Thank you for your patience. My name is Liz, and I will be your conference operator today. I would like to welcome everyone to the First Quarter 2024 Xenon Pharmaceuticals Inc. Earnings Conference Call. I will now hand the call over to Chad Fugere, VP of Investor Relations. Please proceed.

Thank you, operator, and good afternoon. Thank you for joining us on our call and webcast to discuss Xenon's first quarter 2024 financial and operating results. Joining me today are: Ian Mortimer, Xenon's President and Chief Executive Officer; Dr. Chris Kenney, Xenon's Chief Medical Officer; Dr. Chris Von Seggern, Xenon's Chief Commercial Officer; and Sherry Aulin, Xenon's Chief Financial Officer. Ian will begin with a summary of our recent progress. Chris Kenney will provide an overview of our ongoing clinical-stage programs, including our plans in major depressive disorder, or MDD. Chris Von Seggern will summarize key findings from recently completed market research. And Sherry Aulin will close with a summary of our financial results and anticipated milestone events before opening the call up 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 timing of and potential results from clinical trials; the potential efficacy, safety profile, future development plans and 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; the timing and results of our interactions with regulators; our ability to successfully develop and obtain regulatory approvals; anticipated enrollment in our clinical trials and the timing thereof; and our expectation that we will have sufficient cash to fund operations into 2027. Today's press release summarizing Xenon's first quarter 2024 financial results and the accompanying quarterly report on Form 10-Q will be made available under the Investors section of our website at xenon-pharma.com and filed with the SEC and on SEDAR+. Now I would like to turn the call over to Ian. Ian?

Thank you, Chad, and good afternoon, everyone, and thanks for joining us on our call today. Before I provide an update on our pipeline, I'm excited to announce that we have received approvals from the United States Adopted Names, or USAN, Council and the World Health Organization International Nonproprietary Names, or INN, Expert Committee for the use of azetukalner as the nonproprietary or generic name for XEN1101. Notably, the kalner suffix refers to the molecule's novel Kv7 mechanism of action. If ultimately approved for use in patients, azetukalner would become the first medicine with a kalner suffix to be launched commercially. This is an important milestone for Xenon and represents another step forward as we advance azetukalner towards commercialization. Moving now to our pipeline. This past quarter, we continued to make strong progress. Our team remains focused on three key areas: number one, the continued execution of our azetukalner Phase III epilepsy program; number two, the expansion of azetukalner beyond epilepsy with our MDD program; and three, the continued advancement of our discovery portfolio. First, in our epilepsy program, patient enrollment continues to progress in our X-TOLE2 and X-TOLE3 clinical trials in focal onset seizures, or FOS; and our X-ACKT clinical trial in primary generalized tonic-clonic seizures, or PGTCS. We continue to anticipate the patient enrollment for the first of these trials, X-TOLE2, will complete in late 2024 to early 2025. Second, we made important advancements in our azetukalner MDD program over this past quarter, including reaching alignment with the FDA through end of Phase II interactions on key components of our Phase III program, which we look forward to initiating in the second half of this year. We are also continuing to evaluate additional opportunities for azetukalner, focusing specifically on other potential neuropsychiatric indications where a scientific rationale exists as well as a commercial fit with epilepsy and MDD. Later in the call, Chris Kenney will provide additional details on next steps in our MDD program. And third, we are continuing to progress our early-stage discovery efforts. As a reminder, azetukalner is the most clinically validated and advanced Kv7 therapeutic in development across multiple indications. And we see the mechanism as having broad potential applicability. The breadth and depth of potential therapeutic indications for the mechanism provide a compelling strategic rationale for the development of additional Kv7 product candidates that are chemically diverse from azetukalner and could provide additional development opportunities. For that reason, we are excited to continue to leverage our ion channel expertise with the goal of progressing multiple Kv7 molecules forward into clinical development in order to extend the reach of this promising and differentiated mechanism to more patients in need. Beyond our robust potassium channel development efforts, we continue to evaluate and advance development candidates targeting sodium channels, including Nav1.1 and Nav1.7, which may have utility in treating seizure disorders and pain, respectively. We expect multiple candidates to move through GLP toxicology studies and into clinical development over the next few years. During the first quarter, we also continued our outreach efforts to key opinion leaders and leading physicians. At the recent Annual Meeting of the American Academy of Neurology, or AAN, we hosted two oral presentations related to our X-TOLE epilepsy program. And we engaged with neurologists and epileptologists, who continue to express significant excitement about azetukalner's unique and compelling profile in both epilepsy and MDD. We look forward to continuing to showcase azetukalner at upcoming medical conferences throughout the remainder of this year. And Chris will note some of the near-term conferences where Xenon will have a presence. So we're off to a great start to the year. And I'm proud of the continued progress across Xenon's pipeline, including both clinical and preclinical efforts. So now I'll turn the call over to Chris Kenney, who will provide some additional details on the progress within our azetukalner clinical programs. Chris, over to you.

Okay. Thanks a lot, Ian. Before summarizing our clinical development programs, I'd like to touch on our recent presence at AAN in March. Importantly, our abstracts focused on azetukalner in epilepsy. We're selected for two oral presentations. And we're grateful to our epilepsy opinion leaders, both Dr. Jackie French and Dr. Roger Porter, for presenting these data on our behalf. In particular, we highlighted results from our ongoing X-TOLE open-label extension study, which demonstrated impressive seizure freedom rates, including 1 in 4 patients, who were on treatment for 2 years or more, achieving at least 12 months of consecutive seizure freedom. In addition, we have now generated more than 600 patient years of safety data with some patients having been on azetukalner for more than 4 years, supportive of a well-tolerated drug profile. Turning to an update on our clinical development efforts. Within our Phase III epilepsy program, our three clinical trials, X-TOLE2 and X-TOLE3 in focal onset seizures and X-ACKT in primary generalized tonic-clonic seizures, continue to progress. As Ian mentioned, we continue to anticipate completion of the X-TOLE2 patient enrollment later this year or early 2025. As a reminder, we intend to submit an NDA upon the successful completion of X-TOLE2, our first Phase III clinical trial, along with the existing data package from our Phase IIb X-TOLE clinical trial and additional safety data from other clinical trials to meet regulatory requirements. Within our MDD program, we've made significant progress towards advancing our Phase III development plans based on the encouraging top line data generated from our Phase II proof-of-concept X-NOVA study. Earlier this year, we submitted to the FDA our end of Phase II briefing package, which included our draft Phase III protocol synopses in preparation for an April in-person meeting. Prior to the meeting, we received preliminary written feedback from the FDA in response to our briefing package. The feedback was comprehensive and fully addressed our questions to FDA. As a result, the in-person portion was determined not to be necessary. We're pleased to have been able to efficiently achieve alignment with FDA, enabling us to continue progressing our MDD program into late-stage development. Broadly, our development plans include three Phase III clinical trials in MDD, each with one active drug arm for 20 milligrams versus placebo using the Hamilton Depression Rating Scale, or HAM-D17, as the primary endpoint assessing efficacy in depression and continuing to assess the efficacy of azetukalner on improvements in anhedonia as well as HAM-D17 at week 1 with hopes to confirm the compelling data we generated around the rapidity of onset in the X-NOVA study. Having now reached alignment with FDA on key design elements of the Phase III program, we've also elected our CRO and are working to finalize our protocols. Once the final protocols are filed, we intend to provide additional details around the design of our MDD studies and look forward to initiating the first of these Phase III clinical trials in the second half of this year. As Ian noted, we recognize the importance of continuing to educate the health care community about the potential benefits of azetukalner. This week, the Xenon team attended the Annual Meeting of the American Psychiatric Association, or APA, in New York. We're also pleased to announce that we will present the X-NOVA top line data at the Annual Meeting of the American Society of Clinical Psychopharmacology, or ASCP, taking place in Miami from May 28 to 31. This will be the first time these promising results are presented at a major medical meeting and will represent yet another opportunity to raise awareness of azetukalner's differentiated profile and potential impact within the MDD population. I'll now turn the call over to Chris Von Seggern, who will summarize findings from recent market research outlining the azetukalner value proposition. Chris?

Thanks, Chris. On last quarter's call, we discussed our market research findings that have informed our clinical development and commercial plans in depression. To recap, we conducted primary research with 150 high-volume prescribing physicians, who expressed interest in azetukalner's potential profile with ease-of-use properties, such as once-daily dosing without the need for titration; rapid onset of effects; novel mechanism of action; differentiated safety profile compared to standard repair agents, like SSRIs and SNRIs; and ability to address anhedonia, a common comorbidity of depression. These findings suggest there could be a compelling product fit for azetukalner in the MDD treatment landscape, particularly for patients with remaining unmet medical need resulting from inadequate response to initial therapies, or those that experienced common adverse events, such as significant weight gain or sexual dysfunction. This past quarter, we conducted further market research with practicing epileptologists and neurologists in the U.S. to better understand the unmet medical need associated with depression in epilepsy patients. As we have mentioned previously, we believe the data generated in major depressive disorder to date adds to our already clearly differentiated profile in epilepsy. Our past research has indicated that depression is a common comorbidity in epilepsy and that the condition is often underappreciated and potentially undiagnosed, particularly in more difficult-to-treat patient populations. We also know that comorbid depression is associated with worse compliance and poorer outcomes for patients suffering from epilepsy. Our recent research supports a clear need for a novel medicine that offers potent seizure reduction while potentially addressing mood-related conditions. Past research has reinforced the value proposition of azetukalner in FOS with physicians indicating significant interest in a novel Kv7 mechanism that requires no titration and demonstration of rapid efficacy at 1 week. The potential benefit in depression further enhances the profile of azetukalner in epilepsy. And physicians cited lamotrigine as an analog that offers mood benefit in this patient population. Our recent research serves to strengthen our conviction around the highly differentiated profile that's emerging for azetukalner in FOS. And we believe that if approved, azetukalner will be a mainstay of treatment for patients with focal onset seizures. I will now turn the call over to Sherry to summarize our financial results and upcoming milestones. Sherry?

Thanks, Chris. Beginning briefly with our financial results, Xenon is well positioned with a strong balance sheet to support our plans for azetukalner and other earlier-stage programs in our pipeline. As of March 31, 2024, cash and cash equivalents and marketable securities were $885.4 million compared to $930.9 million as of December 31, 2023. Based on current operating plans, including the completion of the azetukalner Phase III epilepsy studies and fully supporting late-stage clinical development of azetukalner in MDD, we anticipate having sufficient cash to fund operations into 2027. I would refer you to our news release and 10-Q report for further details around our financial results. We remain focused on our goal to improve outcomes for patients in areas of high unmet medical need. Looking ahead, we anticipate a number of important milestones and events and goals. We will continue to advance our azetukalner Phase III epilepsy program, including our X-TOLE2 and X-TOLE3 clinical trials in FOS and our X-ACKT clinical trial in PGTCS, with patient enrollment in X-TOLE2 expected to complete in late 2024 to early 2025. We expect to initiate the first of three Phase III clinical trials in MDD in the second half of 2024. We will continue to explore other development opportunities for azetukalner. And we will continue to advance our early-stage preclinical ion channel programs with the goal of advancing multiple candidates into IND-enabling studies in 2024 and 2025. Our strong belief in azetukalner's potential to play a role in epilepsy, major depressive disorder and potentially other indications is centered around its unique mechanism of action and attractive product profile, supported by the clinical data generated to date. We look forward to keeping you updated on our progress. I'll now ask the operator to open the line for any questions. Operator?

And your first question comes from the line of Paul Matteis from Stifel.

I have an X-TOLE question and just one quick Nav1.7 question. On X-TOLE2, Ian, I was wondering if you could just give a little bit more granularity on where you are with enrollment, how things are tracking relative to the last quarter and sort of your comfort that the guidance is intact. I mean, you reiterated it today. And then on 1.7, and doing a little bit more digging around the target, we came across an example of another compound in this space running into issues with syncope and hypertension. And there have been some question around the expression of this target in the autonomic nervous system. And so I was just kind of curious, people always talk about selectivity with 1.7. But how do you think about the on-target margin and sort of where are you with the compounds that you're working on right now?

Thanks, Paul. I can address your question regarding X-TOLE2 and provide some insight into 1.7. As you noted, we reaffirmed our guidance today. We're aiming for 360 subjects randomized in the Phase III studies, which is a bit larger than the Phase II program. We plan to engage around 80 to 100 medical centers to complete these studies, and that suggests variability in patient screening and enrollment. Based on our current data, we still expect to finalize patient enrollment by late this year or early next year. Regarding 1.7, we're continuously evaluating the potential risks, whether on-target or off-target, as we examine safety margins in preliminary studies and prepare for GLP toxicology studies. We recognize the challenges associated with the genetic population that has a complete loss of function but also note that they are largely normal except for the absence of pain response to harmful stimuli. Generally, while there are considerations related to aspects like syncope, we believe these molecules should have favorable therapeutic indices based on our preclinical findings. Chris, do you have any additional insights on these topics?

I mean, there are literature mentions of hypotension in the Nav1.7 loss of function. So I mean, fortunately, that's pretty easy to keep track of in the clinic in terms of following vital signs, following blood pressure and seeing if it's dropping as patients change position from lying to standing. So it's something we'll keep a close eye on, but it's easy to follow.

And next question from Brian Abrahams from RBC Capital Markets.

This is Leo on for Brian. I wanted to ask one maybe just on the nature of the discussions with the FDA you had. I mean, it sounded like those were very positive. But I'm curious if you can maybe talk about some of the key questions you had and the answers you received. In particular, curious if you've got any more clarity on whether you can leverage the safety database across the indications and maybe how you're thinking about that enrollment split across U.S. versus ex U.S. geographies.

Thanks, Leo. I can start and Chris can jump in. I think the team has made really good progress. The fact that we've transitioned from top line Phase II data late in Q4 to not needing an end of Phase II meeting booked in April is impressive. Kudos to the internal team at Xenon for moving that along quickly. We previously mentioned having several questions for the FDA regarding our clinical program. As Chris mentioned, we've shared our Phase III protocol synopses with the FDA and are leveraging our safety database. We have a significant amount of work from our epilepsy program that we can apply to the MDD program, including clinical pharmacology, CMC, and toxicology. For MDD, we plan to run three Phase III clinical trials. While we haven't finalized all clinical trial sites yet, more details will be provided soon regarding the Phase III program. We will have valuable safety data from our epilepsy work to utilize. Additionally, we'll gather substantial data in MDD from the three Phase III trials as well as data from the ongoing X-NOVA study. We expect to have plenty of information for the FDA, and we feel confident moving forward since we received everything we needed in the written response and the meeting was not necessary. Chris, do you want to add anything?

Thank you, Ian. In seeking clarification from the FDA, we aimed to ensure that the overall development program was acceptable, particularly regarding the number of studies required. We have already conducted extensive preclinical work in clinical pharmacology and wanted to confirm that what we accomplished since the last end of Phase II meeting for epilepsy still aligned with FDA expectations. We received confirmation on that, and as Ian mentioned, we are also focused on the design elements, including agreement on the primary endpoint and statistical hierarchy. We have been clear about what we believe will differentiate azetukalner in major depressive disorder and want to ensure that this is incorporated into the statistical hierarchy, allowing us to promote it if the drug receives approval, and that the study size is appropriate among other considerations. Regarding the safety database, we will exceed the ICH guidelines for necessary exposures with this compound, leveraging the work done in epilepsy while addressing all requested safety data for the major depressive disorder population. Additionally, we do not think it is feasible to conduct three large studies in major depressive disorder solely within the U.S., so we are exploring all available options, although we have not finalized our approach yet.

And your next question comes from the line of Jason Gerberry from Bank of America.

Just curious in your FDA meeting on MDD, to the extent that you're willing to talk about this, any feedback that gives you confidence that perhaps you could interrogate the impact on anhedonia in a unique way versus how studies have been done in the past or to potentially generate a unique and differentiated label claim around anhedonia? So that's my question.

Thanks, Jason. Chris, do you want to discuss the reasoning, the process, and what we observed in X-NOVA? We'll also be examining this further in Phase III.

Yes. I mean, the anhedonia story is such an interesting one and such an unmet need. Because not only is it an issue in terms of, on the surface, people are unable to enjoy the things in life that they normally would have, anhedonia is closely linked with suicidality as well. And so this is a meaningful thing to go after. To answer your question more specifically about leveraging anhedonia in a unique way in the label, I sort of already alluded to that. I guess, I was a bit cryptic in the last answer. But just to be clear, we're really interested in anhedonia. There was the earlier study with the Kv7 compound that showed improvements in anhedonia. Azetukalner has done the same. We believe that this may be a real signal that needs to be confirmed in Phase III. And so the manner in which we're assessing anhedonia will be included within the statistical hierarchy. And if it works at the end of the day and we check a couple of other boxes, we're hoping to be able to have that in the label and to have the sales reps speaking with physicians about that, assuming the drug is approved.

Yes, thanks, Chris. And maybe, Jason, we can even expand this a little bit, and Chris Von Seggern can talk about what we've done. I know the market research that Chris was referring to in the prepared remarks was actually looking at the opportunity of addressing comorbid depression in epilepsy. But we had done previously a lot of work with psychiatrists as well. I think the opportunity has a differentiating feature, as you mentioned, of azetukalner with anhedonia is important. Chris, maybe you want to provide your perspective there?

Yes, Ian. I was going to jump in and say exactly that. When we've conducted market research in the past, thinking about the profile of azetukalner, physicians clearly latch on to a number of elements, the novel mechanism of action, the lack of sexual dysfunction or weight gain. But we hear very clearly the unmet medical need that exists with anhedonia and really the desperation for alternatives that offer a compelling efficacy profile in this component of the disease. And we view it as a really important component of the commercial differentiation for azetukalner in MDD. And we're hopeful, as Chris and Ian have both mentioned, that this is something ultimately will be incorporated in the label as we move forward.

And your next question comes from the line of Brian Skorney from Baird.

This is Luke on for Brian. We were just wondering, were there any notable changes that the FDA suggested for the Phase III MDD program, endpoints, enrollment criteria or any other aspects? Or were they largely onboard with your proposed design?

Yes. Thank you, Luke. They were mostly in agreement with our design. If you refer to our Q4 results script from a couple of months ago and the prepared remarks, we provided a high-level overview of our thoughts. Chris reiterated this today regarding the design, the primary endpoint, and other considerations. As you may have noticed in today's remarks compared to our previous comments, there have been no changes. We have good alignment with the agency, and no significant adjustments are needed as we proceed.

And your next question comes from the line of Tess Romero from JPMorgan.

So first one is probably a fairly quick one. Just wanted a little bit of clarity on, is the ASCP presentation more of an encore of what we've already seen? Or are there new analyses that we should be preparing for? And then second one is when you might think you will be able to come and more definitively outline where you might like to take XEN1101? And what types of internal work you are doing to decide on where the most derisked or compelling potential opportunities might be?

Tess, just for clarification, so is the second question on indication expansion outside of epilepsy and MDD?

That's right, exactly.

Okay, great. Chris, do you want to answer the first question on the data that we're going to be presenting from X-NOVA later this month? And then I'm happy to just talk about indication expansion.

Yes. So regarding ASCP, if you're referring to the poster that was shared in the scientific exhibit at AES, it will be largely an encore. There will be one set of new analyses in there.

Thanks, Chris. Tess, regarding indication expansion, we conducted a significant life cycle management project last year between our medical and commercial teams, generating many valuable ideas on the potential uses of azetukalner and other Kv molecules. We’ve made substantial progress with some of these preclinical assets, and we will update you later this year. We remain committed to the Phase III programs in epilepsy and major depressive disorder, and we believe there are additional opportunities to expand the use of azetukalner in other neuropsychological areas. We’ve done considerable work and plan to conduct more before presenting a more detailed plan.

And your next question comes from the line of Khalil Fenina from Goldman Sachs.

This is Khalil calling in for Paul. I guess, a quick one for me. If you could just provide a little bit of color on your Phase III X-ACKT study in PGTCS, has that study completed enrollment? And do you have any color on the timing of when you expect that to read out?

Thanks, Khalil. Sherry, do you want to address milestones for the X-ACKT study?

Yes, the X-ACKT study is currently ongoing. We initiated it last year and are actively recruiting patients. We're using the sites from the X-TOLE2 and X-TOLE3 studies for this research. Investigators, including epileptologists and neurologists with patients diagnosed with PGTCS, can direct those individuals into the X-ACKT study. It's important to note that PGTCS is less common than FOS, resulting in a smaller patient population with a different phenotype rate. Typically, these patients experience more severe seizures but with a lower overall seizure burden. Consequently, the recruitment and enrollment process for the PGTCS population tends to take longer compared to FOS, which aligns with historical trends observed in PGTCS studies from other sponsors. We are making steady progress and continuing to actively recruit patients while utilizing the sites from X-TOLE2 and X-TOLE3. We will definitely provide guidance on the study, but we are not quite ready to do so yet.

And Sherry, this is Chris. Just to add, this was already stated in the prepared remarks. But I think it's really important to keep in mind that we're positioning X-TOLE as the first pivotal trial in focal onset seizures. And it's really the completion of X-TOLE2 that will drive the initial NDA submission. So not to be dismissive of the PGTCS question, but I just want to be clear where the priority is in the short term.

And your next question comes from the line of Alex Nackenoff from Raymond James.

This is Alex on for Danielle. Just another question on MDD, could you walk us through your rationale for running three distinct Phase III trials as opposed to, say, two potentially larger, more well-powered trials? And is it your intention that these trials will be philosophically identical in trial design?

Thanks, Alex. Chris, I can start and you can add in. We haven't provided sample size numbers for the Phase III program yet, but those will come. When we do release those numbers, you'll see that we believe each of these Phase III studies is well-powered, significantly larger than the X-NOVA in terms of the number of patients per arm. The main reason for conducting three studies is due to the subjectivity and variability often seen in depression studies. We believe it is prudent from a risk mitigation perspective to run three studies. Yes, they will be quite similar, and as we delve into more specific details, we can highlight any real differences or nuances at that time. Essentially, you can view them as similar studies, with three ongoing, the first set to begin later this year. As Chris mentioned, we've outlined the primary endpoint, trial design, and other details, including the sample size, which will be finalized in the coming months as we complete the protocol. We will need to submit it to the IND and then prepare to initiate the sites and enroll patients. Chris, do you have anything else to add regarding those details?

Sure. I mean, obviously, the question about how many studies we should do is something that we've intensely thought about over the past several months, really over the past years. And it wasn't like we were weighing two scenarios like, "Oh, let's partially power three studies versus really power two studies." We were going into it with a mindset that every study we conduct will be meticulously conducted to the extent that we can control variables. And then it's just a question of, "Okay, we're going to do that how many times?" And so as Ian has already said, I think when you see the size of these studies coming out, I think you're going to see that we're not taking any shortcuts here.

And your next question comes from the line of Basma Radwan Ibrahim from Leerink.

This is Basma on for Marc. Can you remind us again of the food effect of XEN1101? What kind of food is it? Is it fatty food or just any type of food? We also have another question. Although XEN1101 is being developed as a monotherapy for MDD, there is a high likelihood that it will be used in combination with other antidepressants in later lines if the drug succeeds in this indication. Are you planning to conduct any DDI studies to confirm the safety of combining XEN1101 with other antidepressants?

Thank you. I'll address the background on the food effect and what we're doing in our efficacy studies. From our Phase I research, we know that XEN1101, also known as azetukalner, has a significant food effect. Therefore, all of our efficacy studies have been conducted with the drug taken alongside food, specifically during the evening meal. This is crucial because we observe the highest concentration of the drug during sleeping hours at night. While there is some variability among patients, the protocols specify that the drug should be taken with the evening meal without needing to detail the type of food consumed. I hope this clarifies the food aspect. Chris, would you like to discuss our approach to drug-drug interactions and adjunctive use?

Sure. So in terms of DDIs, I mean, things have evolved over the past couple of decades or so. I think from the standpoint where even if you didn't predict a specific DDI, you would sometimes do a drug-drug interaction study with a drug and another drug, say, an antiseizure medication or antidepressant that's used quite a bit. The field has kind of gone away from that because we've gotten pretty good at predicting drug-drug interactions. And so as it pertains specifically to antidepressants, we don't foresee any major issues whatsoever in terms of drug-drug interactions with any of the antidepressants used. So we don't see any need to do those additional NDA-enabling studies, and we haven't had any regulatory feedback to suggest that there was disagreement.

And your next question comes from the line of Andrew Tsai from Jefferies.

Can you just remind us how long it took X-NOVA to start up and generate the top line data and whether you think the Phase III should also have a similar timing?

Thanks, Andrew. Sherry, do you want to go through the X-NOVA timing?

Yes, certainly. X-NOVA took about 18 months from start to finish. We randomized just over 160 patients in that study. As mentioned earlier, these Phase III trials will be well-powered, allowing us to see a greater number of patients per arm with a 1:1 randomization. You can expect a study size that is 2 to 3 times larger than X-NOVA. Generally, these studies take less time to enroll compared to epilepsy, as there are more patients meeting the enrollment criteria. We anticipate that the timing will be similar to X-NOVA, likely around 2 years from start to finish for each of the Phase III studies. We will initiate them in a staggered manner, with the first study starting later this year, followed by a few months until the second study, and then again a few months until the third study. I hope that clarifies things.

And your next question comes from the line of Peyton Bohnsack from TD Cowen.

Just a quick one from us, can you remind us on what you're doing to control placebo rates in the MDD program in the Phase III trials and highlight any changes that may have come from the learnings from the X-NOVA trial and the interactions with the FDA?

Great. Thank you, Peyton. Chris, do you want to walk through both what we had done and maybe a focus more on what we expect to do to continue to keep an eye on placebo rate in the Phase III MDD program?

We are very pleased with the results from the X-NOVA study. To control the placebo effect as much as possible, we carefully selected a contract research organization that has extensive experience in major depressive disorder. We applied rigorous criteria to ensure that suitable patients were included in the study, using an independent group to manage enrollments. We also chose high-quality sites with considerable expertise in MDD, ensuring that training was conducted effectively. Additionally, we have various methods to monitor data in real time to identify any unusual patterns at the patient, site, or study level. We pay close attention to baseline demographics to build an expected population. It's evident in these studies that a small number of patients can significantly skew results. A common theme in successful MDD studies is to prevent patients with milder symptoms from participating. In our design, we plan to implement a higher cutoff on the HAM-D scale and introduce other measures, which we will disclose publicly when appropriate. Our goal is to minimize the placebo effect as much as possible. Furthermore, ensuring compliance within the psychiatric population is critical, and we plan to enhance efforts as we move into Phase III to maximize adherence.

Thanks, Chris. And the only other one that I would add to Chris' list that we've talked about publicly is in the Phase II program, we had two active arms versus placebo. And in Phase III, as we've talked about, we'll go to a 1:1 randomization. And so the literature teaches us that, that should have an impact on the placebo rate by lowering the placebo rate in terms of expectation bias.

Our next question comes from the line of Tim Lugo from William Blair.

And for MDD, I know there have been many questions about it, but you mentioned the higher cutoff of the HAM-D to manage the placebo effect. Additionally, considering the anhedonia effect and how it differentiates from existing modalities, did the FDA provide any guidance during the meeting regarding how extensively pretreated the population should be or how many therapies they should have failed or cycled through before enrollment?

Thanks, Tim. Chris?

The feedback they provided focused more on the resistance within the population rather than on any specific medications that failed. They did give some suggestions on cutoffs that could help optimize the patient population, and we plan to act on those recommendations. You can expect to hear more details about this soon.

Yes, I just want to remind everyone that there is an ongoing IST for azetukalner in a major depressive disorder study being conducted by Mount Sinai and Baylor. This study is comparing 20 milligrams of the drug to a placebo. The primary endpoint is a functional MRI measure, with secondary endpoints focusing on clinical scales of depression and anhedonia. Tim, we don’t have specific guidance on that right now. However, given our close relationship with the physicians managing that study, we fully expect patient enrollment to finish this year. After that, we will have discussions with the physicians about how the data might be presented, but we don’t have that information yet. Once we have it, we will be sure to share it with you.

Your next question comes from the line of Mohit Bansal from Wells Fargo.

I wanted to ask about your perspective on the depression market in general. There's significant development in mid- to late-stage treatments. Recently, we've observed progress with kappa opioid receptor and Nav1 potentiators, along with interesting data regarding depression scales. Additionally, there may be effects on anhedonia. I would like to know how you compare and contrast XEN1101 with these other mechanisms, which also appear quite safe. How do you see the market evolving with these various drugs available?

Thanks, Mohit. Yes, excellent question that we think about a lot. Chris Von Seggern, do you want to walk through how we just think about the overall medical need and where azetukalner would fit in, especially considering that there are other drugs that are in development?

Yes, absolutely. I think, first and foremost, if you take a step back and you think about the major depressive market, we're talking about an addressable population that is measured in the multimillions. And as we all know, the mainstay of therapy in the space is SSRIs and SNRIs, of which there are many. And patients typically cycle through a couple of those options before they transition into what we consider the more branded market. We think there's ample opportunity for a number of products to fill a void and a need for patients who don't have an adequate response to an SSRI or SNRI, or importantly, have greater need as it pertains to an adverse event associated with either weight gain or sexual dysfunction. So we do appreciate that the competitive landscape in this space is quite a bit more than what we see in the focal onset seizure arena. But from a profile as it pertains to azetukalner, clinicians are really excited and have continued to express enthusiasm about that profile. Kv7 potentiation has a really strong link to the depressive state. The efficacy and safety profile that we've seen coming out of the X-NOVA study has really resonated with clinicians, reaching for a novel mechanism of action. And then importantly, other attributes of rapidity of onset, the potential to address anhedonia are things that clinicians are really hungry for. So the emergence of competition around us will further bolster some of those attributes. But there's still plenty of opportunity for multiple successful products from a branded standpoint, given the residual unmet need that is so substantial in the major depressive market.

And your final question comes from the line of David Hoang from Citigroup.

I wanted to know your latest thoughts on how 1101's clinical profile, which now includes a mood benefit, affects your view on the peak sales potential for the product in epilepsy and major depressive disorder. Are there any historical analogs in the market that could serve as potential comparisons for 1101? I know products like Vimpat have been mentioned in previous discussions, but I would like to understand your current perspective on this.

Thanks, David. Yes, I'll pass the call to Chris Von Seggern because we've done a lot of work now on really understanding having a mood benefit of azetukalner in epilepsy. And we've done even more market research just over the last few months. So Chris talked about that a little bit in his prepared remarks. But I think he can go into a little bit more detail now in terms of that as a differentiator and as an opportunity from a commercial perspective.

Yes, I'm happy to. Before the X-NOVA results, we were very confident based on existing research that the azetukalner product profile, if approved, could lead the market. The features we have previously highlighted, such as its novel mechanism of action, quick onset, and user-friendly design, are extremely compelling when considering the many alternatives available for focal onset seizures. Historically, we've viewed Vimpat as the first major branded option in our field, and we believe azetukalner is well-positioned to follow if it reaches the market. However, our market research and the insights from the X-NOVA data suggest that this product's profile could be significantly enhanced. Clinicians are particularly excited about its potential benefit in treating depression. This enthusiasm is fueled by a couple of reasons: the primary medication in our field, levetiracetam, is known to worsen mood-related conditions, which often influences clinicians' choices of antiseizure medication when mood disorders are present. Additionally, research shows that as patients undergo more treatment lines, their depression rates rise and their outcomes deteriorate, leading to poor compliance and management of seizures. This unmet medical need is heightened for patients with both epilepsy and depression. When we're able to showcase azetukalner's potential mood-related benefits, clinicians respond with considerable enthusiasm. In market terms, this influences the perspective from products like Vimpat, which has seen outstanding success, to lamotrigine, the second most commonly prescribed treatment in our field. Clinicians often cite lamotrigine not just for its seizure control but also for its perceived mood benefits in patients with epilepsy. Therefore, the recent research and evolving understanding significantly reshape the potential opportunity for azetukalner in the focal onset seizure market.

Thank you. And that completes our question-and-answer session. I will now turn the call back over to Sherry Aulin for closing remarks.

Thank you all very much for joining us on our Q1 2024 call today. Operator, you may now end the call.

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