Good day, everyone, and thank you for being here. My name is RJ, and I will be your operator for the conference today. I would like to welcome everyone to the Q3 2025 Earnings Conference Call for Xenon Pharmaceuticals, Inc. I will now hand the call over to Colleen, Senior Vice President of Corporate Affairs. Please proceed.

Good afternoon. Thank you for joining us on our call and webcast to discuss Xenon's third quarter 2025 financial and operating results. Joining me today are Ian Mortimer, President and Chief Executive Officer; Dr. Chris Kenney, Chief Medical Officer; Darren Cline, Chief Commercial Officer; and Tucker Kelly, our Chief Financial Officer. After completing our prepared remarks today, we will open the call up for 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 including the anticipated filing of INDs and NDAs, the timing and results of those filings and 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 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. I will now turn the call over to Ian.

Great. Thank you, Colleen, and good afternoon, everyone. Thanks for joining us on our call today. We're excited to share the considerable progress we have made over the past quarter as we remain focused on our three critical priorities: first and foremost, completing our Phase III X-TOLE2 study of azetukalner for the treatment of focal onset seizures, the top line data readout in early 2026, followed by the filing of our first NDA for the approval of azetukalner in the U.S.; second, broadening the therapeutic opportunities for azetukalner beyond epilepsy with potential neuropsychiatric indications where we have identified strong preclinical, clinical, and genetic evidence supporting the development in major depressive disorder and bipolar depression; and third, expanding our pipeline through the advancement of our promising earlier-stage Nav1.7, Kv7, and Nav1.1 ion channel programs with recent progress of our novel Nav1.7 and Kv7 modulators moving into Phase I studies. I will focus most of my comments on our azetukalner, or AZK, Phase III epilepsy program, and Chris will provide additional details across our clinical stage portfolio. As a reminder, AZK remains 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 a highly compelling placebo-adjusted efficacy in focal onset seizure patients in our Phase IIb X-TOLE trial and durable and sustained efficacy over time through our open-label extension study, with greater than 800 patient years of exposure and safety data. As we disclosed in today's press release, the final patients in our X-TOLE2 study have completed the baseline period, and all patients have now been randomized. The final number of patients randomized is 380, which is a significant milestone, and we remain on track for top line data readout in early 2026. As a reminder, X-TOLE2 was designed and powered to randomize approximately 360 patients. So we are very pleased to have randomized more than the target in the study design. This will result in good power across the critical endpoints in this study. From the outset, we have prioritized working with high-quality, experienced clinical sites to maximize study success while diligently monitoring key metrics throughout the study. These metrics are tracking as we expect and as we disclosed previously, patient baseline demographics and the open-label extension rollover rate are consistent with our successful Phase IIb X-TOLE study. Therefore, we remain confident in X-TOLE2 and share the epilepsy community's excitement as we progress towards top line data readout. Two topics that we often get questions on with respect to X-TOLE2 are the final steps between now and top line data as well as our expectations going into this important readout, so I'm happy to address both of these topics. As I mentioned, the final patients in X-TOLE2 have recently been randomized. That means all patients have completed their 8-week baseline period and the randomization visit. These final patients are now in the 12-week double-blind portion of the study. For those patients who complete the double-blind portion, they have an opportunity to enter the open-label extension. The OLE rollover rate has been high in X-TOLE2, consistent with X-TOLE, where we saw greater than 95% of patients roll over to open label. For those patients who don't enroll in the OLE, there is an 8-week safety follow-up visit. Therefore, the final timing of the top line data will be determined based on the last few patients and whether they enter OLE. After the final patients have completed the double-blind period, we will finalize data cleaning and lock the database, complete the statistical analysis and medical review, and be ready for top line data release. We will be in a position to narrow guidance about the specific timing for top line data in the coming months. We are optimistic for a positive outcome, and we believe that X-TOLE2, together with the strong results from X-TOLE, will serve as the basis for a new drug application for AZK in focal onset seizures. As we prepare for the X-TOLE2 readout, we have completed a detailed review of prior FOS studies, and we find that there is high reproducibility of results from Phase II to Phase III. ASMs that have strong efficacy results in earlier studies demonstrated similar positive results in subsequent Phase III studies, although there is some reduction in effect size, which is not unusual when moving from Phase II to Phase III. Over the last 20 years, anti-seizure medicines that have been approved in adult focal onset seizures in the U.S. have shown a placebo-adjusted seizure reduction percentage ranging from the teens into the low 30s. Interestingly, some of the more successful ASMs, including Vimpat, are on the lower end of this range and often, the drugs on the higher end of the range had other challenges, either around tolerability or an onerous titration or DDI profile. This reinforces what we consistently hear from physicians. Although efficacy is an important component, the overall profile of the ASM drives prescribing decisions to address a broad range of unmet needs for their patients. And it is this overall profile where we believe azetukalner is differentiated and has a compelling set of attributes. At launch, we believe AZK will be an only-in-class Kv7 mechanism of action with strong short- and long-term efficacy, QD dosing with no required titration, no adjustments for DDIs, the potential for mood benefit, and an overall favorable safety and tolerability profile. It is this profile that we believe will drive adoption and commercial success. So again, we have high confidence, and we expect that a positive X-TOLE2 readout, combined with the impressive efficacy from our X-TOLE study, will form a compelling profile supportive of our NDA submission. We remain excited as we look forward to the potential of bringing an important new medicine to the epilepsy community. So I'll now turn the call over to Chris, who will share more details on our clinical development programs across epilepsy, depression, and pain. Chris, over to you.

Okay. Thanks a lot, Ian. I'll begin with an update on our epilepsy program. As Ian already said, we're really pleased to have completed randomization in our Phase III X-TOLE2 clinical study of azetukalner with a total of 380 patients, which exceeded our original goal of 360. Our team's focus is now on completing the study to deliver top line data in early 2026, with the shared goal of the positive impact we could have by providing a new treatment option for these patients. We're also placing a great deal of effort into the other two studies of azetukalner in epilepsy including our Phase III X-TOLE3 study in focal-onset seizures and our X-ACKT study in primary generalized tonic-clonic seizures. While we advance our various studies in epilepsy, we are also focused on scientific exchange and education around the profile of azetukalner with health care providers. This fall, we had a strong showing at the International Epilepsy Congress, or IEC, in Lisbon, where we had an opportunity to present four posters while meeting with various health care providers as we highlighted the 36-month data from the ongoing X-TOLE open-label extension study of azetukalner in patients with focal-onset seizures, which demonstrates sustained monthly reduction in seizure frequency, impressive seizure freedom rates, and a consistent adverse event profile suggesting long-term efficacy and tolerability of azetukalner. We also presented data from our X-TOLE study showing the efficacy of azetukalner in certain focal-onset seizure subtypes as well as presenting a targeted literature review outlining the comorbidity burden in focal-onset seizures. In addition to these clinical presentations, we presented findings from our early-stage Nav1.1 program with data from preclinical models specific to Dravet syndrome. The energy at the meeting was high, and excitement continues to build around the long-term data and continued scientific evidence generation. Looking ahead, we continue to generate data from our azetukalner open-label extension study and will present new 4-year long-term data at the upcoming annual meeting of the American Epilepsy Society, or AES, in Atlanta early December. AES is a critical meeting for us to engage with the epilepsy community, and Xenon is currently an emerging leader in the field. We look forward to significant scientific engagement with seven abstracts accepted for presentation, including updated long-term data from the ongoing azetukalner open-label extension in focal-onset seizures, study centered around depression, and the impact on epilepsy patients as well as preclinical data from our Nav1.1 program. In addition, we look forward to interactions at our various booths, one-on-one meetings with physicians facilitation of ongoing scientific exchange through a dedicated scientific exhibition and symposium. So in summary, considerable momentum is building in our azetukalner epilepsy program with important milestones in the near term with the presentation of the 48-week open-label extension data at the American Epilepsy Society followed by our X-TOLE2 Phase III readout in early 2026. Now turning to Xenon's efforts to expand azetukalner's use into neuropsychiatry, an area where we believe the differentiated profile of azetukalner could really benefit patients. We hear from physicians that they are interested in new therapeutics with novel mechanisms of action, potential benefits on anhedonia, rapidity of onset along with a potentially differentiated tolerability profile. Our clinical development teams have made great progress with X-NOVA2 and X-NOVA3, two of our three planned Phase III clinical trials evaluating azetukalner in patients with major depressive disorder, which are underway and enrolling patients. In addition, X-CEED, the first of two planned Phase III clinical studies evaluating azetukalner in patients with bipolar I and bipolar II depression is also underway. Effective treatments for depression in bipolar disorder are limited, and many patients are non-adherent due to side effects and other factors. There remains a significant unmet medical need for safe and effective therapies to treat patients with bipolar depression, and the physicians that we have spoken with are keenly interested in azetukalner's differentiated profile. Beyond supportive physician feedback, a number of key factors informed our decision to expand our clinical development of azetukalner into bipolar depression, including an in-depth review of the existing literature outlining genetic links between bipolar disorder and Kv7, evidence of Kv7 downregulation in bipolar disorder as well as clinical studies that explore the use of Kv7 potentiators in depression, including results from our own proof-of-concept study in major depressive disorder. We've also generated preclinical data showing an antidepressive effect of azetukalner. Considering the current treatment landscape, azetukalner's novel selective Kv7 mechanism of action, potential benefits on anhedonia, rapid onset of effect, and differentiated safety profile are particularly attractive in bipolar depression. As a reminder, our X-CEED trial is a multicenter, randomized, double-blind, placebo-controlled clinical trial 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 with bipolar I or II depression, with an opportunity to increase the sample size to 470 patients 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. We're incredibly excited about the potential of azetukalner and its Kv7 mechanism in neuropsychiatric indications such as major depressive disorder and bipolar depression, and I look forward to providing updates as we leverage azetukalner's pipeline and mechanism potential across multiple streams of late-stage clinical development. Looking at our early-stage programs. As Ian mentioned, both of the lead molecules in our Nav1.1 and Kv7 programs, XEN1701 and XEN1120, respectively, are now in Phase I first-in-human studies in healthy volunteers. In October, we hosted an investor webinar focused on Nav1.1 and Kv7, which has garnered much interest. We received insightful questions about our approaches, including our focus on leveraging mechanistic insight, especially around ion channel function to target pain at its source and develop precision therapies that can address both the complexity and chronicity of pain. When we engage directly with clinicians, we hear a strong desire for opioid-sparing therapies that can meet the everyday realities of pain management without compounding the problem. Physicians recognize the limited efficacy of current options and remain concerned about the substantial risk of abuse and dependency tied to opioids. Even when opioids are used appropriately, their long-term safety profile is far from ideal. Chronic NSAID usage can also be problematic for different safety and tolerability issues that may arise. So these physicians are looking for alternatives that are both effective and well-tolerated over the long haul, and importantly, they're interested in ion channel blockers as a potential transformative class of therapies. We know that analgesics can act along multiple different points of the pain pathway and interrupt the pain signal on its way to the brain. This is why we are excited about the potential for Nav1.1 inhibitors and Kv7 potentiators as these channels play important roles at multiple points in the pain signaling pathway, including through the initial transduction of pain stimuli into pain signals, the transmission of those pain signals along nociceptive neurons, and the relay from peripheral sensory neurons to spinal cord neurons within the central nervous system. Starting with Nav1.7, we believe it is the best genetically validated pain target with striking genetic data in patients with loss of function mutations who have no ability to feel pain. Gain of function mutations have also been identified that drive pain disorders, further underscoring the critical role Nav1.7 plays in pain signaling. Our lead Nav1.7 inhibitors are CNS penetrant to enable global inhibition of Nav1.7 to better mimic the human genetics. They also demonstrate good free fraction and tissue distribution to achieve high levels of target engagement. And lastly, we have identified molecules that have excellent potency and selectivity to safely achieve target therapeutic levels of Nav1.7 inhibition. We believe we have solved for some of the critical limitations of prior Nav1.7 compounds and continue to build a strong pipeline of optimized Nav1.7 inhibitors for development in pain. With our long history with Nav1.7 and our deep ion channel drug discovery expertise, we are well positioned to deliver a novel and differentiated Nav1.7 compound profile into the clinic, one that has never been tested before. Kv7 is also a compelling pain target to modulate neuronal hyperexcitability at multiple points along the pain pathway, and we believe Kv7 potentiators have the potential to decrease neural hyperexcitability for the treatment of a range of pain conditions. This is supported by high levels of Kv7 expression throughout the pain pathway, and our data shows that Kv7 is enriched in the C and A delta pain subtypes of sensory neurons. In addition, Kv7 openers can block action potential firing in both DRG and spinal cord neurons, thereby significantly inhibiting pain signals from reaching the brain. Additionally, evidence supports that dysfunction or downregulation of Kv7 activity has been observed in altered pain states. And lastly, a clinical compound previously approved for the treatment of pain, flupirtine, has a mechanism of action that involves potassium channel opening, providing further validation of this approach. So in summary, we're excited to have both XEN1701 and XEN1120 now in Phase I first-in-human studies in healthy volunteers. And our goal is to initiate Phase II proof-of-concept studies next year, and we'll provide more details as we get closer to those important milestones. I'll now turn the call back to Ian, so he can cover our Nav1.1 program.

Great. Thanks, Chris, and thanks for sharing the significant momentum across our pipeline. We are proud of our extensive knowledge and development expertise in potassium and sodium channel therapeutics as well as the focus and investment in pain, neuropsychiatry, and epilepsy. Rounding out updates with our Nav1.1 program, which continues to progress as we generate preclinical data that suggests targeting Nav1.1 could potentially address the underlying cause and symptoms of Dravet syndrome. Data shows that dosing with an orally available small molecule CNS penetrant and highly selective Nav1.1 potentiator suppressed induced seizures and improved motor performance supporting the potential for improvements in Dravet patient motor function. Further, in these animal models, chronic dosing suppressed spontaneous seizures, protected against sudden unexpected death in epilepsy, or SUDEP, and increased long-term potentiation, a potential cellular correlate of learning and memory. We anticipate presenting preclinical data from this program at AES and expect that a lead Nav1.1 candidate can enter IND-enabling studies later this year. Finally, also coming out of our lab, a promising selective dual inhibitor of Nav1.2 and Nav1.6 sodium channels is now in a Phase I study as part of our collaboration with Neurocrine Biosciences. Neurocrine has guided that this first-in-human study will evaluate safety, tolerability, pharmacokinetics, and pharmacodynamics of the investigational compound, NBI-921355 in healthy adult participants to support its development for the potential treatment of certain types of epilepsy. As our diverse pipeline of early-stage drug candidates continues to mature, I'm incredibly proud of the considerable progress we are making across multiple programs targeting ion channels. Before offering some concluding remarks, I do want to take a moment to introduce Dr. Kelly as our new Chief Financial Officer. Tucker recently served as the Executive Vice President and CFO at Deciphera Pharmaceuticals, where he oversaw the growth of the company as it advanced from discovery to direct commercialization in the U.S. and abroad. He built and strengthened the company's investor base and led strategic financial planning related to corporate strategy and pipeline, and this culminated in its $2.4 billion acquisition by ONO in 2024. Before joining Deciphera, Tucker also served as CFO of various public and private life science companies and also spent time as a life science investment banker. His experience will be incredibly valuable to our team here at Xenon, where Tucker will be instrumental in our strategic approach to building out the necessary functions, strategies, systems, and infrastructure critical to our future commercial success as we await top line data from X-TOLE2 and prepare for our first anticipated drug approval. I believe he has already made a positive impact, and I look forward to continuing to collaborate with Tucker as Xenon evolves into a commercial stage company. So with that, I'll turn it over to you, Tucker, to say a few words, and then I can conclude with our financials.

Thanks, Ian. I really appreciate the warm welcome. I'm thrilled to join Xenon at such a pivotal time as the company progresses X-TOLE2 with the goal of delivering positive top line results early next year and planning for the anticipated launch for azetukalner in epilepsy and beyond. I'm excited to apply my experience and expertise driving corporate and financial strategy for U.S. and international life sciences companies to Xenon and working with the team here as we build for commercialization and the impact we could have as a fully integrated biopharma company with the aspiration of delivering life-changing therapeutics to patients. With a healthy balance sheet and solid foundation, the future looks bright for us as we plan for a successful commercialization of azetukalner and our long-term growth. I have already been out on the road to begin connecting with our investors to share our vision for Xenon to become a leading company in neuroscience and in pain. Briefly turning to our financial results. Cash, cash equivalents, and marketable securities totaled $555.3 million as of September 30, 2025, compared to $754.4 million as of December 31, 2024. Based on our current operating plans, including the completion of the azetukalner Phase III epilepsy study and supporting late-stage clinical development in MDD and BPD, we anticipate having sufficient cash to fund operations into 2027. Given our strong balance sheet and fiscal management, we are well positioned to support multiple registrational programs for azetukalner and the continued maturation of our early-stage pipeline. I'd refer you to our press release and the 10-Q filed today for further details on our financial results. And with that, I'll turn the call back over to Ian for closing remarks.

Great. Thank you, Tucker. I hope today's call reflected the excitement and relentless drive that permeates the whole team of Xenon. As we continue to progress our Phase III X-TOLE2 study of azetukalner with the anticipated top line data readout in epilepsy planned for early 2026, we are focused on the preparation of our NDA with the intent to file with positive top line X-TOLE2 data and advance azetukalner towards commercialization, bringing us one step closer to delivering a new antiseizure medication for patients still struggling with seizures. As I mentioned earlier on the call, once the last patient has completed the double-blind portion of the study, we will have visibility to the final timelines, and we will be able to narrow guidance at that time. To round out our azetukalner programs, we see the immense promise of applying azetukalner in other neuropsychiatric conditions and serving other patient populations in need and are proud of the progress with the X-NOVA and X-CEED programs. And while earlier stage, the excitement around our discovery pipeline is tangible. As we apply our ion channel expertise across multiple targets and therapeutic areas and grow these programs, we are taking important steps towards becoming a fully integrated neuroscience-focused biopharma company. So with that, I'll pause and operator, we can now open the call up for questions.

Your first question comes from the line of Paul Matteis of Stifel.

I appreciate it. Could you please provide an overview of the upcoming top line data release? How much information should we expect regarding efficacy and safety? Additionally, once you have the data, if it's positive, what factors would limit your ability to file?

Thanks, Paul. I'll begin, and then Chris can share his insights as well. Regarding your first question about the top line data, there is always a balance to strike during a Phase III clinical trial, where we collect a significant amount of data, and what we can realistically complete in a timely manner for a top line press release versus what will be revealed at later medical congresses. If we reflect on our X-TOLE data, I believe that serves as a solid reference for what to expect from X-TOLE2, particularly concerning the key efficacy endpoints and our general remarks on safety and tolerability. In our previous top line press releases, we've aimed to provide a substantial amount of information that balances both efficacy and safety. I don’t anticipate any changes for X-TOLE2 in this regard. As for preparations for the NDA, I’ll start and then Chris may want to add more. The efficacy results from X-TOLE2 are crucial for the timeline. As we know, a lot of work goes into filing a new drug application, and that work is currently underway. Some sections are written and finalized already, and we will continue this process over the coming months. The remaining elements of the package will be compiled throughout 2026, which will naturally include data from X-TOLE2. Chris, do you have any additional detailed comments?

Well, just as you can imagine, I mean, we don't wait to start writing the NDA until the top line X-TOLE2 data comes. So a lot of work is ongoing, and I know a lot has already been completed. So the critical path was your question. It's basically defined by what Ian just said, so incorporating X-TOLE2 into the story that's already being told from a clinical perspective from X-TOLE to create the integrated summary of safety and integrated summary of efficacy. So that's it, and we're well on our way already, Paul.

Your next question comes from the line of Tess Romero of JPMorgan.

Welcome to the team again, Tucker. Are you able to disclose where your screen failure rate ultimately landed for X-TOLE2? And generally, when screen-outs occurred, were they for reasons as expected from prior experience? And then my second question is just how far behind do you think the results of X-NOVA2 will be from X-TOLE2? Think it makes it into 2026?

Thanks, Tess. I'm glad to start, and then Chris can share his insights. I want to clarify some definitions first. We will provide the screen and baseline failure rate at the right time, which is a combined number. This includes patients who may have dropped out during the screening and baseline periods before randomization. Since this is an ongoing study, we won't go into specific details about various aspects of it, but I can say that the trends have been consistent with our expectations in the Phase III program. Chris can explain some of the reasons why patients drop out, such as baseline seizure burden, BMI, compliance issues, or other factors during the screening and baseline periods before randomization. Chris, would you like to elaborate on that? After that, I'm happy to discuss the timing of X-NOVA2.

I'm happy to do that, but I think you kind of covered it, Ian. I mean, the screen failure rates, largely, it's a reflection of insufficient seizures. And then we have a number of other inclusion-exclusion criteria. And so there can be kind of a smattering of other reasons that follow behind that. But it's been consistent with what we would expect from Phase II, Tess.

Thanks, Chris. And then your question on the MDD program and specifically as it relates to X-NOVA2, so this will be the first Phase III readout from the psychiatry program. We haven't yet given guidance on it. That study, that Phase III study started right at the end of last year, kind of really got up and running in the first quarter of this year as we got most of the sites up and running. We haven't given guidance, and I think we've generally said that, in our experience, if we look at our Phase II X-NOVA study, and we extrapolate forward, these studies often take kind of 2, 2.5 years. So as we progress over the next few quarters, we'll be in a position to provide guidance to top line data.

Your next question comes from the line of Brian Abrahams of RBC Capital Markets.

This is Joe filling in for Brian. You mentioned the importance of the overall clinical profile on the commercial side. How much of the efficacy are doctors willing to compromise for other positive aspects like tolerability and ease of use? Additionally, what insights can you share regarding the launch and recent commercial performance of cenobamate?

Yes. I'm happy. Thanks, Joe, for the questions. I'm happy to start. And Darren is here as well and can provide his perspective. Darren's now been here a number of months and had the opportunity to attend one of the big medical congresses in Europe as well as interact with a number of key physicians in the space. So yes, as we talked about in the prepared remarks on a placebo-adjusted basis, we've seen efficacy kind of range from the teens into the low 30s. And so there is quite a range. And it doesn't seem to be predictive of where you are in that range to commercial success. And I think that's, to your point, Joe, that there are a number of these other attributes. You specifically referenced cenobamate. Cenobamate is on the higher end of that range from an efficacy point of view, but we do know that cenobamate in terms of the titration, over 12 to 16 weeks. And as you push that dose higher, there are a number of adjustments that need to be made because of DDIs and tolerability. And so it can be a bit of a more challenging medicine for prescribers and their patients. So again, I think that really reemphasizes the point that we see in the data that efficacy is part of the picture but not the complete picture. And I think Darren's perspective on this would be really helpful.

Thank you, Ian. Each patient with focal-onset seizures is unique and will respond to different therapies. The attributes we have discussed today about AZK provide another option for these patients. For physicians, especially general neurologists who treat the majority of epilepsy patients, these attributes mean simpler, safer, and more reliable decisions about care. For patients, AZK has the potential to significantly reduce the burden of seizures without the drawbacks of titration or cognitive and mood side effects that often limit current therapies. In my five months at Xenon and through interactions with physicians, I can say there is a lot of excitement about what AZK will offer to patients, their families, and caregivers, especially since it will be the next branded drug in nearly eight to nine years after the launch of XCOPRI.

Your next question comes from the line of Brian Skorney of Baird.

This is Charlie on for Brian.

Are you there, Charlie? We can't hear you come through.

Brian. I think you're on mute. Are you still there?

I think he's back. So Charlie, we couldn't hear you, so maybe you can start your question from the beginning.

Okay. Apologies for that. Yes. So it was on the X-CEED trial. Can you hear me?

Yes.

Okay. So on the X-CEED trial, just thinking about the differences between the two types of bipolar disorder, given the higher predominance of depression in type II as well as why you decided to go with the MADRS scale versus HAM-D like you did in the MDD trials.

Yes. The main difference we observe in depressive symptoms between BPD I and BPD II is the tendency towards a true manic state compared to a hypomanic state. Due to the potential for different treatment responses, we're not entirely certain, so we've chosen to separate BPD I and BPD II. We will need to see what the study reveals regarding any differences in depressive symptoms. The choice of using the MADRS scale was primarily based on whether it was for depression or for bipolar disorder.

We have the HAM-D17 endpoint in major depressive disorder and are moving to the MADRS endpoint in bipolar depression.

Thank you. This situation is primarily influenced by the MDD study, which involved an ezogabine proof-of-concept that indicated improvements in depressive symptoms measured using MADRS. This served as a foundation for our X-NOVA study, where we also used MADRS as the main endpoint. We analyzed the data regarding depressive symptoms with the HAM-D score as well. When we evaluated the study, we found about a 3 point improvement in both scales, but the variability in the HAM-D was significantly less, making it a significant metric. The FDA guidelines permit the use of either scale, so with their support, we transitioned from MADRS to HAM-D. In the case of bipolar, I mention this because there is a tradition of focusing on MADRS as the primary endpoint, and this is our first study in this area. We do not have data to definitively favor one scale over the other, so we've relied on established practices from previous bipolar studies to guide our approach. That is the reasoning behind our decision.

Your next question comes from the line of Jason Gerberry, Bank of America.

Congratulations on the quarter. This is Dina standing in for Jason. I appreciate you taking our questions. My first question is about the enrollment of 380 patients in the X-TOLE2 study instead of the initially planned 360. Could you explain the reason for this change? Additionally, do these extra 20 randomized patients affect your powering assumptions at all? I would also like to discuss the earlier stage pipeline. Can you share any updates on data disclosures from the Phase I XEN1120 and XEN1701 SAD, MAD studies? What might an initial update look like and when can we expect it? Lastly, could you define what you consider to be success for those programs?

Great. Chris, do you want to take the first one on X-TOLE2 enrollment and powering? And then I'm happy to do data disclosure around 1701 and 1120.

Thank you for the question. When shutting down a study, there are several factors to consider. Recruitment can increase, stay the same, or possibly decrease slightly. Additionally, the screening failure rate, which you have observed for some time, may remain constant, increase, or decrease. Thus, there are many variables at play. Deciding when to stop screening is not a precise science. When we selected the date to halt screening, we had a notable surge in patient interest at the end, raising our numbers from 360 to 380, primarily due to the interest in azetukalner and its unique profile. The final count was influenced by this last-minute increase. Regarding study power, it's worth noting that the power for 25 milligrams versus placebo in the Phase III study, X-TOLE2, is quite high at 99%. The study is also more than 90% powered for the 15-milligram group against placebo. Increasing the number of patients adds even more power, though I wouldn't assert that the change from 360 to 380 has a significant effect on power; it's simply a slight boost. We feel confident, particularly due to the translatability of Phase II data into Phase III for epilepsy, based on historical precedent.

Thank you, Chris. Dina, regarding your second question on data disclosure, we currently have two programs in Phase I: XEN1701, a selective Nav1.7 inhibitor, and XEN1120, our Kv7 modulator, both aimed at addressing pain. These are being studied in traditional Phase I trials with healthy volunteers, involving dose escalation through single ascending doses and multiple ascending dose cohorts. These studies are ongoing, and we anticipate they will conclude in the early part of next year. Depending on the results, we may move into Phase II proof-of-concept studies for both compounds. For the Phase I data, we're looking for success indicators, which include completing dose escalation and confirming, through our preclinical modeling for XEN1120 and the genetics for XEN1701, that we achieve sufficient exposure to expect an analgesic effect in human proof-of-concept studies. We aim to mimic human genetics with Nav1.7, allowing us to model receptor occupancy effectively. Overall safety and tolerability are also critical factors. The complete Phase I profile will provide us the confidence to advance to Phase II. We have not yet determined how we will disclose this information publicly, but we plan to share insights supporting our decision to progress once we have that data in hand.

Your next question comes from the line of Cory Kasimov of Evercore ISI.

In the recent few months, there have been early Phase II readouts from competitors. If these readouts hold in larger studies, how would that change how you see azetukalner being used? And just another question on how should we think about the operating cost into 2026 given you have to plan for a launch and other Phase IIs are also planned for next year.

Thanks, Adi. I'm happy to take the first question and then let Tucker address the second one. Overall, seeing more innovation in epilepsy is encouraging. It's beneficial for the epilepsy community and for patients. As Darren mentioned earlier, there hasn't been a branded launch in quite a while, and I would argue that there hasn't been much innovation recently either. Therefore, the increase in innovation related to focal-onset seizures is something we should support, which is positive for the epilepsy community. It's always challenging to compare trials across different programs. Additionally, the other programs that have released data this year haven't provided any placebo-controlled data that we have seen in our X-TOLE program, including what we are doing in X-TOLE2. Firstly, I think we have set a very high standard with azetukalner. Secondly, the other programs are significantly lagging, with none of them having conducted a double-blind, placebo-controlled study so far. We are in a position to share information at the American Epilepsy Society meeting next month, where we will present data from patients who have been dosed for over five years. We'll also share our 48-week efficacy data and open-label extension results. We have a substantial amount of information on azetukalner and its attributes, and we feel very confident about our position. I believe we have set a very high standard as others come after us. Tucker, what about OpEx?

Yes. So on the commercial side, so I think we've made some targeted investments already, which we think have been really important for Darren and his team to get prepped for either the readout and ultimately commercialization. So we've made those investments so far. And obviously, on the back of data early next year, we'll continue to prep for launch, and the OpEx will reflect that. But when we look at really a 2027 launch time frame based on the estimated readout and obviously time to NDA submission, the bulk of the cost in terms of bringing on the sales force and the like will likely fall outside of '26. But yes, we will certainly have an increase on the SG&A side in '26 in the back of positive data to get prepped for '27.

Your next question comes from the line of Marc Goodman from Leerink Partners.

For the first question, could you please remind us again whether you're planning to assess HAM-A or MADRS in X-TOLE2 in patients who have comorbid depression? And do we have any idea what's roughly going to be the proportion of patients? Have you looked at the blinded data of how many patients have comorbid depression? Second question we have, could you provide more color on the selectivity of Nav1.7 compared to other channels, the selectivity to 1.7 subunit versus other channels. You only disclosed information about receptor occupancy versus off-target effect. Are you going to have any more information about the selectivity? That's it for us.

Thank you for the questions. Chris, could you start by discussing the exploratory endpoints in X-TOLE2 related to psychiatric comorbidity? It would be helpful to go over the endpoints and clarify that it’s an exploratory endpoint. After that, I can add any additional comments and address the Nav1.7 selectivity question as well.

Okay, thanks for the question. In all Phase III epilepsy studies, including X-TOLE2, we are tracking patient-reported outcomes for depression and anxiety across all patients and visits. This approach is consistent in X-TOLE2 and across the program, where we are collecting extensive data on this subject. Additionally, we are using patient-reported outcomes, specifically the Beck Depression Index for depression and the GAD-7 for anxiety. While we haven't shared baseline characteristics, it's important to note that not all participants are expected to experience depression or anxiety, as we are focusing on a specific level of seizures rather than enriching for these conditions. However, we recognize that these are common comorbidities, and we anticipate that there will be enough cases to analyze the data effectively.

Yes, I'll add to those comments. These are exploratory endpoints, so they are not fully powered. As Chris mentioned, we're uncertain about the extent of impairment in the population. We're also not stratifying for this epilepsy study, so there may be imbalances across treatment arms regarding psychiatric comorbidities. I just wanted to clarify that. Regarding Nav1.7, it's true we haven't disclosed our entire preclinical profile. We can share more information over time, although some of it we want to keep confidential for competitive reasons. However, as you probably heard in the pain webinar, we believe these molecules show high selectivity for Nav1.7 compared to other sodium channel isoforms. We are confident in the profile of our molecule 1701, which has progressed into clinical development, and we have additional molecules in the pipeline. These are highly selective for 1.7. We also believe that the profile of a molecule like 1701, based on free fraction and distribution, has not been tested clinically before. We're very excited that it's now in a Phase I study and hopefully next year will advance to a proof-of-concept study.

Your next question comes from the line of Joseph Thome of TD Cowen.

Maybe on the Phase III epilepsy study, can you talk a little bit about your expectation for the change in cenobamate use in the Phase III versus the Phase II given that that's been on the market, obviously, a little bit longer now? And maybe how should we think about that when we see response rates in the placebo and the active arms or the discontinuation rates due to AEs? Is that going to be a consideration? And then maybe just one on MDD. Can you talk a little bit about why you don't have an interim analysis in the MDD studies? And is this a consideration with the third Phase III that would start given that you did incorporate one in the bipolar study?

Thanks, Joe. Chris, I'll begin with the question about cenobamate and share some insights on our preclinical data that may be relevant. Then you can provide your perspective and address the interim analysis for MDD. Joe, we do anticipate that the usage of cenobamate will be higher in the Phase III study compared to what we observed in Phase II. It's important to note that during Phase II, cenobamate was just starting to gain approvals and become available commercially. As we proceed, we'll need to analyze the data as it unfolds. In our Phase II program, patients were on one, two, or three background antiseizure medications, leading to many combinations of different treatments, making it challenging to separate the effects. However, as we delve deeper into the Phase III analysis, we acknowledge this is a pertinent question we've also been considering. I can share some preclinical data related to azetukalner in our epilepsy models, examining it in combination with various commonly used medications, including cenobamate. Regardless of whether we pair azetukalner with cenobamate, levetiracetam, lacosamide, lamotrigine, or sodium valproate, we have not observed a significant efficacy benefit when combining these drugs, nor have we noted any changes in tolerability. Based on our Phase II data, it appears that azetukalner works well with other medications due to its novel mechanism and profile. We expect this may remain consistent in Phase III, but we'll have clearer insights once we unblind the data. Chris, if you have any additional comments on cenobamate and can address the MDD question, that would be great.

You did a great job covering cenobamate, so we will need to see what the data indicates. We don't anticipate any changes, but we will examine it further. Regarding the question about major depressive disorder, I think I've already provided some context based on an earlier question. The bipolar program is quite different from major depressive disorder in several ways. Notably, we lack a precursor study to inform our data. With the depression data, we had the ezogabine proof of concept and our own proof-of-concept X-NOVA study. Therefore, we entered the Phase III study with a solid understanding of how we expected the drug to perform in a larger trial. We do not have that information for bipolar disorder. We’ve made some assumptions based on what we saw in major depressive disorder and the experiences with other drugs that have been tested in both conditions. However, there is more uncertainty in the bipolar disorder program compared to the major depressive disorder. To address that uncertainty, we decided to conduct an interim analysis that could allow us to expand the study size if necessary. Thus, we believe there is no need for an interim analysis in the major depressive disorder program.

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

It's Brian on for Andrew. Maybe just a follow-up on the interim for the Phase III BPD. What could be in the various scenarios for that interim? And then if you could just share the kind of placebo-adjusted deltas that you'd like to see associated with those scenarios. And then maybe just one more on X-TOLE3 timing. In a very unlikely worst-case scenario that X-TOLE2 doesn't succeed, how much further behind is X-TOLE3 at this point in time? Do you think you'll still be able to file for an NDA in '26?

Thanks, Brian. I think we covered everything. Chris, I can address the question regarding X-TOLE3 if you want to discuss the interim analysis and options for bipolar depression. As we have mentioned before, we have prioritized X-TOLE2, given that it was the first Phase III study we started. We allocated more of the X-TOLE clinical sites to X-TOLE2 and directed more of our U.S. clinical sites there as well. Therefore, there is a delay between X-TOLE2 and X-TOLE3. I agree with your concerns; it seems unlikely, considering the confidence we have in X-TOLE2, that we will need to rely on X-TOLE3. However, if circumstances require it, we will do our best to speed up the timeline to obtain X-TOLE3 data. Chris, would you like to cover the interim scenarios for bipolar depression?

Sure. First of all, the study involving 400 patients was based on the existing data in Major Depressive Disorder (MDD). Specifically, we are aiming for over 80% power to detect a 2 point difference in the Montgomery-Åsberg Depression Rating Scale (MADRS) for 20 milligrams compared to placebo, utilizing variability information, particularly the standard deviation from X-NOVA. The interim analysis will be straightforward. We will isolate the data and assess the study's power. If we determine that additional power is required for a positive outcome, the patient count will increase from 400 to 470. There are various possibilities for how this could unfold, but ultimately it comes down to a simple question: Do we need more power for a successful study? If so, the number of patients could rise from 400 to somewhere between 400 and 470. I hope that's helpful.

So that ends our Q&A session, and we appreciate your participation. I will now turn the call back over to Ian for the closing remarks. Ian, please go ahead.

Great. Thank you, operator, and thanks, everyone, for joining us today. If we did not manage to get to your question during the allotted time, we apologize. We did run out of time, and we will reach out directly to you to connect. We look forward to continuing to provide updates as we continue to advance our late and early stage programs as we deliver on critical milestones over the coming months and quarters. So thanks, everyone. Thank you for joining the call. Operator, we can now end the call.

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