Xenon Pharmaceuticals Inc. (XENE) May 19, 2026 Conference Transcript

Hi again, everyone. I'm Brian Abrams, Senior Biotech Analyst here at RBC Capital Markets. We're really pleased to have our next featured company, Xenon Pharmaceuticals, represented by their president and CEO, Ian Mortimer, and their CFO, Tucker Kelly. Ian and Tucker, thank you guys so much for being here. All right. So it's been a really exciting year so far for you guys with some of the data we've seen from Zettocallender and the XTOL2 Phase 3 focal onset epilepsy study. And the data that you released in March demonstrated very impressive efficacy, a 43% placebo-adjusted seizure reduction at the highest dose. You got to 7% of patients to complete remission. What's been the reactions that you guys have been hearing from KOLs following the data? And how are you thinking azetokalner will ultimately be positioned in the treatment paradigm? now that you've had a chance to kind of sit with the data for a couple of months, hear this feedback, digest some of the details.

Sure. Yeah. Great way to start. So I'll take a little bit of a step back and just give a bit of context on is that to calendar and epilepsy, talk through the phase three data. I think you've set it up really nicely. And then the benefit we had is only a few weeks after data, we were at the American Neurology Meeting AAN in Chicago, where the data were presented at the podium. And so we had this fantastic opportunity to talk with a number of KOLs, both on the epilepsy side, but as I think a bit of a theme that you'll hear from us is that the profile of Zetu Kalaner we think is going to do really well in general neurology as well. And there's a number of those prescribers that we're getting to spend more time with and give them an update on the profile of the medicine. So Zetu Kalaner, this is a KV7 drug, so it affects a potassium channel in the brain, which really is a break on hyperexcitability and can have a benefit on these seizure disorders and epilepsy. And you walked through the data on a placebo adjusted basis. So we had really strong phase 2B data, the XTOL study a few years ago, and we were trying to replicate those data with XTOL2, which read out in March, as you mentioned. And actually we were surprised because the XTOL2 data outperformed the XTOL data. And I think it's rare when you move from phase two to phase three that the data get better. Actually, you and I spoke a lot about this, and you did some fantastic research looking at other epilepsy drugs and how they did from phase two to phase three and consistency, but you expected that effect size to probably come in a little bit. And actually, we went the other way. The effect size got bigger from phase two to phase three. So we're now in this incredibly fortunate position where we've got a drug with a novel mechanism. You know, there are a lot of drugs to treat focal onset seizures. Over 20 drugs are approved. But actually, there's not a lot of mechanistic diversity. Most of those drugs fit into a narrow number of different mechanisms. And so there are no potassium channel modulators on the market to treat epilepsy. So we're bringing a novel mechanism. And we now have in two studies, the best placebo adjusted efficacy ever seen in focal onset seizures in a very refractory population. And if you go back and look at the other studies that have been done historically, it's usually in a population that has either failed fewer drugs or had less baseline seizure burden. Whereas we had a patient population where these patients had failed a number of therapies. The majority of patients were on three background medications and they were still having a seizure every other day. So it was quite a refractory population and about 60% of them, this was a big change as well, about 60% of them were either on or had failed Cenobamate. And that was a big difference from phase two to phase three. And still we got this incredibly strong efficacy readout. So we have a novel mechanism. We have incredibly strong efficacy, both in the double-blind period, but also in open-label extension. The drug doesn't need to be titrated. It's one pill once a day. You're on your efficacious dose on day one. and we don't have meaningful DDIs with other ASMs. And so when you look at this package overall, it's a package that we don't believe has really been brought forward to the prescribers in quite some time. So we had the opportunity at AAN, the chair of our steering committee for X-122, Dr. Jackie French, that many, many people in the audience know very well. She presented the data at AAN in a podium late-breaking science presentation. We had an opportunity to interact with a number of KOLs and a number of general neurologists. And the feedback is incredibly strong, which you'd expect with a profile of a molecule like this, is that I think there's a number of patients, and Tucker can walk through the epidemiology and the number of patients that still are having breakthrough seizures that need better medicines. And so the feedback from the KOL community is they're looking for a novel mechanism. They're looking for a drug that can provide good efficacy, both in the short term and the long term. Probably the difference between the specialist, the level three and level four epileptologist, and the general neurologist is the general neurologist really biases to the ease of use. So not having to do monitoring, not having to have drug interactions, not having to titrate the drug, and having the novel mechanism and the efficacy is things that resonate really well in the general neurology community that are experts but not epilepsy specialists. And the ability for them to keep their patients longer and not have to refer them on to the level three or level four center is, I think, where the drug is going to do really well, both in the specialist community as well as in the general neurology community. But maybe a good opportunity to talk about the overall patient population.

Yeah. So the epi tells you there's about, you know, 1.8 million FOS patients in the U.S. There's another, about 900,000 patients that have generalized anxiety, PGTCS, which is subject of another study that we're running in phase three. But for those FOS patients, the good news for them is that a lot of them are well-controlled with existing medications. So they'll go on, usually a monotherapy to start with an SV2A or sodium channel blocker, and then maybe if they do progress, go on a second monotherapy. But for a good half of those patients, they do well. But what we're going to be going after are those patients who are either partially uncontrolled or significantly under control. And as we saw in our study, as Ian mentioned, these patients have gone through and cycled through five or six prior anti-seizure medications and are on two or three concomitant meds. So there's a heavily pre-treated portion of the population. Our goal, both within the epileptology portion of the channel as well as in the general neurology, is to certainly start there but move upstream rather quickly and try and get this medicine with a novel MOA to the point where it's going to be used more frequently as one of the earlier add-on therapies. We're not looking to go front line. This isn't going to be something that we're going to displace Kepra in de novo patients who've just been diagnosed, but we think it has the opportunity, given all the attributes that he had outlined, that it can be a really significant impact for physicians and patients quite early in the treatment paradigm.

That's really helpful. So I guess you guys have talked about filing sometime this summer. Can you talk a little bit more about maybe the overall status there? What more needs to be done? How have your conversations gone with the agency? And to what degree do you expect some of the changes in FDA leadership will impact that?

Yeah, so we've had a great relationship with the agency thus far. We've been really communicative with them as they have been with us throughout the development of Zeta Calendar. And the team's working really hard to get the dossier put together for the submission in Q3. So the good news is we've got a lot of data that we're able to do in advance of getting the readout from XTOL-2. So a lot of the non-clinical portions of the submission around CMC were already kind of ready to go. The real lift now is with the XTOL-2 data, getting that integrated safety summary, which is a key component and a more complicated piece, that integrates the safety information both from XTOL, the original Phase 2B study, XTOL-2, the Phase 3. And then we've got a number of other open-label studies, so there's a lot of safety data, which we think is great. It's a huge package of information, a really consistent and supportive database of efficacy and safety. And for the safety side, you do additional cuts of that safety data for the initial NDA submission. So teams are working really hard. It's going really well. And we'll have our regular interactions with the FDA. We'll obviously have a pre-NDA meeting. Again, given the strength of the data and the ongoing dialogue we've had with the agency over time, we're not at all worried about that. We think it's going to be a good meeting with them and look forward to getting the submission in later this year.

Excellent. And then speaking of the open-label data, I guess, when could we expect to see additional data from the XTOL to open-label extension? and maybe just how has that overall been tracking so far relative to what you've seen now over obviously a longer period of time with the X-TOL open label?

Yeah, so I'll talk a little bit about the X-TOL open label first and then we'll get to your question on the X-TOL 2 open label. So in X-TOL patients, there was an eight-week double blind. Then patients had the opportunity to go into open label extension. We had a 97% rollover rate, so really high. That was consistent in the phase three program as well, rollover rate, excuse me, about the same in the high 90s for the patients that finished the X-TOL 2 double blind period. We have this real richness of data from the X-TOL open label. All patients have been through four years of dosing. We've actually continued to extend that open label. It started as a one-year OLE. We extended it to three, five, and now it's a seven-year open label. And that's really because the patients are doing remarkably well, and it's the right thing to ensure that these patients continue to have access to the medicine. So what you see at the American Epilepsy Society meeting every year is we mature that open-label data by a year. So we had the 48-month cut data last December, and then coming up this AES in December of this year, we'll have a 60-month cut of the data. and what we're finding for those patients that have been on the drug for more than four years almost 40 percent of them are getting at least 12 months of seizure freedom and that's actually quite remarkable if you think we walked through how many drugs these patients had failed the background medications and they were having on average a seizure every other day and now we have the subpopulation that is going six months or 12 months with no seizures at all that can be game changing in terms of work, school, driving, et cetera. Exactly. In most jurisdictions, if it's 12 months, then you have the opportunity to drive again. We get feedback from physicians that these patients are seizure-free for the first time in their lives. So a massive impact on their independence. The other data cut that we did, which to our knowledge hadn't been done before at AES a few months ago, is we looked at those patients that had seizure freedom and then lost it and whether they could regain it again. So you can have a breakthrough seizure for a lot of different things, right? It may be a missed medication. It could be an impact on your life in terms of sleep or a stress or something else that's changed in your life and you have a breakthrough seizure. And what we found for those patients that had a breakthrough seizure, that the vast majority of them can regain long periods of seizure freedom even after that breakthrough seizure. And I think that was an analysis that was really relevant as we think about how the medicine is going to be used in the real world so that was really well received so we'll have more open label data from x toll your question specifically on x toll 2 we need a little bit more time we need that data to mature so we're not going to have x toll 2 open label extension data at this aes but i'd expect as we get into 2027 2028 you'll start to see some of the open label data from x toll 2 as well given everything we know about the medicine, the rollover rate, our expectations is the XTOL 2 open label data will track what we've seen in the XTOL open label.

Good. And then you talked about just the size of the market and the unmet need amongst patients who are still having frequent breakthrough seizures. So tell us about some of the pre-launch activities and how you're planning to uh to to move in into the market i guess on on one hand um i i'm sure this is a highly specialized uh market you have a unique offering with a differentiated mechanism of action um yeah on on the other hand you know you mentioned that general neurologists i imagine who see a lot of these patients i imagine it's a bit more diffuse and it is a there are a lot of generics and other medicines in this space. So when you sort of think about all those considerations, what are you guys doing today in order to lay the groundwork and foundation for a good launch? And do you have a sense at this point, based on your market research, what sort of a target overall sales team size might look like?

I joined about six months ago from another company that was in the commercial space and targeted ecology world. And one of the things that was really impressive about what Ian and the team had built at Zedon is that we were doing those investments on the commercial side even before we had gotten the XTOL2 data. So we've had MSLs out in the field, almost 10 at the time, almost a dozen now, the last 18, 24 months out there talking with KOLs and physicians, starting that dialogue with them, and building the infrastructure in that core substrate for the commercial team. So we've had folks that are focused on market access for a while now. We've built out the senior leadership team. So I think we had a lot of things in place even before we get to today and kind of the march and the sprint toward the launch of the drug. So we've got a really good foundation to build on, and the team will be doing more between now and the actual approval date to get ready. So we can talk a little bit about kind of what some of those things are, but I think we put in place an infrastructure that will build out with a field force in the U.S. that will be around 75 or so reps, and the total commercial FTEs will be probably in the 150 or so range. And we think that's going to be a great size for us to be able to try and penetrate both the specialists, the epileptologists. There's about 2,400 of those in the U.S. There's obviously a lot more general neurologists. There's about 18,000. We're not going to be going after all 18,000, at least on a personal promotion basis at the outset. But we are going to have a focus group of probably another 5,000, 6,000 of those. So we think the 7,500, 8,000 physicians will be our kind of our core target population comprised of those epileptologists and then a really targeted group of general neurologists that we think either write branded medicines today, see more epilepsy patients. because, again, where we think this can be a really big drug is getting it not only to the epileptologist to see per capita a lot of patients and see some of the more difficult ones, but getting it out into the general neurology community, whereas Ian talked about before, the attributes that Zetucalan brings, we think are going to be great. All those things about ease of use that they bias toward will be really helpful for those physicians to try and take up the adoption. And that's what we see in other ASM launches in the past that we think is different with Assetto Calendar. And so we're building that infrastructure to be able to try and get there quickly.

Got it. And then speaking of ease of use, what doses would you anticipate will be on Assetto Calendar's label in order to enable physicians to optimize and individualize the dose for each patient?

Yeah, I think the back half of your question is super important, right? Not every dose is going to be the right dose for every patient, and so we need that flexibility. So the discussions we've had with the agency to date have been to have four doses on label, 10, 15, 20, and 25. So in our phase two study, XTOL, it was a dose-ranging study where we looked at three doses of the drug, 10, 20, and 25. All doses were statistically significant on that primary endpoint of the MPC or the seizure reduction. clear dose response. If you remember those data as we went from 10 to 20 to 25 almost linear right where you had a reduction in seizures. In the phase three program we've looked at two doses 15 which was a new dose and 25 milligrams as the top dose and again saw a clear dose response. Actually we have this really nice graph that we show of all four doses over the two studies either eight weeks or 12 weeks of dosing, and you can see two really key themes. One, there's a key dose response, but two, there's a time-based deepening of the response, right? That if you move from the eight weeks, which was the double blind period in X-TOL to 12 weeks in X-TOL 2 at the same dose, you have a better response at 12 weeks than you did at eight weeks. And then if you look at our open label data, it then pulls through in the longer term as well. It looks like the response deepens three or four months after and then again at about five or six months and then again at about 12 months. So that population in open label is having about a 90% reduction in their seizures overall. So it does look like, and we don't have a good mechanistic rationale for this, but it does look like patients do even better the longer they're on therapy. But yeah, our discussions with the agency is to have all four doses on label, although all are efficacious. likely not every dose is going to be the right dose for all patients. And often we get a question, where do you think the general patient is going to start? And I think it's going to depend a little bit on the background of that patient, what types of seizures they're having. One of the things that we haven't yet shown in the XTOL2 data, but we did in XTOL, is we talk about these patients as having focal epilepsy, but there's actually a number of different seizure subtypes they can have. One of the more concerning seizure subtype is a focal to bilateral. So it's a primary diagnosis of a focal seizure. So it starts in one hemisphere of the brain, but it can move to both hemispheres as a secondary generalization. So this is a focal to bilateral tonic-clonic seizure. When you're having those tonic-clonic seizures, there's a greater risk of injury and actually a greater risk of death, which is called SUDEP. And we showed in the X-Tool data and X-Tool 2 to come, we'll show some of those data later this year at AES, is that that specific seizure subtype patients did really well. So a really good reduction in their focal to bilateral generalized seizures gives us confidence in the primary generalized tonic-clonic seizure study as well. But again, so patients that are having a certain seizure subtype, you may want to start at a higher dose. But overall, we think that most physicians, when we get feedback, will probably start at 15 milligrams. That's an efficacious dose. And it's a dose that's really benign from a safety point of view. If you remember those AE tables from our Phase III program, the 15 milligrams looks very much like placebo in terms of the AE profile. A little bit higher dizziness in 15 milligrams versus placebo, but everything else very comparable when we look at the 15 milligrams versus placebo. So that's probably a really good starting dose. And then with breakthrough seizures, that's a good tolerated dose. Then the opportunity to move up either to 20 or 25 milligrams.

Thinking about potential speed to market, based on your initial FDA feedback, do you think priority review is a realistic opportunity? Is that something you're planning to apply for?

Yeah, so we think the drug has got an exceptional risk-benefit profile. We think it brings a lot of efficacy to patients. The reality is the landscape of ASMs in the past will tell you that priority review is not something you see with the approvals there. So our base case and going assumption is that we would have a standard review for the drug. But, look, we'll always continue to be the best advocates for the drug that we can. We think it's got a great profile, and so we'll have discussion with the agency. But I think base case is standard review.

That's useful. You've seen broad antidepressive effects in an MDZ study. You've talked about some hints of effects in XTOL2 as well. I guess, can you remind us kind of where we stand with the ongoing phase three program in MDD and how you're thinking about positioning this in the MDD landscape versus just really having the attributes of mood benefits to further enhance to the FOS label.

Yeah, let's start on the psychiatry side. So we read out a proof of concept study called the ExNova study a couple of years ago in patients with major depressive disorder, where we saw a clear separation between active and placebo on both clinical scales using Madras as well as HAMD17, nominal p-values less than 0.05 on HAMD17 and on SHAPS. And we also saw early efficacy. We see this both in epilepsy, we see it in psychiatry, where the separation, you get that separation early. We also saw a dose response. 10 milligrams was better than placebo, 20 was better than 10 milligrams in that exnova study. That gave us confidence to go into a phase three program. So we have a large phase three psychiatry program ongoing for a Z2 calendar, two ongoing phase three clinical trials in major depressive disorder, exnova two and exnova three. and then we started a study in bipolar depression that we called the EXCEED study. First phase three psychiatry readout will be Exnova 2, and that'll be in the first half of 2027. So we've made really good progress on that study. You know, a little bit different than epilepsy, a few things that I think are important when we speak to the prescribers on the psychiatry side. One, again, still a reasonably narrow number of mechanisms available for psychiatrists. So bringing a novel mechanism, there are no potassium channel modulators to treat either epilepsy or depression. I think it's going to be important. Two, the early onset to efficacy is actually probably more important in psychiatry than it is in epilepsy. In epilepsy, these patients have had the disease for many many years absolutely they want to get their seizures under control but they're thinking about it the physicians are thinking about it over a longer period of time with psychiatry if you're in a major depressive episode you want to help that patient immediately and so the SSRIs and SNRIs can often take weeks or months to work so an opportunity to have an antidepressant effect so that we see separation at week one could be very beneficial so novel mechanism, early onset to efficacy, a different side effect profile. So one of the benefits of a Z2 calendar in psychiatry is we don't see the sexual dysfunction or side effects or the weight gain that is seen with some of the current standards of care. So again, a differentiated safety profile and potentially the impact on anhedonia. So these patients can often are doing better on their depressive symptoms, but still are anhedonic. And so the opportunity to have a mechanism that could have an impact on anhedonia could be very positive as well. That's the feedback we get on the psychiatry side. It's a little bit different than on the epileptic side.

I know we have just a minute left, but I'd be remiss if I didn't touch on pain because I know that's an emerging program, but having followed you guys for over a decade now, I know that that's something that you guys were really originators on in terms of ionophantobiology. So it sounds like what you're seeing from both the NAV1-7 and the KV-7 early stage candidates for pain has been encouraging in the healthy volunteers. I guess, can you talk a little bit more about, I guess, what you're seeing when we might see additional phase one data and like just maybe outline preliminarily where you see these moving forward, acute versus chronic and what indications? I know that's a lot, but maybe we could take a one minute summary.

Yeah, for sure. So we've got two phase one studies ongoing, XEN1701, this is a NAV 1.7 inhibitor, XEN1120 is a KV channel modulator, both in healthy volunteer studies. As you mentioned, both we have reached exposures in humans where we believe we would see an efficacious outcome in a proof of concept study. In NAV 1.7, it's more about the receptor occupancy that would mimic the human genetics. So we're seeing those levels of exposure already. On the KV side, enough exposure where we're seeing preclinical efficacy and believe that our model would suggest the exposures that we need to see in a human. So in our phase one studies, the phase ones are not complete, but we're already at levels that give us confidence to move into phase two proof of concept studies. Those phase ones should wrap up later this year, and then we'd be in a position to start those phase two proof of concept studies. Today, those POC studies would be in acute, so either a bunionectomy or an abdominoplasty. Both mechanisms don't necessarily say that we should go either into acute, chronic, nociceptive, or neuropathic. So what you'd expect from us is a broad development program to interrogate both of those as we move forward.

I know we're out of time, Ian and Tucker. Thank you guys so much, and look forward to talking again soon. Thanks again. Thank you, Brian. Thank you.