Xenon Pharmaceuticals Inc. Q2 FY2025 Earnings Call

Thank you for your patience. I would like to welcome everyone to Xenon Pharmaceuticals' Second Quarter 2025 Earnings Conference Call. I will now hand it over to Chad Fugere. You may begin.

Good afternoon. Thank you for joining us on our call and webcast to discuss Xenon's Second Quarter 2025 Financial and Operating Results. Joining me are Ian Mortimer, Xenon's President and Chief Executive Officer; Dr. Chris Kenney, Xenon's Chief Medical Officer; and Darren Cline, Xenon's Chief Commercial Officer. After completing their prepared remarks today, we will 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 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. Today's press release summarizing Xenon's second quarter 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 when filed with the SEC and on SEDAR+. Now I would like to turn the call over to Ian.

Thank you, Chad, and good afternoon, everyone, and thanks for joining our call today. We are excited to share a number of advancements across our pipeline as we have made significant progress over the past quarter. As we reflect on the first half of 2025, we continue to advance against our key strategic priorities. #1, driving towards Phase III data, NDA submission, and commercializing azetukalner for the treatment of focal onset seizures in the U.S.; #2, broadening the azetukalner opportunity across additional epilepsy and neuropsychiatric indications; and #3, expanding our product portfolio through the advancement of our promising earlier-stage ion channel programs. Today, we will cover details and milestones relating to these exciting program advancements and momentum we have going into the second half of 2025. I will begin with a brief review of highlights from this past quarter, starting with our most advanced azetukalner Phase III clinical trial, X-TOLE2. As disclosed in today's press release, we have completed patient recruitment in X-TOLE2. This is a significant milestone in the development of azetukalner and keeps us tracking to report top line results early in 2026 in anticipation for our first approval and commercial product as a company. We plan to refine our guidance for the timing of top line results after the last patients are randomized. We remain highly encouraged by the potential of azetukalner to deliver on the promise of a new antiseizure medication with a differentiated product profile to what is available today. And this could benefit people living with the debilitating effects of uncontrolled seizures. From the outset, we have prioritized working with high-quality experienced sites to maximize study success while diligently monitoring key metrics throughout the study. As discussed on previous calls, we are pleased that these metrics align consistently with our successful X-TOLE study and continue to have confidence in X-TOLE2 and share the epilepsy community's excitement as we progress towards Phase III readout. It's this excitement that drives our scientific leadership and investment in the Kv7 landscape. Azetukalner is the only Kv7 channel opener and the only ASM in development that is backed by long-term efficacy and safety data from clinical studies of patients living with epilepsy. Having demonstrated highly compelling placebo-adjusted efficacy in focal onset seizure patients in our Phase IIb trial in durable and sustained efficacy over time through our open-label extension study. And approximately 800 patient years of exposure and safety data. There remains a substantial need for new, efficacious and well-tolerated epilepsy therapies, especially for those patients who continue to experience the debilitating impact of focal seizures, even while taking multiple antiseizure medications, and we believe that azetukalner key attributes as seen to date demonstrate its potential to provide an important new option for the epilepsy community. We consistently hear positive feedback and excitement within the medical community about azetukalner compelling value proposition, which includes a novel mechanism, rapid onset of effect, robust efficacy and multiple ease-of-use attributes, including once-daily dosing, no required titration along with a potential mood benefit. Azetukalner has the potential to be a best-in-class antiseizure medication that offers significant and meaningful benefits in the future treatment of epilepsy. Chris will touch on more detail shortly as to our continued work with investigators and anticipation building in the field. In addition, we believe there is significant potential for azetukalner beyond epilepsy with initial focus on depression. Within our Phase III MDD program, we have now initiated X-NOVA3, which is the second of three planned studies of the azetukalner in major depressive disorder. Also during the quarter, we initiated the first of two planned Phase III studies in bipolar depression 1 and 2, called the X-CEED study. We continue to execute as planned to expand the clinical development of azetukalner into indications and invest in our neuropsychiatric programs. This is a good time to turn the call over to Chris, who will share more details on our late-stage clinical development programs. I'll then provide an overview of our early-stage pipeline programs as well as conclude with a summary of key milestones ahead.

Yes. Thanks a lot, Ian. Starting with our Phase III epilepsy program, which includes our two studies in focal onset seizures or FOS, X-TOLE2 and X-TOLE3, and our X-ACKT study in primary generalized tonic-clonic seizures or PGTCS. I'm incredibly excited to confirm that our Phase III X-TOLE2 clinical study of azetukalner in FOS has now completed patient recruitment and as guided previously, we expect top line data in early 2026. This milestone reflects tremendous focus and execution by our clinical operations, clinical development and field-based medical teams as well as strong commitment from the epilepsy patient community, our investigators and their site staff. As we progress closer to a top line data readout, we continue our ongoing educational and scientific outreach efforts to raise the profile of azetukalner amongst healthcare providers. Our team will have a strong presence at the upcoming 36th International Epilepsy Congress or IEC, taking place August 30 to September 3 in Lisbon, Portugal. Four abstracts were accepted including an overview of 36-month data from the ongoing X-TOLE open-label extension study of azetukalner in patients with FOS, which demonstrated sustained monthly reduction in seizure frequency, impressive seizure freedom rates, and a consistent AE profile, suggesting long-term efficacy and tolerability of azetukalner. We also intend to highlight data from our X-TOLE study showing the efficacy of azetukalner in certain focal onset seizure subtypes, as well as present a targeted literature review outlining the comorbidity burden and focal onset seizures. In addition, our discovery team will present findings from our early-stage Nav1.1 program with data from preclinical models of Dravet syndrome. Then, of course, we're also looking forward to the American Epilepsy Society later in the year, having already submitted new 4-year long-term data from our X-TOLE open-label extension study with plans to have a strong presence and opportunities for education and interactions with the various event plans. So more to come as we get closer to engaging with the epilepsy community in Atlanta later this year in December. Turning to Xenon's efforts to expand azetukalner's use into neuropsychiatry, I want to first highlight that X-NOVA3, the second of three planned Phase III clinical trials evaluating azetukalner in patients with major depressive disorder has now been initiated alongside X-NOVA2. As we engage with physicians who treat patients and depression and are involved in the studies, they are eager to explore the differentiated profile of azetukalner versus existing agents. They are specifically interested in azetukalner novel Kv7 mechanism of action and its potential benefit on anhedonia, rapid onset of effect, along with a potentially differentiated tolerability profile. Echoing Ian's sentiments, I'm also pleased to announce that X-CEED, the first of two planned Phase III clinical studies evaluating azetukalner in patients with bipolar depression 1 and bipolar depression 2 has been initiated. Bipolar disorder is a psychiatric condition characterized by mania or hypomania and depressive episodes and can severely impact a person's quality of life. As of 2019, approximately 40 million people worldwide were affected by bipolar disorder and nearly 6 million adults in the U.S. On average, patients diagnosed with bipolar disorders spend 3 times as many days with depressive symptoms than with mania or hypomania. And the severity of depressive symptoms has been associated with functional impairment, reduced quality of life and a higher prevalence of attempted suicide. Effective treatments for depression and bipolar disorder are limited and many patients are nonadherent due to intolerability and side effects. In short, there remains a significant unmet medical need for safe and effective therapies to treat patients with bipolar depression. Now expanding into BPD is based on a strong scientific rationale based on preclinical data showing an antidepressant effect of azetukalner, genetic links between BPD and Kv7, evidence of Kv7 down regulation in BPD as well as clinical studies that explore the use of Kv7 potentiators in depression. Considering the treatment landscape for BPD, azetukalner's novel selected Kv7 mechanism of action, potential benefit on anhedonia, rapid onset of effect, and differentiated safety profile are particularly attractive in BPD. Further, we believe that azetukalner's demonstrated safety profile could represent an improvement over commonly used drugs to treat bipolar depression, such as atypical antipsychotics, lithium, valproic acid and lamotrigine. Based on results from our Phase II X-NOVA MDD study, where no study subjects experienced notable adverse effects on sexual function or weight gain. Our Phase III BPD program includes two multicenter, randomized, double-blind, placebo-controlled clinical trials to evaluate the clinical efficacy, safety, and tolerability of 20 milligrams of azetukalner, administered orally with food over the 6-week double-blind period as monotherapy treatment in approximately 400 patients per study with bipolar 1 or 2 depression with an opportunity to increase the sample size to 470 based on an interim analysis. The primary efficacy endpoint is the change from baseline in the MADRS score at week 6 in patients who received azetukalner compared to placebo. Upon completion of the double-blind period, eligible patients may enter an open-label extension study for up to 12 months.

Thank you, Chris. We have strong momentum in our early-stage pipeline with several regulatory filings anticipated this year to support the start of first-in-human trials for various validated ion channel targets. The expansion of our early-stage pipeline is a direct outcome of our successful use of extensive knowledge and development expertise in potassium and sodium channel therapeutics. I'm very proud of the significant progress we are making across multiple programs that target ion channels, including Kv7, Nav1.7, and Nav1.1. I will now update you on each of these promising programs. Starting with our pain programs, I’m pleased to announce that we have begun two Phase I studies for our Kv7 and Nav1.7 programs. Despite a variety of therapies available, many patients still face issues with inadequate pain relief, poor tolerability, or opioid dependence. Therefore, the demand for new non-opioid treatment options is considerable. We consider Kv7 and Nav1.7 to be highly validated targets in pain, as both are crucial in pain signaling by regulating neuronal excitability. Acknowledging the broad applicability of the Kv7 mechanism of azetukalner, we have discovered several chemically diverse Kv7 development candidates, believing this mechanism could be beneficial in various therapeutic indications, such as seizures, pain, and neuropsychiatric disorders like major depressive disorder and bipolar disorder. In the last quarter, we reported that a clinical trial application for XEN1120 was accepted. This Kv7 channel opener is being evaluated as a potential pain treatment, with a Phase I study involving healthy adult participants currently underway. We have preclinical and clinical evidence supporting the development of new selective Kv7 openers tailored for pain, and we expect to identify more Kv7 compounds in diverse chemistries that will follow XEN1120. We are also making significant advancements in our Nav1.7 sodium channel program, where it appears we have addressed the limitations seen with earlier investigational drugs targeting Nav1.7. A key part of Xenon's foundation is our pioneering work that validated Nav1.7 as a pain target through strong human genetics evidence, leading us to believe that Nav1.7 could provide a new class of medications to fulfill the unmet need for effective opioid alternatives. We have advanced several selective Nav1.7 development candidates and are excited to share that a Phase I study has recently begun for XEN1701, our leading Nav1.7 candidate for pain. In early October, we plan to hold a research and development webinar to present our early-stage pain programs, providing in-depth insights into mechanisms, supporting human genetics, preclinical results, and an overview of disease prevalence and unmet needs in specific patient groups. We will provide more details as the date approaches and look forward to hosting a series of these virtual sessions in the future. Progress continues in our Nav1.1 program as well. Our preclinical findings suggest that targeting Nav1.1 might address the fundamental causes and symptoms of Dravet syndrome. Data indicates that dosing with an orally available small molecule that selectively targets Nav1.1 can suppress induced seizures and improve motor performance, signaling potential enhancements in the function of Dravet patients. Moreover, chronic dosing in animal models has shown to suppress spontaneous seizures, safeguard against sudden unexpected death in epilepsy (SUDEP), and enhance long-term potentiation, which is linked to learning and memory. These preclinical results are very promising, and we expect a leading Nav1.1 candidate to enter IND-enabling studies by the end of this year. Additionally, we have made progress from Xenon Labs with a selective dual inhibitor of Nav1.2 and Nav1.6, which is now undergoing Phase I study as part of our collaboration with Neurocrine Biosciences. Neurocrine has indicated that this first-in-human study will assess the safety, tolerability, pharmacokinetics, and pharmacodynamics of the investigational compound NBI-921355 in healthy adult participants to support its potential use in treating certain types of epilepsy. I will briefly touch on our financial results. As of June 30, 2025, cash and cash equivalents and marketable securities stood at $624.8 million, down from $754.4 million as of December 31, 2024. Based on our current operational plans, which include completing the azetukalner Phase III epilepsy studies and supporting the late-stage clinical development of azetukalner in major depressive disorder and bipolar disorder, we project that we will have sufficient cash to sustain operations into 2027. Thanks to our proven fiscal management, Xenon is in a strong financial position to support multiple registrational programs for azetukalner and continue developing our early-stage pipeline. I encourage you to refer to our news release and the 10-Q report filed today for more details on our financial results. Before I wrap up, I want to welcome Darren Cline to our senior executive team as Xenon's Chief Commercial Officer. He will lead our commercial strategy and operations with an initial focus on azetukalner and our first potential launch in epilepsy. Darren brings invaluable experience as a commercial leader, having successfully held senior roles in various renowned companies such as GW Pharma and Seagen. He has a significant background in U.S. and global launches and played a key role in the commercialization of Epidiolex, widely regarded as one of the most successful epilepsy launches. Darren, we are thrilled to have you on board at this critical time, and I believe we will greatly benefit from your extensive experience in epilepsy and a strong history of achieving commercial targets that have made meaningful medicines available to patients. Your joining our leadership team further highlights the exceptional talent we have been bringing into the company. Darren, I'll turn it over to you for a few comments.

Thank you, Ian, for the warm introduction. I'm thrilled to join Xenon as Chief Commercial Officer at such a transformative moment. My experience in epilepsy has fueled my passion for addressing the unmet need of patients living with seizures. The data from the X-TOLE trial and the open-label extension for azetukalner are truly compelling, showcasing its potential to be paradigm-shifting with its novel mechanism of action. I'm eager to connect with the epilepsy community at the International Epilepsy Congress in Portugal later this month and to build momentum towards AES in December. At AES, we'll have the opportunity to share long-term azetukalner open-label extension data, which continues to demonstrate impressive outcomes. Notably, the latest open-label extension data shows that approximately one-third of patients on azetukalner for at least 36 months have achieved seizure freedom for a year or more. This is a meaningful metric as many epileptologists tell us that seizure freedom translates directly into improved quality of life for people living with epilepsy. Joining Xenon at this juncture with the X-TOLE2 database on the horizon and the potential approval of azetukalner in epilepsy is incredibly exciting. Looking ahead, the prospects for additional future indications in MDD and BPD further underscore the transformative potential for the company. I'm excited to engage with the investor community as we continue to make progress towards our goal of becoming a fully integrated commercial-stage neuroscience company. Ian, back to you.

Great. Thanks so much, Darren. The entire Xenon team is galvanized and driven by the strong potential of azetukalner and our broad pipeline of innovative neuroscience programs. We are entering a transformational period for Xenon as we evolve from a clinical to commercial-stage company. We believe that positive top-line results from our Phase III epilepsy program will enable an NDA submission to the FDA with the goal of advancing azetukalner towards commercialization. In addition, a number of our other late-stage neuropsychiatric programs are now underway in recruiting patients. Our deep pipeline also contains multiple promising early-stage therapeutic candidates across a number of ion channel targets supporting our goal to be a premier neuroscience-focused company. On behalf of everyone on the Xenon team, we are incredibly excited by the advancements in both our late- and early-stage programs, expansion of our pipeline as well as how the team is preparing towards commercialization and remain focused on taking important steps forward to bring us closer to delivering azetukalner to people living with epilepsy. So with that, that concludes our prepared remarks. And operator, we can now open the call up for questions.

Your first question comes from Paul Matteis with Stifel.

This is Emily on for Paul. Just two quick questions from us. Just first, can you remind us again how quickly do you think you'll be able to file on the back of that top-line FOS data and then secondly, on the Nav1.7 program in pain, could you talk to us a little bit more about your confidence on why you won't see safety issues like other drugs that have tried this same mechanism and target.

Thank you, Emily. I can address both of those questions. Firstly, regarding the timing for filing after the X-TOLE2 data, while we haven't provided specific guidance, we've discussed this with several investors in the past. As we approach the top line results and the filing of the NDA, we expect to give more detailed guidance, but we think it will take about six months from the top line data to the NDA filing. For your second question about Nav1.7, you may be alluding to cardiovascular signals observed in some earlier molecules during clinical development. We believe that both the drug's profile in terms of central and peripheral exposure, as well as the time to TMAX, play a role in this, and we feel confident about our understanding. We have not observed any cardiovascular signals in our preclinical safety data, and we will continue to monitor this closely during human clinical development. We are enthusiastic about making significant progress in getting this molecule into the clinic and establishing a strong leadership position in the Nav1.7 space.

Congratulations on the quarter.

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

Congrats on the progress here from us. So for X-TOLE2, when would you expect all the patients to be randomized here? What was your patient recruitment split U.S. versus ex U.S.? And can you comment on how many sites you ultimately enrolled for X-TOLE2? And how many of them you used in X-TOLE?

Chris and I can address these together. I’ll provide some perspective, and you can add more details since you're closely involved with the program. We recently completed patient recruitment, which is a significant achievement for the company. This gives us a clear timeline as those patients progress toward the top-line data. The last patients will undergo an 8-week baseline period, after which they will be randomized. We can provide future updates, but keep in mind that there is this baseline period followed by a 3-month double-blind period after randomization, as well as a safety follow-up, database lock, and data analysis. We should have the last patients randomized in the near future. Many of your other inquiries will need to wait until this happens, as we don’t have specific breakdowns yet; the data is constantly changing in terms of U.S. versus ex U.S., how many sites enrolled patients, and the comparisons with the X-TOLE sites. Chris, would you like to offer any guidance based on what we observed in X-TOLE and what we might expect in X-TOLE2?

I would say that overall, the goal of X-TOLE2 has been to remain as consistent with X-TOLE as possible, given the very positive results from that study. In terms of geographical distribution, I believe it will likely turn out to be similar between the U.S. and other countries. However, as Ian mentioned, we won't have the exact figures for another eight weeks or so. Regarding the total number of sites, there were slightly fewer than 100 used for X-TOLE, and we are randomizing more subjects in X-TOLE2 than in X-TOLE, which has allowed us to tap into a larger number of sites. We will provide all those details when the time is appropriate.

Ian and Chris, have you seen any compassionate use interest?

Yes, there’s interest in this mechanism, not just within the central nervous system, neurology and psychiatry, but also beyond. We regularly receive inquiries about using azetukalner in various situations. As you can see on our website, we do not currently have a compassionate use program in place. We have had many active discussions about when that approach might change, but we will provide more information on that later.

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

Congrats on all the progress. So I realize for X-TOLE2, you still need to finalize randomization. But I'm curious if we should be sort of thinking about this potentially the study size and the end being larger than the 360 originally planned sort of depending on how things go. With the final screens and randomization. And then I guess along those lines, some of our analysis has shown that Phase II to Phase III translatability in focal tends to be pretty good with limited diminishment of the delta in seizure reduction. So I guess I'm curious if you could maybe speak to your latest assumptions for what the delta could be and what the dropout rate could be for the study as we think about powering.

Thanks, Brian. Chris, I'm happy to start and give my perspective and then you can add in, especially as you kind of think about the X-TOLE2 readout. So, Brian, in terms of your N number, as you spoke to, the study was designed for 360 subjects, it's 3 arms, 120 subjects per arm. That's approximate. So we try to get as close to that as possible. But as you know, we have to stop patient screening at these individual sites before the final randomization numbers and that screen and baseline failure rate can move around a little bit. And so I don't have a final number yet because we don't have it internally, but we'll try to get as close to that 360 as possible. And I think that's important. I don't think we have to kind of over-enroll and maybe this is a bit of commentary to your second question. As you've mentioned and we agree with, I think reproducibility and translatability between different epilepsy studies in Phase II to Phase III are generally very good and very high, definitely in the neuro field. And we have lots of power at that sample size. We’ve talked about at the high dose of 25 milligrams based on our Phase II data as inputs into the model. We have more than 99% power, and at the 15-milligram dose, we have more than 90% power. So very, very comfortable in terms of the statistical analysis, how we've designed the study to sample size and the powering. My perspective on what we need to see in terms of X-TOLE2 is this study needs to be adequate for us to file. And we've had a very successful readout in X-TOLE. And so the second study, X-TOLE2, we need it to be statistically significant, and we need for that to support an NDA filing because now that X-TOLE is already complete, we have those data in hand. And as we've talked about previously, I think they're remarkably robust. On a placebo-adjusted basis, it's the best efficacy we've ever seen in a focal onset seizure study. In the most refractory or severe population ever tested at least our review of the literature. So now that that's already completed, I really think that the bar is we need statistical significance. We expect to see, obviously, some consistency. We're seeing that in the baseline demographics and the data going into the study, and that would support a filing. But Chris can probably provide his perspective as well.

Yes, thank you, Ian. I believe you covered it well. There are limitations to what we can observe in an ongoing blinded Phase III study. However, when we examine the patients who are being screened at the sites and who are passing through the screening and baseline processes, we can observe certain metrics during the double-blind period and then look at the transition into the open-label phase. Everything appears to be progressing as we anticipated, given that it remains a blinded study. Additionally, we have been cautious regarding metrics that tend to impact placebo responses, such as geographic factors. It’s difficult to expect two large studies to produce identical differences. Nonetheless, when we assess the primary factors contributing to that difference based on our own data and other studies, we feel as comfortable as possible, considering it is still a blinded study.

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

On 1701, can you talk a little bit about the molecule's profile? Do the preclinical models in the PK and bioavailability suggest to once daily or more frequent dosing? Can it be developed in an IV formulation? And how are you thinking about the first clinical pain model to serve as proof of concept here as opposed to operative pain, severe pain model or more along the lines of a moderate pain indication?

Thank you, Brian. There are a lot of questions there. If I miss any, please feel free to jump back in and remind me. Regarding your first question about pharmacokinetics (PK), we'll be able to provide an answer soon as we gather data from the first human cohorts. One of the difficulties in drug development is translating animal PK data to humans. We will design our drugs with the correct half-life in mind, but we need early clinical data from humans to address that question specifically. We'll follow up once we have some data. In terms of epilepsy and pain treatment, we believe there's a possibility for both intravenous (IV) and oral formulations. For instance, azetukalner 1701 is currently being developed as an oral drug, with IV options typically coming later. However, we are actively considering this for azetukalner, 1701, and other Nav1.7 candidates, as I think you might be hinting at with your question. There is a strong opportunity to provide an IV formulation of the same drug alongside oral pills for patient convenience at home. More information will follow, especially during our webinar in early October where we will focus on both KV7 and Nav1.7 for pain management. As for the proof-of-concept study, we have not fully designed the Phase II proof of concept for either 1120, the KV drug, or 1701 yet. We are exploring a postoperative context, looking at procedures like bunionectomy and abdominoplasty. Now that both drugs are in Phase I studies, we are bringing the team together to optimally design these proof-of-concept studies, considering aspects such as the number of doses and controls, along with other relevant factors.

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

Just another X-TOLE2 question now that enrollment is complete. And in terms of the blinded demographics, I'm just curious to the extent maybe severity, if you've had a chance to assess that to look similar to X-TOLE1. I know a competitor in the space ended up enrolling less severe patients. And we're just kind of wondering if that's perhaps company-specific or maybe an industry trend. And then with your BPD study, do you anticipate a high degree of site overlap with MDD. I'm just wondering if there's an opportunity for accelerated enrollment of the BPD study. And then just lastly, I think there were comments that with these healthy volunteer pain studies that there'd be some sort of induced challenge to assess efficacy parameters. I know that there's some debate around the utility of those, but I'm just kind of curious if that's something that you'll be assessing in those Phase I pain studies.

Thanks, Jason. Chris, I'm glad to address both your first and third questions, and please feel free to add anything regarding X-TOLE2. Regarding the bipolar, depression, and MDD question, Jason, you inquired about the baseline blinded demographic data related to patient severity for X-TOLE2. As we mentioned in our last call and confirmed again today, the patient characteristics resemble those in X-TOLE. However, we don't have final data yet since patients are still being randomized, and we lack the final sample size to provide a conclusive answer, but it appears to align more closely with X-TOLE regarding the key demographics we assess at baseline. My perspective, and I believe Chris may share his insights as well, is that these studies show patients becoming more severe over time, not less. I understand you referenced a recent dataset from a competitor that may indicate a less severe population. I think I know the study you mean, and it appears to be an open-label study with a very small sample size, from which I wouldn't draw too many conclusions. Our experience suggests that the patient demographics have shifted over the last 10 to 20 years, particularly when compared to earlier generation ASMs that dealt with a significantly less severe population. We are the company that has conducted the two most prominent studies in this area over the past five years, so we have valuable insight. Chris may want to expand on my comments. Regarding your third question about pharmacodynamic endpoints in pain studies, those endpoints can vary widely. There are many aspects to consider, and the challenge always lies in whether they are adequately powered. Our perspective is that in Phase I, alongside PK and safety assessments, we aim to ensure proper exposure based on our preclinical modeling, which leads us to believe we should observe an analgesic effect. From there, we can proceed with a patient population and conduct a rigorous proof-of-concept study to measure outcomes effectively. This has been Xenon's guiding principle, and we anticipate conducting two proof-of-concept studies for 1120 and 1701 next year. Chris, would you like to add anything to the first question and the inquiry regarding bipolar and MDD?

Yes. I have a few quick points to make. Our pharmacokinetic-pharmacodynamic analysis of the X-TOLE study indicates that we expect an intermediate response between what we observed with the 10 milligram and the 20 milligram doses in X-TOLE. We will determine that soon. I think it's very important to acknowledge Ian's point about having multiple doses approved. Lastly, it's worth noting that we only need about 40 to 50 patients per treatment group to achieve a 90% statistical power when comparing 25 milligrams of azetukalner to placebo in a focal onset seizure study. Therefore, the study is well-powered at 90% for the 15 milligram dose and significantly overpowered for the 25 milligram dose. We believe we are in a very good position.

And our last question comes from the line of Paul Choi with Goldman Sachs.

Maybe for either Ian or Chris to start. Now that you've completed enrollment in the Phase III. Could you maybe give us your latest thoughts on just how you're thinking about the potential difference in dose response for the 15 milligram and 25 milligram doses versus the dose response we saw in the Phase II? And as part of your filing strategy, is the plan to definitely go with both doses or just maybe the minimally efficacious dose? And maybe that is the first question. And then second, on the Nav1.7 program. Once you establish proof of concept, would you contemplate exploring combinations with the 1.8? I think one of your competitors in the space is examining that; just your thoughts on potentially looking at dual-targeted therapies here.

Thank you, Paul. I'll address the question regarding 1.7 first and then provide some insights while inviting Chris to share his thoughts on the dose response and our approach for both the Phase III program and regulatory submission. We are indeed excited about our leadership position with 1.7 as we prepare to enter the clinic and aim for proof of concept. Your query touches on a broader topic—exploring various combinations of mechanisms, including Nav1.7 and Nav1.8, as well as our Kv mechanism, which we find very promising. We believe that in the long run, combining different non-opioid mechanisms might yield the best results. However, it’s too early to finalize any specific strategies. Nevertheless, there are intriguing development questions to consider. Regarding epilepsy, we're pleased to announce that recruitment has now been completed. In the Phase II study, 15 milligrams was not tested, but we observed a clear dose response between 10, 20, and 25 milligrams. We anticipate a similar dose response between 15 milligrams and 25 milligrams in the Phase III program. Our objective, discussed with the FDA, is to have more doses available on label rather than fewer. This is important since individual patient responses and background medications can affect exposure differently. Hence, offering flexibility to the epilepsy community, including neurologists and epileptologists, is crucial. Chris will provide more detailed insights from his viewpoint as a neurologist, but our goal of making multiple doses available aligns with our ongoing discussions with the FDA and our NDA filing strategy. Chris?

Yes. I have a few additional points to mention. Our pharmacokinetic and pharmacodynamic analysis of the X-TOLE study indicates that we should observe an intermediate response between the results from the 10 milligram and 20 milligram doses in X-TOLE. We will know more soon. Ian's observation about the significance of having multiple doses approved is very crucial. Lastly, I want to emphasize that only around 40 to 50 patients per group are needed to achieve a 90% power when evaluating 25 milligrams of azetukalner compared to a placebo in a focal onset seizure study. Thus, the study is well-powered at 90% or potentially even higher for the 15 milligram dose and significantly overpowered for the 25 milligram dose. We believe we are in a strong position.

And that concludes our Q&A session. I'd now like to turn the call back over to Ian Mortimer for closing remarks.

Great. Thanks, operator. I really want to say thanks for everyone joining us today. And I do want to pass my credit to the entire Xenon team. This is an incredibly productive quarter. For the first time, we've completed enrollment and recruitment in our Phase III epilepsy program in X-TOLE2, and we're excited that we're getting close to top line data but we also initiated two Phase III clinical trials within the quarter, both in the psychiatric program with bipolar being up and running, in our second MDD study and getting our Nav1.7 and real leadership position there into the clinic as well. So an incredibly productive quarter on the Xenon side. I know we didn't get to all the questions today. I'm happy to follow up with people one-on-one after the call. But thank you for all of your support. And operator, we can now end the call.

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