Good afternoon, and thank you for joining us. I would like to welcome everyone to Xenon Pharmaceuticals, Inc. Third Quarter 2024 Earnings Conference Call. I will now turn the conference over to Chad Fugere, Vice President of Investor Relations. Please proceed.

Good afternoon. Thank you for joining us on our call and webcast to discuss Xenon's third quarter 2024 financial and operating results. Joining me today are Ian Mortimer, Xenon's President and Chief Executive Officer.

I'm just going to jump in for Chad. Ian will begin with a summary of our recent progress across our business. Chris Kenney will provide an overview of our clinical stage programs and ongoing outreach to the medical community, and I will close with a summary of our financial results and anticipated milestones. We will then open the call up 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 timing of and potential results from clinical trials, the potential efficacy, safety profile, future development plans in current and anticipated indications, addressable market, regulatory success and commercial potential of our and our partners' product candidates, the efficacy of our clinical trial designs, our ability to successfully develop and achieve milestones in our clinical development programs, the timing and results of our interactions with regulators, our ability to successfully obtain regulatory approvals, anticipated timing of the top line data readout for our clinical trials of azetukalner and our expectation that we will have sufficient cash to fund operations into 2027. Today's press release summarizing Xenon's third 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'd like to turn the call over to Ian.

Thank you, Sherry, and good afternoon, everyone, and thanks for joining us on our call today. We have made significant progress over the past quarter, consistent with our overall strategy of being at the forefront of discovery and development of ion channel therapeutics. And our focus hasn't changed to maximize the full potential of our lead product, azetukalner, to build upon our leadership position in the Kv7 space and to continue to mature our promising ion channel pipeline. Xenon's leadership position in the Kv7 field is unmatched as azetukalner represents the only highly potent and selective Kv7 potassium channel opener in clinical development for multiple indications that is backed by long-term efficacy and safety data in patients living with epilepsy and encouraging proof-of-concept data in patients with major depressive disorder. Within our portfolio, we remain focused on three key areas: continuing the execution of our Phase 3 azetukalner epilepsy program while raising the profile of azetukalner with both physician and patient communities, advancing our Phase 3 azetukalner MDD program with a focus on X-NOVA2, which is expected to initiate before the end of this year, and expanding our pipeline, both through the advancement of our portfolio of next-generation ion channel modulators as well as further potential indication expansion of azetukalner. As I said earlier, Xenon's leadership in the Kv7 landscape is unmatched. Azetukalner represents the most advanced clinically validated potassium channel modulator in late-stage clinical development. Our substantial clinical experience with azetukalner includes robust long-term efficacy and safety data with over 600 patient years of exposure in focal epilepsy patients. Importantly, we have generated highly compelling double-blind efficacy data from our X-TOLE study that we believe demonstrates the best placebo-adjusted results ever seen in a clinical study in patients with focal onset seizures. In our X-TOLE open-label extension study, we are seeing patients experience the long-term benefits of seizure freedom and improved quality of life as well as a favorable safety profile. We believe that azetukalner represents a potentially best-in-class anti-seizure medication that could be paradigm shifting in the treatment of epilepsy. In addition to the impressive efficacy data generated to date, azetukalner has other important attributes such as once-daily dosing without the need for titration, rapid onset of effect, novel mechanism of action and potential mood benefit. The body of compelling clinical evidence that we have amassed to date continues to generate significant excitement from physicians and key opinion leaders as they see the potential of what azetukalner could mean for the epilepsy community. As we continue to educate key stakeholders around the benefits of azetukalner, Xenon will have an increased presence at the upcoming American Epilepsy Society Meeting, or AES, taking place December 6 through the 10 in Los Angeles. We'll have new data presentations and updated results from our ongoing X-TOLE open-label extension study. Patients in the X-TOLE OLE have now been on drug for at least three years, with some patients in the OLE having more than five years of exposure to azetukalner. We continue to see better efficacy in the open-label extension, the longer patients are on drug, and many patients are experiencing the long-term benefits of seizure freedom and improved quality of life, and we're excited to present this new 36-month data at AES next month. We believe this long-term data package will support our regulatory filings on the pathway towards commercialization and is a key differentiator when compared to other molecules in earlier-stage clinical development. Further, we are in an incredibly fortunate position in that azetukalner's attributes enable significant potential across both epilepsy and neuropsychiatry, including MDD and potential other indications. Physicians who treat MDD are looking for medications with novel mechanisms and favorable product profiles such as the ability to address anhedonia, demonstrate a rapid onset of effect or avoid adverse effects that are seen with standard of care agents, such as sexual dysfunction or weight gain. As we shared last quarter, clinical site planning is well underway, and we expect to initiate our Phase 3 MDD program before the end of this year. Shifting gears beyond azetukalner to our broader pipeline. Our discovery team has applied its many years of experience in ion channels to advance multiple Kv7 product candidates that are chemically diverse from azetukalner so that we can leverage the target's pipeline and the mechanism potential, providing us with numerous clinical development opportunities across a broad range of therapeutic indications, including seizure disorders, pain and neuropsych conditions and ultimately extending the reach of this differentiated mechanism to even more patients in need of better therapeutic options. Today, we have multiple Kv7 candidates in our pipeline and IND-enabling work is currently underway to support our goal of filing an IND or equivalent for the first of these candidates in 2025. Staying on the topic of our early-stage pipeline, we continue to make meaningful progress within our Nav1.7 sodium channel program as well. We are proud of Xenon's pioneering work in identifying promising genetic targets associated with rare phenotypes. It was through these efforts that the connection was made between individuals who had the inability to perceive pain and the complete loss of function mutations in the gene encoding for Nav1.7. Conversely, individuals who experienced non-precipitated spontaneous severe pain correlated with Nav1.7 gain of function mutations. This identification of Nav1.7 as an important pain-related target also offered the possibility of a new class of pain medications that are not burdened by the liabilities of opioids. Importantly, we believe that Nav1.7 has by far the strongest genetic validation amongst pain targets, and we continue to pursue the development of novel, non-opioid-based pain medications. And while the development of ion channel therapeutics is certainly a complex challenge, we are applying all of the knowledge gained from the past molecules to advance novel selective Nav1.7 inhibitors within our portfolio of next-generation modulators. Currently, IND-enabling work is underway with a lead Nav1.7 development candidate in support of our goal of filing an IND or equivalent in 2025, enabling us to generate important derisking proof-of-concept data. In addition to Nav1.7 and Kv7, we are also advancing potentiators of Nav1.1 with the aim of addressing the underlying etiology of Dravet syndrome and delivering a disease-modifying therapy. In support of our hypothesis that a precision medicine therapy for Dravet syndrome should restore Nav1.1 activity specifically without impacting other neuronal functions or proteins. We look forward to presenting some of our preclinical Nav1.1 data, including protection against spontaneous seizures and SUDEP as well as strengthening long-term potentiation at the upcoming AES meeting. These data support an incredibly compelling profile for a small molecule Nav1.1 potentiator when compared to other drugs available and in development to treat Dravet syndrome. Finally, as I continue to reiterate, it's an exciting time for Xenon due to the advancement of our clinical programs and our progress towards commercialization. In August of this year, Dr. Matthew Ronsheim joined our senior executive team as Chief Operating Officer based in Boston, overseeing our R&D operations and providing strategic and operational leadership for our pipeline of small molecule programs and preparation for the anticipated commercial launch of azetukalner. Matt's extensive operational, pharmaceutical development and manufacturing expertise are important as we expand our Phase 3 programs, plan for regulatory submissions and commercialization as well as progressing our broad portfolio of early-stage assets. Matt has already made a positive impact, and we look forward to his continued leadership. With that, I'll now turn the call over to Chris Kenney to provide a brief overview of our clinical stage programs and our ongoing outreach with healthcare providers at key medical congresses. Chris, over to you.

Okay. Thanks, thanks a lot. I'm pleased to report that our late-stage clinical development programs for azetukalner are progressing as planned. Our Phase 3 epilepsy program includes X-TOLE2 and X-TOLE3 in focal onset seizures and X-ACKT in primary generalized tonic-clonic seizures. Importantly, the first top line focal onset seizure data readout from X-TOLE2 is anticipated in the second half of 2025. In support of an anticipated NDA filing, we plan to submit the results from X-TOLE2 along with the existing data package from X-TOLE and additional safety data from other clinical trials. In parallel with the significant progress made across our Phase 3 azetukalner programs, our medical affairs team continues to engage with the broader medical community to highlight the robust scientific evidence generated to date. We are in an enviable position as not only can we showcase the positive results from our completed X-TOLE trial, but we have our ongoing 7-year open-label extension study, providing further long-term data from patients living with epilepsy, which we believe is a key differentiator from other molecules currently in development. To give you a sense of some of these interactions, in September, we attended the European Epilepsy Congress, which attracted more than 3,600 delegates from around the globe, Xenon had a strong presence, presenting three posters and hosting a scientific exhibit. We successfully engaged with key opinion leaders, prescribing clinicians and principal investigators from our study sites. Many of our discussions centered around the X-TOLE data, which we believe demonstrate the best placebo-adjusted clinical efficacy in the most refractory patient population trial as well as a favorable tolerability profile in adult patients with focal onset seizures. Furthermore, we continue to receive strong feedback from the epilepsy community on the long-term efficacy data from our X-TOLE open-label extension study, which shows increased seizure reductions with patients on azetukalner out to 30 months experiencing a greater than 90% reduction in median monthly seizure frequency. Additionally, approximately one in four patients on azetukalner for at least two years in the X-TOLE open-label trial have been seizure-free for a full year or longer, giving both us and the epilepsy community tremendous confidence in azetukalner's potential to address the significant need for new anti-seizure medications. These data are particularly impressive given that the literature concludes the likelihood of achieving seizure control once a patient has failed three anti-seizure medications is less than 5%. And we believe that future open-label extension data updates, including our upcoming 36-month data set at AES will continue to strengthen our leadership position. Physicians regularly treating epilepsy patients are impressed by the azetukalner data gathered to date, noting that it sets an incredibly high bar, not just for other Kv7 drugs in earlier-stage clinical development, but other anti-seizure medications within the current treatment landscape. This is especially true when considering some of azetukalner's potentially differentiating attributes such as its positive impact on mood. Our outreach to the medical community is not limited to epilepsy; we're also engaging with prescribing physicians in the MDD space. With our Phase 3 MDD program, the first of three planned Phase 3 clinical trials examining azetukalner in major depressive disorder is anticipated to initiate before year end. At the end of October, we attended the Psych Congress in Boston, giving us another key opportunity to interact with physicians in the MDD space and present our Phase 2 X-NOVA data, discuss the potential use of azetukalner as a treatment for MDD and outline our near-term plans to initiate a Phase 3 program in major depressive disorder. We continue to emphasize azetukalner's potentially differentiated profile versus standard of care agents in MDD as physicians continue to have a particular interest in azetukalner's novel, selective Kv7 mechanism of action and its potential benefit on anhedonia, rapid onset of effect as well as its potentially favorable tolerability profile with no notable adverse effects on sexual function or weight gain. We have the benefit of being able to reference not just the X-NOVA data for efficacy but also the long-term tolerability data gathered from our ongoing X-TOLE open-label extension study. We're excited to be advancing another late-stage clinical development program for azetukalner with the hope of addressing the needs of patients diagnosed with MDD who are still struggling to find effective treatments. We also continue to support the investigator-led MDD study conducted by Dr. James Murrough of Mount Sinai School of Medicine and Dr. Sanjay Mathew at the Baylor College of Medicine. This 60-patient placebo-controlled Phase 2 trial has a functional primary endpoint with the objective of evaluating the effect of azetukalner on brain measures of reward as measured by the change in activation within the bilateral ventral striatum from baseline to end of treatment at week eight as assessed by functional MRI. Also, the study is evaluating secondary endpoints that include MADRS and SHAPS. Patient enrollment was recently completed and results anticipated in the first half of 2025. Now looking ahead, we're incredibly excited to expand our presence at AES this year as part of our ongoing outreach to the medical community. As the premier epilepsy conference, AES is an important venue for us as we continue to strengthen our profile and reputation as a leader in epilepsy, laying the foundational framework for a successful future potential launch in epilepsy. We have scheduled numerous meetings with physicians, key opinion leaders, academic leaders and patient advocacy groups. I'm extremely proud that we have five accepted abstracts at this medical meeting and look forward to presenting these posters, including an update to our X-TOLE open-label extension study. We have expanded our presence in the exhibit hall and are eager to welcome all visitors to the Xenon booth who are interested in learning more about azetukalner and our broader pipeline.

Thanks, Chris. Looking briefly at our third quarter financial results. As of September 30, 2024, we had cash and cash equivalents and marketable securities of $803.3 million compared to $930.9 million as of December 31, 2023. Based on current operating plans, including the completion of the azetukalner Phase 3 epilepsy studies and fully supporting late-stage clinical development of azetukalner in MDD, we anticipate having sufficient cash to fund operations into 2027. I'd refer you to our news release and 10-Q report for further details around our financial results. We anticipate that 2025 will be a pivotal and transformational year for Xenon with several important milestones on the horizon. First and foremost, we're driving towards the highly significant data readout from X-TOLE2 expected in the second half of 2025. Importantly, positive results from X-TOLE2 will enable the submission of our NDA with the goal of advancing azetukalner towards commercialization. In the MDD program, we're anticipating results from the investigator-sponsored Phase 2 proof-of-concept study of azetukalner in MDD in the first half of 2025. In addition, our company-sponsored broad Phase 3 MDD program will be well underway with the initiation of X-NOVA2 anticipated before this year end. As we continue to advance our early-stage preclinical pipeline, we anticipate filing multiple INDs or equivalent in 2025 with the goal of initiating first-in-human trials across multiple targets while also exploring other potential indications for azetukalner that may be well suited for late-stage clinical development. With this in mind, we have built a foundation of strong, thoughtful fiscal management, which positions us to execute on our planned strategies to advance azetukalner through late-stage clinical development in both epilepsy and MDD, while at the same time supporting a robust pipeline of next-generation ion channel therapeutic candidates. To summarize some of the key takeaways from today's call, we believe strongly in azetukalner's compelling clinical profile, which is built on its unique mechanism of action and supported by the meaningful body of clinical data we've generated thus far. We're excited to engage with key patient and physician communities to raise further awareness about the potential of azetukalner in the future treatment of epilepsy at the upcoming AES meeting, where we will also present the latest data from our ongoing X-TOLE OLE study. For those of you on the call attending AES, we look forward to connecting with you in Los Angeles. And looking slightly further out, we look forward to connecting at the upcoming JPMorgan conference, which will give us an opportunity to kick off the year and outline our key goals for 2025 in more detail. I hope you share our excitement as we continue to execute our clinical development plans and anticipate these key events next year. Thank you for your attention today, and we look forward to sharing more in the coming months. I'll now ask the operator to open the line for any questions.

Your first question comes from Paul Matteis with Stifel. Your line is open.

Hi there. This is Julien on for Paul. Thanks so much for taking our question and congrats on the progress. Just wondering if you could provide a little bit of color, again, on enrollment dynamics and whether things are tracking according to your expectations? Any other details or learnings perhaps since our last quarterly update? And then secondly, quickly, just on the MDD investigator-sponsored study, I'm just curious on how you perceive that study either reading on to or not reading on to your Phase 3 pivotal program and thus confidence in execution of your own study?

Thanks for your question. I'm glad to address the first part and also touch on the second. Chris Kenny can share his insights on the IST and MDD as well. We receive many questions regarding our Phase 3 epilepsy program, and we feel confident in our current position. Nothing significant has changed in the past quarter in response to your specific inquiry. I want to emphasize that we have substantial experience managing large focal epilepsy studies in a contemporary clinical trial environment. We aim to provide the best information possible, and right now, our guidance for X-TOLE2 is to expect top line data in the second half of next year. There’s nothing new to add to what you’ve already heard from us. Regarding MDD, I’ll share our perspective on this study, and then Chris can outline what we anticipate seeing because the endpoints mentioned in his prepared remarks differ slightly from our sponsor perspective. We regard the team at Mount Sinai and Baylor, particularly Dr. Murrough and Dr. Mathew, as key opinion leaders who have made significant contributions to this area in major depression. We are pleased to support their efforts and collaborate with them, providing drug supply to their research. However, this is a small IST at two medical centers and does not inform our own MDD program. We are committed to conducting three Phase 3 clinical trials in major depression using the 20-milligram dose of azetukalner, and we have made excellent progress on the first study, X-NOVA2, which will soon be underway. Therefore, there’s no correlation between that study's outcomes and our own. We expect to have top line data from our study in the first half of 2025. Chris, would you like to share your thoughts?

Sure. The investigator-initiated trial has enrolled 60 patients, with one group receiving a placebo and the other receiving the active treatment. Additionally, our X-NOVA study involved approximately 168 patients. As we advance to Phase 3, our studies will include 450 patients. Therefore, I want to emphasize that the investigator-initiated trial is relatively small, with 30 patients in each treatment group, making it underpowered for clinical outcomes like MADRS and SHAPS. However, it is designed to show improvements in fMRI based on the research conducted with ezogabine for moderate-to-severe depression. It will be interesting to see if there is a readout on fMRI, which, while somewhat academic, could shed light on why this mechanism is beneficial in major depressive disorder, particularly regarding its effect on the reward circuit. Importantly, this study will not hinder our Phase 3 plans. Another aspect to watch is the tolerability we observed in our Phase 2 study, which we hope to either confirm or refute when we receive the results next year. That's all I have.

Thanks.

Thank you. Operator, we can go to the next question.

Next question comes from the line of Tessa Romero with JPMorgan. Your line is open.

Hi team. This is Caroline Pocher on for Tessa Romero with JPMorgan. Thanks for taking our questions. So first from us, when can we expect to learn more about the clinical profile of the lead Nav1.7 candidate, including the level of receptor occupancy and potentially binding site? And then if I could just sneak another one in. Based on your prepared remarks, it sounds like a proof-of-concept study is in the cards for next year. Could you just frame what such a study could look like for Nav1.7? Thank you.

Thank you for the question. We've learned a great deal from our overall properties, including receptor occupancy and binding site selectivity, as well as biodistribution, although we haven't shared much of this information publicly. Our key insights are being incorporated into our program, but we won't be sharing them widely. We believe we have a suitable profile of molecules to conduct the necessary human experiments to test whether selective Nav1.7 sodium channel inhibition with high receptor occupancy can provide pain relief. We're confident in our ability to test this hypothesis in humans, which excites us. As for our clinical development plan, the initial study will follow a standard first-in-human approach, SAD/MAD. Regarding the proof-of-concept, while it's still in the planning stage, we are considering a study in bunionectomy as a likely option. We're working on organizing this planning, with the first step being to complete GLP toxicology and submit an IND before commencing our first-in-human studies.

Next question comes from the line of Andrew Tsai with Jefferies. Your line is open.

Hi, good afternoon. Thanks for the updates. Thanks for taking my question. Maybe a brief question is just for the ongoing X-TOLE studies, X-TOLE 2 and 3, what are you assuming for the placebo rate on seizure reduction? Is it similar to what you saw in the Phase 2b? And how are you controlling for placebo risk if there is one? Thanks.

Thanks, Andrew. Chris, I'll begin by addressing the question from a slightly different angle to provide some context that I believe will be useful. Then, Chris, you can discuss the management of the placebo rate in epilepsy studies regarding the jurisdictions and the quality of the sites we are collaborating with. Andrew, concerning our modeling, the key issue revolves around our comfort level with the study design, powering, and statistical analysis. We have analyzed all the data from the X-TOLE study, which was a large four-arm study consisting of three active doses and a placebo. This data serves as the foundation for our statistical model regarding powering. We utilized the actual placebo rates from the X-TOLE study, which was in the high teens. This aligns with our expectations for the Phase 2 study. Overall, we believe it was executed effectively. We can incorporate these actual data points—placebo rate, active rate, and standard deviation—into our Phase 3 model. As we've indicated before, at the high dose of 25 milligrams, we have over 99% power, while the lower dose of 15 milligrams has about 90% power. For the study sizing, we based our decisions primarily on the lower dose since we have significant power at the high dose. Chris, could you comment on the execution of Phase 3 regarding the placebo rate?

Yes. One advantage of epilepsy compared to other fields like neurology or psychiatry is that the data can transition from Phase 2 to Phase 3 more easily. However, we are taking several steps to reduce the risk of an increasing placebo effect, mainly related to geography. Certain geographical areas show a higher placebo effect in epilepsy. We are also focusing on experienced research sites—not just those with general drug experience, but specifically those familiar with azetukalner. Additionally, we have been selective about which sites participate in the study, ensuring they have dedicated expertise in epilepsy. Although we could involve more sites, we have chosen to be diligent, and most of our sites specialize in epilepsy. These are the key ways we are addressing the placebo effect as we move from Phase 2 to Phase 3.

And Chris, I'll add, and Andrew, I'll add one more interesting point regarding the use of electronic diaries. When we initiated the X-TOLE study, there was significant internal discussion as it marked a transition between the use of paper diaries and electronic diaries by sponsors. While we can’t run the experiment twice, we have a sense internally that the electronic diary and the technology we employed in Phase 2, which we are also using in Phase 3, has been beneficial. This is because we are consistently reminding patients to record their seizure data, allowing us to track it in real-time in the cloud and ensure there is no missing information. I believe this is advantageous.

Next question comes from the line of Brian Abrahams with RBC Capital Markets. Your line is open.

Hi there. Thanks for taking my question and congrats on the continued progress. As we head into AES, I'm wondering if you could talk a little bit more about what some of the highest focus elements of the 36-month data will be relative to prior cuts, your level of confidence in the continued safety profile? And then some of the key aspects that you're going to be highlighting and seeking input on there as you ramp up your presence and engagement. Thanks.

Thanks, Brian. These are very important questions. I believe the AES is the foremost medical congress in epilepsy, and our team has put in a significant amount of planning for it. We are eager to have a strong presence there and showcase the extensive work we are doing across our portfolio. I'll begin by sharing my thoughts on the 36-month data, and then I'll invite Chris Kenny and Chris Von Seggern to provide their insights as well, since their teams will also have a significant presence at the event as we continue our medical communications and prepare on the commercial side. Regarding the 36-month data, we've previously shared OLE data, and you can expect to see consistency there. All patients will have completed 36 months, allowing us to present data on the population and their seizure reduction. We've observed improved seizure reduction over time for those who remain on the medication. Additionally, the seizure freedom rate is showing a positive trend, increasing as patients stay on the drug longer. This is particularly relevant for the clinical community, as more patients are achieving 12 months of seizure freedom, which we are excited to communicate. It's important to note what Chris Kenny mentioned earlier. Given the literature on this patient population, whose members have failed multiple drugs and exhibit refractory conditions, we wouldn't expect to see high seizure freedom rates. Literature suggests it should be below 5%, but we reported significantly higher seizure freedom in our 24-month data last year, with an update for the 36 months coming this year. On the safety front, we have seen a consistent safety profile, which gives us a lot of confidence. We will provide a safety update; the adverse events during the double-blind period align with those observed in the open-label extension. With over five years of dosing and more than 600 patient years of exposure, we are gaining a deep understanding of the adverse events and overall safety profile of the molecule, which reassures us. Chris Kenny, please share your perspective, and Chris Von Seggern, I know this meeting is particularly significant for your team as well.

Yes, it's a significant moment for us at AES. We have a lot happening beyond the open-label extension poster, which was the focus of your question, Brian. Ian addressed it well. I want to add that we will be providing retention rates for a longer duration, extending beyond just one or two years to three years. What we're observing is that once patients reach the two-year mark, they tend to stay in the study for an extended period. Additionally, as Ian mentioned regarding seizure freedom, the longer the study continues, the more data we gather on seizure freedom over extended timeframes. I believe you'll find the data impressive. Chris?

Yes. Beyond the data platform, we see AES as a great opportunity to connect with potential future prescribers in the market. AES consists of a high concentration of epileptologists and neurologists focused on epilepsy. Our team is preparing to interact with as many key opinion leaders and potential future prescribers as possible to gather feedback on azetukalner, its profile, and how it could fit into the market. This meeting is a major event for us, not only regarding data but also for the chance to engage with leading physicians in the field.

Next question comes from the line of Brian Skorney with Baird. Your line is open.

This is Luke on for Brian. Thanks for taking my question. On FOS, can you share your current thinking on bringing azetukalner into development for pediatric patients? And is this something that could commence ahead of X-TOLE2 data? And is there anything unique from X-TOLE2 in how you would conduct a study in these patients? Thanks.

Yes, good questions. We haven't actually talked about the pediatric development probably for a few quarters now. So a nice reminder. So yes, we have agreed upon pediatric plans with both FDA as well as EMA. So we know exactly what we need to do to bring the molecule into younger patients. So just as a reminder, in FOS, X-TOLE2 and X-TOLE3 are focused on adults. Actually, in our primary generalized tonic-clonic seizure study, we're going down to 12-year-olds. So that was based on some FDA feedback. So that study is looking at 12 and above. But we have an agreed-upon plan and essentially, you go through younger cohorts of patients over time. There's nothing specific in the X-TOLE2 data that we're looking for that necessarily informs there. A lot of the work we're doing is really the pediatric formulation, juvenile toxicology, the other work that we need to do to get into younger patients. So a lot of that work is happening in parallel. And then over time, you'll see kind of these age groups of cohorts as we step down all the way into very, very young patients over time. So the pediatric plan is ongoing kind of in parallel in the background, and you'll start to see some clinical development over the next couple of years in younger FOS patients. And then as I mentioned, on the primary generalized side, we're already down to age 12.

Yes. The only thing I'll add to that is that, of course, those patients are lighter in weight. So we have to make dose adjustments. But that's it. Otherwise, Ian covered everything.

Next question. Thanks Luke.

Next question comes from the line of Jason Gerberry with Bank of America. Your line is open.

Hi guys, thanks for taking my question. Mine just is a patent question actually. So specifically, your food effect patent, my understanding is the strength of these patents tends to be, can you get some sort of incorporation in the product labeling around the food effect such that generics wouldn't be able to eventually one day carve it out in their own insert. So just wanted to get your confidence when you think about the Phase 3 study protocol and getting label language around a recommendation for dosing close to meal time, which I think is sort of a key to that bioavailability argument with that patent. And just wanted to understand kind of how you're thinking about that and the strength of that patent. Thanks.

Yes. I think you framed it really well. Sherry can go into the details on our approach.

Yes. I won't get into too much detail on this, Jason, as I'm sure you can appreciate there's some sensitivities around this. But look, overall, we're very comfortable in this food effect patent but more broadly in our patent portfolio, which takes us out to 2039, '40 absent extension of term. But on the food effect point specifically, so we do have a food effect with this molecule, which is unique to azetukalner. So it's not something that is seen broadly with the mechanism. So it wasn't, for example, seen with ezogabine. And we understand it's not seen with other Kv modulators in development, not something that was therefore predicted by us. But yes, we have been dosing azetukalner with food in proximity with the evening meal through our Phase 2 study, X-TOLE as well as in Phase 3 development, both in our epilepsy program as well as in MDD. So we do reasonably expect that, that will be on label at the end of the day, given that's how the drug has been dosed and not doing so would potentially have implications on both or either of efficacy and tolerability.

Next question comes from the line of Sarah Schram with William Blair. Your line is open.

Congrats on another great quarter and thanks for taking my question. So given what we know about other sodium channel targeting therapeutics in the clinic to treat pain, would you expect to pursue both acute and chronic pain indications? Or do you anticipate a little bit more of a narrow focus? I know you mentioned bunionectomy studies earlier, but is there kind of anything specific to Nav1.7 that would be more well suited to one pain setting or the other? And relatedly, given your expertise in ion channel chemistry, would you ever look to develop a Nav1.8 inhibitor? Or do you see that space as increasingly crowded here?

Yes, I'm glad to address those questions. Currently, the focus on Nav1.7 isn't limited to just acute or chronic nociceptive or neuropathic pain. It's still early in the process since this is a preclinical asset. We aim to conduct a proof-of-concept study, such as a bunionectomy, to demonstrate target engagement and achieve an analgesic effect. As we consider mid- and later-stage clinical development, we are open to exploring all options. We're not constrained by genetics or the target as we approach this. Regarding Nav1.7 versus 1.8, we frequently get that question. We prefer 1.7 for several reasons, including its strong genetic backing and being in a less competitive field. The chemistries have also been more challenging, and we believe we have a significant advantage there. We have additional ideas for potential directions, which we haven't publicly disclosed, but we currently do not have a formal Nav1.8 program. Our primary focus is on Nav1.7, as it is a target where we are well-positioned to conduct human clinical trials.

Next question comes from the line of Paul Choi with Goldman Sachs. Your line is open.

Hi, thanks for taking our question. Clinicaltrials.gov is currently showing that the X-TOLE3 study will reach primary completion just four months after X-TOLE2. So presumably, the top line results should be available roughly or concurrently with your planned NDA filing for azetukalner following X-TOLE2. So can you maybe just update us on your latest thinking of how X-TOLE3 might figure as part of your data strategy for your filing? Will it be primarily included in the NDA? Or is it primarily for the European filing? Just your latest thoughts there would be great. Thank you.

Thank you, Paul. I'm glad to start. Chris, feel free to jump in with any comments. We've been prioritizing X-TOLE2 over X-TOLE3 for a while now, and this is happening in a few different ways. First, X-TOLE2 was initiated before X-TOLE3 concerning the first clinical sites being operational. We also prioritized several sites experienced with the molecule for X-TOLE2, and we leaned towards sites in jurisdictions where studies typically commence faster, like the U.S. Thus, several of those sites are focused on X-TOLE2. The prioritization of X-TOLE2 is crucial since it's on the critical path to filing the NDA and commercializing in the U.S. Regarding X-TOLE3, we believe it's essential for filing in regions outside the U.S. and for enhancing our overall safety database. We consider safety based on ICH requirements and exposure in the labeled population. We've discussed our long-term exposure extensively today, and we expect to see substantial long-term exposure and unique exposures across X-TOLE, X-TOLE2, X-TOLE3, and X-ACKT along with all the open-label work. This context illustrates how the two studies interact. Chris Kenny, did I miss anything?

No, you didn't miss it, but I think it's really important to emphasize that we are positioning the X-TOLE study as our first pivotal trial in focal onset seizures. Once we get the second trial, presumably X-TOLE2, we will submit the NDA. So there will be no delay waiting for X-TOLE3 to submit the NDA. I just want to make sure that's absolutely clear.

Next question comes from the line of Danielle Brill with Raymond James. Your line is open.

Chris, you commented during the prepared remarks that in X-TOLE, azetukalner demonstrated the best placebo-controlled efficacy to date. If the effect size happens to diminish in X-TOLE2 relative to X-TOLE, what impact might that have, if any, on its value proposition? Thanks so much.

You want me to go in?

Chris, do you want me to start and then you carry on?

Sure, yes.

Thanks, Danielle. The key point we're making is that we have set a very high benchmark. Based on our review of the literature, we believe that azetukalner shows the best efficacy when adjusted for placebo. Specifically, at the 25 milligram dose, the primary endpoint in X-TOLE minus the placebo rate is the highest figure we’ve identified in the literature. This is particularly noteworthy in the most severe or refractory population that has been trialed, at least according to our literature review. While we are making cross-trial comparisons, the efficacy outcome is still very impressive and has established a significant standard. It's important to note that as we move forward with our filings for X-TOLE and X-TOLE2, those data are already completed and unblinded. We can rely on the reproducibility and consistency we've seen across studies in epilepsy, although there will always be variations. To directly address your question, if the data from X-TOLE2 are not as strong as from X-TOLE, we still have the X-TOLE data, and we believe the results from X-TOLE2 will confirm that this is an effective agent and a significant molecule, along with its other qualities. Therefore, we don’t overly focus on the exact efficacy results from X-TOLE2 or their implications. I think Chris Kenny and Chris Von Seggern can add their insights, particularly regarding the commercial aspects if there's a noticeable difference between X-TOLE2 and X-TOLE.

I just want to quickly emphasize the X-TOLE data because it's what we have and we find it quite compelling. We're not making predictions about X-TOLE2 or 3 in terms of whether the data will be better, worse, or the same since that’s difficult to foresee. The focus is on the actual data we have. Ultimately, we need the trial to be positive so we can submit the NDA. Chris?

Yes. And then if we think about the positioning of azetukalner in a potential future commercial environment, clearly, what we've said in the past is that physicians are looking for new medicines to address continued seizures in this patient population and efficacy is an important value attribute. But when we think about efficacy, there are multiple dimensions beyond just the top line data. We're going to share the updated open-label data, which are going to show continued durable response and impressive seizure freedom data over time. That's the totality of the efficacy story in addition to potential rapidity of onset as demonstrated by week one efficacy. And then there are a whole host of other ease-of-use attributes that consistently are identified by physicians as a reason to turn to azetukalner for a patient who's continuing to suffer from residual seizures. So while efficacy is important, the totality of the data package associated with this molecule, we consistently hear time and time again is compelling. And therefore, we believe it will offer a really important treatment alternative to patients in this marketplace.

Next question comes from the line of Marc Goodman with Leerink Partners. Your line is open.

Ian, can you just talk about the strategy for MDD program just in total with respect to when are we going to get the second trial started and the third trial started and how you're thinking about that, how to stagger it and just in the same light as the way you talk about the epilepsy program, just so we have an update. Thanks.

Yes, this is in line with our epilepsy program. We plan to run the Phase 3 studies in Major Depressive Disorder in parallel, although they won’t start at exactly the same time. The initiation of X-NOVA3 will not depend on the results of X-NOVA2, but there will naturally be a slight delay between the two. Right now, we are concentrating on getting X-NOVA2 underway, and then X-NOVA3 will follow after some time. Both studies, along with X-NOVA4, will be conducted roughly concurrently. As you may know, the enrollment for MDD studies tends to be quicker than for our epilepsy studies. Looking ahead to the next few years—2025, 2026, and 2027—we anticipate generating a significant amount of clinical data related to Xenon and azetukalner across our entire portfolio.

Next question comes from the line of Joseph Thome with TD Cowen. Your line is open.

Hi there. Good afternoon and thank you for taking my question. Maybe as we think about the Kv7 development candidates that you have in the early pipeline, how are those differentiated from azetukalner? Do they have different selectivity, different PK or sort of what will you be looking for, for those assets? And then related to an earlier question, would all of these have, I guess, a new IP portfolio around it? Can you talk a little bit about that as well? Thank you.

Yes, thanks, Joe. To start with your last question, these are all new structures and markers, representing distinct intellectual property when compared to azetukalner. An interesting point of discussion internally regarding the Kv7 molecules is that we are not specifically trying to change or improve any aspect of azetukalner’s profile. The factors we are examining are numerous; we’re considering a range of properties for these molecules without focusing on one particular aspect. While you mentioned pharmacokinetics or selectivity, we don't have a singular focus because the profile of azetukalner is compelling. That said, we do have chemical diversity in our portfolio. In terms of the properties we anticipate, we are excited about what we see preclinically. The real confirmation will come as we transition into clinical trials and learn about the pharmacokinetics in humans. Moreover, we understand the exposure levels we’re aiming for in humans based on the translatability of some preclinical findings. We know that at a certain plasma exposure, azetukalner provides both an anti-seizure and an antidepressant effect, which gives us confidence in the translatability from animals to humans. So, this is an exciting time for our early-stage portfolio, including the Kv7 and the 1.7 and 1.1 programs. We expect to see multiple Kv7 molecules advance to human clinical development over the next few years, some of which may resemble azetukalner while others may exhibit different properties, which we will learn about during development.

And our last question comes from the line of Laura Chico with Wedbush Securities. Your line is open.

Hello, thank you for taking our question. This is Dylan on for Laura Chico. We're just wondering, so how should we think about the cadence and readouts for the ion channel portfolio? And should we be looking for data in the 2025 timeframe?

Thank you for the question, Dylan. We haven't reached that level of detail yet. Based on our prepared remarks and the information shared in our press release and quarterly report, the Kv7 and Nav1.7 molecules are a bit further along in development compared to Nav1.1. We are currently conducting IND-enabling studies for both Kv7 and Nav1.7, and assuming everything goes smoothly with the remaining non-clinical studies, we expect these molecules to enter human clinical development next year. We will provide updates throughout 2025 as these transitions occur. The timing of these transitions will give us a clearer idea of when we can expect to see human pharmacokinetic data, as well as our single ascending dose and multiple ascending dose data. This will also allow us to discuss the characteristics of these molecules, particularly regarding receptor occupancy related to our Nav1.7 program. We anticipate learning a lot from the first-in-human studies, followed by moving into proof-of-concept studies. Please stay tuned for further updates in 2025.

And no further questions at this time. I will turn the call back over to Sherry Aulin for closing remarks.

Great. Thanks, everyone, for joining us today. If we didn't manage to get your question during the allotted time, we'll reach out directly to connect. Operator, we can now end the call.

And this concludes today's conference call. You may now disconnect.