Xenon Pharmaceuticals Inc.
Q3 2021 Earnings Call Transcript

Published: 10 Nov 2021

[Operator:]

Good day. And thank you for standing by. Welcome to the Third Quarter 2021 Xenon Pharmaceuticals Incorporated Earnings Conference Call. I would now like to hand the conference over to your first speaker today, Ms. Sherry Aulin, Chief Financial Officer of Xenon Pharmaceuticals. Please go ahead.

[Sherry Aulin:]

Thank you. Good afternoon, everyone. Thank you for joining us on our call and webcast to discuss our third quarter of 2021 financial and operating results. Joining me are Ian Mortimer, Xenon’s President and Chief Executive Officer; Dr. Chris Kenney, Xenon’s Chief Medical Officer; and Dr. Chris Von Seggern, Xenon’s Chief Commercial Officer. Today, Ian will provide a corporate update on our proprietary program and then turn the call over to Chris Kenney, who will provide a summary of the actual data and our XEN1101 plans moving forward. Chris Von Seggern will then provide context regarding the adult focal epilepsy market based on market research with leading KOLs and treating physicians. Lastly, I will summarize our high-level financial results and milestones from both proprietary and partnered programs for the months ahead, before opening up the call for your questions. Please be advised that during this call, we will make a number of statements that are forward-looking, including statements regarding the research and clinical development plans and time lines and results of operations, the timing of and results from clinical trials and preclinical development activities, of our proprietary and partnered product candidates, the potential efficacy, safety profile, future development plans, addressable market, regulatory success and commercial potential of our proprietary and partnered product candidates; the anticipated timing of investigational IND or IND-equivalent submissions and the initiation of future clinical trials for our proprietary products and those related to our other partner candidates; the efficacy of our clinical trial designs; our ability to successfully develop our proprietary development programs; the timing and results of our and our collaborators’ interactions with regulators; the timing and anticipated enrollment in our clinical trials; the potential receipt of milestone payments and royalties from our collaborators; our expectation of having sufficient cash to fund operations into 2024 and the timing of potential publication or presentation of future clinical data. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time to time in our SEC filings. Our results may differ materially from those projected on today's call. We undertake no obligation to publicly update any forward-looking statements. Today's press release summarizing the results of Xenon's third quarter 2021 financial results and the accompanying quarterly report on Form 10-Q will be made available under the Investors section of our website at www.xenon-pharma.com and filed with the SEC and on SEDAR. Now I would like to turn the call over to Ian.

[Ian Mortimer:]

Thanks, Sherry. And good afternoon. And thanks for joining us today. Xenon marked an incredibly important milestone last month, when we announced a positive top-line results from our Phase 2b X-TOLE clinical trial. XEN1101 demonstrated impressive efficacy in difficult-to-treat adult patients with focal epilepsy. With its differentiated potassium channel mechanism of action, strong efficacy data, and ‘ease-of-use’ attributes, including once-a-day evening dosing and no titration, we believe XEN1101 could play an important role in treating adult focal epilepsy. These data exceeded our expectations with consistent, dose-dependent and statistically significant efficacy across the key primary and secondary seizure reduction end points. With these positive data in hand, we conducted a detailed analysis of our product pipeline, including the evaluation of additional indications for XEN1101. Moving forward, we intend to sharply focus our efforts on the finalization of clinical development plans for XEN1101, including a plan to end the Phase 2 meeting with FDA anticipated in the second quarter of 2022 and the initiation of our Phase 3 program in adult focal epilepsy anticipated in the second half of 2022. We look forward to providing more details on the final XEN1101clinical development plan in the first half of 2022, including the final design of our Phase 3 program, and our plans to evaluate other epilepsy indications, as well as supporting Phase 2 development in major depressive disorder or MDD. In addition to XEN1101, our XEN496 EPIC Phase 3 trial continues to enroll patients with KCNQ2 developmental and epileptic encephalopathy or KCNQ2-DEE. Further, this portfolio focused on XEN1101 and XEN496, has helped shape our decision around our XEN007 program. To date, a total of eight subjects have been enrolled in an investigator-led Phase 2 proof-of-concept study examining the potential clinical efficacy, safety and tolerability of XEN007 as a treatment in patients diagnosed with treatment-resistant absence seizures, including childhood and juvenile absence epilepsy. As disclosed previously, we believe XEN007 is demonstrating efficacy in these patients with absence seizures. However, given the focus and resources required to advance XEN1101 and XEN496, we do not intend to allocate any resources to company sponsored XEN007 development activities in 2022. So, looking forward, you will see that our company objectives and activities are centered around our Kv7 potassium channel programs and advancing our proprietary neurology pipeline. In addition to our clinical advancements, we have also focused over the past few years on expanding our intellectual property portfolio for XEN1101, and we have made excellent progress on this front. Over the past few months, two new U.S. patents were issued to Xenon. The first contained claims related to four distinct crystalline forms of XEN1101 drug substance, including the form that we intend to use in our Phase 3 development and for commercialization, along with methods for their preparation. The second patent relates to the methods of enhancing the bioavailability of XEN1101 by administration with food. And this is consistent with the dosing of our XEN1101 in our clinical studies. Absent any extensions of patent term, these U.S. patents are expected to expire in 2039 and 2040 respectively, providing us with an extensive runway protecting XEN1101. Turning now to our other Kv potassium channel program, XEN496, new sites and jurisdictions continue to come online to support our EPIC study, which is a Phase 3, randomized, double-blind, placebo-controlled, parallel group, multicenter clinical trial, evaluating the efficacy, safety and tolerability of XEN496 in approximately 40 pediatric patients age one month to less than six years with KCNQ2-DEE. Based on its Kv7 mechanism of action, as well as published physician case studies, we believe that XEN496 has the potential to address an important unmet medical need for these patients. We anticipate that the EPIC study will be completed in the first half of 2023 and we look forward to keeping you updated on its progress. Before turning the call over to Chris Kenney, I want to remind everyone that we're planning a significant presence at AES 2021. This is the annual meeting of the American Epilepsy Society held in December. We look forward to presenting additional X-TOLE data at this event, including sub analysis of the responder analysis, as well as more detailed safety data, in a late-breaking poster presented by Dr. Jackie French, as well as during our sponsored scientific symposium. Activities at AES 2021 include scientific posters related to XEN1101, including the late breaking X-TOLE poster, as well as XEN496 and Xenon’s other earlier stage preclinical work. We will be participating in a joint industry, scientific exhibit relating to rare, genetically defined epilepsies and we will also be sponsoring a scientific symposium featuring a panel discussion with key opinion leaders in adult focal epilepsy space to discuss XEN1101 and the KV mechanism. For those of you who are unable to join us in Chicago this year, we expect to host a conference call and webcast to discuss our presentations at AES, specifically focused on the new analysis within our X-TOLE data. We will circulate details in a news release closer to the event, and we look forward to connecting with you either in person or virtually. So, with those invitations extended, I'd now like to turn the call over to Chris Kenney. And Chris will touch upon some of the highlights from the X-TOLE data and our XEN1101 plans moving forward. Chris?

[Chris Kenney:]

Thanks, Ian. Today, I'm going to hit on some of the highlights of the X-TOLE data. So, I encourage listeners to also review the October 4 news release, or you can listen to our webinar from that date as we went into considerable detail around the X-TOLE top-line results. As a reminder, X-TOLE was designed as a randomized, double-blind, placebo-controlled Phase 2b study to evaluate the clinical efficacy, safety and tolerability of XEN1101, administered as once daily adjunctive treatment in adult patients with focal epilepsy. The study results include a total of 325 randomized and treated subjects in the safety population and 323 subjects in the modified intent-to-treat population with the efficacy analysis. Of the 285 subjects who completed the double-blind period, 96.5% entered the open-label extension to evaluate the long-term safety, tolerability and effectiveness of XEN1101. This high rollover rate provides important insight into the comfort of clinicians and their patients with the overall benefit in tolerability profile of XEN1101. The trial met its primary endpoint with XEN1101, demonstrating a statistically significant, dose-dependent reduction from baseline in monthly focal seizure frequency when compared to placebo. A monotonic dose response with a P-value of less than 0.001. Key secondary efficacy measures included a pairwise comparison of each active dose to placebo and the proportion of patients who achieved a 50% or greater reduction in monthly focal seizure frequency from baseline. The median percent reduction in monthly focal seizure frequency was 52.8% in the 25-milligram group, 46.4% in the 20-milligram group and 33.2% in the 10-milligram group compared to 18.2% in the placebo group. These data suggest a clinically meaningful dose response relationship to XEN1101, in the adjunctive treatment of focal seizures in adult patient. We believe these data are even more impressive when we take into consideration the history of these patients in terms of their exposure to previous anti-seizure medications and the concomitant anti-seizure medications while on study. In this context, XEN1101 demonstrated a statistically significant reduction from baseline in monthly focal seizure frequency compared to placebo for all three XEN1101 doses in pairwise comparisons between each dose and placebo with two-sided P values of P less than 0.001 for 25 milligrams versus placebo; P of less than 0.001 for 20 milligrams versus placebo; and a p-value of 0.035 for 10 milligrams versus placebo. These efficacy data strongly suggest that XEN1101 is highly active in the central nervous system. XEN1101 was generally well-tolerated in the study with adverse events consistent with other commonly utilized anti-seizure medications. There were no pigmentary abnormalities reported during the double-blind study or during the open-label extension to date, with 70 subjects now treated more than 12 months. The most common treatment emergent across all XEN1101 dose groups were dizziness, somnolence, fatigue, and headache. The treatment emergent adverse event rates were consistent with other anti-seizure medications and at rates that were expected. Overall, the safety and tolerability profile of XEN1101 is in line with other anti-seizure medication. And what would be expected given XEN1101 appears highly active in the central nervous system. To summarize, the X-TOLE results demonstrate impressive efficacy of XEN1101 for adult patients with focal epilepsy, including those with seizures that are deemed difficult to treat when compared to other clinical trials. In addition, we believe physicians and patients could benefit from XEN1101’s other important attributes, such as once-a-day dosing in the evening with no titration. Given XEN1101’s unique potassium channel mechanism of action and the strength of these data, we believe XEN1101 could play a very important role in treating focal epilepsy in the future. Since announcing the top line data, we have focused on building out our Phase 3 development plans. We anticipate having an end of Phase 2 meeting with FDA in the second quarter of 2022 to support the initiation of our Phase 3 clinical program in adult patients with focal epilepsy anticipated in the second half of the year. In addition, the X-TOLE open-label extension, which has been extended to three years is expected to continue to generate important long-term data for XEN1101. As Ian noted, we're also expanding the development of XEN1101 to MDD, major depressive disorder. We have a strong, scientific rationale based on promising preclinical data, as well as clinical results from both an open-label study and a randomized placebo controlled clinical trial that explored the targeting of KCNQ2 channels as a treatment for MDD using ezogabine, an earlier generation Kv7 potassium channel opener that is no longer commercially available. We're collaborating with the School of Medicine at Mount Sinai to conduct an investigator sponsored Phase 2 proof-of-concept, randomized, placebo-controlled clinical trial of XEN1101 for the treatment of major depressive disorder with patients screening and randomization currently underway. Approximately 60 patients with MDD will be randomized in a one-to-one fashion to XEN1101 or placebo with subjects taking 20 milligrams once-a-day of either XEN1101 or placebo over the course of eight weeks. The primary objective is to investigate the effective XEN1101 on brain measures of reward using functional, magnetic, resonance imaging. Secondary endpoints include clinical measures of depression and anhedonia. In addition, planning a larger company-sponsored clinical study in major depressive disorder with XEN1101, which is expected to be initiated in the first half of 2022. Now a few months ago I joined Xenon based part on the promise of Xenon’s maturing neurology pipeline. And I couldn't be more excited that the X-TOLE results exceeded our expectations, which allowed us to accelerate our Phase 3 development program for XEN1101. As Ian noted, we're committed and focused on advancing XEN1101 as we believe it could benefit a large number of patients suffering with adult focal epilepsy. With that, I'd like to turn the call to Chris Von Seggern, who will share some market research insights shaping our current plan for XEN1101. Chris, I’ll turn it to you.

[Chris Von Seggern:]

Thanks Chris. Briefly by way of background, prior to the X-TOLE top line, readout, we conducted primary market research in a blinded fashion with 50 clinicians ranging from academic epileptologists to high volume prescribing neurologists and epileptologists across the U.S. This earlier market research underscored the enduring unmet need that remains despite the availability of numerous anti-seizure medications for the treatment of adult epilepsy. Physicians emphasize that high clinical unmet need exists, particularly among patients who are not well controlled, despite being treated with multiple drugs in a polypharmacy approach. The results of our prior market research suggested that the potential profile of XEN1101 was compelling, given an anticipated efficacy profile, that at the time was in line with current standard of care. We modeled a 35% reduction in the 25-milligram treatment group, a comparable safety tolerability profile to existing ASMs, along with differentiated ease of use attributes such as QD dosing, and no titration. Then, following the X-TOLE results, we surveyed 148 prescribing epileptologists and neurologists in the U.S. to understand their perspectives on the anticipated XEN1101 product profile based on the X-TOLE data. The survey sample following the X-TOLE results had prescribing behaviors consistent with the broader U.S. market and surveyed physicians noted that the efficacy and safety are the most important factors contributing to the treatment decisions for ASMs. Overall, the profile of XEN1101 was very well regarded and both neurologists and epileptologists viewed the efficacy and tolerability of XEN1101 as potential differentiators. In particular, differential efficacy was cited as a driver of use for XEN1101 across all lines of therapy. Beyond efficacy, QD dosing, no titration, and the novel mechanism of action reviewed favorably to highly favorable compared to current ASMs. In light of the strong efficacy, the overall product profile physicians indicated comparable utilization of XEN1101 to Vimpat, competing for the first branded opportunity for patients with residual seizure burden. Given the substantial efficacy demonstrated in the X-TOLE results, combined with all we have learned from our market research, we believe the profile of XEN1101 has the potential to significantly improve the standard of care for patients with residual seizure burden and if approved, would represent a meaningful advancement in the therapeutic armamentarium for this disease. I'd now like to turn the call over to Sherry, who will provide some financial highlights and a summary of our important milestones ahead. Sherry?

[Sherry Aulin:]

Thanks Chris. Today I will focus on some highlights from this quarter’s financial statements and would refer you to our news release and 10-Q report for further details. Cash and cash equivalence and marketable securities as of September 30, 2021, were $249.6 million compared to $177 million as of December 31, 2020. Subsequent to the quarter, we raised additional net proceeds of approximately $324.3 million net of underwriting discounts and commissions, but before offering expenses in a public offering. As Ian noted, following the X-TOLE data, we thoroughly analyzed our product portfolio and revisited our cash runway guidance, focusing on our most important programs based on current assumptions, which include fully supporting the planned XEN1101 clinical development program, our XEN496, epic Phase 3 clinical trial and our pre-clinical and discovery programs we anticipate having sufficient cash to fund operations into at least 2024, excluding any revenue generated from existing partnerships or potential new partnering arrangements. Guided by our focus on our proprietary Kv7 potassium channel programs, we believe we are in a strong position to execute against our corporate goals. I would refer you to today's press release and our 10-Q filing for other specific details from this quarter's financial statements. I'll give you a quick update on our partner programs before upcoming milestones from our proprietary pipeline. Our two key partners, Neurocrine and Flexion, have made important progress this year. Under our Neurocrine collaboration, there are now two ongoing Phase 2 clinical trials with NBI-921352, including one study in adolescent patients aged 12 years in older with SCNA day developmental and epileptic encephalopathy. And a second study has recently been initiated in adult patients with focal onset seizures. We are excited for these studies to test our hypotheses of selective Nav 1.6 inhibition and the impact on seizures in both the genetic gain of function patients, as well as the broader population of focal epilepsy. Turning to our partners at Flexion, following the decision to expand the study with an additional cohort, Flexion anticipate data in the first quarter of 2022 from a Phase 1b proof-of-concept trial evaluating the safety and tolerability of FX301 in patients undergoing bunionectomy. In addition, looking ahead, key objectives and milestone opportunities, in our proprietary pipeline include our activities at AES 2021 and the release of additional Phase 2b X-TOLE data within a scientific poster presentation and at a scientific symposium conducting an end of Phase 2 meeting with the FDA in the second quarter of 2022 to help guide our Phase 3 development program for XEN1101, which will be initiated in the second half of 2022, continued support for the ongoing investigator-led study, examining XEN1101 and MDD, and the initiation of a larger company sponsored MDD clinical study in the first half of 2022, continued evaluation of other epilepsy indications well suited for the future development of XEN1101 and the ongoing advancement of our EPIC Phase 3 clinical trial in pediatric patients with KCNQ2-DEE with estimated completion in the first half of 2023. On behalf of the entire executive team, we are proud of the hard work that led us to this exciting point in Xenon's history. As we look ahead to 2022, we have multiple ongoing Phase 2 and Phase 3 clinical trials underway from both our partnered and proprietary programs. I'm excited to keep you updated on our progress as we continue to advance XEN1101 and the rest of our neurology-focused pipeline. I'll now ask the operator to open the line for any questions.

[Operator:]

Thank you, Sherry. And our first question is from Paul Matteis from Stifel. Your line is now open.

[Unidentified Analyst:]

Hey, thanks for taking our question. This is Alex on for Paul. A couple on XEN1101. And then one on XEN007 if that's all right. I guess moving forward with XEN1101, is your expectation that you would only run one Phase 3 study or are you planning on running two? How are you thinking about that? And then I'll ask a couple follow ups if that's okay.

[Ian Mortimer:]

Sounds good, Alex. I'll pass it to Chris Kenny, just to talk about kind of what our proposal will be in front of FDA and the Phase 3 program in focal epilepsy.

[Chris Kenney:]

Yes, sure. Thanks again. Yes, we're certainly going to be going out next year with more details about this, but we’re of the opinion that simply conducting one more randomized control trial, will probably not be sufficient to have a large enough safety database at the time of the NDA submission to increase our chance of success. So, we're planning on doing more than that and the details of which will be forthcoming.

[Unidentified Analyst:]

Okay.

[Chris Kenney:]

You can imagine. I mean these are pretty straightforward in terms of their design. And so, what you're seeing, you'll see a repeat of work already done to a large extent and something beyond that to return.

[Ian Mortimer:]

Yes, Alex may be…

[Unidentified Analyst:]

Sorry.

[Ian Mortimer:]

Yes, I was just going to maybe add to that before you jump in on XEN007. Look, we believe strongly in the strength of the X-TOLE data. So, we will be making our arguments in front of the FDA that this is one of two registration studies, which is, I think, maybe a bit of a nuance on your question. But as Chris mentioned, expect that the Phase 3 program overall will be broader than just one Phase 3 trial.

[Unidentified Analyst:]

Yes, makes sense. And then one more on XEN1101 before XEN007. But I guess, is there anything gating for your own Phase 2 MDD study out of the Mount Sinai study, or are you planning to start that before you might see any more data out of that?

[Ian Mortimer:]

Chris, do you want to just go through our thought process on our own company-sponsored MDD study?

[Chris Kenney:]

Sure. I mean, the quick answer to your question is that there is the the MDD trial at Mount Sinai just began screening and randomization, we're going to be doing the same shortly. So, we're not waiting for any data to initiate.

[Unidentified Analyst:]

Makes sense. And then quickly on XEN007, I guess, has your view of the molecule changed over the last quarter or so? I mean, any more color that you can give on sort of the prioritization of XEN1101 and XEN496 next year? Thanks.

[Chris Kenney:]

No, not at all. It's really about prioritization, as you can imagine a lot of the focus on the XEN1101 program, we talk about what the Phase 3 trials will look like, but we're gearing to moving as quickly as we can to get this drug filed and approved. And so, there's a massive amount of work both in talks as well as clin pharm, the clinical trials will need to run and all of the CMC work. Those are the competing resources to put those resources on other programs. And so, to us XEN496 is ongoing and the broad XEN1101 development program is the most important objective that we're focused on. So, it's really a focus on prioritization and effort there rather than anything specific around XEN007. We believe the drug is active. We've seen that, we've talked about that publicly. And obviously the investigator-led study has gone slowly. And I think a lot of that was due to COVID impacts that we've seen across clinical development, but we absolutely believe that we're seeing drug activity for XEN007. Right now, we just need to focus our efforts on XEN1101 and XEN496.

[Unidentified Analyst:]

Makes sense. Thanks. So much

[Operator:]

Thank you. Next, we have Andrew Tsai from Jefferies. Your line is open.

[Andrew Tsai:]

Okay, great. Thanks for taking my questions. Good afternoon. So. my first one is on AES when you present the full data set, you did mention responder analysis, more safety. I mean I guess my question is, could you share more and if so, I guess what would you encourage us to focus on as it relates to kind of understanding XEN1101's competitive profile? And I also want to ask could we see seizure freedom data for instance, or even kinetics around efficacy? Just maybe talk a little bit more about that that would be helpful? And I have a follow-up. Thanks.

[Ian Mortimer:]

Sure. Maybe Chris, maybe I'll give a couple comments on AES and then and then you jump in as you're close to the details. So, I know you suggested Andrew kind of the full data set, the full data set would come in a publication later. But there's definitely going to be more information at AES and in our top line press release. And we're still receiving, you know, additional data in terms of PK and other things from the study. I had mentioned in my prepared remarks that we'll break down the responder analysis. So, to answer your question very specifically, yes, you'll see seizure freedom data, and also kind of those bins of those that responded more than 50%, more than 75%, and other bins as well. There's some additional subgroup efficacy analysis that we're interested in that we're running right now also. So, you'll probably see some more efficacy data in subgroups as well as more detailed AE tables and overall safety. I think my overall comment and then I'll pass it to Chris to add is that nothing changes our view here. I think it's always great to do additional analyses and have additional information presented in scientific forums and at medical meetings. But nothing has changed in terms of our overall view. The topline efficacy, in terms of the dose dependency and the efficacy and what we would expect to see on the safety side, nothing has changed in our views as we get deeper into the data. Chris anything to add?

[Ian Mortimer:]

Okay, we just – sorry, I just got a note that Chris Kenny just lost connection. So, we'll carry on. Andrew. Do you want to do you want to go on your second question?

[Andrew Tsai:]

Hey, thanks. Yes, thank you for the details. My second one is actually I would love your latest thinking and your kind of your appetite around partnerships for XEN1101. I'm curious if you're keen on licensing out U.S. rights or is it ex-U.S. you're interested? And then corollary to that is just as I think about EU development and tying that with your upcoming FDA meeting, I don't know, I mean, could there be a scenario where you run one Phase 3, U.S. one Phase 3 global, and then together that's how you can file both an NDA and a MAA down the road at the same time, I guess? Maybe talk about those two dynamics. Thanks.

[Ian Mortimer:]

Yes, I mean, there's a fair bit there. So, I'll give a couple comments and maybe Chris Von Seggern, you can talk a little bit about some of our thinking on the commercial side also. So, Andrew, we don't give guidance on partnering and when we may be in partnering discussions or not but we are in terms of our strategic objectives, our goal is to launch XEN1101 just like to launch XEN496 in the U.S. market ourselves. We have focused our comments today on an end of Phase 2 meeting and getting feedback from FDA. But we will be doing the same thing with European regulators. We will be going through the process to receive scientific advice. And I think as we get through those meetings, we can answer one of your questions more directly, which is what are going to be the requirements for the NDA and the filing in the U.S. versus the requirements in Europe. And so, we'll be able to get into more of those details in 2022. But that's our overall thinking in an overall strategy. Chris Von Seggern maybe you can comment a little bit as we think about U.S. commercialization and our forward integration.

[Chris Von Seggern:]

Yes, Ian happy to. So, when we think about the epilepsy opportunity on a global basis, the U.S. represents the lion share of the commercial opportunity predominantly driven by the differential pricing that one can achieve in the U.S. market. It's our belief that we have the capacity to bring this product to the market in the U.S. built on the backbone of the commercial infrastructure that we’ll first have with XEN496. And it's our intention to be able to build and execute within the U.S. market. The European market is a much more challenging one. But also, a very meaningful commercial opportunity in its own, right for OS products. And that's an area where we still have work to do, to think through the best commercialization strategy to optimize the opportunity in that market as well.

[Andrew Tsai:]

Thanks for all the color, congrats on all progress.

[Ian Mortimer:]

Thanks Andrew.

[Operator:]

All right, before we proceed, I'd like to ask the speakers first, how is your audio? Is everything fine? Can you hear the questions perfectly?

[Ian Mortimer:]

The audio is good on our side, we did drop – one of our speakers got disconnected, Chris Kenney. So, if you can reconnect him, I think, he was trying to dial back in, but we can continue on with the Q&A.

[Operator:]

Thank you for confirming Chris – sorry, Ian. All right next question is from Marc Goodman with SVB Leerink. Your line is open.

[Ian Mortimer:]

Mark you are there?

[Operator:]

Mark withdrew the question. Next is Brian Abrahams, RBC Capital Markets. Your line is open.

[Brian Abrahams:]

Hey guys, thanks so much for taking my questions. XEN1101, I'm sort of curious if you've done any additional PKPD and safety analysis since the top line X-TOLE data? And maybe where that's steering you with respect to potential Phase 3 dosing as well as dosing for the MDD study? And then had a quick follow-up.

[Ian Mortimer:]

Sure, Brian, I'll take that – I think actually, Chris Kenney, are you back online now?

[Chris Kenney:]

[Ian Mortimer:]

Okay. Did you hear the question? Maybe you can – if you heard the question, maybe you can address kind of the PKPD. I know a lot of that stuff still coming in, and then your thinking around dose selection for Phase 3 and MDD.

[Chris Kenney:]

Yes, sure. So, obviously, the information that we already have is suggestive of which doses we could bring into Phase 3. We're in a very fortunate situation where, I think, you could make an argument that you could bring any or all of those three doses forward. And we're just trying to figure out which dose or doses would be best. PKPD is certainly a part of that. We're in the process of having that information come in right now. Regarding the safety, we are also spending a lot of time evaluating all the safety data and much of that will be presented at AES, in a more granular format than what you saw in the press release. So, we're bringing in all the information. And next year we're going to be more forthcoming about exactly which dose or doses we're bringing into Phase 3.

[Brian Abrahams:]

Got it. And then maybe just a quick follow-up if I could. Maybe you alluded to broadening out the XEN1101 program, epilepsy program, given the strength of the data. Just curious if you could expand a little bit on some of the possible other epilepsy indications you might consider and might this also include going down an age to a pediatric population? Thanks.

[Ian Mortimer:]

Yes. Brian, good questions. I'll start and then Chris Kenny, if you want to join as well. We did a webinar on XEN1101 in the summer where one of our KOLs talked a lot about the preclinical data. And I think what's fascinating about the KV mechanism and XEN1101 is just its broad-spectrum activity. And so that gives us a lot of confidence combined with the X-TOLE data to go into other epilepsy indications in addition to adult focal. We're doing that evaluation right now. They are other large epilepsy markets to give you a bit of an idea. And then specifically around pediatrics, that's another part of our planning. Again, I think many of you will know kind of what the extrapolation guidance is from FDA in terms of expanding the label into younger patients with focal epilepsy. And that's something we're working through right now and we'll be submitting definitely our formal pediatric plans to both FDA and European regulators. Chris Ken, anything to add kind of on your thought on expansion?

[Chris Kenney:]

Yes, I mean, it's a similar answer to what I said about doses. I mean, we have the luxury of broad-spectrum activity in preclinical models in conjunction with really robust clinical data and focal onset seizures. So, we're looking at all potential avenues. You can be sure we'll be sort of specify what our plans are again, next year.

[Brian Abrahams:]

Great. Thanks Chris. Thanks Ian very helpful.

[Operator:]

Next, we have Laura Chico from Wedbush Securities. Your line is now open.

[Unidentified Analyst:]

Hi this is Sam on for Laura Chico. Thanks for taking the question. I'm wondering if you can tell me what the communication around the 101 open label extension study? So, just curious about how you're thinking about additional updates from that study?

[Ian Mortimer:]

Thanks Sam. That's a good question. As we had mentioned in our remarks, it's very common to have 12-month of OLEs but we did extend for X-TOLE our open label extension to three years to generate some of that longer term safety data. We're not going to have any cuts of the OLE data at AEs, so maybe I can just be clear on kind of the near term. And then I expect that we will have some updates from the OLE in 2022. We haven't quite mapped out exactly where that is, but we will be wanting to share some of that data with FDA at the end of Phase 2 meeting. But exactly where that fits in the medical meeting schedule, we haven't mapped out yet. But I would expect that we'll see, we'll be disclosing some of additional open label extension data during 2022.

[Unidentified Analyst:]

Makes sense. Thank you.

[Operator:]

Next, we have Marc Goodman from SVB Leerink, your line is open.

[Marc Goodman:]

Sorry about that. I'm not sure what happened. But can you just talk a little bit about the upcoming meeting with FDA that you're planning on having? And what are your goals? What are kind of the key questions that you feel like you need to get answered there? Thanks.

[Ian Mortimer:]

Chris, do you want to address that?

[Chris Kenney:]

Sure. I mean, one of them, Ian already alluded to, so as you take a look at the X-TOLE data, it's really quite robust, right? And if you take a look at the size of that study and the convincing nature of the efficacy data, we think that there's a reasonable chance that – we are considering it as a pivotal trial, we just don't know if FDA agrees that position or not. So that'll be an important topic. And then the rest of it is sort of the typical stuff that you would expect. So, we're planning on doing – at least we're going to do at least one more randomized controlled trial in focal-onset seizure. And so, we want to run the study design by them for that although it's pretty basic from study to study. So, we’re not expecting any sort of surprises there. We've already talked about considering other areas of epilepsy besides focal-onset seizures. So, we're going to want to go through all the implications of that in terms of making sure that they're on board with the study design and what implications there would be from a label perspective. And then of course there's toxicology making sure that you're going to be coming to the NDA with everything that they're going to need to be able to support the clinical program from the tox perspective and then of course clinical pharmacology. So, we have a clinical pharmacology plan with several NDA enabling studies, and we want to make sure that they think that what we're doing is sufficient.

[Marc Goodman:]

And, just unclear your plan is to do probably two studies, but that's not necessarily because you feel like you need two studies, you really think, I mean, obviously they'll confirm it. Do you feel X-TOLE is a pivotal, you only need one more pivotal? The reason you do two studies is not for efficacy, it's really more for just enough safety data, is that correct?

[Chris Kenney:]

The primary driver there is that if you take a look at the other antiseizure medications in terms of what they brought to the table at the time of approval, they're fairly robust safety databases. So, we don't think they’re just doing another randomized control trial in epilepsy. We think that there would be a certain amount of regulatory risk there that it would be a very thin NDA. So, we're planning on doing more. And what we're trying to figure out is what exactly that means. And so does that – what other areas in epilepsy would we consider, et cetera.

[Marc Goodman:]

Thanks.

[Operator:]

All right next, we have Yatin Suneja from Guggenheim. Your line is now open.

[Eddie Hickman:]

Thanks. This is Eddie on for Yatin. Appreciate you guys taking the question. So, thanks for the IP update. Can you remind us when the composition of matter patent and polymorph patents expire? And do you have any additional patents pending that could extend protection beyond 2040? And then when do you think we could see some MDD data from either the investigator or company generated studies? Are there any postdoc analysis from the X-TOLE study to support the MDD indication? Thanks.

[Chris Kenney:]

Thanks, Eddie. So yes, I mean, thanks for the question on IP. I think we've done an excellent job really identifying other ways to extend exclusivity. And obviously some of the work we've done over the last couple of years is now coming to fruition with some of these patents being issued. So, I think many people on the call know the base composition of matter when we acquired the drug with median Hatch-Waxman took us into the 2030s. But we wanted to extend that. And obviously we've had a strategy that so far has been successful focused on the food effect as well as on polymorph. And the polymorph is – polymorphs are compositions in terms of the polymorph patent that's in now being issued, that gets us out to 2039, 2040, absent any patent term extension there. We do have other ideas that we are working on, but nothing yet that would take us past that timeframe. We're really focusing on that timeframe. In terms of your MDD question, we haven't guided on this. We believe, although the Sinai study is up and running, meaning that they are screening and they've randomized patients. So, that's a really nice progress in the last quarter. And our study will start later, but we expect our study would probably go more quickly because it will be at multiple centers rather than just two. And when we've looked at other companies that have run kind of these Phase 2 proof-of-concept studies, they've often had data in a reasonable period of time. So, if we can get the study up and running, which is our expectation in the first half of next year, I think, we could see MDD data in 2023.

[Ian Mortimer:]

Appreciate it. Thanks for the color. There was also a questionnaire about whether X-TOLE data is needed to inform those studies. I mean the major driver for the MDD trials is the preclinical data and then the clinical – the preclinical data with XEN1101 and then the clinical data with ezogabine. So, we don't necessarily need X-TOLE data to inform what we want do.

[Operator:]

Next, we have a Tim Lugo from William Blair. Your line is now open.

[Unidentified Analyst:]

Hey guys, this is Lachman on for Tim. Thanks for taking the questions. So, on the topic of the MDD trials, I realize it's early in the investigator-initiated studies generally enroll pretty slowly. But is there anything you can say about the enrollment progress or trends there that you’re seeing in that study? And then on the company sponsored one, have you made progress on the design for that in terms of I know dosing has been mentioned earlier that you're going to roll out therapies any sort of high-level criteria like that you've decided on?

[Ian Mortimer:]

Sure Lachman I'll give a couple comments and then Chris can add as well. We don't give guidance on any of our studies in terms of where we are with enrollment. But I will give the caveat that the investigator study is just up and running now. So, it's very, very early days for that, but they have randomized which is great. And in terms of our study, we've given a little bit of color previously. I think one of the things that we have kind of paused on, although we're making good progress is just trying to now incorporate our thinking with the X-TOLE data. So that's really around kind of the final dose selection for our company sponsored study. In terms of the endpoints, we will not have a functional MRI endpoint, which is the primary endpoint in the IST with Sinai. We'll be focused on the clinical endpoint of depression and anhedonia. And it's currently being designed as a monotherapy study. Chris any additional color in your thinking?

[Chris Kenney:]

I think you covered it, nothing to add.

[Ian Mortimer:]

Okay, great.

[Operator:]

Next, we have David Hoang from SMBC. Your line is now open. It looks like David withdraw the question. Our last question is from Serge Belanger, from Needham and Company. Your line is now open.

[Serge Belanger:]

Hi, thanks for squeezing me in. Couple questions, first one on XEN007, do you still plan to report results from the ongoing investigator study? And is that a program you could eventually partner? And then secondly regarding the Flexion collaboration, just curious if there's any changes in the economics of that collaboration with the expected change and control of that company? Thank you.

[Ian Mortimer:]

Thanks Serge. May be, I'll answer the second one first so no changes to any of the economics as Flexion is going through their transactions. So, the new company would just step into their shoes in terms of the economics to Xenon. So, no change there. In terms of XEN007, so the IST is continuing and will really be driven by the investigator in terms of her plan to publish data or present data at medical meetings. So, I do expect at some point we will see more data from that XEN007 study. And as I had answered in one of the questions earlier, we believe that the drug is active based on what we've seen. This is an open label study. And so, in terms of what our strategic optionality for that asset, I still think we have some really today's decision and communication in what we've been focused on internally in our planning is the work that that is coming for XEN1101 and XEN496 and the focus on that. But we absolutely feel that XEN007 is an active drug and we'll continue to support the investigator as she finishes off her study.

[Operator:]

And there are no further questions. And that concludes the question-and-answer session. I will now turn the call back to Sherry Aulin for closing remark.

[Sherry Aulin:]

Just wanted to say, thank you everyone for joining us today. And operator, we will now end the call.

[Operator:]

And this concludes today's conference call. Thank you all for your participation. Enjoy the rest of your day. Keep safe, and you may now disconnect.