seizure frequency, specifically $80 to 90% seizure reduction as measured by median percent change from the double blind period baseline.

Also seizure freedom for greater than or equal to six month and greater than or equal to 12 months consecutive durations was achieved and 17, 5% and 10, 5% of patients respectively.

<unk> <unk> hundred one continues to be generally well tolerated in the open label extension with adverse events consistent with prior results and other anti seizure medications Doctor French Express that these data are encouraging for prescribing physicians, who continue to see new differentiated therapeutics that improve upon existing.

Options and May provide further hope for the many patients who experienced the debilitating impacts of focal seizures, even while taking multiple anti seizure medications.

Looking ahead.

Our team is excited to continue to showcase <unk> at 11 O. One at medical conferences later this year, including our presence at the upcoming 35 International Epilepsy Congress in Dublin in September and at the American Epilepsy Society meeting in December at IEC in September we have multiple podium and poster.

Patients highlighting our <unk> 11 O one phase III program as well as new quality of life data from the ongoing <unk> open label extension.

In addition, we're in the process of submitting abstracts at the American Epilepsy Society meeting, including.

Including 30 months open label extension data from X Tole supporting the long term use of <unk> 11, O one as well as important seizure freedom data.

We look forward to keeping you updated on our progress on the <unk> hundred one phase III epilepsy program.

As well as continuing to build a profile of vaccine <unk> with physicians and the medical community.

Now I'll turn the call over to Sherry, who will give us a brief update on our partnered program with Neurocrine before summarizing our first quarter financial results and upcoming milestones Sherry.

Thanks, very much Craig so beginning with our partnered programs our collaborators at Neurocrine are conducting two separate phase two clinical trials evaluating MDI 90 1352.

One study is focused on adult patients with focal onset seizures and the other study is examining the use of MDI 90, 1352 in pediatric patients with <unk> related Apple ABSSI. We're looking forward to the results from Neurocrine adult focal study, which are anticipated in the fourth quarter of this year.

Cash and cash equivalents in marketable securities were 687 3 million as of March 31, 2023, compared to $728 million as of December 31, 2022.

Based on current operating plans, including the completion of the planned at CN 11 O. One phase III epilepsy studies, we anticipate having sufficient cash to fund operations into 2026.

Before concluding our prepared remarks, I'll briefly summarize some of our Golden milestone events ahead, including as Ian mentioned at data rich period for xenon between now and the end of the year.

We will focus on advancing our <unk> 11 O one phase III program, including our <unk> annex told three clinical trials and focal onset seizures and our exact clinical trial NPG Tcs. We are excited to present additional <unk> X Tole open label extension clinical data at both.

The IEC in September and Aes in December .

We anticipate topline results in the fourth quarter from our ex Nova clinical trial and MDT.

And we expect another data readout in the fourth quarter of this year from the adult focal onset study conducted by our partner Neurocrine.

In closing, we believe that we have established an enviable leadership position in the kv field, that's supported by our clinical development efforts and financial resources to help us execute on our ambitious plans as we focus our efforts on our phase III epilepsy program and proud of the team we continue to Belden xenon we are.

Wasteful to our employees across the business, who are committed to the announced mission to deliver new neurology therapeutics to patients in need.

I'm excited by our 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.

Thank you as a reminder to ask a question you will need to press star one on your telephone please standby, while we compile the Q&A roster.

Our first question comes from the line of Paul Mathias from Stifel.

<unk> phase III.

It sounds like things are going well, but you arent yet guiding too when you were Turkey. These results too.

Ultimately available and I was wondering if you give just a little bit more color on what youre seeing on enrollment dynamics.

And when do you think youre going to get to a point, where you'll be ready to give us more affirmative guidance and then on the <unk> study I wanted to ask if you're willing to disclose anything about the patient population you've enrolled specifically as it relates to baseline severity and the reason why I was asking as I think your your cutoff on Ham D is a little bit lower than some.

The other contemporary MDT trial.

Historically that can have some impact on things like placebo effect and so again, just a little bit curious on the population. Thanks so much.

Thanks, Paul Yeah happy to address your first one and then Chris Kenny maybe we can let's talk a little bit about it.

The baseline <unk> score is kind of a cutoff and then kind of where we expect the patient population probably to come in by your first question. It's a question we get a lot about just how we're doing in phase III epilepsy, and recruitment and as I mentioned in the prepared remarks. We believe we are on track and progressing well maybe you can give you.

A bit more granularity as you asked so we track site initiations, we track patient screening and patient randomization, we built a model based on our actual experience both both our experience and as well as with the <unk>.

And we track against that model to see how we're doing and as we've talked about before we do use the X Tole study is a bit of a proxy obviously challenges in that study it was run during COVID-19.

And we didn't have the profile of the drug or at least the efficacy data on the molecule at that time, which we do today in terms of forward guidance, yes at some we will be providing guidance for top line data likely later this year I think we've been very consistent and we wanted a couple of quarters of enrollment under our belt, where we got the majority of.

Sites up and running.

And then we can give some guidance on topline data so that to come.

And Chris I'll pass it to you on the baseline characteristics going into the MDT study.

Sure. Thanks, Ian Yes, so in terms of the inclusion criteria patients have to have the Hamilton D screening or at least the <unk> and the idea is to capture a population of depressed patients who at least moderate.

And then based upon that we are keeping an eye on all baseline characteristics as more patients are being randomized in the baseline characteristics are largely following what we had expected.

And we're hoping to share more details on that potentially.

Obviously by the end of the year.

Anything you can say, Chris on how these baseline characteristics compare to other studies.

<unk> completed in depression recently.

Very similar.

Okay. Thanks.

Thank you one moment for our next question.

Our next question comes from the line of Brian Abrahams from RBC capital markets.

Hi, good afternoon, and thanks, so much for taking my questions. Congrats on all the progress two from me I guess first off as we get closer to the <unk> results I'm curious your latest views on depression as a primary indication for 11 a one.

The data were positive or how far behind with next generation programs being that could take advantage of the validation of the pharmacology and then secondarily what learnings from epic can you use to shape how to optimize the development of 11 O. One in kids.

Thanks, Brian Yes.

I can address the first one and then I'm happy to make a couple of comments on Opex and Chris kind of if you want to jump in as well.

As we think about.

The pediatric development for 11 O. One so Brian in terms of MTBE. Obviously, the data is going to be a critical implant. We've really talked about that there's multiple paths here. One is that we're continuing to generate data.

There will be important in the Apple.

And in epilepsy call point, So we know the depression is the most common karma comorbidity in an epilepsy, so generating data it could be important but we are interested potentially in doing as you say primary developed development in the primary indication of major depressive disorder. We're doing some additional work between now and top line data just.

Answer some of the commercial questions that we have internally.

But we'll be in a position to when we have top line data also provide next steps in that program.

Asked about nexgen compounds taken advantage of the kv pharmacology. So obviously, we have significant efforts pre clinically none of those molecules have transitioned into the clinic, yet probably the first ones would transition sometime next year. So there would be a bit of a gap between <unk> 11 O one in any of.

Backup molecules that would move into development.

On the kind of Opex, two <unk> 11 O one transition I mean, the pediatric plans are very different.

<unk> hundred 90, <unk> was being developed for a very rare pediatric epilepsy or that study was looking at KFC in Q2 D, which is a very different population than the pediatric population both in focal epilepsy and primary generalized tonic clonic seizures and maybe actually this is a good time, we could talk a little bit about just the PD.

Attract patients with Apple ABSSI and so.

So Chris Kenny I don't know if you want to talk or if you want to say anything more about just the learnings from epic into the pediatric development of 11 O. One, but then I think Chris one sector and can provide some perspective on the market opportunity or at least the patient population and focal and generalized for pediatric patients.

Sure I would say.

The biggest feature that's feeding into the pediatric plans for <unk> 11 O one.

It is more about what we learned in the adult X Tole study I would say than necessarily in the epic study.

To the extent so that the data from the epic study is still blinded and to the extent that you can assess blinded data was largely consistent with what we would expect with the saga game. So will underline that data in the near future, but I wouldn't say that there's any particular learn.

From that study per se that has illuminated the path for the pediatric development of of <unk> 11 O. One.

Ian would you want to add to that.

No I think that's really good.

Chris on the on.

On pediatric development and the patient population.

Yes, absolutely happy to share so when we think about the current development plan focusing predominantly on the adult population. We have to remember that there are hundreds of thousands of patients with who are under the age of 18 in the United States that have epilepsy.

So the.

Broad reaching numbers, we're talking about 500000 patients under the under the age of 18 and similar to the adult patient population, we see a bias towards more patients with focal onset seizures in general generalized seizure disorders. However, within this patient population what mirrors very much the adult patient population as the high <unk>.

Unmet medical need for patients who have difficult to treat disease, and we see a similar dynamic of a large percentage of those patients progressing on to your second or third line therapeutics and just like the adult population branded therapeutics tend to play a role in those more difficult to treat patients and as a result, we see a great opportunity.

Any frac sand 11 in London, and the pediatric market. Our market research has suggested that the value attributes associated with <unk> or.

Similarly positive in the pediatric patient population is what we've seen in the adult population with actually a slight bias towards QD drugs as being even more beneficial for this audience, where compliance becomes a bit more problematic than what we see with adult patients. So there's a great opportunity for Etsy 11 O. One as we continued the development of the PDR.

Population.

Thanks, so much for the really detailed answers super helpful.

Thanks, Brian .

Thank you one moment for our next question.

Our next question comes from the line of Tessa Romero from J P. Morgan.

Hey, guys. Thanks, so much for taking our question.

So ex toll free is off the ground now which is really nice to see how should we think about dynamics between enrollment for <unk> and <unk>.

Can you remind us how much overlap areas in the clinical trial sites, there and any color you could provide us on with respect to competitive competitive enrollment dynamics.

<unk> and <unk> trials, and Fos NPG Tcs versus other programs at your clinical trial sites.

I have one quick follow up.

Thanks Seth.

So a lot there I'll start and Chris can you feel free to jump in and add as well.

So just as a reminder for everybody exon two and external X 12, three are both in focal onset seizures. They will not be at the same clinical sites and so ex told two started first and and we've said that we kind of bias X tole too in terms of starting first and a number of the sites that have it.

Experience with <unk> at 11 O. One have gone into that study for <unk>. Three we are using some of the same sites from X tool, but there is no overlap with the ex told two sites and so.

Each clinical site can only run one of those protocols for exact for the primary generalized tonic clonic seizures that is it a little bit different that exact study can happen at either ex told two sites or X tole III sites, and we think that's where we can get leverage it's the same investigator.

It's the same contract in the same institution and if they have a patient that's eligible in focal epilepsy. They can go into <unk>, two or three as appropriate and if they have primary generalized they can go into the exact studies. So that's where we get some benefit in some some leverage over that.

In terms of competitive drugs, obviously were.

The only drug with.

To our knowledge with compelling.

Clinical efficacy data in late stage clinical development program. We know there are a number of few other molecules that are pre Africa. So they're just in their proof of concept phase II studies.

And so we haven't seen anything that's concerning from a competitive point of view in terms of patient recruitment.

Chris anything to add there and then I noticed you had a follow up.

One thing I would add is just that.

Down to 12 years of age today. So we'll we'll have that as an amendment to the protocol and so for 12 and above we don't need a pediatric specific formulation. We can use them. The same presentation that we use for adults and then in focal epilepsy. There's this pique extrapolation rule where.

We can get into younger patients and an open label basis overtime and you go into progressively younger patients over time in terms of the pediatric formulation development I mean, we have yes, we have experience in this area. We do have quite a quite a significant C. M. C group internally that works on formulation development for.

Are preclinical programs as well as for 11 O. One so that works already underway I think probably will have a good idea test later this year on how we're doing in the pediatric formulation development, which we would be required to get into much younger patients, but there's still a fair, but we can do even before that pediatric formulation is required.

Got it. Thank you so much for taking my question.

Thank you one moment for next question.

Our next question comes in the line of <unk> from Bank of America.

Hi, Good afternoon. This is dina on for Jason.

Congrats on their progress this quarter and thank you for taking a question. So we just have a couple of questions on the M. D. D X smells I read out and so beyond demonstrating <unk> address and good mono therapy Tolerability what else are you focusing on in this read out.

And since safety is a key area of interest was 11 O one's a profile of consideration when picking the 10 milligram and 20 milligram doses and where are these chosen based on 11 O. One mono therapy healthy volunteer data.

And then also just curious if you've looked at placebo response rate.

Patients that have clinically significant <unk> and if they differ from the general M. D. D subjects. Thank you so much.

Great. Thanks dinner.

Chris why don't you tackle the last part on and a Danya, maybe I'll talk about the totality of the data and Chris One second I know we've done some market research of looking at the kind of Apple icy adverse event profile into depression. So maybe we can talk a little bit about about that as well, but dina I would say in.

Terms of kind of go forward planning M. D. D. We would be looking at the totality of the data. So you've mentioned, obviously, we need to look at efficacy and adverse events as well and kind of overall, where we believe it would fit in in terms of inputting into into our decision for next steps.

In terms of dose selection, yeah, I mean, what are the.

The actual data was was informative.

The healthy volunteer data as you suggest but the actual data was very informative for us as we chose dose selection for M. D. D. So uhm, the 20 milligram dose and X tool was obviously an application dos and we believe well tolerated I think the 10 milligram doses quite interesting because we did see statistical significance on hall seizure reduction on.

Points at 10 milligrams and X tall, but the a your profile was quite benign and so that was a dose that we wanted to try and test is part of our M. D. D Phase two study and so we actually made a protocol adjustment before we had initiated the study to include a 10 milligram arm and that's why we we chose 10 Mil.

Grams, 20 milligrams and placebo for R. M D D study so.

So maybe Chris one second I know, we've looked at the a a profile.

At least an epilepsy talking to some of the prescribers and depression, maybe you can walk through some of those details and then we can answer the antidote of your question.

Yeah, absolutely and I think what's important to note to build that money and set is the data coming from X tall are studied in a highly refractory patient population with epilepsy with patients who are on multiple background therapies uhm. So we do see you know a N a.

<unk> profile in Apple Apsey, which is generally higher than what you would see for for most M. D D products, but knowing that we took the existing profile from X toll into market research for both the 20 milligram profile in the 10 milligram profile to understand whether or not clinicians would be comfortable with a <unk>.

Could offer a compelling efficacy with with with that associate it a profile. What we heard was assuming that we have compelling efficacy. That's there is an opportunity for a profile that looks like etsy and 11 O. One for patience remember these are highly active C. N S <unk>.

Drugs that are going to have some level of a associated with them, but when you look across the range of approved M. D. D products, there's a balance of adverse events that one is looking into and uhm importantly, the major categories of drugs that are used today have both substantial sexual side effects and.

<unk> associated with the SSRI SNRI class. So lets physicians are looking for alternative mechanisms in later life patience, they're willing to be a bit more tolerant of the profile consistent with what we saw it coming out of external but also they are optimistic that perhaps in amount of therapy environment and the last of your pace.

Population, that's the profile looks a bit different or perhaps it a bit less.

Has a bit less of an impact on some of the a is coming from the epilepsy patient population. So the totality of the evidence suggests that there is an opportunity again, assuming that there is a compelling efficacy for the profile.

[noise], Thanks, Kress because kenny.

Yeah. So the the question as I understood. It pertain to the placebo effect and kind of trying to draw a distinction between patients and the ongoing study who are.

Depressed verses, having donia, so I'd give us a similar you know we're looking at blinded data right. So ultimately we don't know exactly what's going on but similar to the answer to Paul's question about baseline characteristics of the population you know the the skills are behaving in the manner, we would've predicted but give.

Even the caveat that of course, it's blinded data to your question about making a distinction between kind of patients who may be more depressed or more you know and have more predominant anhedonia I would say that it's hard to make that distinction because once you use that cut off that I mentioned earlier too too.

Enrich this population for patients with moderate to severe depression.

Most of those patients already have an eidolon ear. So in my mind I wouldn't really necessarily separate those two the those two features seemed to be happening fairly consistently together and and of course, we have no idea what the placebo effect is because we have an unplanned. This study just yet.

Next question.

Alright, Thank you for the additional color and congrats on all the progress.

Thank you Dana.

Thank you one moment for next question.

Our next question comes from the line of Paul Choi from Goldman Sachs.

Hi, This is cade on for Paul two questions for US first do any of the recent M. D. D failures from competitors data cause you to change your thinking you're modeling regarding potential placebo for four months for your face too and then secondly is how might R&D expenses go forward R&D expenses change.

Post 496 removal from the pipeline. Thank you.

Great. Thank you Kate Uhm. So crest you wanted to just maybe talk about.

Mm M D D and placebo rate and how we've we can probably walk through the the power and calculations and how we're thinking about that and then Sherry can talk about RMT expenses.

Yeah sure so as far as protecting from the placebo effect.

Discuss this before but you know largely has to do with choosing an experienced C. R O choosing experience sight.

Make it where only running the study in the United States, making sure that there is an external evaluation of each patient so that we're enrolling appropriate patients using to save for a valuation. Those are that's really the key focus in terms of minimizing the placebo effect in this trial and of course.

Keep an eye on the data in real time to make sure that I had a patient level or at a state level, there isn't something unexpected happening that that that would that would be a typical.

So we're keeping an eye on on all of that you know another thing that's happened you.

You know is that we've gone through this we've gone through Covid and that's had some impact on.

The the patients who are experiencing depressive symptoms and so we've made sure that we have patients who've had depression before COVID-19. So that there's no strange sort of population being created so those are all the things that we've been doing to to manage the placebo effect and I wouldn't be able to come up with.

Anything more that we could be doing.

In case just to respond to your question on R&D expenses. So over the last couple of quarters Y'all have seen better R&D expenses are trending upwards.

That's largely driven by our initiation as our our fraud and ambitious phase three program with with multiple phase three studies any 11 to one epilepsy program now under way, we're gonna continue to see as we initiate more sites in enrolling more patients that that R&D expense will continue to ramp upwards until we had steady state later this.

<unk>.

You'll see that we've reiterated our cash runway guidance that into 2026, and so that remains unchanged with the recent strategic decision around 496.

Got it thanks, so much for taking my questions.

Thank you. Thank you.

One moment for next question.

Our next question comes from the line of Andrew Sigh from Jeffries.

Alright. Thanks. Good afternoon. Appreciate you taking my question so to an M. D. D. I understand it's about the totality of evidence, but is there a minimum Madras Delta that you wanted to see for you to continue pursuing Ah depression, and general obviously, the higher the better.

But for instance is three point sufficient or should we be thinking of something to where you're actually power to four so maybe like four point and then secondly, what's <unk> what specifically in the phase two data will drive your decision to continue on with 11 O one for depression, and what and the data well.

Make you instead pursue a new kv seven compound for depression. Thanks.

Thanks, Andrew Yeah, we are.

We reset this a number of times, we're really looking at the entire.

Data package when we Unblind later, this year and and as as we've mentioned we continue to do work on the commercial side as well to inform ourselves and provide input. So there isn't a single Madras cut off that if that if we had acts. We're gonna go ahead and if if we don't we're not gonna go ahead. So.

You know it it is a more complex question and and we'll be looking at multiple inputs and and making that decision and and that's really <unk>.

Related to your second question as well I mean, I think we need to look at the data in its entirety to make that decision on whether 11 O. One it makes sense for continued development and an M. D D or as you mentioned, whether we you know the the the nice thing of xenon as we do have some of that off.

<unk> in terms of other molecules and we talked about that earlier and the Q&A as well. So there isn't one specific answer I can give you if we really need to unwind the data see everything in its entirety and then and then we can have that conversation as I mentioned earlier in this call will be ready to have that conversation.

And and communicate that at the time of top line data.

Makes sense very clear thank you.

Yep.

Thank you one moment for next question.

Our next question comes from the line of Joseph down from T. D. T D Cowan.

Hi, there good afternoon, and thank you for taking my question is maybe the first one as it relates to the pediatric F. O S. Plans I guess as you go into younger patients you need to adjust or consider any sort of dose titration before getting into the the Max dose given the the age there and then maybe second on M. D D.

Obviously the pay your landscape here is changing a little bit it seems like payers want demonstrated a failure of one or two generic ssris or et cetera is when you think about development strategy do you think the F. D. A wants to see demonstrated activity to treat my depression patients or as M. D D kind of sufficient so thank you.

Thanks, So uhm, Chris Kenny why don't we start with you just in terms of dose probably not maybe specifically around titration per se, but obviously dose will be adjusted as we got into younger patients, but maybe you can provide a bit more contacts there and then Chris one second <unk>.

Let's talk a bit about the pair environment in terms of kind of the previous generic drugs and we're branded agents are used in depression, and then lastly, we can get to the T. R. D question.

Sure so.

Just briefly on titration the the.

The programs right now using accident 11 O one with a fairly long have like.

You know, we <unk>, we are not using titration and so there's no intention to use titration, we don't have.

The data we've taken a look at suggests that there's there's no obvious upside to titrating.

And you know one of the benefits of <unk> that we're seeing at the cause it really quickly nearly the full extent of the advocacy that we see is present within one week. So so no intention to treat the pediatric population differently than the adults from the standpoint of titration now obviously as you go down and age the the.

Body weight changes substantially right from the adult population that down to the adolescents and then further into the the younger kids and so that will have to be taken into account and we've proposed specific things to the agency and you seem to have their agreement for that for that taking that sort of the trust me into account.

Oh.

Thanks, Chris corresponds iron on M D D and the pair environment.

Yeah, absolutely we have spent time and actually done quite a bit of work to better understand the payer landscape within the M. D D space and as Ian had mentioned this is a space that is largely dominated in first and second line buy generics and the availability of multiple ssris an S. S. R. S N R I.

Is it results in fairly heavy pay your management upstream not dissimilar to what we expect to see in the epilepsy space as well with early line treatment for established therapy before moving into the Brandon environment, and we've seen that and in the M. B D space and that's been well established now for quite some time, what we are seeing.

Though is more management and the M D D space and what we see in the epilepsy space and with the new entrance. We do expect to see a slightly tighter management approach within the M. D. D category as patients need to document failure and different approaches from a pair of management tools that being said there still is.

Stanfield refractory patient population that is accessible to branded therapy is after the early line failures, we haven't heard from our payer research the need necessarily to have demonstrated evidence in quote unquote treatment resistant depression patient population. So we <unk>.

Not heard the necessity for that for access for drugs and later lines. It's really based on the clinical profiled. It pairs are thinking about how to approach payer management and what tools they might use to manage a product it looks like actually on 11 O one in the future.

And your last question on kind of other populations within depression. So our expectation is that we're not gonna have to do specific work in and T. R. D. I will say that you know post. This is a phase two study. The current next Nova study, we have not had <unk>.

Regulatory engagement in terms of what the late stage clinical development plan with looked like so post data uhm. If we're to move ahead and you know our expectation is that we would engage with F D a and get better clarity on what late stage development would look like.

Perfect. Thank you very much.

Thank you one moment for next question.

Our next question comes from the line I'm Mark Goodman from S V B.

Thanks for taking my question. This is Rudy on the line for a month.

So for the pediatric formulation, you mentioned that <unk>, maybe like more beneficial in those patients maybe probably more color on.

The key considerations for two Ottoman.

Pediatric formulation like what are the <unk>.

T differentiate between the pediatric formulation and your current formulation.

<unk>.

Thanks for to Yeah, I can I can address that so it's it's really about as we get into younger patients we need to have a dosage form that they can take so it needs to be something especially as we get into very young kids that they can either it can be mixed into solution or it can be a solution or it can.

Can be used in soft foods. So uhm today. The formulation development is focused on the animal population as I mentioned, we can get into adolescence with that.

With that presentation, but as we got into younger children will be coming up with a pediatric specific formulation. So that work is ongoing as we progress on that work, we're happy to provide future updates.

Got it <unk>.

Thank you. Thank you one moment.

Thank you one moment for next question. Our next question comes from the line of Danielle Braille for Raymond James.

Hi, guys. Good afternoon. Thanks for the question too quick one for me I'm. Just curious if you could provide more color on the factor is attributing to the slight delay and expected timing a M. D. D data and then with exactly recruitment expansion down to 12 years of age do you anticipate that this will accelerate your recruitment timeline. Thank.

Yeah.

Thanks, Daniel Yeah, but I think the delay in M. D. D is really really minor you know we had this this study just got up and running last summer Ah screening and randomization is being really consistent throughout we gave our best estimate when we put the guidance in place. This was a few quarters ago.

It was our best estimate at that time and now just getting towards the end of screening. We've just refined that a little bit. So last patient is gonna be screened next month and then you kind of just do the math forward from there in terms of the screening period, the treatment period to follow up and all the steps that need to be done before we can get the top line data.

So instead of the the data being available towards the end of Q3. It's just it's it's been delayed ever so slightly in the queue for an an exact uhm I think it's too early to tell obviously the opportunity you could make the argument that as we Amanda protocol in to younger children that opens it.

<unk>, but I think it's a little early to to tell on whether that's gonna accelerated timelines overall, but you know as we as we move forward and we got some experience we were happy to take care of that information as we go ahead.

Great. Thanks, so much.

Yep.

Thank you one moment for next question.

Our next question comes from the line of Laura Chico for Wedbush Securities.

Good afternoon. Thanks, very much have taken a question I just have two so first do you have any data, indicating kind of split on <unk> and pediatric versus adult patients. While it was still on the market any idea about pediatric uptake.

And then second within the Cassie study of <unk> and depression.

Do you have a sense as to how adherent patients were in that studying and realizing it with a smaller study, but the reason I ask is they were using 300 milligram P. I D and they had to titrate shape titrate patients up initially to trying to understand what impact that might've had when we're thinking about contrasting at first does something like <unk> Minister daily Thanks very much.

Thanks, Laura I'll make a comment on this argument Chris one second I don't know if you have.

Additional information Uhm I mean his argument was approved in adults local epilepsy and that's what the label was then they would've been moving into younger patients uhm likely under agreed upon pediatric plan with regulators, but to my to my knowledge I think it was <unk>.

From the market for commercial reasons prior to getting into a younger population, but Chris one second I don't know if you have any different perspective on that.

Yeah, the only thing I would add Ian is what.

What we did see from actual scripts for Misogamy and what was that there was some pediatric use while they were executing against that pediatric plan, but it was minor so is seen it mentioned that it was overwhelming majority of patients for adults.

Thanks, Chris and then Chris Kenny I know, we we spoken with with Doctor Moreau a fair bit about his his <unk> study. So just a question about tolerability and adherence <unk> 300 milligrams T. I D M a population.

Well I can only be.

I can only be sort of vegan and speculate with with limited information but.

Obviously you know.

This study was pretty positive I mean, with a relatively small number of patients.

They they hit on basically every efficacy and point that they looked at.

And then.

So that's one of the reasons that gives us some optimism and the reason why we're going forward.

You know just I I don't know for sure what the adherence within that study because I don't think they captured it you know beyond sort of go counting and so forth, but I would just speculate that you know if you're if you're doing this study like that three times a day you're gonna have.

Good or better adherence with a drug once a day. So I think we're in you know I I think it's <unk>.

Less of a concern with once a day then three times a day.

But of course.

There was nothing in that publication that really kind of quantifies adherence.

That I can remember.

Laura does that does that address your question.

Yeah. It does thanks very much guys.

Excellent.

Thank you one moment for next question.

Our next question comes from the line of Charles Duncan from Cancer Fitzgerald.

Hi, This is <unk> Charles Duncan Thanks for taking our questions in the <unk> study what can you tell us about treatment persistence, thus far and are you continuing to see similar level. This application freedom. Additionally have there been any safety factory.

Changes in body weight.

Great. Thank you <unk> do you want to comment on obviously, we're communicating on 18 months kind of the data from last September and then we'll do an additional cut of the data for 30 months as we mentioned later this year, but Chris maybe if.

Your comments on the external openly <unk>.

Yeah, So what we'll update all this information at the American Epilepsy Society at the end of the year. The data cut that we've done so far showed that over the course of one calendar year patients gained about one kilo on average and so that's that's fairly modest if you look at the the publications that have.

Talked about weight gain.

Context of those anti seizure medications to the point about seizure freedom.

So.

<unk>.

The open label is is still ongoing and if you. If you think about it in terms of patient ears for the.

For the X tools study, we still have a ways to go I mean, we're sort of just passed the halfway mark and so as patience have longer opportunity to be on the drug the seizure freedom numbers can can only go up right. I mean, if you have a patient whose experience one Europe seizure freedom you can't take.

That way you can only add to it. So you know, we're we're optimistic about where it's heading and I'll have to leave it at that until we sure details at the end of the year.

That's helpful. Thank you.

Thank you one moment for next question.

Our next question comes from the liner Mohit <unk> for Wells Fargo.

Great. Thank you for taking my question and that's in the process.

Maybe a couple of questions from my side.

And so what I think what else your fears is talking about a little bit of challenge in terms of enrolling epilepsy tries at this point given the competition for those patients and then obviously a couple of job. It is I'm not <unk> not available anymore. So so are you seeing any any chat.

And just like that in terms of initiating those centres R. R. R. R R and wanting to trial at this point in my second question is [noise].

Regarding the regarding the uptake of X coffee I mean, it seems quite interesting and fascinating that's how well this drug is doing despite the despite the safety burden and complications because our conversation.

Said that they like drugs, which are less complicated, but this is definitely not the one but so does it does it does it make you more comfortable around the <unk> <unk> has just launched surprise you is that.

Alright, Thanks <unk> yeah.

Yeah, I'm I'm happy to address your first one and then Chris one second and can talk a little bit about the center of the main launch and and how we're thinking about it and how that may inform as well in terms of the attributes that we have for 11 O. One so in terms of epilepsy clinical development.

<unk> and recruitment and enrollment as we mentioned earlier, we we are progressing as we would expect and we're not seen those headwinds that maybe others are I mean, obviously, we have the benefit when we compare at least are clinical trial currently ongoing with some of the other clinical trials that are ongoing.

As we do have a molecule was very strong attribute and compelling efficacy and that's the conversation that we can have with investigators and sites. The other ongoing epilepsy studies are different just at a different stage of development much earlier that haven't shown any proof of concept efficacy yet so so far where we're tracking where we would expect them to.

<unk> of enrollment and not seeing those recruitment headwinds uhm, Chris one second comment on sent overnight.

Yeah. So no meat is obviously doing a great job early and and their launch an and we'd agree that they've done very well. Despite some of the limitations of the products from our perspective, there is ample room for multiple branded products in this marketplace and we wish them well along their trajectory in in in the early days.

<unk> I think you highlighted though something that's quite an important which is that we hear from our market research that the titration profile of the burden associated with the titration is actually quite cumbersome for physicians and it does both limit the ability for the drug to be used more broadly and we hear quite clear.

[noise] physicians in general are not getting to the top Joseph <unk> of <unk> because of safety or tolerability issues. During the titration schedule and that just creates an opportunity for us when we think about the positioning of our product to move upstream or ease of use attribute sweet commonly here are much better than the other.

Alible products and that gives us an encouraging view on where actually 911 O. One will be position really fighting upstream of a product like X copra, which today. Despite its strong start is still really used for the last nine patients and we believe that 11 O. One will play sufficiently upstream in the future.

Hello, Thank you.

Thank you. This concludes the Q and a portion of the call. This concludes today's call. Thank you for joining and you may now disconnect.

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Yeah.

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