Q3 2025 Xenon Pharmaceuticals Inc Earnings Call

Speaker #1: 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 * followed by the number 1 on your telephone keypad.

Speaker #1: If you would like to withdraw your question, press * one again. Thank you. I would now like to turn the call over to Colleen Senior Vice or Xenon Senior Vice President.

Speaker #1: Of Corporate Affairs. Please go ahead.

Speaker #2: Good afternoon. Thank you for joining us on our call and webcast to discuss Xenon's third quarter 2025 financial and operating results. Joining me today are Ian Mortimer, President and Chief Executive Officer; Dr. Chris Kenny, Chief Medical Officer; Darren Cline, Chief Commercial Officer; and Tucker Kelly, our Chief Financial Officer.

Speaker #2: After completing our prepared remarks today, we will open the call up for questions. Please be advised that during this call, we will make a number of statements that are forward-looking including statements regarding the timing of and potential results from clinical trials, the potential efficacy, safety profile, future development plans in current and anticipated indications, 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 clinical development programs, including the anticipated filing of INDs and NDAs, the timing and results of those filings, and our interactions with regulators, our ability to successfully obtain regulatory approval, anticipated timing of the top-line data readout for our clinical trials of a ZET2 calendar, and our expectation that we will have sufficient cash to fund operations in 2027.

Speaker #2: Today's press release summarizing Xenon's third quarter financial results and the accompanying quarterly report on Form 10Q will be made available under the Investor section of our website at xenon-pharma.com and filed with the SEC and on CDAR.

Speaker #2: I'll now turn the call over to Ian.

Speaker #3: Great. Thank you, Colleen, and good afternoon, everyone. Thanks for joining us on our call today. We're excited to share the considerable progress we have made over the past quarter, as we remain focused on our three critical priorities: first and foremost, completing our Phase 3 XTOL2 study of a ZET2 calendar for the treatment of focal onset seizures; the top-line data readout in early 2026; followed by the filing of our first NDA for the approval of a ZET2 calendar in the U.S.; second, broadening the therapeutic opportunities for a ZET2 calendar beyond epilepsy, with potential neuropsychiatric indications where we have identified strong preclinical, clinical, and genetic evidence supporting the development in major depressive disorder and bipolar depression.

Speaker #3: And third, expanding our pipeline through the advancement of our promising earlier-stage NAV1.7, KV7, and NAV1.1 ion channel programs, with recent progress of our novel NAV1.7 and KV7 modulators moving into Phase 1 studies.

Speaker #3: I will focus most of my comments on our ZET2 calendar, or AZK, Phase 3 epilepsy program. And Chris will provide additional details across our clinical stage portfolio.

Speaker #3: As a reminder, AZK remains the only KV7 channel opener and the only ASM in development that is backed by long-term efficacy and safety data from clinical studies of patients living with epilepsy.

Speaker #3: Having demonstrated highly compelling placebo-adjusted efficacy in focal onset seizure patients in our Phase 2B XTOL trial, and durable and sustained efficacy over time through our open-label extension study.

Speaker #3: With greater than 800 patient years of exposure and safety data. As we disclose in today's press release, the final patients in our XTOL2 study have completed the baseline period, and all patients have now been randomized.

Speaker #3: The final number of patients randomized is 380, which is a significant milestone, and we remain on track for top-line data readout in early 2026.

Speaker #3: As a reminder, XTOL2 was designed and powered to randomize approximately 360 patients. So we are very pleased to have randomized more than the target in the study design.

Speaker #3: This will result in good power across the critical endpoints in this study. From the outset, we have prioritized working with high-quality, experienced clinical sites to maximize study success while diligently monitoring key metrics throughout the study.

Speaker #3: These metrics are tracking as we expect, and as we disclosed previously, patient baseline demographics and the open-label extension rollover rate are consistent with our successful Phase 2B XTOL study.

Speaker #3: Therefore, we remain confident in XTOL2 and share the epilepsy community's excitement as we progress towards top-line data readout. Two topics that we often get questions on with respect to XTOL2 are the final steps between now and top-line data, as well as our expectations going into this important readout.

Speaker #3: So I'm happy to address both of these topics. As I mentioned, the final patients in XTOL-2 have recently been randomized. That means all patients have completed their eight-week baseline period and their randomization visit.

Speaker #3: These final patients are now in the 12-week double-blind portion of the study. For those patients who complete the double-blind portion, they have an opportunity to enter the open-label extension.

Speaker #3: The OLE rollover rate has been high in XTOL2, consistent with XTOL, where we saw greater than 95% of patients roll over to open-label. For those patients who don't enroll in the OLE, there is an eight-week safety follow-up visit.

Speaker #3: Therefore, the final timing of the top-line data will be determined based on the last few patients and whether they enter OLE. After the final patients have completed the double-blind period, we will finalize data cleaning and lock the database, complete the statistical analysis and medical review, and be ready for top-line data release.

Speaker #3: We will be in a position to narrow guidance about the specific timing for top-line data in the coming months. We are optimistic for a positive outcome, and we believe that XTOL2, together with the strong results from XTOL, will serve as the basis for a new drug application for AZK in focal onset seizures.

Speaker #3: As we prepare for the XTOL2 readout, we have completed a detailed review of prior FOS studies. And we find that there is high reproducibility of results from Phase 2 to Phase 3.

Speaker #3: ASMs that have strong efficacy results in earlier studies demonstrate similar positive results in subsequent Phase 3 studies. Although there is some reduction in effect size, which is not unusual when moving from Phase 2 to Phase 3.

Speaker #3: Over the last 20 years, anti-seizure medicines that have been approved in adult FOS in the U.S. have shown a placebo-adjusted seizure reduction percentage ranging from the teens into the low 30s.

Speaker #3: Interestingly, some of the more successful ASMs, including Vimpat, are on the lower end of this range. Often, the drugs on the higher end of the range faced other challenges, either around tolerability or an onerous titration or DDI profile.

Speaker #3: This reinforces what we consistently hear from physicians. Although efficacy is an important component, the overall profile of the ASM drives prescribing decisions, to address a broad range of unmet needs for their patients.

Speaker #3: And it is this overall profile where we believe Azetucalner is differentiated and has a compelling set of attributes. At launch, we believe AZK will be a one-of-a-kind KV7 mechanism of action with strong short- and long-term efficacy, QD dosing with no required titration, no adjustments for DDIs, the potential for mood benefit, and an overall favorable safety and tolerability profile.

Speaker #3: It is this profile that we believe will drive adoption and commercial success. So again, we have high confidence, and we expect that a positive XTOL2 readout, combined with the impressive efficacy from our XTOL study, will form a compelling profile supportive of our MDA submission.

Speaker #3: We remain excited as we look forward to the potential of bringing an important new medicine to the epilepsy community. So I'll now turn the call over to Chris, who will share more details on our clinical development programs across epilepsy, depression, and pain.

Speaker #3: Chris, over to you.

Speaker #2: Okay, thanks a lot, Ian. I'll begin with an update on our epilepsy program. As Ian already said, we're really pleased to have completed randomization in our Phase 3 XTOL2 clinical study of Azetucalner, with a total of 380 patients.

Speaker #2: Which exceeded our original goal of 360. Our teams focus is now on completing the study to deliver top-line data in early 2026, with the shared goal of the positive impact we could have by providing a new treatment option for these patients.

Speaker #2: We're also placing a great deal of effort into the other two studies of Azetucalner and epilepsy, including our Phase 3 XTOL3 study in focal onset seizures and our exact study in primary generalized tonic-clonic seizures.

Speaker #2: While we advance our various studies in epilepsy, we are also focused on scientific exchange and education around the profile of Azetucalner with healthcare providers.

Speaker #2: This fall, we had a strong showing at the International Epilepsy Congress, or IEC, in Lisbon, where we had an opportunity to present four posters while meeting with various healthcare providers as we highlighted the 36-month data from the ongoing XTOL open-label extension study of Azetucalner and patients with focal onset seizures.

Speaker #2: Which demonstrated sustained monthly reduction in seizure frequency impressive seizure freedom rates and a consistent adverse event profile suggesting long-term efficacy and tolerability of Azetucalner.

Speaker #2: We also presented data from our XTOL study showing the efficacy of Azetucalner in certain focal onset seizure subtypes, as well as presenting a targeted literature review outlining the comorbidity burden in focal onset seizures.

Speaker #2: In addition to these clinical presentations, we presented findings from our early-stage NAV 1.1 program with data from preclinical models specific to Dravet syndrome. The energy at the meeting was high, and excitement continues to build around the long-term data and continued scientific evidence generation.

Speaker #2: Looking ahead, we continue to generate data from our Azetucalner open-label extension study and will present new four-year long-term data at the upcoming annual meeting of the American Epilepsy Society or AES in Atlanta early December.

Speaker #2: AES is a critical. With the Epilepsy Community and Xenon is clearly an emerging leader in the field. We look forward to significant scientific engagement.

Speaker #2: With seven abstracts accepted for presentation, we're looking forward to showcasing a number of presentations that include updated long-term data from the ongoing Azetucalner open-label extension and focal onset seizures.

Speaker #2: Studies centered around depression and the impact on epilepsy patients, as well as preclinical data from our NAV 1.1 program. In addition, we look forward to interactions at our various booths and one-on-one meetings with physicians.

Speaker #2: Facilitation of ongoing scientific exchange through a dedicated scientific exhibition and symposium. So in summary, considerable momentum is building in our Azetucalner epilepsy program with important milestones in the near term with the presentation of the 48-week open-label extension data at the American Epilepsy Society followed by our XTOL2 Phase 3 readout in early 2026.

Speaker #2: Now turning to Xenon's efforts to expand Azetucalner's use into neuropsychiatry in areas where we believe the differentiated profile of Azetucalner could really benefit patients.

Speaker #2: We hear from physicians that they are interested in new therapeutics with novel mechanisms of action potential benefits on anhedonia, rapidity of onset, along with a potentially differentiated tolerability profile.

Speaker #2: Our clinical development teams have made great progress with XNOVA-2 and XNOVA-3, two of our three planned Phase 3 clinical trials evaluating Azetucalner in patients with major depressive disorder, which are underway and enrolling patients.

Speaker #2: In addition, XEED, the first of two planned Phase 3 clinical studies evaluating Azetucalner in patients with BPD-1 and BPD-2 depression, is also underway. Effective treatments for depression and bipolar disorder are limited, and many patients are non-adherent due to side effects and other factors.

Speaker #2: There remains a significant unmet medical need for safe and effective therapies to treat patients with bipolar depression, and the physicians that we have spoken with are keenly interested in Azetucalner's differentiated profile.

Speaker #2: Beyond the support of physician feedback, a number of key factors informed our decision to expand our clinical development of Azetucalner into bipolar depression. This includes an in-depth review of the existing literature outlining genetic links between BPD and KD7, evidence of KD7 downregulation in BPD, as well as clinical studies that explored the use of KD7 potentiators in depression, including results from our own proof-of-concept study in MDD.

Speaker #2: We've also generated preclinical data showing an antidepressant effect of Azetucalner. Considering the current treatment landscape, Azetucalner's novel selective KD7 mechanism of action potential benefits on anhedonia, rapid onset of effect, and differentiated safety profile are particularly attractive in BPD.

Speaker #2: As a reminder, our XEED trial is a multicenter randomized double-blind placebo-controlled clinical trial to evaluate the clinical efficacy, safety, and tolerability of 20 milligrams of Azetucalner administered orally with food over the six-week double-blind period.

Speaker #2: As monotherapy treatment in approximately 400 patients with bipolar I or II depression. With an opportunity to increase the sample size to 470 patients based on an interim analysis.

Speaker #2: The primary efficacy endpoint is the change from baseline in the moderate score at week six in patients who received Azetucalner compared to placebo. Upon completion of the double-blind period, eligible patients may enter an open-label extension study for up to 12 months.

Speaker #2: We're incredibly excited by the potential of Azetucalner and its KD7 mechanism in neuropsychiatric indications such as MDD and BPD, and I look forward to providing updates as we leverage Azetucalner's pipeline in a mechanism potential across multiple streams of late-stage clinical development.

Speaker #2: Looking at our early-stage programs, as Ian mentioned, both of the lead molecules in our NAV 1.7 and KD7 programs XEN-1701 and XEN-1120 respectively are now in Phase 1 first-in-human studies in healthy volunteers.

Speaker #2: In October, we hosted an investor webinar focused on NAV 1.7 and KD7, which has garnered much interest. We received insightful questions about our approaches, including our focus on leveraging mechanistic insight, especially around ion channel function, to target pain at its source and develop precision therapies that can address both the complexity and chronicity of pain.

Speaker #2: When we engage directly with clinicians, we hear a strong desire for opioid-sparing therapies that can meet the everyday realities of pain management without compounding the problem.

Speaker #2: Physicians recognize the limited efficacy of current options and remain concerned about the substantial risk of abuse and dependency tied to opioids. Even when opioids are used appropriately, their long-term safety profile is far from ideal.

Speaker #2: Chronic NSAID usage can also be problematic, for different safety and tolerability issues that may arise. So these physicians are looking for alternatives that are both effective and well-tolerated over the long haul, and importantly, they're interested in ion channel blockers as a potentially transformative class of therapies.

Speaker #2: We know that analgesics can act along multiple different points of the pain pathway and interrupt the pain signal on its way to the brain.

Speaker #2: This is why we are excited about the potential for NAV 1.7 inhibitors and KD7-potentiators as these channels play important roles at multiple points in the pain signaling pathway.

Speaker #2: Including in the initial transduction of pain stimuli into pain signals, the transmission of those pain signals along nociceptive neurons and the relay from peripheral sensory neurons to spinal cord neurons within the central nervous system.

Speaker #2: Starting with NAV 1.7, we believe it is the best genetically validated pain target, with striking genetic data in patients with loss of function mutations who have no ability to feel pain.

Speaker #2: Gain of function mutations have also identified have been identified that drive pain disorders further underscoring the critical role NAV 1.7 plays in pain signaling.

Speaker #2: Our lead NAV 1.7 inhibitors are CNS penetrant to enable global inhibition of NAV 1.7 to better mimic the human genetics. They also demonstrate good free fraction and tissue distribution to achieve high levels of target engagement.

Speaker #2: And lastly, we have identified molecules that have excellent potency and selectivity to safely achieve target therapeutic levels of NAV 1.7 inhibition. We believe we have solved for some of the critical limitations of prior NAV 1.7 compounds and continue to build a strong pipeline of optimized NAV 1.7 inhibitors for development in pain.

Speaker #2: With our long history with NAV 1.7 and our deep ion channel drug discovery expertise, we're well positioned to deliver a novel and differentiated NAV 1.7 compound profile into the clinic.

Speaker #2: One that has never been tested before. KD7 is also a compelling pain target to modulate neuronal hyperexcitability at multiple points along the pain pathway.

Speaker #2: And we believe KD7-potentiators have the potential to decrease neuronal hyperexcitability for the treatment of a range of pain conditions. This is supported by high levels of KD7 expression throughout the pain pathway and our data shows that KD7 is enriched in the C and A delta pain subtypes of sensory neurons.

Speaker #2: In addition, KD7 openers can block action potential firing in both DRG and spinal cord neurons thereby significantly inhibiting pain signals from reaching the brain.

Speaker #2: Additionally, evidence supports that dysfunction of downregulation of KD7 activity has been observed in altered pain states. And lastly, a clinical compound previously approved for the treatment of pain flupertine has a mechanism of action that involves potassium channel opening.

Speaker #2: Providing further validation of this approach. So in summary, we're excited to have both XEN-1701 and XEN-1120 now in Phase 1 first-in-human studies in healthy volunteers and our goal is to initiate Phase 2 proof-of-concept studies next year.

Speaker #2: And we'll provide more details as we get closer to those important milestones. I'll now turn the call back to Ian so he can cover our NAV 1.1 program.

Speaker #2: Ian? Great. Thanks, Chris. And thanks for sharing the significant momentum across our pipeline. We are proud of our extensive knowledge and development expertise in potassium and sodium channel therapeutics.

Speaker #2: As well as the focus and investment in pain neuropsychiatry and epilepsy, rounding out updates with our NAV 1.1 program, which continues to progress as we generate preclinical data that suggests targeting NAV 1.1 could potentially address the underlying cause and symptoms of Dravet syndrome.

I believe he has already made a positive impact, and I look forward to continuing to collaborate with Tucker as Xenon evolves into a commercial stage company. So with that, I'll turn it over to you, Tucker, to say a few words, and then I can conclude with our financials.

Thank you and I really appreciate the warm welcome. I'm thrilled to join Xenon. It's set to pivotal time as a company, progresses XL2 with the goal of delivering positive, Topline results early next year and planning for the anticipated launch Rosetta calendar in epilepsy and Beyond.

I'm excited to apply my experience and expertise, driving corporate, and financial strategy for us and international Life Sciences, companies to Xenon and working with the team here as we build for commercialization and the impact we could have as a fully integrated biofarma company, the aspiration of delivering life-changing, Therapeutics to patients

With a healthy balance sheet and a solid foundation, the future looks bright for us as we plan for a successful commercialization of the edge of counter and our long-term growth.

I have already been out on the road to begin connecting with our investors to share our vision for Xenon to become a leading company in neuroscience and to paint.

Briefly turn into our financial results, Cash Cash, equivalents and marketable, securities totaled, 555.3 million, as of September 30th 2025 compared to 754.4 million as of December. 31st 2024.

Based on our current operating plans, including the completion of the is that to counter phase 3, epilepsy study and supporting late stage clinical development in MDD and BPD. We anticipate having sufficient cash to fund operations into 2027. Given our strong balance sheet at fiscal management. We are, well, positioned to support multiple registration and programs for Zeta counter and the continued maturation of our early stage pipeline.

I'd refer you to our press release and the 10-Q filed today for further details on our financial results. And with that, I'll turn the call back over to Ian for closing remarks.

Great. Thank you, Tucker.

2 data and advances that your calendar towards commercialization bringing US 1 Step Closer to delivering a new anti-seizure medication for patients still struggling with seizures.

As I mentioned earlier on the call, once the last patient is completed, the double-blind portion of the study will have visibility to the final timelines, and we will be able to narrow guidance at that time.

To round out our isatu calendar programs. We see the immense promise of applying is that to counter in other, neurosis, and serving other patient. Populations in need and are proud of the progress with the EXN Noah and exceed programs. And while earlier stage, the excitement around our Discovery pipeline is tangible.

As we apply our ION channel expertise across multiple targets and therapeutic areas and grow these programs, we are taking important steps towards becoming a fully integrated Neuroscience, focused biofarma company. So with that, I'll pause and operator. We can now open the call up for questions.

At this time, I would like to remind everyone in order to ask a question. Press star, then the number 1 on your telephone keypad and we have only asked to limit your question into 1. So we can cover all your concerns.

We will pause for just a moment to compile the Q&A roster.

Your first question comes from the line of Paul Matthews of Stifel. Please go ahead.

Hey guys uh thanks so much for taking my question, I appreciate it. Um I was wondering if you could just kind of set the stage for the top line data release. How much should we expect to be disclosed on efficacy and safety and once you have those data in hand if possible if positive what would be rate limiting to filing? Thank you.

Uh, thanks Paul. Um, I can start and then press please, add your perspective as well. Um, so your first question just on Top Line data. So yeah, there's always this balance is you can appreciate between um a face or a clinical trial where we generate a huge amounts of data and what we can actually just realistically get done in a in a reasonable period of time to get out, a Topline press release and then what would come out its subsequent medical congresses. Um, so if you look back at our X toll data, I think that's a pretty good, um, proxy for what you'll see at XL 2. So obviously the key efficacy end points, uh, as well as our overall comments on safety and tolerability. So, um, I think, you know, in our previous Top Line press releases, we've tried to have a fair bit of information in there and good balance between both efficacy as well as safety and tolerability. And I don't think anything would be different for X tool too. Um, in terms of um, prepping for the NDA

I can start and then Crest please add your prospective. So um it's really the the efficacy results from Excel too that are on the critical path. Um, as we all know there's a huge amount of work that goes into filing, a new drug application. A lot of that work is ongoing and continues to be we even have sections that are written and completed today and we'll continue to do that over the coming months, um, and the rest of the package and dossier will come together. Um, you know, over the over the course of 2026 including obviously the data from Excel 2. Um, but Chris do you want to provide any more granular comments?

Well, just as you can imagine. I mean we don't wait to start writing the NDA until the Top Line next till 2 Data comes. So a lot of work um is ongoing and and a lot has already been completed so the critical path was your question. It's basically defined by what what? Ian just said. So incorporating, um, X tool 2 into the story that's already being told from a clinical perspective, from X, toll, to create the, to create the integrated summary summary of safety and integrated summary of efficacy. So that's that's it. And then we're well on our way already, Paul.

Your next question comes from the line of test Romero of JP Morgan. Please go ahead.

Hi, Ian, and welcome to the team again, Tucker.

Are you able to disclose where your screen failure rate? Ultimately landed for XL, 2?

And generally, when screen outs occurred, were they for reasons as expected from prior experience.

And then my second question is just how far behind do you think the results of xnova 2 will be from Excel 2? I think it makes it into 2026. Thank you.

So those are patients that may have dropped out during the screening period, as well as the Baseline period, um, prior to randomization. So again, we're, you know, with an ongoing study, we we don't go into, um, very very specific details across a number of different parts of the study including this. But I would say that it's kind of trended and tracked as we would have expected in the phase 3 Program. Um and Kristen go through probably some of the reasons that you know, you lose patients due to either Baseline seizure burden or or BMI or compliance with diary or a variety of things that people drop out, um, during the screen and Baseline period before randomization. So Chris do you want to do that? And then I'm happy to address the second question which is just the timing of xnova too.

I'm happy to do that, but I think you kind of covered it in. I mean, the screen failure rates largely, it's a reflection of.

Um, you know, insufficient seizures. And then we have a number of other inclusion exclusion criteria and so there can be kind of a, a smattering of other reasons that follow behind that. But um, it's been consistent with what we would expect from Phase 2 tests.

Thanks Chris. And then your question on the MDD program and specifically as it relates to sex, Nova 2. So this will be the first phase 3 readout from the Psychiatry program. We haven't yet given guidance on it. Um, you know, that, uh, study that phase 3 study started right at the end of last year, kind of really got up and running in the first quarter of this year. As we got, most of the sites up and running, you know, we haven't given guidance. I think we've generally said that in our experience, if we look at our Phase 2, next Nova study and we extrapolate forward. You know, these studies often take kind of 2 2 2 and a half years. So as we uh, progress over the next few quarters, we'll be in a position to provide guidance to Topline data.

Your next question comes from the line of Brian Abrams of RBC Capital Markets. Please go ahead.

Hi, this is Joan for Brian. Thank you for taking our question. Um, on the commercial side, you talked about overall, clinical profile being important, um, just wondering how much of that of the, uh, the efficacy. Um, docs are willing to trade off, for other, positive benefits like tolerability, easy, ease of use and, um, some of the other benefits there and what are some of the learnings, um, from house Noble mate? Um, launched and has been performing commercially as of late. Thank you.

Yeah, I'm happy. Thanks Joe for the questions. I'm happy to start and Darren is here as well, and can provide his perspective, Darren's now being here. A number of months and had the opportunity to attend 1 of the big Medical congresses in Europe as well as um, interact with a number of of key physicians in the space. So yeah, as we talked about in the prepared, remarks on a placebo adjusted basis, we've seen efficacy kind of range from the teens into the low 30s. And so there is quite a range in and it doesn't seem to be predictive of where you are in that range to commercial success. And I think that's to your point. Joe that there are a number of these other attributes. You know, you specifically referenced soba mate. You know, SOB is on the on the higher end of that range, from an efficacy point of view, but we do know, um, that sonova made in terms of the titration over 12 to 16 weeks. And as you push that dose higher, there are a number of adjustments that need to be made because of ddi's and tolerability. And so it can't

Can be a bit of a more challenging, um, medicine for prescribers in their patients. So again, I think that really, um, you know, re-emphasizes, the point that we see in the data that efficacy is part of the picture, but not the complete picture. And I think, Darren's perspective on this would be really helpful. Yeah, thanks Joe. And it's, uh, yeah, I think it's the, you know, each

Focal onset. Seizure patient. You know is a different 1 and and will respond to to different types of therapies. I think with azk and the attributes we provide that we've outlined on the call today. Um provide you know another option uh for patients and if you think about Physicians and particularly the general neurologists, who treat a majority of of these epilepsy patients, you know, these attributes translate into the simpler safer safer and really more reliable, uh, care decision

To interact with Physicians.

You know AZK, which will be the first next branded drug, and after almost 8 or 9 years since the launch of Xcopri, there's a lot of excitement around the attributes that AZK is going to bring to patients, their families, and caregivers.

next turn.

Thank you, Joe.

Next question comes from the line of Brian's corny of beard. Please go ahead.

Hi. Uh, thanks for taking our question. This is Charlie on for Brian. Um,

Are you there Charlie? We can't hear you come through.

Hello, Brian. I think you're on mute. Are you still there?

All right, let's move on to.

I think he's back. Um, so Charlie, we—yeah, you cut out. Um, so maybe you can start, uh, your question from the beginning.

Okay, apologies for that. Um yeah, so it was on the XC trial

Can you hear me?

Yes.

Okay. Uh so on the exceed trial, just thinking about the differences between the 2 types of the of bipolar disorder um given the higher predominance of depression and type 2 as well as uh why you decide to go with the mattress scale versus Hamdi like you did um in the MDD trials. Thank you.

Great. Uh, Chris do you want to address both of those? Just the bp12 and then also using address versus handy 7?

So, the first 1 was, what was the question about BP when I apologize?

I was just a question around. Um, I think Charlie it was just around the, um, the differences between bipolar 1 and bipolar 2. Um, and including both of those patients, I think patient populations in the exceed trial.

Yeah, I mean so the the bipolar the difference in depressive time dominance in bipolar 2.

Got it. Yeah, the difference in depressive symptoms between BPD I and II.

Yes.

Yeah. I mean I I mean the the the largest difference that we're going to see is just the propensity towards a true manic State versus hypo manic State and because of the potential for differential treatment response, you know that we don't know that for sure. We've decided to stratify, BPD 1 and um BPD too to

The extent that there could be, you know, a different response in depressive symptoms, I guess we'll have to kind of see, um, what the, what the study shows, the the decision on modus was largely driven just by the in you was that about depression? That was the MDD or the dpd,

Just changing the um, we have the hamd 17 endpoint, in MDD Crescent, and moving to the address endpoint in in bipolar depression. Thank you. Um, yeah. I mean this is largely driven by the fact so, so let me just kind of explain what happened in MDD just as to accept the the stage.

So what happened in MDD was, there was an isogamy proof of concept, study that showed improvements in depressive symptoms. They had used Modis and that was the precursor to our X Nova study. And so, we did the same. We used mod address as the primary endpoint. Fortunately, we also looked at the data, the depressive symptoms with the hand, dcore and ultimately, when we looked at that study, even though there was a essentially a 3-point Improvement in both scales, there was much less variability within the hamd. And so it was, it was significant and so, um, FDA guidance allows you to use either. And so we decided to switch from Modis to hamd, um, with, with FDA support. So, bipolar is the reason why I say all that is because bipolar is a different situation where basically, there is a largely, a precedent of focusing, on modus for the, the primary endpoint. And this is the first study that we've done.

And so we don't have data that that would suggest 1 or the other. And so we lean heavily upon the Precedence for how things have been done in most bipolar studies up until now so that's the main logic.

Your next question comes from the line of Jason, Jabbary, Bank of America. Please go ahead.

Hi. Good evening, everyone.

And you know, do the, the additional 20 patients randomized, like impact your powering assumptions at all and then just wanted to touch upon the earlier stage pipeline. Um, can you provide just any color on data disclosures from The Phase 1? Um Zen 1120 and Zen 1701, sad mad studies, maybe what like an initial update might look like and when we can expect it and if you could also maybe frame, what do you what? You kind of Define as success from both programs? Thank you.

Uh, great. Thanks. Dina. Um, Chris. Do you want to take the first 1 on Pixel 2 enrollment and and powering? And then I'm happy to do a data disclosure around 1701 and 1120. Yeah, sounds good to you. Thank you, yes. So thanks for the question. Um yeah, you have to keep in mind that when you're, you're shutting down a study, you have, you know, several factors that that are that are occurring. The sometimes, there's an increase in recruitment. Sometimes it stays the same time. It could even like unusually go down a bit. Um, and then you have a screen failure rate, which you have been seeing for a while which may remain the same or may go up or may go down. And so there are certain amount of variables. And so when you decide when to kind of shut down screening, um you know it's it's it's an imperfect science and so when we chose a date um on the back end to stop screening there was a significant bolus of patient

On the back end that brought us from 360 to 380, largely driven by the interest in in, is that your calendar? And it's differentiated profile which we, we've already gone through. So, um, you know, it could have ended up being 360, it ended up being 380 because of that that um, increase at at the end and then um, as far as the power goes, I mean, just as a reminder for everybody,

The um the powering for 25 milligrams versus placebo in in the phase 3 study and Excel 2 is quite High.

Like 99%. Um, and so the the study is, is also powered over 90% for the 15o. And so, you know, if you go up in the number of patients, you get an even higher bump in power, I wouldn't really say that. I think there's an appreciable impact on power going from 360 to 380, but whatever it is. It's it's certain a little bit higher than it would have been at 360. So we're feeling confident um, you know, as confident as we can particularly, because of the the translatability of phase 2 data in apple phase 3, at least historically.

Thanks Chris. Um and then DNA your second question just on data disclosure so yeah just as a reminder we have these 2 um programs in Phase 1. Now xtn 1701 this is the selective nav 1.7 inhibitor and then 1120 which is our kv7 modulator that we're also developing both of them for pain.

So they're both in traditional Phase 1, studies. So these are healthy volunteer, what you would expect dose escalating through, uh, single ascending dose and and, and mad cohorts. Um, so those are ongoing. Um, we believe those will wrap up, um, probably in the first part of next year at some point. And then, we would be in a position, depending on the data to support moving into a phase 2, proof of concept. Um, studies for for both molecules. So in terms of the phase 1 data, um, you know what we're looking for and what success would look like is that we'll get through the dose escalation and we can, you know, based on our pre-clinical modeling, um, for, for 1120 and also based on the genetics for, for 1701 or nav 1.7 is that we want to make sure that we have high enough exposure, um, that we believe we're going to see an analgesic effect in a human proof of concept study. Um, so that's based on our preclinical modeling, or we're trying to, with nav 1.7, really mimic.

The human genetics. So we can look at things like a modeling of receptor occupancy. Obviously, we'd want to look at overall, safety and tolerability and so, we'll be that that profile in totality in Phase 1. That would give us confidence to move into phase 2. Um, you know, we haven't yet decided how that information will be disclosed publicly. Um, but I think needless to say, I think, once we have that information in hand, and we're ready to move to phase 2, we'd be happy to give, uh information.

Supporting our decision for future development.

Your next question comes from the line of Corey Kasimov of Evercore ISI. Please go ahead.

Um, uh, competitors, um, if these uh readouts, uh, hold in larger studies. How would that change how you see as you to calendar being used? Um,

And, uh, just another question on. Um, how should we think about the operating costs, uh, into 2026 given? Um, you have to plan for a launch and other phase. 3s are also planned uh, for next next year. Thank you.

Thanks Eddie. Um, I'm happy to take the first 1 and pass it to Tucker for the second 1. So, yeah, there's been, um, I think overall seeing more innovation in epilepsy is great. That's good for the epilepsy Community, it's good for patients. I would actually, you know, Darren mentioned earlier on 1 of the questions that there hasn't been a branded launch in quite some time, I would argue there hasn't been a lot of innovation in quite some time, so to see more Innovation into focal onset seizures. I think we're a bit of a drive for that and that's good for the epilepsy Community, you know, specifically always challenging to compare across trials, um, with different programs. I'll also say that, you know, the other programs that have really stated this year, we haven't seen any Placebo Control Data, um, you know, you know, the definitely kind of as we see in the X tool program either in the X tool or what we're doing in X tool 2. So you know 1 I think we've set an incredibly High bar with the attributes.

So is that your counter and 2? You know, we have, you know, these these other programs are significantly behind with um, you know, no. None of the other programs, having run a double blind, Placebo controlled study uh as of yet. Um, and you know, we're in this position and we're going to share at the American epilepsy society meeting next month. You know, where we now have patients out, more than 5 years of dosing will show our our 40 48 weak data on on efficacy and open label extension. So, we have a huge amount of information on on a Z2, calendar in the attributes, and feel really comfortable with our position, and I think we've set an incredibly High bar as others are coming behind us. Um, Opex Tucker. Yeah, so on the commercial side. So I think we've made some targeted Investments already. Um, which we think have been really important uh, for Darren and his team to get prep for even the readout and ultimately commercialization. So, um, you know, we've made those Investments so far and obviously,

On the back of data early next year, we'll continue to prep for launch and the Opex will reflect that. But um, but when we look at really a 2027 launch time frame, uh, based on the estimated readout and obviously time to NDA submission, um, you know, the bulk of the costs, in terms of, you know, bringing on the sales force and the like, uh, we'll likely Fall outside of 26. But yeah, we will certainly have an increase, uh, on the sgna side. Uh, in 26, in the back of positive data to to get prepped for 27.

Here. Next question comes from the line of Mark Goodman from learing Partners. Please go ahead.

Hi. Uh, this is basma on for mark. Thank you for taking my questions. Uh, for the first question, could you, please remind us again whether you're planning to assess ham a or or medress, uh, in axle 2 in patients who have come, comorbid depression and do we have any idea what roughly going to be the proportion of patient? Have you have you looked at the blinded data of how many patients, uh, have comorbid depression? Um, second question we have, could you provide more color on the selectivity of nav 1.7? Uh, uh, uh, compared to other channels, uh, to, um, the sub the selectivity to 1.7 subunit, versus other channels. Uh, you only disclosed, uh, information about this sector occupancy versus off-target effect. Are you going to have any more information about the selectivity? Uh, that's it for us. Thank you.

Great, thanks for the questions. Um,

Chris do you want to I think it'll be helpful maybe just to walk through the exploratory. Endpoints in Excel 2. As it relates to the psychiatric comorbidity, maybe the um, endpoints and obviously that it's an exploratory endpoint. Why don't you start there? And then I can add any other comments and then I'll I can address the nav 1.7. Selectivity question as well.

Okay. Sounds good and thanks. And thanks for the question. If so, in not only an X tool too but in all the phase 3 epilepsy studies We are following a patient reported outcome both for depression and anxiety anxiety.

For all patients at all visits in the study.

A really large body of data that we're gathering on this topic throughout the program.

That's the first comment. Um the second is that the where the scales that we're using are patient reported outcomes specifically for depression, it's the Beck depression index and then for anxiety, it's the Gad 7. Um, you had asked a question about the percent, I mean, so we haven't shared, you know, Baseline characteristics and so, um, you know, these are sorts of things that you keep an eye on but we we haven't been sharing them. Just suffice it to say that. Not the entire population is expected to have depression and or anxiety because we're not enriching for that. We're enriching. We're enriching for for certain degree of seizures that said, there's such common. Comorbidities we do think that there will be sufficient numbers, that will be able to look at data and see if there's a readout

Yeah.

Yeah, maybe I'll just add to those comments. These are exploratory endpoints. So obviously, um, you know, not not powered and as Chris said, you know, not sure exactly how impaired the population is going to be uh, and we're also not stratifying so um you know this is an epilepsy study and so we may get some imbalances across the treatment arms um, in the psychiatric comorbidities as well. So I just want to provide the appropriate caveats there. Um you know, on that 1.7. I think, um, you, you're right, we have

Provided all of our pre-clinical profile there. Uh, I think we can provide more overtime. Some of that, you know, we, we do want to keep for competitive reasons, uh, but needless to say, and I think you probably heard this in the pain webinar that we feel that these molecules are very selective for nav, 1.7 over the other um sodium Channel ISO forms. Um, so we feel very comfortable with the profile that we're that we have moved for 1701 into clinical development and we have a number of molecules that are coming behind it as well. So yeah these are highly selective for 1.7 as we said. We think also from a free fraction point of view and a distribution point of view that a profile of a molecule like 1701 has never been tested clinically before. So we're really excited that that's now in a phase 1 study and and hopefully next year moving into a proof of concept studying

Your next question comes from the line of Joseph. Stone of TD Cohen. Please go ahead. Hi there. Good afternoon. And thank you for taking my question. Um, maybe on uh, the phase 3, uh, epilepsy study. Can you talk a little bit about your expectation for, uh, the change in snowman? Use in the phase 3 versus The Phase 2? Given that that's been on the market. Um, obviously a little bit longer now. And maybe, how should we think about that when we see, um, you know, response rates, and the placebo and the active arms, or the, uh, the discontinuation rates due to AES? Is that going to be a, uh,

A consideration, and then maybe just one on MDD. Can you talk a little bit about why you don't have an interim analysis on the MDD studies? And is this a consideration with the third Phase 3 that would start, given that you did incorporate one in the bipolar study? Thank you.

Uh, thanks Joe. Um,

Chris, why don't I start on the on the soba? May question. Um, and I can share maybe some of our thoughts on preclinical data, there as well. Um, that may be relevant and then you can add your perspective, as well as answer, the question on the internal analysis on MDD. So, um, so Joe. Yeah, we expect, um, that Sova May usage.

And so we saw some Sova May usage in in Excel in the phase 2 study. But you remember around that time Sova May was just going through kind of getting approvals and then being available commercially. So we do expect

Senova make usage to be higher in the phase 3 study than we saw in Phase 2. And we're just going to have to kind of see what those data. Tell us when we unblind obviously in our Phase 2 program, you know, because patients are on 1 2 or 3 background anti-seizure medicines. And there's lots of these drugs available. There's actually a huge number of permutations of different kind of combinations of background medications that it becomes quite difficult to tease all that apart. But you know, I think that as we get deeper

Into the phase 3 analysis. I think you've raised an interesting question that we've been thinking about as well. I mean, I can share with you. Um, some preclinical data that maybe gets to your question a little bit of a different way.

Including sonova made and whether we combine is that your calendar with sonova made or Levitra acetamide or Lamotrigine, sodium valproate. Like we've looked at a whole bunch. We've looked at that panel and um, we don't see when you add the 2 drugs together. Um, you you, you you get a benefit of efficacy. Um, and we don't see changes necessarily um, from the tolerability perspective. So um, I think we feel, you know, we've we've at least based on our Phase 2 Data is that your calendar based on the novel mechanism and the profile. We think plays really well with others. And I'm not sure that's going to change in Phase 3 but we'll know better when we unblind the data. Um, Chris, I don't know if you have anything to add on the Sonoma side and then maybe you can address the MDD question.

I would say you covered site really well. Um, so we'll just have to see, you know what, the data shows. We're not expecting a difference, but, but, um, we'll have to take a look and find out, um, on the depression on the MDD question. So you know, why not have an interim analysis? I sort of already, I think laid the groundwork for the answer, you know, from a previous question, um, the the bipolar program really is different than MDD in a few different ways but in particular we don't have a precursor study to to base the the data on. So you know with with depression data we had the exygy proof of concept. We had our own um, proof of

concept xnova study and so we really went into the phase 3 study with a pretty good idea of how we thought the drug would behave in a larger in a larger study, we don't have um you know we don't have that data in BPD and so we've made some

Um, assumptions based upon what happened in MDD and what's happened with other drugs that have been tried in both, um, indications. But ultimately, there's a little bit more ambiguity in the BPD program than there is in the MDD. And we decided to compensate for that by conducting an interim analysis, to allow for the study to be increased in size. Should we need it?

And um, and so yeah we we don't see any need to do an interim analysis in the MDD program.

Thanks for the question.

Next question, comes from the line of Andrew chai of Jeffrey's. Please go ahead.

Hi, Brian on for Andrew. Uh, maybe just a follow up on the interim for the phase 3, BPD. Um, what could be the various scenarios for that interim? And then if you could just share the kind of the the kind of uh, Placebo adjusted belts is that you you'd like to see um associated with those scenarios. Um, and then maybe just 1 more next clearly, 3 timing.

In a very unlikely, you know, worst case scenario that ex totally 2 doesn't succeed. How much further behind is is totally 3 at this point in time? Do you think you can still be able to file for an NDA in?

26.

Thank you.

Uh, thanks, Brian. I think we got them all. Um, Chris I can do the XLS. 3 question, if you want to do the bipolar depression in terminal analysis and and options there. Um, so yeah, we as we spoke spoken about previously, we have prioritized X tool 2 both in terms of that was the first phase 3 study. That we initiated, um, we did bias more of the X tool clinical sites in text tool 2 um and biased. More of our us clinical sites and text tool too. So there is some delay between XL 2 and Excel 3. Um, I mean, I think I, I share what you said in your, in your, in your question, which is, I think it's unlikely, you know, given the confidence, we have going into text tool 2 that we're going to need it. Um, but yes if uh if for whatever reason, then we would do everything to accelerate the timeline as best we could to get text all 3 data.

Um, Chris, do you want to address the bipolar depression in term scenarios?

Sure.

You know, the how did we come up with a study with 400 patients?

That's largely based upon um the data that we do have in MDD so more specifically we're powered at greater than 80% to detect a 2 point difference in the the modulus for 20 milligrams versus placebo.

Using the information that we got on data variability, specifically, the standard deviation from Xnova, um,

Out in the number of patients has increased from 400 up to 470. So um there's so many different possible ways. There's a lot of different ways it could go but ultimately it's broken down to a binary question which is do you need more power for a successful study and if so then there's an increase from 400 to a number North of that between 40470 hope that's helpful.

Does that end our Q&A session? We appreciate your participation. I will now turn the call back over to Ian for the closing remarks. Please go ahead.

Great. Thank you, operator. And thanks everyone for joining us today. If we did not manage to get to your question during the allotted time we apologize, we did run out of time and we will reach out directly to you to connect. Um, we look forward to continuing to provide updates as we continue to advance our late and early stage programs, as we deliver on critical Milestones over the coming months and quarters. So, thanks everyone. Thank you for joining the call. Operator, we can now end the call.

Ladies and gentlemen, that includes today's call. Thank you all for joining. You may now disconnect.