Okay, we're going to get started with our next session. I'm Andrew Tsai, Senior Biotech Analyst here at Jeffrey's. Thanks for joining, and it's my pleasure to have the Xenon team with me today. To my direct left, Ian Mortimer, CEO, and to his left, Tucker Kelly, CFO. Welcome, both of you. Thanks, Andrew. Thanks for having us. So, Ian Tucker, congratulations on showing blowout Phase III epilepsy data months of, I forgot when, like two months ago, but anyway, people who are less familiar with the Xenon story, could you kind of give us a brief overview about your lead program, your other pipeline programs, and then milestones over the next 12, 18 months?

Sure. Happy to, and good morning, everyone, and thanks, Andrew, for hosting us today. We appreciate it. So for those that are less familiar with the Xenon story, there's really three things that we focus investors on. One is our lead molecule, azetucalinar, in epilepsy. The second is the expansion of the program into psychiatry. And then the third is our earlier stage portfolio focused both on pain as well as a really interesting epilepsy target called NAV 1.1. If we start with azetucalinar in epilepsy, as you mentioned, Andrew, we had really strong phase three data earlier this year in March, it was called the XTOL2 study. So azetokalinar is a potassium channel modulator, it targets KV72 in the brain. We've now, in epilepsy, unblinded two large randomized studies, X-TOL and X-TOL-2. And I think when we unblinded the Phase III study, it really exceeded our expectations. The placebo-adjusted efficacy is the best that's ever been seen in focal onset seizures in an incredibly refractory population. And so we're going into the most common form of epilepsy with a novel mechanism. There are no potassium channel modulators on the market to treat epilepsy today. The molecule doesn't need to be titrated. It's one pill once a day. We don't have to make adjustments for drug-drug interactions with other anti-seizure medicines. And the drug works very quickly. You see an immediate separation at week one between active and placebo. SIBO, you see a clear dose response between the four different doses that we have tested over the two big clinical studies, Extol and Extol2. The efficacy is really strong both in the near term but also in the long term. So from our phase two study, we have a seven-year open-label extension study. This year, later this year, at the American Epilepsy Society, we'll have the five-year And what we're seeing in those patients that have been on the drug longer, they're doing even better. So, the four-year cut of the data that we announced about six months ago, for those that have been on the drug for more than four years, up to about 40 percent of them are getting 12 months of seizure freedom. And this is absolutely remarkable when you think about the patient population. These patients, the median patient has failed six anti-seizure medicines, they're on three background medications, and they're still having a seizure every other day. And we're getting the subpopulation that is having long periods of seizure freedom. So this is having a significant impact on the patient's quality of life. For that program, we will file our first new drug application later this year in Q3, and then hope to have a commercial launch in the back half of 2027. So that's in epilepsy. We are expanding also into another form of epilepsy called primary generalized tonoclonic seizures, and that phase three study is ongoing. If we expand outside of epilepsy into psychiatry, we have a large Phase III psychiatry program. Today we have two clinical trials in major depressive disorder that we call ExNova II and ExNova III. The first of those will read out in the first half of 2027, which is our ExNova II study. We also have a third psychiatry Phase III study in bipolar depression. So not only do we have a very active program in epilepsy, which would be the first commercial launch, but we're expanding into psychiatry as well. And then if we look at the earlier stage portfolio, we transitioned two molecules into phase one human clinical studies last year. These are both going to be developed for pain. These are novel mechanisms. One is a KV7 drug that we call XCN1120. The other is a target called NAV1.7, which has really incredible human genetics behind it, which is called XCN1701. So, both of those molecules are in healthy volunteer studies in phase one. Those will wrap up this year and then we hope to move them into phase two proof of concept studies in pain. So that portfolio has been maturing really nicely over the last little while. And then lastly, as I mentioned, we have an epilepsy target called NAV 1.1. This is an oral small molecule that would be developed for patients with Dravet syndrome. We're in toxicology studies in that program. so hopefully we'd have a molecule that would transition into human clinical development next year. Balance sheet is strong. We have $1.3 billion at the end of Q1. Gets us cash runway into 2029 with a huge number of critical milestones over the next few years.

Wonderful. So sticking with focal epilepsy to start, you mentioned earlier AES, we can You can expect five-year data from the phase 2B open-label extension. From the phase 3, can we expect additional analyses, actually, at AES?

Yes. As Ian said, we've been really, I think, fortunate to have a really deep database of clinical data over an extended period of time from the phase 2B. And we'll obviously, as we talked about, continue to publish on that. The phase 3 does have an open-label extension. That's not as obviously mature. So we just read out the study in March, so if you're going to do the math and roll back to when the last patients had come on study, we really don't have the last patient in have at least a year, which is typically what we'd like to do, kind of have these annual cadences of disclosure around them. But we will build additional data there. It's at a different dose as well, right? So the initial OLE was at that 20 milligram dose. We had 25 milligrams there, which is the high dose that we studied in the phase 3x2 study.

So I think it's going to be a great complementary data set, and that will continue to evolve over time and and I think speaks to the the real depth of what we see in terms of benefit and the really good safety and tolerability profile even after patients have been on the study for four or five years right and so the question then would be when then because I think back in the phase 2b you did do additional analyses like you know subtypes type 4 seizures or seizure benefit by baseline and ASMUs, maybe even mood neutrality. When do those data points come?

Yeah, we'll see some of those. The abstracts will be submitted shortly for AES. We'll have multiple abstracts. So, yes, we'll absolutely be looking at different analyses within the Phase III program, XTOL-2. You mentioned some of them that we've done previously. Those are absolutely on our list, looking at different seizure subtypes or different populations of patients that maybe had less severe or more severe disease. So we haven't submitted the abstracts yet, but that'll be shortly. But we expect to have a big presence at the American Epilepsy Society meeting as we do every year.

Okay. I, you know, worst case, I'll stay patient, but on the mood neutrality part in this phase three, because it could maybe have some, give some people more conviction about your phase three MDD data in the first half of 2027. So did you happen to see signs of mood benefit or neutrality in these patients who happen to have high comorbidity for depression?

Yeah I think it's a it's a good question so let's take a bit of a step back first so we know that for epilepsy patients that have breakthrough seizure a lot of them have psychiatric comorbidities so these patients have depression and anxiety many of them do and the more refractory patients you see those psychiatric comorbidities at a greater rate so really to tease apart the antidepressant you know profile of this drug is in our MDD studies so those the first one as I mentioned will read out in the first half of next year. What Andrew's referring to is in our phase three epilepsy program, we did look at endpoints on depression and anxiety. A couple of comments on that. One, that wasn't an entry criteria into the study. So the entry criteria into the study is to have a certain number of seizures on a monthly basis, not whether you had elevated depression or not. And so we actually didn't find a significantly impaired population from a depression point of view in the study. We also did not use a clinician-administered scale. So the scales that we use in depression studies are scales like the Madras scale or the HAMD17. Those are administered by a psychiatrist. We did not have a psychiatrist participate in the epilepsy program. So these were patient-reported outcomes, so kind of very, very quick forms for the patient to fill out on every visit. What we have said, we haven't shown the data publicly, and I would still say we're still analyzing some of it, but what we did say at top line data in March is we saw all patients get better. So whether they were on the placebo group or on the active group, when we looked at those patients that had elevated depression at baseline, those patients got better regardless of what group they were in, which is probably to be expected because we didn't control for all of the things that you would control for in a psychiatry study. these patients had lots of visits and it wasn't a one-to-one randomization they didn't have elevated depression coming in so what we see is that the patients in both the placebo and the active groups did better in terms of their depression and anxiety when we look at those data but I will say we're still continuing to do more analysis there great and so in the meantime like you

said you're filing you're planning to file in Q3 that's coming up I know it's You know, given this kind of data, though, does it make sense to file for breakthrough designation just for bragging rights, for instance? And plus, if you got a breakthrough, maybe a high likelihood of chance to get a priority review from there and expedite the approval and launch?

So we feel really good about the package we've got to submit to FDA. You know, the efficacy and safety and tolerability has been really exceptional. And we're always going to be strong advocates, certainly, for our product. And we think it's going to help a lot of patients. So, you know, from a regulatory standpoint in posturing, the breakthrough is a very high bar and not one that you see in focal onset seizures. So I wouldn't expect that breakthrough therapy designation is something we would expect, and that's similar for even priority review. So, you know, prior FOS drugs have not gotten priority review. We've got a novel mechanism. We've got great data and efficacy that can help patients that are having uncontrolled seizures, but it's quite a high bar. So I think our base case that we've communicated to the market is that we would expect a standard review. And if that certainly changes, we'll let you know.

Just thought I'd ask. And so let's just say you're approved on a standard review basis in third quarter of next year. From the time of that approval to launch, I guess there's also DE scheduling. How long does that take and what kind of scheduling do you think you'll get? And is that going to hurt or dampen sales in any way?

Yeah, that's right. So in this class of medications, you've got to do human abuse potential studies. and the ASM class broadly is scheduled by DEA. So one that does add on to the timeline for actually getting kind of product to patients. So following the FDA approval, you've got a three month or 90 day period with time for the DEA to respond and to get to the scheduling. So that's just sort of part of the regulatory process we gotta follow until we get on the market and we would expect to be scheduled like others. We don't expect that to have any impact commercially to the product and its uptake and we feel really good about the overall package we've got and now let's talk about the launch prospects and and so I you know bottom line it feels like you've got that all the attributes of what epilepsy doctors want and not just epitophilologists but general neurologists as well so I mean why wouldn't there be a bolus once you launch yeah so I think this would mean by bolus look we think there's gonna be a lot of patients out there who unfortunately don't have good seizure control today who are looking for something that's not a an SV2A or sodium channel blocker to help them get that kind of relief so I think in that sense there'll certainly be a group of patients and physicians who are eagerly awaiting a new approach and a new medicine and we obviously have a great profile for them as well as for patients who over time may continue to have breakthrough seizures you know I think if you think of a bolus in the sense that we're gonna have a big spike of patients come on like you would maybe in a rare disease you know we don't think that's likely to be the case but we do think there's going to be a lot of work that we've got to do to help educate a lot of physicians who you know don't know the mechanism because this will be the first time that they'll have something in their hands with a potassium channel modulator so yeah it's going to be I think very much something that physicians are looking forward to but bolus in terms of a large number of patients it sort of has a different

trajectory and launch curve I think is not likely to be the case in FOS yeah And maybe just to add to that, you kind of referenced the two prescriber bases of the specialist versus the general neurologist, which I think is maybe worth spending a minute So there are epileptologists, there's about 2,400 of them in the U.S. that treat these patients. But many of these patients are also treated with by their general neurologists. And what we find is the epileptologist, obviously it's a specialist, there's a number of drugs drugs that they're comfortable using that the general neurologist is not comfortable using. And the only branded drug that's currently on the market to treat focal onset seizures is excopri, which has quite a challenging titration and also has a number of DDIs. And so there has to be adjustments made. Not only do you have to titrate up, but you have to adjust the other background medications. That's something that the specialists are very comfortable with, but it is more challenging for those in general neurology. I think the profile of this medicine. We've talked about the mechanism and the efficacy, but the ability that the drug doesn't need to be titrated. You're on your efficacious dose on day one, and you don't have to make adjustments for other background anti-seizure medicines does make the profile of a Zetucalner, you know, really something that the general neurologist feedback is incredibly positive. So we will be building the commercial infrastructure and thinking about it not only from an epileptologist point of view but also from the general neurologist.

Great and speaking of XCOPRI I think that's expected to do a billion in peak sales in the US alone but you just mentioned I think you have better properties than XCOPRI so is it your full expectation you do you you gain more traction than XCOPRI full stop?

Yeah look XCOPRI is a good drug it provides a lot of benefit for a lot of patients but as Ian said it really is given a number of its properties around and ease of use and having to manage DDIs and titration, not one that is widely used amongst the general neurologist. So we do think we've got a very differentiated profile. We think we're gonna be able to penetrate both the epileptologist and help those patients that may be on X-COPRI today, but we think we've got a much broader profile. You know, we saw that in the clinical studies, right? In X-TOL-2, we had a lot of patients that either had seen or been on X-COPRI during the study. It was different from when we ran the phase two study. At that time, Excopri hadn't been approved. It was just approved toward the very end, so we had literally a handful of patients. So we think we've got a profile that really is superior to what Excopri has in terms of some of its ease of use attributes, and we think that'll help us with uptake. So, look, it's been a good drug. It's doing well, but we think we've got the opportunity to kind of bend the shape of that curve and have a launch that's a bit better than that, But over time, really importantly, get that broad penetration amongst the two physician prescribing groups and a deeper penetration among the patient population that, you know, would make it a larger commercial opportunity than what they have.

And we're just talking volume, but there's also the pricing side. Talk about how you're thinking about price. Is it going to be a premium to Xcopri, which I believe costs $15,000 a year?

Yeah, so Scopri, again, was launched back in 2019, 2020, during the pandemic, but they also priced at a different time in terms of what we see today with new drug pricing. Look, we think we've got a great benefit to cost, a story to be told to payers. We've been engaging with them before the XTOL2 data, and we'll continue to do that now with the package that we have. So we do think that we've got the chance to price above where Scopri, Excopri, which today is the only branded drug in FOS that's still out there. And we've got a really compelling value proposition for payers. And so we'll be doing that work with our commercial team and market access team now between here and launch. We haven't talked about kind of what range of prices they might be, but we do think there's an opportunity to have enhanced pricing from what the class historically has seen.

Great. And the sales force strategy here, How many sales reps do you need to market effectively in both doctor groups?

Yeah, so we're fortunate, as Ian said, to have a really strong balance sheet with a billion three today, and that gives us, I think, a lot of confidence going to the launch. We've got a great team that's launched drugs and launched SM drugs before, and so our belief is that we can really get good uptake with a very initially modestly sized field force. So we think we need about sort of 75 reps in the U.S. to be able to effectively commercialize to the epileptologist and this target group of general neurologists and the ability to use things like non-personal promotion to really get awareness for the brand and for the company out there. I think over time, the great thing is we're going to also have a distribution model that gives us a lot of access to data and information. And we think that'll be key to help us continue on that path, trying to find the best way to get the broad reach into the general neurology population and expand access and uptake for the drug. So I think over time, there's certainly opportunities to continue to deploy capital in really effective ways. But at the outset, we think we've got, you know, really modestly-fized field force that we think can really do the job.

Great. And this is more of a check-the-box question on that you actually do have a second phase three, XTOL3. What exactly is the timing for that? I know the purpose of that is also to help drive EU approval, but the timing could be helpful here.

Yeah, so we had two phase three clinical trials running in parallel, XTOL2 and XTOL3. They're carbon copies of each other, the same inclusion-exclusion criteria. You know, XTOL2 was the critical path to filing in the U.S. with our X-TOL data. That's the interactions we've had with FDA, and that's why we'll be filing the NDA here shortly. X-TOL 3, we've really focused on approval in Europe, but importantly, and we've had interactions with EMA over the past number of years, but importantly, we also had regulatory interaction with PMDA towards the end of last year. So we're amending the X-TOL 3 protocol to include Japanese subjects. We're not going to have to run a separate Phase III program in Japan. We can incorporate Japanese subjects into the ongoing Phase III and XTOL III. So I think that's a real advance that we made towards the end of last year, and this was on the backs of doing an ethnobridging study. So what we've said for XTOL III is that the non-Japanese enrollment will complete this year, so we've made really good progress. The Japanese sites will be up and running this year, and we'll start to get Japanese enrollment. So the study will take a little bit longer to complete overall, but the non-Japanese enrollment will complete this year.

Okay, very good. And then shifting to your other programs out there, you said earlier there's PGT-CS, MDD, bipolar depression, all four, as to Kellner. And then you've guided to one of two MDD studies to read out in first half of 2027. For the remaining three studies, MDD, BPD, PGT-CS, can you give us the cadence, which one might come first and when that could be?

Sure, I'm happy to wrap up epilepsy first, and then we can move to psychiatry. So we've got an ongoing study in primary generalized tonic-clonic seizures. Patients with PGTCS, it's a less common epilepsy than focal onset seizures. These patients have fewer seizures as well, but they're more severe. So it's the tonic-clonic seizure, what we used to call the old nomenclature was the old grand mal seizure. So unfortunately, these patients have a greater risk of things like fall and injury, but they We also have a greater risk of what we call SUDEP, which is sudden unexplained death and epilepsy. So a huge medical need. It is a more challenging clinical study to complete. And so we would expect, we haven't guided to timing, but we would expect that this would be an SNDA that would be after the approval of a Z2 calendar in focal onset seizures. If we move to psychiatry, we've guided for the first study, that's XNOVA2, so that's It's an MDD study that will read out in the first half of next year. The cadence of XNOVA3 is it started about six months after the start of XNOVA2, so you can kind of think about the cadence of psychiatry readouts starting with XNOVA2, then followed by XNOVA3, and then it would be the bipolar depression study.

And so then in MDD, because ExNova 2 is reading on the first half, 2027, phase 2, you showed a three-point placebo-adjusted delta on, give or take, I think, Madras and HamD. Now the primary endpoint is HamD. So maybe talk about your confidence why the efficacy separation will not actually degrade in phase 3 for this ExNova 2 study.

Yeah, you know, look, I think we have to acknowledge that psychiatry drug development is incredibly challenging, and we made a number of changes from the phase 2 study to the phase 3 study. For this mechanism, this potassium channel modulation mechanism, there have been four clinical trials that have been run in major depressive disorder, two with a predecessor molecule that was called a zagabine, and two with our molecule is etucalinar. All four Our studies had a separation between active and placebo, so we fully, you know, our perspective is that this mechanism has an antidepressant effect. The question is how do we execute the best phase three program that we can? So the changes that we made from phase two to phase three, we went from two to one randomization to one to one randomization. The literature supports that that will have an impact, a positive impact on the placebo A significantly increased sample size. phase, we are using HAMD17 as the endpoint and not Madras, and that's because we saw less variability. So we had a nominal p-value of less than .05 in the phase two for HAMD17, and that was because we saw less variability for our mechanism with that endpoint. We've also increased the entry criteria, so it's a more severe population coming in. We have fewer visits. We have, we're using the MGH CTNI safer group to be able to provide trial oversight. And we have a placebo script. So we're doing a number of things to try to manage that study as best we can as we think about moving from the phase two program to the phase three program. And because the sample size has increased materially that we can power it such that we could have less than a three-point separation and still have statistical significance.

Thank you and so what's interesting here at based on phase two data the safety profile in this patient population actually looked quite clean to me. I think that's very differentiated when I think MDD drugs it's kind of riddled with side effects of other therapies so would you expect the same kind of AE profile actually in phase three more or less?

Yeah I mean I mean, we had this discussion with you, Andrew, and with investors going into the phase two study in depression is the safety profile was a concern on what it would show in that patient population, and it was surprising to us. It was actually more benign. This is a cross-trial comparison, so I think we have to be a little bit cautious in that. The epilepsy patients are on multiple background medications. The depression study is done as a monotherapy. So I think it's difficult to completely answer the question, but we saw the same side effects we see in epilepsy and depression. We just saw them at a lower level, so it looked like a more benign safety profile, at least on the surface in depression. I really think that is that to counter in depression has a number of clear differentiators. Psychiatry like epilepsy, there's lots of drugs available, but very narrow in terms of different mechanisms. So bringing a novel mechanism into psychiatry is important. The challenge with the SSRIs and the SNRIs, it often takes weeks or months for these drugs to work. What we find in psychiatry, the same thing that we see in epilepsy, that the patients that respond, respond very quickly. So we see that separation immediately. And if someone's in a major depressive episode, to be able to have an early onset to efficacy is important. The other thing is not just the side effect profile, but a different side effect profile. So current standard of care in psychiatry, you see things like weight gain and sexual dysfunction. We don't see any of either of those adverse events in the profile of a Z2 counter. And then the last point is on anhedonia. So, really, many of these depressed patients, the current standard of care can maybe help them on the depression, but they still don't have the motivation or the enjoyment, so they're still anhedonic. And what we found with this mechanism, and there are scales for us to look at this, we looked at it in phase two, it's called the SHAP scale. We're also going to look at it in phase three, as it looks like there is a separation on anhedonia that we're also improving a key comorbidity in the depressed population.

I think I would just double click on something that Ian said as well. What we see in our market research and in talking with physicians is that, yeah, they really value the different safety profile that it brings and a different option. That efficacy is certainly important, but if you've got a drug that's approved and efficacious, it really does oftentimes comes down to sort of what's the right tolerability profile for my patients here. And I think that's where we can offer something different in addition to mechanism but a different safety profile. And we also decided to use a slightly lower dose as our top dose in MDD. So we went with that 20 milligram dose very intentionally so that the goal was, again, to try and hit that sweet spot of getting good efficacy, that we can get that separation from placebo that we need for an approval, but that we really try to manage the side effect profile so that we can, you know, at a commercial level, provide an alternative that we think is going to be really attractive for physicians and patients.

And so at the end of the day, if this is approved, where do you think this will be positioned relative to antipsychotics, for instance?

Yeah, look, it's a marketplace that's evolving. There are, as Ian said, a lot of options for patients. We're really pleased with our initial research that we've done into the potential positioning for it. We obviously have to get through the studies themselves, but we do think the novel MOA, the different safety profile, can provide an alternative along with things like the rapidity of onset and getting that, you know, disease benefit in terms of patients feeling less depressed, hopefully dealing with things like anhedonia, while not having things like sexual side effects and weight gain. We think that's a really compelling profile, and there's obviously a lot of people that need different alternatives that maybe haven't responded to SSRIs or it's not the right fit. So we think it could open up a very large market opportunity, certainly for us, outside of focal onset seizures and provide a really attractive option for patients.

Okay, and so Exinova 2, first half of 2027, Exinova 3 sounds like six months behind, give or take. So this could actually be approved late 2028, give or take?

I think when Ian outlined the milestones we had before, we don't have specific dates around a number of them, but there's going to be a lot of clinical candidates. We can talk a little bit if we have time on our pain programs, but over the next couple of years, we're going to have some really significant readouts beyond obviously the launch, which will be a key focus for investors. So the readouts in psychiatry over the next couple of years, bipolar depression, the PGTCS. And then, again, we probably won't have time to touch on our pain portfolio, but we'll have hopefully a couple of POC studies reading out on two pain programs with novel mechanisms that could be really impactful. So it's an incredibly catalyst-rich year for a company that is also obviously going to be focused heavily on making sure this is an exceptional launch.

And the bottom line for pain in the last minute, that you've already made the decision to move forward to phase two based on the single ascending dose data suggesting high receptor occupancy for both of the KV7 and NAV 1.7. So now is the MAT phase and phase one, is that right? And then it's kind of checking the box and then you start phase two pain studies, acute pain studies with data in 2027.

We need to finish the phase one clinical trials. I don't want to get ahead of ourselves until the phase ones are complete. But what we did say earlier this year is we believe both for the KV7 mechanism and the NAV1.7 mechanism, we're already seeing exposures safely in a human that we would expect to translate into an analgesic effect in a proof of concept study. So I think we've already made significant progress in the phase one study, but we're not done yet. So we need to complete the phase one studies. studies, those should wrap up over the next number of months, and then that would put us in an opportunity to start the phase two proof of concept. These would be phase two proof of concept in acute pain, either a bunionectomy or an abdominoplasty study, and then those run actually reasonably quick. So to Tucker's point, I think we see this richness of clinical catalysts and data over the next couple of years that would include proof of concept data in pain.

Thank you for walking us through your story and congratulations on the progress. I appreciate it.

Thanks. Thank you.

Thanks