Xenon Pharmaceuticals Inc. Q2 FY2020 Earnings Call

Good day, ladies and gentlemen, and welcome to quarter 2 2020 Xenon Pharmaceuticals, Inc. Earnings Conference Call. The operator provided instructions to callers. I would now like to turn the call over to Ms. Jodi Regts. Ma'am, the floor is yours.

Thank you. Good afternoon. Thanks, everyone, for joining us on our call and webcast to discuss our second quarter 2020 financial and operating results. Joining me on today's call are Dr. Simon Pimstone, Xenon's Chief Executive Officer; and Ian Mortimer, Xenon's President and Chief Financial Officer. Following this introduction, Simon will give an overview of Xenon's clinical programs, and then Ian will provide some high-level financial commentary. After that, we will open up the call to your questions. Please be advised that during this call, we will make a number of statements that are forward-looking, including statements regarding the anticipated impact and timing of the COVID-19 pandemic on our business, research and clinical development plans and timelines and results of operations, the timing of and results from clinical trials and preclinical development activities, including those related to XEN496, XEN1101, XEN007 and other proprietary products and those related to NBI921352, FX301 and other partnered product candidates; the potential efficacy, safety profile, future development plans, addressable market, regulatory success and commercial potential of our proprietary and partnered product candidates; the anticipated timing IND or IND equivalent submissions and the initiation of future clinical trials for our proprietary products and those related to other partnered candidates; the efficacy of our clinical trial designs, our ability to successfully develop and achieve milestones in our proprietary programs, the timing and results of our interactions with regulators, the potential to advance certain of our product candidates directly into Phase II or later-stage clinical trials, the timing and anticipated enrollment in our clinical trials, the progress and potential ongoing development programs, the potential receipt of milestone payments and royalties from our collaborators, our expectation of having sufficient cash to fund operations into 2022 and the timing of potential publication or presentation of future clinical data. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time to time in our SEC filings. Our results may differ materially from those projected on today's call. We undertake no obligation to publicly update any forward-looking statement. Today's press release summarizing the results of Xenon's second quarter of 2020 and the accompanying quarterly report on Form 10-Q are available under the 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 Simon.

Thank you, Jodi, and good afternoon, everyone, and thanks for joining us today. I hope everyone is staying well. Here at Xenon, we continue to manage well as we respond to the global COVID-19 pandemic, and importantly, also have the cash runway to support our near-term business objectives. We're looking forward to several key milestone events over the next 12 months, including top-line data from our XEN1101 Phase IIb clinical trial, the anticipated start of a Phase III clinical trial with XEN496, data from our Phase II proof-of-concept trial with XEN007, the expected initiation of a Phase II trial in our partnered program with Neurocrine and initiation of clinical development with FX301 under our agreement with Flexion. Today, I'll provide a brief status report on each of our proprietary programs. First, XEN1101, which is a differentiated next-generation Kv7 potassium channel modulator that is in our Phase IIb X-TOLE clinical trial in the U.S., Canada and Europe. Briefly, this trial is a randomized, double-blind, placebo-controlled multicenter study to evaluate the clinical efficacy, safety and tolerability of XEN1101 administration as adjunctive treatment in approximately 300 adult patients with focal epilepsy. The primary endpoint is the median percent change in monthly focal seizure frequency from baseline compared to treatment period of active versus placebo. In the context of the COVID-19 pandemic and its impact on ongoing clinical studies, we're in close collaboration with each of the XEN1101 clinical sites in North America and Europe, taking specific direction from their respective clinical guidelines as they relate to new patient screening and randomization. To support increased patient screening, we are expanding the X-TOLE clinical trial to include new sites in both existing and new jurisdictions. Although new patient screening and randomization were significantly impacted in the spring due to COVID-19, we have seen a recent increase in screening over the past number of weeks. And while screening is not yet back to where it was pre-COVID, we believe our presence in multiple jurisdictions with new sites opening is helping to mitigate risks of delay presented by COVID-19. We continue to be on track for expected top-line data in the first half of 2021, of course, dependent on the ongoing impact of the COVID-19 pandemic on patient enrollment rates in the coming months. In the X-TOLE trial, dropout rates continue to be low, with good tolerability continuing to be reported and rollover into the open-label extension portion of the study continuing to be very high at over 90% of subjects that have completed the double-blind portion of the trial. We also continue to explore potential indications outside of epilepsy that may be well suited for the unique mechanism of action of XEN1101, and we do intend to outline our plans for a Phase II proof-of-concept trial as details are firmed up in the coming months. Next, I'd like to turn to XEN496, which is a Kv7 potassium channel modulator that contains the active pharmaceutical ingredient ezogabine, also known as retigabine, that we have now reformulated and are developing as a treatment for a rare pediatric neurodevelopmental disorder called KCNQ2 developmental and epileptic encephalopathy, or KCNQ2-DEE. This is a severe pediatric condition for which no medicine has been approved to date. KCNQ2-DEE is characterized by multiple daily refractory seizures presenting within the first week of life with significant developmental impairment that follows. Recent epidemiology statistics indicate the incidence is approximately 1 in 17,000 live births compared to approximately 1 in 12,000 for Dravet Syndrome. We have developed our XEN496 program based on a strong genetic rationale. The mechanism of action of XEN496, enhancing the M-current through the KCNQ2 channel, suggests that ezogabine may be efficacious as a treatment for KCNQ2-DEE, which is caused by loss-of-function mutations in this very channel. This genetic validation is further supported by data from clinical case reports and surveys as well as from anecdotal parental and physician feedback that have suggested ezogabine may reduce seizure burden with the potential to improve development and cognition in this rare pediatric population. We have made considerable progress towards our goal to initiate a Phase III clinical trial examining XEN496 in patients with KCNQ2-DEE. On the regulatory front, the FDA has granted Xenon Fast Track designation for the investigation of XEN496 for the treatment of seizures associated with KCNQ2-DEE and orphan drug designation for the treatment of KCNQ2-DEE. The results from our recent pharmacokinetic, or PK, study of XEN496 in 24 healthy adult volunteers support our Phase III development plans. These PK data are comparable to historical PK data for immediate-release ezogabine tablets with XEN496 showing similar absorption and elimination curves. We achieved another important milestone recently with the filing of our XEN496 Phase III protocol with the FDA, having implemented recommendations made by the agency in previous interactions. Based on the entirety of the FDA's feedback to date, we anticipate initiating a randomized, double-blind, placebo-controlled Phase III clinical trial to evaluate the clinical efficacy, safety and tolerability of XEN496 in pediatric patients with KCNQ2-DEE. The primary endpoint is expected to be the median percent change in seizure frequency from baseline compared to treatment period of active versus placebo. It is anticipated that approximately 40 patients will be randomized in a blinded manner to either an active treatment group or to placebo. After screening, patients will enter a baseline period to assess the frequency of seizures, followed by a titration and then a maintenance treatment period and then a post-treatment follow-up period. It is expected that there will also be an open-label extension period after the double-blind portion of the trial. With site selection well underway, we have completed a number of the steps necessary to prepare for the Phase III clinical trial, including the selection of a CRO, establishment of a global steering committee and determining the principal investigator for the study is Dr. John Millichap. We're also planning regulatory submissions outside of the U.S. to support the broader clinical development of XEN496. This is an exciting point in the XEN496 program as we anticipate initiating in the near term the first Phase III precision medicine program in a pediatric epilepsy in the KCNQ2-DEE population. Before turning from our Kv7 programs, I would note that we continue to be present in a virtual format at the premier epilepsy-related conferences and meetings. I presented an overview of our XEN1101 and XEN496 programs at the recent Eilat Conference on New Antiepileptic Drugs and Devices. Xenon will present a similar overview on August 27 at the upcoming 2020 Epilepsy Pipeline Conference presented by the Epilepsy Foundation. Turning now to XEN007 with the active ingredient flunarizine, which is a CNS-acting calcium channel modulator that modulates Cav2.1 and T-type calcium channels. A physician-led single-site Phase II proof-of-concept study is examining the potential clinical efficacy, safety and tolerability of XEN007 as an adjunctive treatment in pediatric patients diagnosed with treatment-resistant childhood absence epilepsy, or CAE. Due to the impact of COVID-19 on clinical trial enrollment, and in particular, the multi-month closure of our clinical sites, the top-line results from the study are now expected in the first half of 2021. Depending on the final results, CAE may represent an exciting potential orphan indication for future development of XEN007. We're also proud of the progress made by our collaborators. We have an ongoing collaboration with Neurocrine Biosciences to develop treatments for epilepsy. Neurocrine has an exclusive license to XEN901, now known as NBI921352, a clinical-stage selective Nav1.6 sodium channel inhibitor with potential in SCN8A developmental and epileptic encephalopathy, or SCN8A-DEE, as well as other forms of epilepsy. Neurocrine has indicated that it anticipates filing an IND application with the FDA in the very near term in order to start a Phase II clinical trial in SCN8A-DEE patients in the second half of 2020. This important milestone would trigger a $25 million milestone payment to Xenon upon FDA acceptance of the IND for NBI921352 with 55% of the amount in the form of an equity investment in Xenon at a 15% premium to the 30-day trailing average share price and 45% of the amount in cash. Moving now to our partnership with Flexion Therapeutics, who acquired the global rights to develop and commercialize XEN402, a Nav1.7 inhibitor also known as funapide. Flexion's preclinical product candidates, which they've termed FX301, consist of XEN402 formulated for extended release from a thermosensitive hydrogel. The initial development of FX301 is intended to support administration as a peripheral nerve block for control of postoperative pain. Flexion anticipates initiating human clinical trials next year in 2021, and we look forward to keeping you informed about this partner program. Before turning the call over to Ian, I'd also like to take a moment to welcome a new member to the Xenon leadership team. Earlier this week, Sheila Grant joined us as our Senior Vice President of R&D Operations, reporting to Dr. Ernesto Aycardi, our Chief Medical Officer. Sheila has more than 20 years of senior-level experience in the pharmaceutical industry, most recently at Correvio Pharma Corp., with responsibilities that have encompassed global regulatory, manufacturing and supply chain operations for multiple commercial-stage drugs registered in numerous countries. I am confident Sheila's expertise will support Xenon's growth and maturation as we advance our neurology programs into late-stage clinical development and increase our commercialization efforts. Sheila joins us at a time when I truly believe Xenon is one of the most exciting epilepsy pipelines currently in development. I'm extremely proud of our team as we have rallied to adapt to the impacts of COVID-19 and continue to make substantial progress. I believe we at Xenon also have an opportunity to provide leadership by example within our community as we continue to help employers and employees plan for transitions back to the workplace while safely managing the risks associated with COVID-19. At this point, I'll ask Ian to recap our financial position and to provide some closing commentary before opening up the call to your questions. Ian?

Thanks, Simon, and good afternoon, everyone. The specific details within our financial statements are covered in today's press release and our 10-Q filing, but I will provide an overview and conclude with a summary of upcoming milestones. In the second quarter, we reported total revenue of $13.4 million related to the recognition of $11.9 million of deferred revenue as well as $1.5 million for research and development services from the license and collaboration agreement we have with Neurocrine. There was no revenue recognized for the same period in 2019. R&D expenses for the quarter were $10.7 million compared to $8.2 million for the same period in 2019. The increase of $2.5 million is primarily attributable to increased spending on Xenon's clinical development product candidates, XEN496 and XEN1101, and to a lesser extent, increased spending on preclinical discovery and other internal program expenses. This was partially offset by decreased spending on XEN901, now known as NBI921352, as clinical development costs are now borne by Neurocrine. G&A expenses for the quarter were $3.3 million compared to $2.3 million for the same period in 2019. The increase was primarily attributable to increased stock-based compensation expense, salaries and benefits, insurance premiums and business development expenses, partially offset by a decrease in legal fees for intellectual property protection. This provides a net loss for the quarter of $0.2 million compared to $10 million for the same period in 2019. The change is primarily attributable to revenue recognized in the quarter ended June 30, 2020, pursuant to the agreement with Neurocrine, partially offset by an increase in R&D and G&A expenses as compared to the same period in 2019. Cash, cash equivalents and marketable securities as of June 30, 2020, were $202.8 million compared to $141.4 million as of December 31, 2019. Based on our current assumptions, which include fully supporting the planned clinical development of XEN1101, XEN496 and XEN007, we anticipate having sufficient cash to fund operations into 2022, excluding any revenue generated from existing partnerships or potential new partnering arrangements. And importantly, we believe we have the cash runway to support the business objectives we have outlined today, and we continue to make prudent business and spending decisions to manage through these unprecedented times. In summary, we look forward to achieving several important clinical milestone events. We expect to initiate a Phase III clinical trial for XEN496 in KCNQ2-DEE later this year. We anticipate a $25 million milestone payment upon FDA acceptance of an IND to be filed by our partner, Neurocrine, in the near term in order to start a Phase II clinical trial for NBI921352 in SCN8A-DEE pediatric patients. In the first half of 2021, we anticipate results from our Phase IIb X-TOLE clinical trial examining XEN1101 in adult focal epilepsy. We look forward to the results from the physician-led Phase II open-label study in treatment-resistant childhood absence epilepsy with XEN007, anticipated in the first half of 2021, and we anticipate Flexion's continued development of FX301 to support the initiation of human clinical trials in 2021. With Xenon eligible for various regulatory and development milestone payments of up to $9 million through the initiation of a Phase II proof-of-concept clinical trial. On behalf of the entire Xenon team, we look forward to updating you over the coming months. At this point, we can now open the call up for questions. Operator?

The operator provided instructions to callers. We have your first question from Mr. Paul Matteis from Stifel.

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

Sure. I'll take a stab at this, and Ian, please comment. Yes, in terms of the first question, no, we've been communicating for some time now that we're exploring indications outside of the focal epilepsy indication, which remains our primary indication for this drug, but there's a tremendous amount of literature that's building on the role of the Kv7.2 and Kv7.3 channels in neuronal hyperexcitability that underlies a number of interesting neurological disorders where hyperexcitability appears to perhaps drive, for example, apoptosis in motor neuron disease, hyperexcitability through this channel mediating pain signaling, hyperexcitability through this channel potentially having a role in anhedonia and major depressive disorder. And we know these channels are also expressed in the ear and the hair cells, in particular, and the potential for treatment using a Kv7.2 modulator for tinnitus is also of interest. So we're looking at a number of these types of disorders. We've been talking about this for some time. There's been a lot of activity at the company, and we expect pretty soon to be able to communicate what that plan is. It doesn't detract from the focus being in focal epilepsy; that's the primary opportunity and it remains so. The trial continues to progress well as was updated, tolerability seems very good. We get a high rollover rate and a low dropout rate. Of course, everything is blinded, but observations seem consistent with the hypothesis going in; the preclinical data and the TMS data are very supportive of epilepsy as an important indication. And of course, there's precedent with ezogabine being the first-generation drug working very well in focal epilepsy. So no, the strategy hasn't changed, but we do see some very exciting opportunities outside of focal epilepsy, including, by the way, within epilepsy but outside of focal epilepsy, and how that may impact long-term from a commercial standpoint is something we would discuss publicly at the right time. In terms of XEN007, this is a single-investigator-led, single-site study. It's a non-controlled study in the sense that there isn't a placebo; this is an open-label study compared to baseline. These are highly refractory patients. The two drugs that are primarily used in these patients with childhood absence epilepsy are ethosuximide and sodium valproate. These would be children and adolescents in which those drugs either have not worked to suppress absence seizures or are not tolerated, which is generally thought to be the case in about one-third of these kids. Remember, this is a condition that's actually quite prevalent, affecting about 40,000 to 45,000 kids in the U.S., and it's estimated about 25% to 30% are either refractory or have tolerability concerns with the known drugs. So I think overcoming the refractory nature of this disease, given the highly refractory nature of these children, is important. I think the question really goes down to what we deem to be potentially clinically meaningful. Generally, for disorders like this and similar for focal epilepsy as well, a clinically meaningful effect is generally one that's deemed to be more than 30% in terms of seizure frequency reduction. And certainly, with focal epilepsy, that spread we see in terms of seizure frequency reduction is often in the 30% to 40% range. So seeing a reduction in seizures in that range in this refractory population, I think, would be deemed clinically meaningful. Of course, seizure freedom rates are important, but this is a relatively small study, as we've talked about, with about 20 subjects. So we're very excited by this. We think the preclinical data is supportive for flunarizine in this condition, and we really look forward to data coming out of the study. As I noted in my update, there will be a bit of a delay. This is, again, a single-site study with a multi-month closure due to COVID, sites just coming back online and starting to see patients. These types of studies, unfortunately, will be impacted in this setting, but I don't think it's going to be a major delay to the program.

Next question comes from the line of Andrew Tsai from Jefferies.

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

Sure. I'll take a stab at this and bring Ian in. It's a tough question; I don't have an exact answer for you, but we can follow up offline. Different sites have different requirements, and as you can imagine, we're not able to implement standard protocols across every site because some sites are open, some partially open, some are not open, some are seeing patients back in the clinic, and others are seeing them remotely. So we've had to adapt site by site. That said, we feel we've maintained the integrity of the data in the study and don't believe there's any material impact on the outcome integrity of the study. We've been able to question subjects and examine them as needed. We've had nurses coming into homes where needed to measure blood pressure, perform mobile EKGs, take blood and urine. We've had drug being delivered to patients' homes. In general, the integrity of the data, we feel, is sound. There will be a few gaps here and there, which we get in every study, let alone in a COVID environment, but none that we believe are going to be materially impacting the ability to read the study and determine safety parameters of the drug. Ian, thoughts?

Andrew, I can provide a little bit of detail on how the protocol was designed and then, as Simon mentioned, there are a number of adjustments. None of the adjustments do we believe have any impact on the integrity of the data or what the result is going to be at the end of the day. We do have patient visits at screening and baseline because we need those baseline characteristics. Then during the study, there would have been normally weekly visits. A number of those visits we've moved to telemedicine visits, but we do want those baseline characteristics. That's why we saw very few patients going through screening during March, April and May when sites were closed. After the last baseline visit is when you get into randomization, which is a very important visit to do and where some of the delays occurred. During the randomization visit, patients must be examined.

Yes. And the final visits, of course, will include eye exams, and there may be instances where there might be a few weeks off because of sites opening and closing. But again, we're not aware of cases where timing issues would materially affect measurements such that data integrity would be compromised. It's actually been remarkably well managed. When sites were closed, the focus shifted from screening and randomization to remote monitoring and drug supply and maintenance of data integrity. Now we are seeing sites open. Europe may do better than the U.S. in the next few months, and a lot of our new site activity has been in Europe.

That's great to hear. It sounds like you have a great handle on the situation. Maybe if I can ask a follow-up.

Sure.

In your prepared remarks, I think you said dropout rates continue to be low and tolerability good and rollover good. That's great. That led us to think, I'm curious, how often can you guys monitor the blinded safety data? Is it on a can-you-do-it-whenever-you-want basis? Or is it once per quarter? And then maybe...

The team has access to blinded safety data for monitoring in real time. We need to know, once patients are dosed and once blood is drawn, whether there are any lab abnormalities or EKG issues. That data is available in real time; the team and the CRO provide oversight and are very much on top of this. So these are current observations, not something we wait months to review.

Next question comes from the line of Laura Chico from Wedbush.

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

Laura, we're pretty close to getting final FDA feedback. Our preference is to have a call and go through study details once we have a final protocol. I don't want to give perspectives that may change based on FDA feedback. Given we're not far from that, I'd prefer to hold off on detailed discussions around statistics and design until we have the minutes from the agency. Regarding the competitive environment, every one of these monogenic epilepsy indications will face multiple modalities, including gene therapies and antisense approaches. Those modalities are likely to be long-term development programs that will be cautiously tested in select patients and will have to build data sets over time. Given these are single administrations in many cases and do not have reversal agents, there will be a cautious approach. Ion channels illustrate a Goldilocks phenomenon; modulation needs to be 'just right'. Small molecules, which is our approach, and oligonucleotides or gene therapies all have a place. I expect, at least initially, that gene-modality approaches will be reserved for the very severe, very refractory patients and may be later-stage options. Over time they may show remarkable effects, but for the foreseeable future there is a place for small molecules in these populations.

To add, what we're doing to help control our own destiny is we have a close relationship with the advocacy group and key KOLs in the space. We've identified more sites than we likely will need. We have a relationship with Invitae on the testing side. There are several databases with academics tracking these children. So we've got multiple angles to identify patients and sites to get the study underway. If everything goes according to plan, we should be up and running by the end of the year.

That's great. Maybe one follow-up to the 1101 study. Could you walk us through the timeframe in which subjects enter for screening and the elapsed time it takes for them to reach their final visit if they're accepted in this study? What I'm trying to get at is, what's your confidence in hitting that target for a first-half 2021 readout?

I'll walk you through the schematic a patient goes through and then comment on confidence, which is really driven by the pandemic and enrollment over the next months. Patients are screened; if they meet criteria in screening they go into baseline. The baseline mirrors the double-blind portion and is an eight-week baseline. We're looking at the number of seizures in that period: patients need a minimum of four seizures in 28 days and can't be seizure-free for more than three weeks of any given period. Once they go to a randomization visit, they're randomized to one of the three arms, including placebo, and then there's eight weeks of treatment. After the double-blind period they can roll directly into open-label extension immediately, which many are choosing to do, or if they don't, there's a six-week follow-up visit, which is the final piece of data we need to complete the study. One of the benefits of the study is we are using an electronic diary to capture efficacy endpoints, so unlike paper diaries we can track missing data points in real time. We expect cleaning up of the data, data scrubbing and locking the database to be more efficient because we're doing a lot of that in real time throughout the study rather than waiting until the end.

Next question comes from the line of Yatin Suneja from Guggenheim Partners.

This is Eddie on for Yatin. Just a follow-up on collecting metrics and endpoint data in the quarantine telemedicine environment. Do you have an agreement on how you're accounting for missed data points in the study? And do you think you'll be able to give more updated or granular guidance before the end of the year on progress as you get a sense of how enrollment is going? And then I have a question on 496.

To your second question, yes, we probably will be able to give updated guidance by the end of the year. What's really key is what happens over the next six months with sites. We are on track in terms of our predicted curves and have been conservative in those curves, but if sites start closing again that will impact us. Regarding missed data points, I don't believe we have a formal regulatory agreement on data gaps, but we've spent a lot of time on this internally and with regulatory advisers and feel very confident, including with the CROs, that we don't believe there will be immateriality concerns in terms of adequacy of data. There will be some data gaps, as there are in every clinical trial, but we don't believe those gaps will be meaningful enough to impact regulatory decisions on the primary endpoint or on safety assessments for this drug.

Because we use an electronic diary to measure the efficacy endpoints, COVID hasn't been relevant there and we don't expect gaps other than the usual ones when someone forgets to fill it in. For in-person visits that were moved to telemedicine you might miss some safety assessments, for example blood draws unless we have a home health visit. But again, we don't believe this is going to affect the integrity of the efficacy readout.

Remember, it's a Phase II clinical trial and the statistic is built around the primary endpoint, which is an efficacy readout we view as low risk to be impacted because of the electronic diary capability. While there might be some gaps in safety assessments like blood pressure or missed eye exams, in the context of the study these are unlikely to affect the ability to read the study and determine safety parameters to decide whether to proceed to Phase III.

Great. And just quickly on 496. If the FDA does come back with additional suggestions on the final protocol, what does the timing look like? Does that reset the clock and then you have to go back to the drawing board? Or is there a chance you could still get started this year?

I don't want to get specific, but we have orphan drug designation and Fast Track, which provide opportunities to interact with the agency without waiting standard cycles. We've tried to implement in the submission what the FDA guidance has been from two prior meetings, which gave us good feedback. The risk of a material difference between what we've submitted and what the FDA asks for is quite low because many nuances can be amended in the final protocol without putting the study on hold. We're planning operationally to initiate the study in the second half of this year. Could we accommodate a month or two delay? Possibly. It will depend on the agency's feedback.

Next question comes from Antonia Borovina from Bloomberg.

Two questions. For the new sites that you've opened for 1101, you mentioned most of the new sites are in Europe. Could you specify what territories you've opened new sites in? And how confident are you that the baseline standard of care and patient outcomes will be consistent between sites? Second, for the 496 study, in addition to seizure reduction, are you looking at any secondary endpoints that may indicate improvement in developmental delay in these patients, or will that not be looked at in the study?

In terms of territories, we haven't disclosed specific countries, but these are well-known jurisdictions for epilepsy trials. Some new sites will be in the U.S., but the majority are in Europe. We were thoughtful in site selection and considered COVID conditions in those countries. We'll probably be adding ultimately 15 to 20 new sites above the initial target. We're comfortable that baseline exams and ability to follow protocol will be maintained; our screening criteria include looking at both quantity and quality of previous studies at sites, regulatory history and deviations. Regarding XEN496, yes, we are interested in secondary endpoints outside of seizure frequency. However, the double-blind portion of the study is relatively short, so it is unlikely we would see meaningful impacts in development, cognition or intellectual behavior in a three- or four-month clinical setting. We expect the open-label extension to be important for assessing developmental outcomes and other comorbidities, including parental impression of change, behavior, cognition and developmental milestones. Those outcomes will be followed through the open-label extension and over time.

That concludes the Q&A session. I will now turn the call over to Jodi Regts for closing remarks.

Thanks, everyone, for joining us today. Operator, we will now end the call.

This concludes today's conference call. Thank you, everyone, for joining. You may now disconnect. Have a great day.