Xenon Pharmaceuticals Inc. Aktie

We're going to get going here with our next company presenter at the BofA Annual Healthcare Conference. My name is Jason Gerberry. I cover biotech and pharma and I'm pleased to be introducing Xenon Pharmaceuticals and Tucker Kelly, CFO. So Tucker, thanks for joining us.

Great. Jason, wonderful to be here in Vegas with you and the BofA team and appreciate the opportunity.

Great. So maybe we'll start with just azetukalner for FOS epilepsy. You recently had your confirmatory pivotal study and next step is going to be regulatory. But maybe just at a high level, how would you -- coming out of that data, say the elevator hook is looking for azetukalner in the ASM space. There's a lot of different ASM alternatives. So maybe if you could just sort of frame the why and then we can go from there.

Yes, absolutely. So we were really excited when we reported out in March, the second, as you say, of our pivotal studies for azetukalner in focal onset seizures. So this is the X-TOLE2 study, which had a tremendous result, largest median percent change in seizure frequency on a placebo-adjusted basis ever seen in a registration study. And helpfully as well, it was incredibly confirmatory of the initial X-TOLE2 study -- the X-TOLE study we had done in the Phase IIb. So the efficacy, the safety, all the metrics that you really care about were incredibly consistent with what we've seen before. So we think we've got a really great drug on our hands. As you said, we're going to be marching toward filing our NDA submission in Q3. And we have a really different product.

So as you said, there's a lot of ASMs that are on the market today. It's a generic market for the most part. There's now just one branded ASM remaining. But we have a really different approach. We've got a potassium channel modulator. Most of the class today in ASMs is around sodium channel blockers or SV2As. So we have a different mechanism of action. We have got a compelling efficacy profile and an ease of use and tolerability that we think is going to be really important as we touch on the commercial opportunity and the physician that we intend to go after. So yes, we're really excited about the data from X-TOLE2. We've got some initial feedback from KOLs and physicians and it's all been incredibly positive.

Yes. Okay. So the plan, as I understand it, will be to file the NDA in 3Q. What are sort of the -- if you can kind of just give us a sense of regulatory interactions, what are the steps needed to get that NDA through?

Sure. So we had a really productive series of conversations with the FDA over the years. And the team has been working hard even before the X-TOLE2 data was announced to get the NDA submission ready. So all the things that we could do beforehand without that data, we really worked on it and got done. So a lot of the CMC work, the module 3 components of the NDA submission were all kind of prepped and ready to go. That's assuming -- there's a lot of work left to be done. This will be our first NDA submission as a company. So it's a big lift, not at all worried about the packet but it is a lot of work. So the team is working really hard right now to pull together the integrated safety summary and the other modules with the combined data sets. And we'll have our interactions with FDA leading up to the NDA submission later this year and we're really excited about that.

Okay. So your base case is standard review. The last branded approval XCOPRI was also standard review. So that all makes sense. Are there any scenarios that could bump that up to priority review that expedite things?

Yes. As you say, when you look back at prior approvals in ASMs, there are always standard reviews. We think that's likely to be the case here. Look, we'll always be a strong advocate for our drug. We think it's got great properties. We think it's bringing a real differentiated clinical benefit in the way that other current approved products don't. So we'll always be a strong advocate for it. But I think as you say, the base case really should be standard review, so 12 months from NDA submission.

Got it. And you mentioned the reductions in the seizure frequency. Can you maybe talk a little bit about some of the data that you had at AAN around seizure freedom and how important that durability metric is ultimately to commercial adoption?

Sure. So the Phase III studies in FOS cover usually either 8- or 12-week double-blind period. So that's the principal data from the primary endpoint for both the X-TOLE study and the X-TOLE2 study. And what we touched on at AAN were 2 things. One is some additional data from X-TOLE2, talking about seizure freedom or as we really should call it 100% seizure reduction in the double-blind period. Typically, seizure freedom from a clinical standpoint is thought of as 6 or more likely 12 months of no seizures. And that's important because for these patients in most states that you can't drive if you've had a seizure within either 6 or 12 months.

So seizure freedom is really thought of as a long-term goal that physicians are trying to achieve with their patients. What we talked about at AAN was both the 100% seizure reduction in the double-blind period, so over 12 weeks. And what we saw was, again, really consistent with what we've seen in X-TOLE as well as consistent with the OLE data. So from the X-TOLE study initially, we have patients that after the double-blind period ended, stayed on drug and we've got data that we put out at AES last year and as well at AAN this year out to 4 years on therapy for a lot of these patients. And what we see is whether it's in the double-blind period or in the OLE period, [indiscernible] years that the efficacy continues to improve. And we saw that as well in terms of 100% seizure reduction in double-blind, where we're up at that level that you mentioned by the last 12 weeks.

And as you look back from 4 or 6 weeks out, it continued to go up. So we think that's really important. We bridge that to the OLE data showing that if you're staying on drug longer, you're getting much more significant periods of seizure freedom. And we had a lot of patients out to 4 years. And for those patients that have been on for 4 years, a very high percentage of those were able to get at least 12 months of seizure reduction at some point over those 4 years, so almost 40%. And there was another sort of 10% that were able to get seizure reductions, 100% seizure freedom over that 4 years. So a really compelling long-term efficacy data that we think is going to be impactful for us clinically as well as commercially.

Okay. So we've also heard just in our physician calls that the uniqueness of the Kv7 mechanism is an important attribute. There are others pursuing the Kv7 approach. I think Jazz has a very early stage I. Biohaven has a later stage I, not a lot of data that are out there. So it's kind of difficult to know what you're up against. But do you feel like the lead is so far and the bar is so high that you don't really concern yourselves. The focus is just internally what you have to do? Or how do you think about the defensibility given that there are other Kv7s out there?

Yes. That's right. So we feel really good about our position. As you mentioned, we certainly have the pole position. We're furthest out with a really robust and deep data set for azetukalner. So we've got the 2 Phase III studies that have read out. We've got the long-term extension data. We have over 800 patient years of experience now on the drug and we think we've got a really complete package that we think is going to set up well. So we both have a temporal head start in terms of others that may be coming behind us. We think we've got the best chemistry, highly potent molecule that gets good CNS penetration that obviously drives efficacy. And we've got a lot of other strong attributes as well. So we're going to try and get 4 doses on label with 2 doses that we've studied in the initial Phase IIb, 10 milligrams and 20 milligrams alongside the 15- and 25-milligram doses that we studied in X-TOLE2.

And we think that's really important because not all patients are going to require or want or need the same dosage formulation. So we've got kind of a really strong data set across a variety of doses that will allow physicians to figure out kind of what they're trying to solve for a particular patient. Are they looking to try and maximize seizure reductions? Are they trying to get a different balance between seizure reduction and adverse events that you see with a lot of ASMs. So we think we've got a really broad moat that we've built around our franchise with azetukalner in epilepsy. And we think the data, as you talked about kind of speaks for itself in terms of the strength of the efficacy data in the class overall. But certainly, we're the only ones that have read out a pivotal study or a registration study with the KV7 today in epilepsy.

Okay. Can you outline -- I know price is becoming a little bit more of a discussion point. And you mentioned maybe starting some payer discussions now as you get ready for launch preparations. Some of the unique aspects of being kind of a later line, probably a 2L or 3L drug in the epilepsy space. It's a protected category. So maybe just think about the proportion of the business that's Medicare and how you envision policies? I know in past conversations with Xenon management, I think in epilepsy, it's -- the payers will typically let one branded agent be included in a multidrug cocktail. So as you think about sort of what the desired outcome would be from a ease of access standpoint and how the policies will be crafted. Maybe you can talk a little bit about that.

Sure. So there's a lot of factors. So maybe first to set the stage. So what we see in terms of clinical yield today is that patients typically go on like an SV2A inhibitor as a monotherapy to start. And then oftentimes, if they can't get seizure control, luckily, a lot of patients can get seizure control with a frontline agent, they'll often go to a second monotherapy, excuse me, a sodium channel blocker. And then after that, it gets more money. And there's a lot of heterogeneity in terms of the clinical practice. So oftentimes, it moves to a polypharmacy approach. And so you're mixing in SV2A inhibitors, sodium channel blockers but there aren't many mechanisms available. So there's really just a handful of kind of general options available to physicians.

And what that means is that you've got a market that's highly genericized. There's only one sodium channel blocker today that is still branded. And so that leads to some interesting dynamics on the commercial side. So the payer mix is roughly 40% for commercial. And then after that, it's Medicaid because a lot of these patients and people who suffer with epilepsy are on disability and then Medicare after that. And as you mentioned, it's a protected class for Medicare purposes. And from a commercial standpoint, because it's a highly genericized market, it's not heavily managed. So there's a high unmet medical need and burden with these patients. There aren't a lot of category spend here because there aren't many branded agents and there hasn't been a lot of innovation.

And in addition, when we look at it, there are certainly still with the branded agent that's out there and the ones that just came off patent in the last 1 year or 2, there certainly are some of the traditional step edits, prior authorizations and formulary restrictions. But because of the way the clinical medicine is practiced today, they don't mean quite as much in the sense that patients are already going to be on an SV2A inhibitor or an initial sodium channel blocker. So we don't, in practice see that branded agents have a particularly challenging time getting reimbursement. Their formulary placements are very manageable and reasonable. So we think we actually have a really nice setup from a commercial standpoint.

As you mentioned, the team has been out already now talking with payers and PBMs and really introducing Xenon as a company, introducing azetukalner as a drug, talking about its benefits, its novel MOA, the unmet medical need and doing a lot of education. So this will be the first FOS launch since XCOPRI launched in 2019. So by the time we're on the market, 7, 8, 9 years. And so there's education to be done. It's not a category that the commercial payers have had to pay attention to. And we think we've got a great story to tell with a great drug and we intend to try and get really good value for the benefit we think we bring.

And I think what's been said on different calls, I want to make sure I summarize this right, is that the company's -- believes that there could be a price premium relative to, say, where XCOPRI comes out. That's like the current most widely used branded agent in the ASM space.

Yes. So obviously, the team is doing a lot of work on pricing with the data from the Phase III in hand and we'll continue to talk with payers and really, again, press the benefit and the unmet need and the novel MOA and all the other features. It's interdynamic because the last branded launch, as I mentioned, was in 2019. So it's been a number of years. I think if you look across the landscape of biotech and pharma, in general, prices have gone up in that time in terms of launch prices for a lot of new drugs. And we think we've got a really strong compelling value proposition to provide. So we'll continue those conversations. We do think there's a potential for premium pricing to where those agents are today. And we think it's justified based on the strong efficacy, safety and overall clinical benefit that we bring with a novel mechanism.

Yes. Can you talk a little bit about -- I think the market for kind of these more refractory patients in the past has been estimated at around [ U.S. 500,000 ] or so 500,000, 600,000, if have my numbers right. What I wonder is like of those, what proportion are presenting for a new treatment cocktail in a given year? Because that's kind of your in-play dynamic market in any given year. And I think what -- a lot of people who followed launches in this space, there's a bit of a slow year 1, 2 and then a build, right? And so I do wonder is it just the dynamic where it's 10%, 20% of those patients are maybe presenting in a given year for something new and that's what you're fighting for competing against like XCOPRI and other treatment options to get that incremental patient?

Yes. So the FDA would tell you that there's about -- in focal onset seizures, there's probably about 1.9 million patients in the U.S. As I mentioned earlier, the good news is for a lot of those patients, they're well controlled with an existing medication. So say roughly half of those patients don't need and aren't looking for on a regular basis, a new therapy. But the others do. So only roughly half of those patients are not well controlled. Some of them are not well controlled at all and really uncontrolled patients. And what we're looking at is that half of those patients is the ones that we think within FOS are going to be the addressable market.

Half of the 1.9 million?

Half of the 1.9 million, yes. And then amongst those, there's probably just over half of those are partially controlled. So they're getting decent seizure reductions. They're not having their seizures as frequently but they're certainly not well controlled to the point where they're not looking for other possibilities. And then just under half of those are really uncontrolled. And so I think at the outset, when you look at our commercial launch in FOS, we're likely to be making our first headway into that group of uncontrolled patients. But we do think that, again, given the novel mechanism and the strong data that our goal is to rapidly move up earlier in the treatment paradigm and be one of those early add-ons to your initial SV2A or sodium channel blocker.

So we think it's a really large patient population that has a significant unmet medical need and we're bringing something very different to the table. This is all about FOS. We can also talk a little bit about the generalized seizures or PGTCS. That's a smaller market opportunity. It's probably about 900,000 patients overall that have generalized seizures with a similar mix of patients who are controlled and uncontrolled. So we think it's a really substantial number of patients that need new therapies and new options in the U.S., and we think that translates into a really strong commercial opportunity for azetukalner.

So for that uncontrolled group, do you have a sense of people -- those people will trial a regimen 3, 6 months and then the determination is made that they're not achieving control? Or is the profile a bit variable, some that lack of control is discerned early and others, it takes a while, maybe it either works early and then stops working.

Yes. I think it's really a patient specific. I think there's a couple of flavors of what you see. You typically see patients who either are looking for new therapies because they're not getting the efficacy that they desire, they're getting breakthrough seizures and uncontrolled seizures. And again, there, they would look to typically add on another ASM. So again, they see stacking, like in our clinical studies, patients had been on an average of 6 prior ASMs. They were on the study in both arms on an average of 2 to 3 ASMs. So patients kind of have this polypharmacy approach. And what we see then is other patients who maybe don't have the ability to tolerate the drug. There's certainly a lot of adverse events that patients suffer from with a lot of sodium channel blockers.

And so oftentimes, you'll see patients who will be looking for new therapies and discontinue their existing ASMs for tolerability concerns. So I think each physician is really looking at their patient individually and figuring out what they're trying to solve for in terms of adverse event profile, seizure reduction. And that's again where I think they're cycling through different agents at different rates but they have got a limited toolbox to work with in terms of the types of agents that they can go to. So again, we think AZK provides a really nice option for them to look at, whether it's a tolerability issue because they've been on sodium channel blockers and they get a series of adverse events that are challenging there, or again, whether they're trying to get additional efficacy, which they've been going off the same mechanistic basis, having a potassium channel modulator could provide a very different option for them to try and maximize efficacy.

Okay. Can we talk a little bit just about like the marketplace and who is the likely prescriber of a drug like azetukalner. And so if I talk to a neurologist in a tertiary care setting, right and they kind of get to third, fourth line, they kind of feel like the value of adding another different therapeutic option starts to diminish and they may go to put a patient on a clinical trial or a nontherapeutic option. This drug is a lot easier to give than the competitive brand, which is XCOPRI. So that makes me think, all right, it's going to play well with the community who may be less inclined to do these nontherapeutic options. So maybe can you just paint a picture of who the likely early users or bulk of utilization is going to come from?

Yes. So that's where we think AZK can really have a different impact because it does have the ease-of-use attributes in addition to the efficacy and safety that we think are going to drive broader adoption, not only amongst the epileptologists, the specialists who treat epilepsy patients day in and day out and the general neurologists. And as you say, XCOPRI is a good drug. It does really well for a lot of patients. But because it has issues in terms of its titration, the need to manage drug-drug interactions, it really is very much relegated to the epileptologists. So most of the scripts for XCOPRI are in that setting and very few are in the general neurology setting. We think with azetukalner, we've got a very different profile. It has sort of the ease of use of one of the prior drugs called Vimpat.

Again, it's once daily, doesn't have drug-drug interactions, doesn't require titration. We've got a rapid onset of action. And again, the efficacy and safety profile that we think is really favorable. So that provides us the opportunity not only to be really impactful for the epileptologists who see maybe the more refractory severe patients and on a per capita basis, certainly prescribe more than general neurologists do. But a lot of these patients are still at the general neurologists. And as you say, they tend to stay there even beyond the first, second and third therapy, even though that's more difficult to manage. They don't necessarily get things like XCOPRI that could be beneficial to them because it's just not really in the wheelhouse of a lot of these general neuros. And they may hold on to patients until they look at things like nonsurgical options -- nonmedication options, things like surgery and then refer out to an epileptologist.

So we think from our commercial standpoint, we want to penetrate both. We want to try and get this drug widely used at both call points. It will be gradual in the sense that we'll certainly make better penetration sooner with the epileptologists, right? They're more up to speed on the novel therapies. They're going to be more intrigued by the novel mechanism of action. They see more patients. They've got more severe patients. But we're going to try both at the outset and we're going to really work hard to penetrate into the general neurologist community and we're going to do that in a really targeted way. So if you look at the kind of prescribing base, there's probably a 2,400 epileptologists in the U.S., there's 18,000 general neurologists. We're going to really target about 7,000 to 8,000 physicians at the outset. So all those epileptologists but then a subset of the general neurologists who either write some branded or have patients that are, we think, more ready for azetukalner. And the goal really is to be a widely used ASM across both parts of the channel and we think we've got the profile to be successful there.

And apologies if I missed this but have you said how many sales reps that would generally entail and how that might compare to what SK or Lundbeck have done in the past in this space?

Yes. So we're going to start with about 75 reps on the commercial side. Our field force in total will cover both the commercial reps but then we'll also have medical science liaisons, a number of whom are already on board today. We already have about a dozen MSLs on staff doing scientific communication. And they've been great about really getting some initial feedback from KOLs on the data. But yes, we think that, that profile can capture that strong market share that we're looking for amongst the epileptologists for the personal promotion and we're going to use a lot of nonpersonal promotion efforts as well to broaden the reach and targeting in areas like general neurology where, again, you might want a larger field force over time as well.

So yes, we think that's a really good starting point for us. We think it's going to be an effective way to do it. Similar to what SK has today, I think they started with a little bit higher number of reps. They were probably in the 120 range at the beginning and they've dialed that back now to somewhere in that sort of 75-ish range, we think. So we think it's a great starting point, very manageable for us to do and will allow us to capture the opportunity in those settings.

Okay. And when you think about the launch curve and comps that are out there, would you advise investors to say, hey, look at how XCOPRI looked in the first 4 to 8 quarters, how maybe Vimpat adoption looked in those quarters, apply a haircut potentially given, I don't know, later mover, I don't know, how would you kind of advise investors when you think about comps or even go outside the FOS space for comps?

Yes. So the commercial team is going to be doing a lot of work now to refine their go-to-market strategy and their launch forecast. So I think we'll have more color as we get closer to launch itself. But what I'd say is that in the past, certainly, if you look at prior launches in ASMs that, like XCOPRI, a lot of them -- I like the prescribing patterns that a lot of these physicians do, they're kind of low and slow. So these are not hockey stick ramps, rare disease launches where you get a huge number of patients that are warehoused or a bolus and you've got this kind of revenue number that just is up and to the right really quickly. It tends to be a more gradual slope of the curve. Our goal is to have the best FOS launch ever. We hope to bend the slope of that curve. Some of that will be, I think, driven by the strong data we have and our execution on the commercial side.

And again, it's a relatively conservative physician base. And so we're going to have to do a really strong job to try and help them that. I think XCOPRI was unfortunately hampered a little bit by the fact they launched during the pandemic. So that certainly didn't help them. But again, we think we've got a really good value proposition, a strong story tell and a commercial team that's very experienced in doing new drug launches, new drug launches in epilepsy. And so we think we've got the opportunity to have a fantastic launch. But exactly how long it takes us to sort of get that reach and breadth with physicians and get that uptake, we'll have to see as we get closer to the launch.

Maybe just a quick word on OUS and regulatory possible partnership and what you'd envision being kind of the split U.S., OUS for a drug like XCOPRI -- or azetukalner.

Yes. So look, we think it's a great drug and we want to get it to as many patients as we can, not only in the U.S. but around the world. It can help thousands and thousands of patients based on the data we've seen in the study. And so we certainly want to make that widely available. On the other hand, we are not going to be the company that puts in infrastructure in Europe or in Asia. It just doesn't make economic sense for us given that the economics abroad but also the fact that we don't have other drugs today that we could put in our commercial [indiscernible] bag. So it's not really a viable proposition for us but we think there's great value there. We'll continue to build value in the data packet, everything from running X-TOLE3, which is another Phase III study that is ongoing now and we've said we'll finish enrollment for the non-Japanese portion of subjects later this year. That is very much carbon copy of X-TOLE2.

The reason we're running that study is principally for ex U.S. purposes. So in Europe, for instance, the regulatory guidance is that you have 2 12-week studies. Our initial X-TOLE trial was an 8-week double-blind period. It was 12 weeks in X-TOLE2. So this would give us 2 12-week studies. And what we announced earlier this year as well is that we have got an alignment with the PMDA in Japan based on the results of an ethnobridging study we have done that would allow us to take 60 patients out of the 360 from the X-TOLE3 trial and allocate those to Japanese subjects. So that would allow us to not have to run a separate efficacy study in Japan. So we think that's great value creation for the brand internationally. I think for us, the challenge is finding the right time to do that. And one of the issues today for a lot of sponsors and actually to us is the potential for most favored nation or MFN here in the U.S. The economic value from a pricing standpoint and return heavily favors the U.S.

So if you look like at XCOPRI, they're doing about $500 million kind of annualized here in the U.S. It's about $100 million in Europe. So it's a fraction of what it is. So for us, the economic return is still heavily dependent on our ability to capitalize on stronger pricing here in the U.S. And so at the moment, I think we'll be cautious about how we think about partnering. But certainly, at the right time, we think it'd be great to get it in the hands of somebody who's got a good presence and can bring the drug to a lot of patients around the world.

Yes. Okay. Maybe just focus on the next thing, which is, I guess, MDD data in the story next year. And what are the aggregate learnings here around the profile of azetukalner on mood in the epilepsy population and to the extent you see read-through to the MDD studies?

Yes. So what we know kind of qualitatively from our discussions with physicians, what we see in the adverse event profiles that unlike other ASMs, we don't have any worsening of mood, which is really, really great for epilepsy. And that gives us a little bit more confidence in MDD but I'll talk in a second about kind of what gives us confidence as much as you can in any MDD study for the X-NOVA2 trial we're going to read out in the first half of next year. We did look at some mood PRO endpoints in the epilepsy study. But again, that was not a trial that was either enriched for patients with depression, though a lot of patients with epilepsy suffer from it. You can have background medications there.

And what we saw was that we had a positive benefit for these patients on that PRO and also the control arm, right? So these patients there also saw a similar benefit to what they've seen in the treatment arm. So I think it was helpful for us. I think it gave us continued confidence that we've got mood neutrality within the epilepsy framework. And on the depression side, we're really pleased from our X-NOVA trial, which was a Phase II study that we ran a couple of years ago that came out with a positive result on measures of depression. So we had a clinically significant separation from placebo in those cases on 2 endpoints, MADRS and HAM-D and we'll be studying HAM-D in the X-NOVA2 trial reading out in the first half of next year. There have been a prior generation drug with a Kv7 mechanism that also had positive clinical data in depression. And so we've got kind of clinical evidence that we think gives us confidence to run the study.

But as you well know, these are really tough trials to run. You get a lot of placebo effect. And so the team has been working really hard to try and manage that placebo effect in the MDD studies, a lot of operational things that we've done to try and mitigate the placebo response and try and let the drug declare itself and show in a statistically significant manner that we've got an effect on mood, which certainly would open up a large opportunity for us in MDD and would also be a tailwind for the epilepsy franchise as well. If we could have a MDD positive readout, even though that's not in epilepsy patients, that certainly would be in a strong additional set of data because a lot of those patients already suffer from depression today.

This may be a reach but when we look ahead, you have 3 pivotals going on for MDD. FDA has communicated they only need one pivotal study now. So if X-NOVA2 is positive, does that create a potential regulatory path in this whole discussion, I don't know if it's confounded by recent changes at FDA and sort of the catalyst behind that?

Yes. So we're going to read out the first of the Phase IIIs in MDD in the first half of next year. So our hope is that we may know a little bit more about FDA's posture on one study approvals. And that will give us a little bit of time. I'm glad we're not having to make that decision today. And we'll have the other studies. We've got one other study that we're running there as well today and then one that's currently ongoing in bipolar depression. I think the caution that we think about with respect to the one study approach is that, that may not be as relevant or as quick to come in certain indications.

I think MDD is probably one of those where it would be further along the risk curve for FDA in terms of having a willingness to look at one study. There's just a lot of variabilities we touched on. So yes, if we get a positive readout, I'm sure we'll consider it and think about it and we'll evaluate where the FDA is in 1 year's time. But we're also cautious given the indication in general and the fact that it may be one of the more conservative areas of FDA when it comes to looking at one study but we'll see.

All right. Great. Well, we're out of time. So Tucker, thanks so much for joining us.

Great. Thanks so much for having me, Jason.

All right.

Thank you.

Thank you for standing by. My name is Rebecca, and I will be your conference operator today. At this time, I would like to welcome everyone to the First Quarter 2026 Xenon Pharmaceuticals Earnings Conference Call. [Operator Instructions]

I will now turn the call over to Colleen Alabiso, Senior Vice President of Corporate Affairs at Xenon. Please go ahead.

Good afternoon. Thank you for joining us on our call and webcast to discuss Xenon's First Quarter 2026 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, Chief Financial Officer. After completing our prepared remarks today, we will open the call up for your questions.

Please be advised that during this call, we will make a number of statements that are forward-looking, including statements regarding the timing of 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 strength 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 top line data readouts for our clinical trials of azetukalner and other candidates and our expectation that we will have sufficient cash to fund operations in 2029.

Today's press release summarizing Xenon's first 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 on SEDAR+.

I'll now turn the call over to Ian.

Thanks, Colleen, and good afternoon to everyone joining us today. We are excited to recap an exceptional quarter for Xenon, where we made tremendous progress toward our goal of becoming a fully integrated neuroscience company, delivering life-changing medicines to patients. In March, we reported results from our Phase III X-TOLE2 study of azetukalner, or AZK, in focal onset seizures that exceeded our expectations. Now with these positive data in hand, we are focused on our NDA submission to the FDA expected in the third quarter of 2026, and we also continue to work on increasing AZK awareness and education through our scientific engagement amongst HCPs as well as our commercial readiness activities.

In addition, we continue to broaden the therapeutic opportunities for AZK beyond epilepsy with potential neuropsychiatric indications where we have strong preclinical, clinical and genetic evidence. Our 3 Phase III depression studies in major depressive disorder and bipolar depression continue to enroll, and we're on track to deliver top line results from X-NOVA2 in the first half of 2027. Successful studies in MDD, BPD or both would serve to benefit patients and substantially expand the commercial opportunity for AZK.

Finally, we remain focused on expanding our pipeline through the advancement of our promising earlier-stage ion channel programs, with exciting candidates that provide the potential to drive our long-term growth. This includes completion of our first-in-human studies for XEN1701, targeting Nav1.7, and XEN1120 targeting Kv7 later this year, with the intent to advance both programs to Phase II proof-of-concept studies in pain. As we continue to execute our clinical programs and prepare for the anticipated approval and launch of AZK, we also continue to prioritize maintaining a strong balance sheet.

So today, I'm going to focus most of my comments on AZK and epilepsy, and then I'll turn the call over to Chris, Darren and Tucker. As you all know, in Q1, we announced positive top line results from the X-TOLE2 study in focal onset seizures, which exceeded our expectations by surpassing the already strong results from the Phase IIb X-TOLE study, and to our knowledge, demonstrated the highest placebo-adjusted median percent change in monthly focal seizure frequency ever seen in a pivotal FOS study. Similar to X-TOLE, we observed a rapid onset of efficacy, strong and dose-dependent responder rates and a consistent safety and tolerability profile.

Following the top line announcement, we were excited to present the data as a late-breaking oral presentation at the American Academy of Neurology Annual Meeting in Chicago. Around these 2 milestones, we have engaged with hundreds of epileptologists and neurologists and the feedback we've received has been incredibly positive. HCPs are enthusiastic about the magnitude of the efficacy benefits seen in our 2 randomized trials, the breadth and consistency of our safety and tolerability data, the impressive rates of seizure freedom in the OLE and the key differentiating attributes of AZK, and this includes novel Kv7 targeting mechanism of action, no titration, once-daily dosing and no dose adjustments for other ASMs.

If approved, this profile would add a meaningful new medicine to their toolkit and provide the opportunity for rational polytherapy. We feel increasingly confident in AZK's potential to become a preferred ASM for the significant number of patients who do not achieve seizure freedom with initial treatment. We are working hard to submit our new drug application to the U.S. Food and Drug Administration in the third quarter of 2026. Our base case assumption is a standard review period followed by DEA scheduling, which would put us -- which would put the anticipated launch timing at the end of 2027 or early 2028.

At the same time, we are focused on building out our commercial infrastructure and finalizing our go-to-market strategy, and Darren will speak to this a little bit later on the call. Beyond FOS, we're encouraged by the potential of AZK in primary generalized tonic-clonic seizures, and our Phase III X-ACKT study continues to enroll. Positive results in X-ACKT would enable us to submit a supplemental NDA for an additional epilepsy indication, which would meaningfully increase our addressable patient population.

Outside of epilepsy, we're making good progress enrolling our 3 ongoing neuropsychiatry studies, X-NOVA2 and X-NOVA3 in major depressive disorder and X-CEED in bipolar depression. There is strong rationale for Kv7 openers in depression. Several preclinical and clinical studies, including our own X-NOVA study, have shown promising signals of antidepressive effects for the Kv7 mechanism. Additionally, in bipolar depression, there are genetic links with Kv7, including evidence of Kv7 downregulation. We look forward to sharing our first top line Phase III data set in MDD in the first half of next year.

We also continue to progress our early-stage programs, including our first-in-human studies with XEN1701 targeting Nav1.7 and XEN1120 targeting Kv7. These are both compelling targets to treat pain with non-opioid approaches. These programs are exciting as they leverage our deep expertise in ion channel science and the strength of our discovery capabilities and would address large unmet medical needs. Acute and chronic pain affects more people than diabetes, heart disease and cancer combined, yet effective non-opioid options are scarce. There is a significant opportunity for Xenon to be a leader in unlocking the next generation of pain therapeutics.

We're also excited about our early-stage epilepsy programs, including our Nav1.1 program in Dravet syndrome. IND-enabling studies are ongoing, and we continue to showcase our encouraging preclinical findings at large congresses, such as the recent AAN meeting. Our collaborators at Neurocrine are also progressing a Phase Ib study for NBI-921355. This is an investigational selective inhibitor of voltage-gated sodium channels Nav1.2 and Nav1.6, which is being investigated as a potential treatment for certain types of epilepsy. Data from this study are expected next year.

Finally, I want to highlight another major accomplishment for Q1, which was the completion of our $747.5 million financing. It significantly extends our cash runway into 2029, allowing us to transition to a commercial stage company and advance our depression and pain programs to key data milestones.

So now with that overview, I'll provide -- I'll turn it over to Chris to provide an update on our activities at AAN and our broader clinical program. Chris?

Okay. Thanks a lot, Ian. It's been a really exciting time at Xenon since we reported our top line X-TOLE2 data. As you would imagine, there's a great deal of enthusiasm in the epilepsy community with the prospect of a new antiseizure medicine that could address many of the gaps in today's treatment paradigm, including the limited number of mechanisms available. With the strong X-TOLE2 data that exceeded all expectations, coupled with the long-term OLE data showing sustained effects and impressive seizure freedom, I'm incredibly excited about the potential for AZK to positively impact the lives of patients in the near future and for decades to come.

Recently, our team spent a week in Chicago at the American Academy of Neurology Annual Meeting, where we gave several important clinical, preclinical and real-world data presentations, which collectively underscored the significant opportunity for AZK and our growing leadership within epilepsy. I'll start by highlighting the X-TOLE2 data that were featured as a late-breaking science presentation.

Every year, AAN receives more than 300 late-breaking science submissions. And this year, they selected just 18 abstracts for data that they viewed as warranting expedited presentation and publication to their neurologists. Dr. Jackie French of NYU and Chair of the X-TOLE2 Steering Committee presented the X-TOLE2 data in both an oral platform presentation as well as a poster. The reactions were very positive with the session moderator from Harvard University and Massachusetts General Hospital characterizing the data as outstanding. And Dr. French highlighting rapid onset of efficacy and no titration as key differentiating aspects of AZK that will appeal to physicians.

Our X-TOLE2 presentation reinforced the positive top line data we announced in March, including that the study met its primary endpoint of median percent change in monthly FOS frequency from baseline to week 12 in both the 25-milligram and 15-milligram AZK dose groups compared to placebo. Specifically, we observed an MPC reduction of 53.2% for 25 milligrams, 34.5% for 15 milligrams and 10.4% for placebo, results that were highly statistically significant and actually outperformed the Phase IIb X-TOLE study. We also observed early dose-dependent MPC reductions in weekly FOS from baseline to week 1, which were sustained through the double-blind period with both AZK doses, reinforcing AZK's rapid and sustained antiseizure activity.

These efficacy results are even more impressive when you consider that X-TOLE and X-TOLE2 included the most treatment-resistant FOS population ever trialed. At baseline, patients in X-TOLE2 were experiencing a median of 13 seizures per month, had been treated with a median of 5 prior ASMs and more than half were already using 3 concomitant antiseizure medications. About 60% were on or had already tried and stopped cenobamate and still they had not achieved seizure control. We also provided additional data from our responder rate analysis, where we observed dose-dependent increases in the proportion of participants with at least 75% and 90% reductions in monthly seizure frequency through the double-blind period.

We also presented 100% responder rate data, which demonstrated that a 100% reduction in seizures over the double-blind period was attained by a greater proportion of participants with AZK 25 milligrams than placebo, results which were highly consistent with the results of X-TOLE. While AZK has a rapid onset of efficacy, it also takes a few weeks to reach steady-state levels. And we've seen in other instances such as the X-TOLE OLE that efficacy continues to build over time. Therefore, we also conducted a post-hoc analysis of the X-TOLE2 data to see if a greater proportion of participants experienced a 100% reduction in seizures over time.

Indeed, 100% responder rate increased steadily over the last 8, 6 and 4 weeks. For example, the 100% responder rate over the 12-week double-blind period for 25 milligrams was 6.5%. But over the last 6 weeks, it increased to 11.3% and over the last 4 weeks, it increased further to 13.7%. We're looking forward to continuing to follow this trend in the Phase III OLE.

This brings me to our other key AZK presentation at AAN, our 48-month X-TOLE OLE data, where the trend of efficacy building over time is even more compelling. The OLE is also where we are best positioned to evaluate whether patients are truly achieving seizure freedom, which has been a consensus definition of no seizures for 12 months or more. This definition also aligns to practical real-world outcomes for patients, as in many states 12 months without seizures means they're able to drive again.

Our long-term OLE data demonstrated continued reductions in focal seizures with a 91% reduction in monthly seizure frequency for those treated for at least 48 months. Those who entered the study taking 1 or 2 ASMs demonstrated a 100% reduction in monthly seizure frequency compared with an 82% reduction in seizure frequency among those taking 3 ASMs at baseline. With regards to seizure freedom, the patients treated for at least 48 months, almost 40% were seizure-free for at least 12 months and 1 in 4 were seizure-free for at least 2 years.

If you consider how treatment-resistant the overall patient population was at baseline, this is truly remarkable. Based on feedback from our investigators, we understand some of these patients have never experienced seizure freedom before taking AZK, and their stories fuel our desire to bring AZK to patients and clinicians as quickly as possible.

Finally, I'll also note that our AZK data at AAN continued to support a general well-tolerable profile. The safety data are remarkably consistent between X-TOLE and X-TOLE2 in terms of types of treatment-emergent adverse events, the frequency at which they occurred, the number and types of serious adverse events and the events that led to discontinuations. The most common treatment-emergent adverse events across both studies in the AZK dose groups were dizziness, somnolence, headache and fatigue. With more than 800 patient years of safety and exposure data, we are comfortable that this profile is consistent with other well-tolerated ASMs and with a drug that is potent and active in the central nervous system. We will continue to add to these robust safety and tolerability data with our ongoing Phase II and Phase III OLEs in epilepsy.

Another focus for Xenon at AAN was education around unmet needs in epilepsy care, including the impact that titration has on both patients and HCPs and the opportunity for no titration options to improve treatment experiences, outcomes and health care resource utilization. We presented real-world data that captured the challenges reported by patients around medication schedules, daily life and quality of life during titration periods, while physicians reported challenges related to treatment complexity and cross titration.

When questioned on the perceptions of ASMs without titration, most patients noted that they either agree or strongly agree that initiating an ASM without needing to titrate to a stable dose would boost their confidence, reduce anxiety and improve adherence. Physicians noted that no titration options would increase simplicity as many patients are already on complex drug regimens. These findings suggest using ASMs that do not require titration may reduce stress and simplify FOS management. And we heard this echoed in our discussions at AAN as well, especially for general neurologists who value the ease-of-use attributes in prescribing decisions.

We rounded out our AAN scientific program with an oral presentation of preclinical data from our Nav1.1 program in Dravet syndrome. These data demonstrated that selective potentiation of Nav1.1 channels in Dravet mice improved motor function, suppressed spontaneous seizures, preventing sudden unexpected death from epilepsy, increased long-term potentiation, which is a potential cellular correlate of learning and memory, and produced more mature dendritic spine morphology. The data continued to support our belief that targeting Nav1.1 with a small molecule could potentially address the underlying cause and symptoms of Dravet syndrome. IND-enabling studies for this program are currently ongoing. All in all, we're very proud of our scientific contributions at AAN as well as how positively they were received by the community.

Moving on to our other clinical programs. We've had a lot of activity as we continue to enroll 3 Phase III studies in depression and 2 Phase I programs in pain. Depression is an area where the differentiated profile of AZK, including its novel mechanism of action, rapid onset of action and potential benefits on anhedonia could meaningfully benefit patients. Like epilepsy, the depression landscape has experienced a dearth in innovation for some time and new mechanisms are urgently needed. Our clinical development team has made great progress with X-NOVA2 and X-NOVA3, which are ongoing and enrolling patients with major depressive disorder.

As Ian previously stated, we anticipate sharing top line data from X-NOVA2 in the first half of 2027. In addition, X-CEED, a Phase III clinical study evaluating AZK in patients with bipolar I and bipolar II depression, also continues to enroll. This is another area where there is significant unmet need for safe and effective therapies due to nonadherence related to side effects and other factors. The physicians that we've spoken with are keenly interested in AZK's novel selective Kv7 mechanism of action, potential benefit on anhedonia, rapidity of onset and differentiated safety profile.

To round out my remarks, pain continues to be an area of growing focus, and we're looking forward to completing our first-in-human studies for our novel pain programs this year. There remains a strong desire for non-opioid pain therapies given the limited efficacy of current options and substantial risk of abuse and dependency tied to opioids. 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, and we believe in the potential for Nav1.7 inhibitors and Kv7 potentiators to play important roles at multiple points in this pathway, including in 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 in the central nervous system.

We believe Nav1.7 is the best genetically validated pain target with striking genetic data in patients with loss of function mutations that have no ability to feel pain. Pain of function mutations have also been identified that drive pain disorders, further underscoring the critical role Nav1.7 plays in pain signaling. With XEN1701 as well as other Xenon programs in preclinical development, we believe we have solved for some of the critical limitations of prior Nav1.7 compounds.

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 treat a range of pain conditions. This is supported by high levels of Kv7 expression throughout the pain pathway and our preclinical data shows that Kv7 is enriched in the C and A delta 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.

Evidence supports that dysfunction or downregulation of Kv7 activity has been observed in altered pain states. We're excited to be advancing an optimized Kv7 opener with our XEN1120 program. We're really encouraged by our Nav1.7 and Kv7 work in pain and look forward to providing more details later in the year.

With that, I'll turn it over to Darren to provide an update on our path to commercialization, including interactions and discussions at AAN. Darren?

Thank you, Chris. I would like to reinforce the comments from Ian and Chris regarding the strong interest in our X-TOLE2 data since we first reported the results in early March. Since then, we have seen sustained engagement and interest from a broad group of epileptologists and neurologists attending AAN. Across these interactions, they reiterated the strength of our X-TOLE2 and OLE data sets and AZK's differentiated profile, and we consistently heard enthusiasm about the potential to use AZK in clinical practice.

Physicians highlighted the importance of efficacious therapies that are also straightforward to incorporate into routine patient care. AZK's unique mechanism and its expected profile of once-daily dosing, an effective starting dose, no drug interactions and no dose adjustments with other ASMs remains among the most frequently cited and most compelling attributes. Looking ahead, we plan to increase our understanding through primary research, advisory boards and one-on-one meetings as we continue to deepen our insight of AZK in advance of potential approval and launch.

Based on our growing engagements with this audience, we believe AZK has the potential to become the preferred branded ASM for general neurologists. We also continue to hear that AZK's profile may support greater confidence in treating a broader range of epilepsy patients within community practices rather than referring patients to a Level 3 or 4 epilepsy center after exhausting existing available options, which could contribute to broader adoption, improved patient outcomes and meaningful prescription growth over time.

Launch readiness remains a key enterprise priority. Over the past several months, we have focused on increasing our scientific engagement with epilepsy specialists, neurologists and advanced practice providers, while continuing to expand our field-based capabilities, including the recent addition of several medical science liaisons. In parallel, we have initiated discussions with payers to introduce Xenon, better understand unmet needs and communicate potential value proposition of AZK.

In March, we attended the Pharmaceutical Care Management Association, or PCMA, meeting for the first time and held a number of productive introductory discussions with pharmacy benefit managers and payers. The timing of these conversations alongside our X-TOLE2 data release helped drive interest and momentum. We plan to participate in several national payer meetings this year. And in the coming months, we expect to expand our field-based payer team to continue dialogue with this important constituency and further strengthen our launch preparedness.

As we execute on these launch readiness priorities, we remain focused on building an experienced launch and life cycle management organization, advancing innovation across channels and patient services and increasing awareness across our customer universe. Our commercial objective is to establish Xenon as a leader in epilepsy, and we believe we are making meaningful progress towards that goal. We are highly motivated by the opportunity to deliver meaningful benefits to patients and the physicians who care for them.

With that, I'll turn the call over to Tucker to review our financial results.

Thanks, Darren. As Ian mentioned, the exceptional results in X-TOLE2 allowed us to complete a highly successful public offering of nearly $750 million, which fortified our balance sheet as we move to a potential approval and launch. We ended Q1 with cash, cash equivalents and marketable securities of $1.3 billion compared to $586 million as of December 31, which, based on our current operating plans, provides cash to fund operations into 2029.

Given our strong balance sheet and fiscal management, we are well positioned to support AZK's U.S. launch, multiple registrational programs for AZK and the continued maturation of our early-stage pipeline. I would refer you to our press release and our 10-Q filed today for further details on our financial results.

Overall, it's a very exciting time at Xenon as we continue to build momentum in our pipeline spanning epilepsy, depression and pain, and make progress against our critical priorities, with our first target being the submission of our NDA for AZK to the FDA in the third quarter of 2026 as well as the advancement of our commercial readiness activity to support a strong launch in FOS.

We also remain focused on broadening the therapeutic opportunities for AZK beyond epilepsy, and we continue to make good progress enrolling our studies in major depressive disorder and bipolar depression, with the readout of our first depression study anticipated in the first half of 2027. And lastly, we are pleased with the momentum in our early-stage pain program and we anticipate completing the first-in-human studies for 1701 targeting Nav1.7 and 1120 targeting Kv7 later this year, and we seek to advance both programs to Phase II proof-of-concept studies. We are in an excellent position to execute our priorities due to our strong cash position, and we are feeling very optimistic about a bright future as we begin to transition to a commercial stage company, delivering meaningful medicines to patients.

And with that, we can open the call up for questions. Operator?

[Operator Instructions] And your first question comes from the line of Paul Matteis with Stifel.

Congratulations on everything from the first quarter. I wanted to ask a couple of questions on the pain programs, if that's okay. First, as it relates to the Nav1.7 compound, I was wondering if you could talk about where you've gotten to in your Phase I program at this point? And how much you feel like you've derisked some of the safety issues that have plagued other drugs? And then separately, can you maybe just speak to more specifics around these Phase II plans in acute pain? And what would sort of the size and scope of those studies potentially look like, assuming the Phase I data later this year lets you advance?

Chris, I'm happy to start, and then provide your perspective, especially on the future clinical development. So Paul, we announced at JPMorgan earlier this year in January, I think some of the progress we had made on both Nav1.7 and Kv7. You asked specifically around Nav1.7. At that time, we said that we already felt that we were at high enough exposures to get receptor occupancy that would mimic the human genetics. So we had already made good progress in those early cohorts of dose escalation.

If we kind of bring forward to today, we've continued to enroll additional healthy volunteers in that Phase I study. So I think sitting today, we feel really good that we can safely dose, have the appropriate therapeutic index and give this mechanism a real shot to show proof-of-concept data in Phase II. So based on what we know today, our plans are to move forward into a Phase II acute pain proof-of-concept study.

I can start on how we're thinking about it, and then Chris can add some details. Obviously, on the acute pain side, we're looking at studies like bunionectomy or abdominoplasty. We haven't yet fully designed the studies. We would want to have them of sufficient size and power, obviously, to show -- and these would be placebo-controlled studies to show a difference between active and placebo. The question really that we continue to think about internally is just how many arms, active comparators, how many doses, all of those things we're still planning. And that will become clear as we finish Phase I and we have a really good idea of what we're seeing in terms of the dose response and safety profile in those Phase I healthy volunteer studies.

Chris, any color to add on additional details for future development?

No, I'll just double down on your point that we think we have what we need to go forward into Phase II on both programs. And we just -- we haven't worked out exactly what the plan would be after the proof-of-concept that would be with abdominoplasty and/or bunionectomy.

Your next question comes from the line of Tessa Romero with JPMorgan.

Congratulations from us on all the progress. Ian, Chris, I was wondering if tonight you could provide your perspective on how the seizure freedom data that you have shared at 12 weeks from X-TOLE2 compares to what we know about XCOPRI on a cross-trial basis numbers-wise. How do you think doctors will approach thinking through the seizure freedom data that we have for these 2 assets, given that nearly 60% of the patient population were taking or had already discontinued XCOPRI and X-TOLE2 and, of course, that XCOPRI has to be titrated.

I'll start. Chris can provide his perspective. But I also want Darren to weigh in because we've had a huge amount of interaction with HCPs and the feedback that they're providing us. And Chris touched upon some of this in the prepared remarks, but maybe I'll give a little bit more detail.

So Chris mentioned in the prepared remarks that the consensus definition of seizure freedom is really having no seizure for 12 months. And so when we talk about our seizure freedom data with prescribers, we focus more on our open-label data than our double-blind data. So you'll hear us use terms like RR100 in the double-blind period, which is the percentage of those patients that had 100% reduction over the double-blind.

You've asked for a comparison between azetukalner and cenobamate. It is a cross-trial comparison and it is challenging, but I will make a couple of comments. One, it was a materially different patient population. So Chris walked you through and you've seen in our publications, in our posters and in our disclosure that we believe that both in X-TOLE and X-TOLE2, this was the most refractory population ever trialed in a pivotal FOS study. And when we look at the cenobamate data and the double-blind data trials that they did over a decade ago, this was a significantly less refractory population. So we are comparing actually 2 different clinical populations within FOS.

You also mentioned another key factor, which is, because cenobamate is titrated, when they look at their RR100 during their double blind, they only report over the maintenance period, which is the last 6 weeks of dosing. One of the reasons why we had a breakdown of that last 8, 6 and 4 weeks. Maybe the last comment on the cross-trial comparison is that often they show their data at their 400-milligram dose, which the feedback we get, and we see it both in data, but also in feedback from prescribers is that patients rarely get to 400 milligrams.

So if you look at their 200-milligram dose and you look at the last period within our double-blind period -- within the last 6 weeks or 4 weeks of our data, I would actually say that our RR100 is higher than the cenobamate data seen at their 200-milligram dose. Then the last point you made, which I think is an important one, is we actually have a cenobamate refractory population in our trial when -- as we mentioned, about close to 40% of patients were on background cenobamate and approximately another 20% of patients had tried it and had failed it either for efficacy or tolerability and were no longer on the drug.

So overall, I wanted to provide a little bit more of that background because I think our data stack up really well. And I haven't even talked about the open-label data. That's just a cross-trial comparison during the double-blind period. So I'll pass it to Chris to talk about the open-label seizure freedom data and then to Darren on how that's really being pulled through into the real world.

Yes. I mean it's interesting, in the epilepsy field, I think there's a little bit of a disconnect. And what I mean by that is that if you talk to epileptologists and neurologists and you ask them what they're hoping to achieve, they talk about seizure freedom on a long time horizon, like at least 6 months, more like a year, sometimes more. And yet in the same conversation, they'll ask what was your seizure freedom over a month or 2 or 3 months. And so there's this sort of inconsistency there that I just want to kind of note.

I think that as you make the comparisons -- Ian's already commented on the details matter here, if you're talking about seizure freedom with cenobamate at 400 milligrams with hardly anybody taking 400 milligrams. And really, it's -- 40% of patients are treated with cenobamate at 200 milligrams and the rest of them are treated at lower doses. I think it's important to think about dose. Also, in the label, when they talk about seizure freedom and cenobamate, they're excluding the first 6 months -- excuse me, 6 weeks of the trial period, which is why we've provided sort of these different cuts of seizure freedom to allow a better comparison.

But I mean, let me just zoom out for a second. I was prescribing when levetiracetam Keppra was approved. And what people want, especially general neurologists, is something easy to use. And with azetukalner, you don't have to worry about titration. You don't have to worry about drug-drug interactions and manipulating other medications to get therapeutic dose and so forth. So it's easy to use.

But then just to kind of wrap it up with the seizure freedom. I mean, I really think that we should be talking about what's happening in the long term. And what we're seeing in the long term with the data that we just presented at AAN is that of the patients who've been treated for 4 years or more, we're seeing 40% of patients with seizure freedom for a year or more. That's what really matters, not so much what happened over 1 month or 2 months. Darren?

Maybe Darren -- yes, can weigh in here as well.

Yes. I'll just reiterate what Ian and Chris said. When we engage with physicians, both epileptologists and general neurologists at AAN and other forums, this is largely -- XCOPRI is an epileptologist drug. And when we query about the seizure freedom as it relates to the 400 milligram, I'll just put a finer point on what Ian and Chris said, very, very few, if any, patients get to the 400-milligram dose. So as it relates to their own experience with the seizure freedom, it's not as compelling as in the real world.

Now XCOPRI does have benefit, but they're not seeing anywhere near what they see at the 400 milligram. And I make this comment about it being epileptologist drug because when we talk to general neurologists, they have really struggled with using it and they're pretty much -- they try it once and they're done. And this is as what Chris said, what differentiates AZK and what we believe will make this a tremendous opportunity is with the general neurologist. The ease-of-use attributes, the lack of titrations, daily dosing and no DDIs really, really ring true with them and they look forward to incorporating in their practice.

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

This is [ Adi ] on for Cory. Just on the earlier question asked on the pain assets, I just wanted to ask that can you confirm if investors should anticipate any data this year? I believe earlier it was mentioned that maybe Phase I SAD/MAD data might be presented. I just wanted to get if we should anticipate that data.

Yes, we're very comfortable in saying that the Phase I healthy volunteer studies for both 1701 and 1120 will complete this year. So in terms of how much of those data we provide publicly, for competitive reasons, I think -- obviously, we'll talk about that we believe we have enough receptor occupancy and exposure and coverage to have a really good shot at seeing an analgesic effect in a proof-of-concept study. But really to be determined right now whether we're going to broadly show the Phase I data publicly. But we are comfortable that those studies will wrap up this year.

Your next question comes from the line of Peyton Bohnsack with TD Cowen.

This is Peyton on for Joe. I guess, have you scheduled or had a pre-NDA meeting yet? And if you have had the meeting, can you talk about any feedback you've received from the FDA? And then I guess the schedule. Can you walk us through the time lines and your expectations for what kind of schedule you would have for that?

Chris, do you want to address the regulatory interaction?

Yes, sure. So just the second part of that was the time line on that meeting. Was it just a reiteration of the other part of the question? Or was there something different there?

I was more referring to the DEA scheduling and natural time lines to be approved.

DEA scheduling. Okay. Yes, so -- yes, so what we're sharing is that -- what we've guided on, we just had top line X-TOLE2 in March. We've guided that we're expecting about a 6-month period of time between that and submitting the NDA. We're expecting a standard review of 12 months and then DEA scheduling is expected to be 3 months. Which is why Ian stated in his comments that we expect approval end of 2027 or early 2028.

We have, obviously -- I mean, pre-NDA meetings are standard. We're expecting for that to occur in between the top line data, which has already occurred in the NDA submission, obviously, in the fall. But we haven't gone into specifics about when exactly that's going to take place. I will tell you that we've had thoughtful and timely interactions with FDA, and we think we have a decent reputation with them, and we don't -- we haven't foreseen any problems up until at this point in time. So we're looking forward to more interactions with them in the future.

Your next question comes from the line of Andrew Tsai with Jefferies.

This is Matt Barcus on for Andrew Tsai. I just wanted to see if you can give us a little bit of flavor on one of the Phase III data analysis that you might share later this year, especially at AES conference in December, which can further showcase AZK's potential differentiation.

Chris, do you want to walk through maybe some of our thinking around AES and additional analysis?

Yes. So we've -- as you can imagine, we spent a lot of time trying to understand what's going on with the Phase III and understanding all the data. And so we're sort of working through exactly what we intend to submit as potential abstracts at AES. As you know, you submit those and they may or may not be approved. We've had a pretty good acceptance rate, but you don't know for sure.

We're focusing on looking at kind of the combination. Now we have 2 -- what we consider 2 pivotal trials for FOS. And so we're interested in kind of combining that data and sharing with the world what that efficacy and safety data looks like combined. We're also -- you may remember from the X-TOLE study that we looked at seizure subtypes, and so we're probably likely to look into that and share that. And then, of course, we're -- every year, we update the X-TOLE OLE data.

And so those are the things that for sure will happen. And then we're just kind of working through whether there'll be anything else there. Ian, you want to add anything to that?

No, that was great.

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

This is Charlie on for Brian. So just thinking about your Nav1.1 in Dravet, obviously, a pretty crowded space. How do you see this compound and mechanism differentiating from the field, especially considering there are some other therapies out there addressing this issue in epilepsy? And just one more if I could ask on pain. What are you thinking about long term in terms of chronic pain versus acute pain and how each asset might fit into that paradigm?

Chris, I can start on Nav1.1 and then feel free to add, and then we can talk about the pain, although we talked about earlier that we're still working on kind of the development strategy for the pain assets. On Nav1.1, so these children that have Dravet syndrome are haploinsufficient for Nav1.1, so they have 50% of the protein. The drugs that are currently approved address the seizures. So drugs that are used like clobazam or Epidiolex or Fintepla are really trying to prevent the seizures that these children are having.

Really, where we believe the field is going in addition to those therapies is to see if we can start to correct the underlying genetics. And so there's ASO approaches that I'm sure you're aware of. And what we think is the opportunity to have a small molecule that can be orally administered and can really be titrated or appropriate weight-based dosing for these patients that have a wide variety of weights as they're diagnosed generally within the first 6 to 18 months of life.

And so if there's an opportunity to have an oral small molecule, where we potentiate the channel so we can increase current through the wild-type channel as the opportunity potentially to correct the underlying challenges of this disease. And the preclinical data that Chris walked through and you've seen in poster presentations, and we had an oral presentation, standing room only oral presentation at AAN this year, those data are quite remarkable.

And these are in genetic animals. So these are in animals that are haploinsufficient and very much look like the human phenotype in terms of the spontaneous seizures and the SUDEP. And not only is the seizure reduction impressive in our preclinical studies, but also really the potential for disease modification. We're protecting these animals from death and really helping them in terms of the long-term potentiation.

So we've showed some of those data historically. I think they're really interesting. We're now in tox studies. But I think there's a huge opportunity and need for better therapies for Dravet, and I think this will fit in really nicely. But it's early days.

Chris, anything to add on the 1.1? Or do you want to move to just thinking about longer-term development in the pain portfolio?

A couple of things. Maybe slightly crowded, but if you think about -- this is a really devastating disorder. And so I think it's good that multiple people are working on this. The reason why we think we're differentiated is because we're coming along with a small molecule that we think will deal with the underlying pathophysiologies in a similar manner to what Stoke's ASO was doing. But obviously, an ASO is being delivered through the intrathecal route, and this would be an oral therapy.

So I would just draw kind of an analogy with what happened in spinal muscular atrophy, where gene therapy came along, ASOs came along and then oral therapies came along, and you know how that went. So we do think that we have something to offer these patients. And then, yes, we're still working through the pain. So we're focused on getting out of first-in-human into proof-of-concepts, and then we still need to figure out chronic versus acute and a whole sorts of different things in the coming months and years.

And maybe I can just add on the pain side. Obviously, the first proof-of-concept studies will be in acute pain, and we've talked about bunionectomy or abdominoplasty. There's nothing in the underlying genetics in Nav1.7 or the mechanism of Kv7 that should suggest or support that these mechanisms should only work in acute chronic or nociceptive or neuropathic pain. So if these programs continue to look promising and we can get good proof of concept, the plan would be to go quite broad in terms of the late-stage clinical development.

Your next question comes from the line of Myles Minter with William Blair.

One on the commercial side, I find it interesting that we're all comparing XCOPRI when that's not the #1 branded product, BRIVIACT is. And I think that, that had gone generic at the start of the year. So the question is, is that a headwind to marketing of a newly branded ASM there because costs are coming down in the general neurology practice? Or is that actually a tailwind because you no longer have to compete for that branded slot against BRIVIACT kind of coming in and taking the market specifically within that general neurologist population?

No, I think on the contrary, I think when you look at AZK, all the attributes, particularly the novel mechanism after generations of SV2A channel blockers, sodium channel blockers, SV2As and GABA, the novel Kv7 is a benefit. All our ease-of-use attributes that we've outlined on the call and that we get positive feedback from both epileptologists and general neurologists. And you look at the timing of when we ultimately launch. It will be almost a decade of really what I would characterize as kind of a stagnation of development in focal epilepsy.

And so we really think that's the backdrop along with our clinical data and profile that we can really, really have a great opportunity here. And again, I think if you look at the case with XCOPRI, we've talked about that. But even I think BRIVIACT, it was another kind of me-too mechanism on top of a wildly successful parent in Keppra. And so I think that's a completely different market and opportunity than what we have with AZK as we look in the future and we prepare to launch this.

Your next question comes from David Hoang with Deutsche Bank.

So maybe first, again, on the commercial side, given the strong balance sheet you have now, how can you think about leveraging that to perhaps ensure the best commercial launch you can for AZK in focal epilepsy? For example, would you think about maybe increasing the number of sales reps that you would field?

And then just thinking about different angles out there in the focal epilepsy market, a competitor of yours is doing a monotherapy study, I believe, and they think that by weaning patients off background meds and having them on a monotherapy, that may be will also allow them to get into earlier lines of treatment. I was curious if you've ever thought of a study designed like that and if you think that would be helpful for AZK.

I'm happy to start just because I think a little bit of historical context is important here, and then Darren will go through kind of the details of preparing for launch. And then, Chris, do you want to address the question just on monotherapy and the label, at least how we think about that?

Really since the X-TOLE data in 2021, David, we have really moved to investing in commercial preparation at risk. I think this is a generational type opportunity, paradigm shifting. As Darren mentioned, it will be almost a decade since we've seen a branded launch in FOS. But it's been ages since we've seen this kind of mechanistic diversity and the profile of something like azetukalner. So given our confidence going into the Phase III readout in X-TOLE2, we started that commercial preparation already.

So not only was Darren hired almost a year ago, but we've had field medical out -- MSL speaking with prescribers and engaging in medical and scientific exchange. This summer, it will be 2 years since we've had that team out there. Darren's already got his leadership team in place. We've had people on the access side in place for years. So we really believe that early investment was going to be an opportunity here to have real success in those early days of commercialization. But Darren can give you a little bit more detail on that.

Yes, I think -- and if you kind of -- and Ian hit it on it. You look at successful launches, and some of that I've been a part of, there's a few ingredients. One is the early investment, which I was very pleased joining Xenon that, that was in place. Second is the team that you can put -- yourself put together. And I think from a commercial leadership perspective, we have folks with deep epilepsy experiences and relationships, launch experience, which provide us, I think, a leg up.

Third, and also part of that is, we will be a variable desirable place for professionals that have dedicated their careers to epilepsy. As we pointed out, there's been really nothing new. And so I think when we start posting positions, we're going to get the best available people. Then you turn to the product that we have available to us. And from a brand marketing positioning perspective, the clinical data is, some would argue, the best in focal seizure. I think as we think about the opportunity to price this and extract the value that we think the asset deserves.

And then also, too, the services, the distribution model, I think we're thinking of it in a very creative way. That again will extract the most value. But most importantly, have the best patient and physician experience, because as we know, while it takes a lot of effort and investment to create the demand, converting that prescription to paid scripts and persistency and compliance, that's the entire equation. And so when we think about our commercial team and our launch preparation, all those variables are being put in place. And again, with the backdrop of the clinical profile that we have with AZK, we're extremely, extremely excited and bullish on this launch.

And Chris, you want to talk on the monotherapy?

Yes. I mean it's hard to not be blunt. I don't see the upside of doing it, frankly. So from a labeling perspective, the current labels don't say that these drugs are approved for adjunctive. They just say that they're approved for the indication. So I don't see any upside from a labeling perspective per se. I'll defer to Darren on the commercial side.

I will say this, though, if for whatever reason I did see an upside with doing a monotherapy study, I would do a monotherapy study drug versus placebo from the very beginning. I think if you're manipulating other ASMs and trying to back off and then interpret that efficacy and safety data, it's probably very challenging.

Your next question comes from the line of Ben Burnett with Wells Fargo.

This is [ Orpheus ] on for Ben. Congrats on the progress. Maybe just a quick one on our end. As we look forward to X-TOLE3 data and a potential ex-U.S. launch, how are you thinking about commercialization in ex-U.S. territories? I know that in the past, you have shared you would look to partner in such geographies. So is that still your latest thinking? And are there any updates you can share on that front?

Sure. I'm happy to address that. So we are doing the clinical development that we think will meet regulatory requirements around the world. So we've been talking for some time that the clinical program should meet requirements in Europe. And then an update over the last couple of quarters for us was interaction with PMDA and the incorporation of Japanese sites and subjects into X-TOLE3 to meet the requirements in Japan without having to run a completely separate Phase III program in Japan.

So I think we've done everything kind of across the board to continue to drive the global clinical development and drive value. We've also been really clear that we're not going to build infrastructure, market access and commercial infrastructure outside of the U.S. And so when the appropriate time is right, that would be when we would engage with potential partners to access those markets. But right now, we're really focused on the global clinical development.

I will now turn the call back over to Ian Mortimer for closing remarks.

Thanks very much, operator, and thanks to everyone for joining us today. I know there were other questions in the queue. So if we didn't get to your question, we will reach out to you directly to connect. And we look forward to providing continued updates as we advance our programs and we deliver on important milestones throughout the remainder of the year. So operator, we can now end the call.

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

Good morning, ladies and gentlemen, and thank you for standing by. My name is Kelvin, and I will be your conference operator today. At this time, I would like to welcome everyone to the Xenon Pharmaceuticals Phase III X-TOLE2 study top line results. [Operator Instructions]

I would now like to turn the call over to Colleen Alabiso, Senior Vice President of Corporate Affairs. Please go ahead.

Good morning. Thank you for joining us on our call and webcast to review the top line results from the Phase III X-TOLE2 study in focal onset seizures. 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, Chief Financial Officer. After completing our prepared remarks today, we will open the call up for questions.

Before we begin, please note the standard notice that we will make a number of statements today that may be forward-looking. Attendees are cautioned not to place undue reliance on such forward-looking statements, and we encourage you to review our SEC filings for a more complete discussion of the risks and uncertainties relating to our business. After today's call, a recording of this presentation will be available on the Investors section of our website at www.xenon-pharma.com.

I'll now turn the call over to Ian.

Thank you, Colleen, and good morning, everyone, and thanks for joining us on this very special day. As disclosed in this morning's press release, today, we announced positive top line results from our Phase III X-TOLE2 study. This is truly an incredible moment for all of us at Xenon. But more importantly, this is an incredible moment of hope for people living with epilepsy.

I would like to first recognize that we would not be here without the work of the entire epilepsy community, including patient advocates and clinicians. We also want to acknowledge and thank the investigators, clinical site teams and the clinical trial participants. Their participation underscores the community's continued determination to advance research and find new treatments that address the significant unmet needs in epilepsy. And today, with their help, we have made a meaningful step forward.

Epilepsy research has been a primary focus at Xenon for many years, and we are proud that azetukalner is the only Kv7 potassium channel opener in development to complete 2 large, randomized placebo-controlled studies. As many of you know, data from our first RCT X-TOLE and our ongoing 7-year X-TOLE OLE have and continue to exceed expectations. Data from the X-TOLE double-blind period demonstrated what we believe was the best placebo-adjusted reduction in monthly seizure frequency seen in a focal onset seizure epilepsy study and in a very refractory patient population. And our goal with X-TOLE2 was to get as close as possible to replicating those positive results. And we are absolutely thrilled to be able to share that once again, we have exceeded all expectations with the X-TOLE2 results.

With these 2 impressive data sets, our next priority is to complete our NDA submission with the goal of gaining FDA approval, and ultimately delivering what we believe could be one of the most important new antiseizure medications in decades for patients living with uncontrolled seizures.

Azetukalner or AZK has a highly differentiated profile among both established and investigational ASMs, combining robust clinical data, a well-documented safety profile, ease-of-use attributes and a novel mechanism. The placebo-controlled Phase IIb X-TOLE and Phase III X-TOLE2 studies have both shown robust efficacy over their double-blind periods. Additionally, in the ongoing 7-year X-TOLE OLE, we continue to see strong efficacy and periods of seizure freedom, the longer patients are on drug.

As a reminder, in our recent 48-month OLE data presented at the American Society of Epilepsy meeting, patients have achieved median reductions in monthly seizure frequency exceeding 90%. Almost 40% of those patients have achieved 12 months or more without any seizures. And this is the consensus definition of seizure freedom in the epilepsy community. It has been truly inspiring to hear the stories of patients who are achieving seizure freedom for the first time in their lives with AZK. Through our randomized trials in the X-TOLE OLE, we now have more than 800 patient years of exposure data in FOS patients, and there are some study participants who have now been on drug for more than 5 years. The safety profile of AZK has remained consistent between X-TOLE and X-TOLE2, and Chris will share more of these details later in the presentation.

AZK is also differentiated due to its potential ease-of-use attributes. It is taken as one pill once a day with food with no titration required. This profile is differentiated in a treatment setting where lengthy, complicated titration regimens are the norm, which requires clinicians to start low and go slow and delays onset of efficacy. Further, based on our evidence to date, AZK does not have any meaningful drug interactions with other ASMs. These attributes are appealing to epilepsy specialists, but perhaps even more so to the general neurologists who may avoid using newer ASMs due to their complexity.

Finally, as a highly potent Kv7 potassium channel opener, AZK has a novel mechanism that can be used in combination with foundational ASM treatments. One of the most consistent themes that we hear from clinicians is they don't necessarily need more of the same mechanisms that are already on the market. Up to 50% of people with epilepsy continue to live with uncontrolled seizures in spite of available mechanisms and medications. Taken together, we believe our data support azetukalner is having a compelling profile of robust efficacy, well-documented safety, ease of use and a novel MOA.

Before I turn the call over to Chris to go through the top line results, I want to highlight a number of key points that speak to the strength of the data and importantly, gives us confidence in the full package we plan to submit to FDA. Most importantly, X-TOLE2 met its primary endpoint, demonstrating a highly statistically significant dose-dependent reduction from baseline in median monthly seizure frequency over 12 weeks versus placebo. The p-value in the primary endpoint at 25 milligrams versus placebo has a remarkable 11 0s.

On a key secondary endpoint of RR50, AZK also demonstrated highly statistically significant dose-dependent increases in the number of participants who have had at least a 50% reduction in monthly seizure frequency. We also observed a rapid onset of efficacy with the 25-milligram dose showing a statistically significant reduction in weekly seizure frequency at week 1. Overall health status also improved in the study as assessed by the Patient and Clinical Global Impression of Change scales. And finally, we saw a safety and tolerability profile that was consistent with the prior X-TOLE study. There are a number of other post-hoc analyses and exploratory endpoints that we are still analyzing and will not be part of today's presentation, but we expect to present further data in the coming months and in future and further publications.

So now, Chris, I'll turn the call over to you to walk us through the top line data results.

All right. Thanks a lot, Ian. Good morning, everyone. I'm honored to have the opportunity to take you through these impressive X-TOLE2 top line results. First, a reminder, on the study design, X-TOLE2 was a randomized, double-blind, placebo-controlled, multicenter Phase III study evaluating the efficacy, safety and tolerability of AZK in adult patients with focal seizures. In this study, AZK was administered as an oral adjunctive therapy once daily with food and with no titration period.

Patients first completed a 9.5-week screening and baseline period and randomization visit before entering the 12-week double-blind portion of the study. The study randomized participants in a blinded manner to either AZK 25 milligrams, 15 milligrams or placebo. For those who completed the double-blind portion, they had the opportunity to enter the open-label extension study or OLE. For those who didn't enroll in OLE, they completed an 8-week safety follow-up visit. The primary objective was to evaluate the effect of AZK versus placebo on median percent change or MPC from baseline to monthly focal seizure frequency during the double-blind period of 12 weeks. Secondary objectives included assessment of the effect of AZK versus placebo on responder rate 50 treatment effect measured at week 1 and change in the Patient Global Impression of Change score.

The study also assessed safety and tolerability of AZK throughout the double-blind period. A total of 380 patients were randomized in the study, 2 patients in each cohort did not receive any study treatment. This left 374 patients in both the safety and modified intent-to-treat populations, 125 in placebo and AZK 15 milligram groups, and 124 in the AZK 25 milligram group.

Now looking at the baseline demographics, the mean age in the study was about 40 years of age. The breakdown of gender was approximately equal. Geographically, 42% of patients were in North America and 58% were at states outside of North America. Mean BMI was about 27 for the population and average age of disease onset was 16 years. These demographics are very similar to the X-TOLE study. Like X-TOLE, participants in X-TOLE2 had highly treatment-resistant epilepsy. They had tried and discontinued a median of 5 prior ASMs. They had a baseline seizure frequency of about 13 seizures per month, so roughly 1 every other day. More than half were taking 3 concomitant ASMs, which they were required to maintain throughout the double-blind period. With this refractory patient population, the bar for success was quite high.

I'm very excited to share our primary endpoint data, which you'll see on this slide. As a reminder, the primary endpoint was median percent change or MPC in monthly focal seizure frequency for AZK versus placebo. In the 15 milligram dose group, we observed a 34.5% reduction from baseline to week 12. And in the 25-milligram group, we observed a 53.2% reduction compared to a 10.4% reduction in placebo. The results for both dose groups compared to placebo are highly statistically significant, as you can clearly see on the slide. When adjusted for placebo, the MPC and seizure frequency for the 25 milligram group was 42.7%. As a reminder, the placebo-adjusted efficacy in the 25-milligram group in X-TOLE study was 34.6%, which was already the best placebo-adjusted efficacy in a FOS study at that time to our knowledge. Now we're 8 points higher. With a lower placebo response in X-TOLE2, placebo-adjusted MPC substantially improved from Phase II to Phase III.

I have to add here that it's pretty unusual in any therapeutic area for Phase III to outperform Phase II. So we're incredibly pleased with this outcome. We believe our trial conduct, gold standard design and execution and, of course, close collaboration with the community all played a factor. We also are the only sponsor over the past 10 years to run and complete 2 randomized controlled trials in epilepsy, and we believe X-TOLE and X-TOLE 2 have truly set a new bar for rigor and clinical efficacy in focal onset seizures. Responder rate 50, a key secondary endpoint in X-TOLE 2 measured the percent of participants who had at least a 50% improvement in monthly seizure frequency. 20.8% in the placebo group, 37.6% in the 15 milligram group and 54.8% in the 25 milligram group had at least a 50% improvement. This, again, was highly statistically significant, and the results were also consistent with what we've seen previously in the X-TOLE study.

Another secondary endpoint evaluated onset of efficacy by measuring median percent change in weekly rather than monthly seizure frequency. As you'll see on this slide, from baseline to week 1, the 25 milligram reduction was statistically significant, while there was a statistical trend for the 25 milligram group. This is also consistent with the X-TOLE study, which showed a rapid onset of efficacy at week 1. Additionally, when we followed this weekly analysis out for the duration of the double-blind period, the 25 milligram dose led to an approximate 70% to 75% median reduction in weekly seizure frequency over the last few weeks of the study. What these results show us is consistency in dose response and time response with a sustained effect.

The Patient and Clinical Global Impression of Change scales or the PGIC and CGIC are widely used scales across therapeutic areas. As neurologists who used to treat patients with epilepsy and other neurological conditions, these scales are very important because they take into account how many patients -- how patients and their clinicians feel that they are doing in the study overall and whether the results are clinically meaningful or not. In X-TOLE 2, the PGIC was a secondary endpoint and CGIC was an exploratory endpoint. On the CGIC at week 12, 46.4% and 45.2% in the 15 milligram and 25 milligram groups, respectively, rated themselves as either much improved or very much improved compared with the 26.4% in the placebo group.

On the CGIC at week 12, 37.7% and 38.5% of clinicians rated their patients in the 25 -- excuse me, in the 15 and 25 milligram groups, respectively, as either much improved or very much improved compared with 23.1% in the placebo group. This demonstrates that both patients and their clinicians view the reductions in seizure frequency as clinically meaningful and consistent with what we saw in X-TOLE. Additionally, it's notable that the 15-milligram and 25-milligram dose performed similarly here, even though the MPC and monthly seizure frequency was higher in the 25-milligram group.

As you'll see in the next few slides, the AE profile on 15 milligrams looks similar to placebo, and we believe that may be coming through in the PGIC and CGIC data. It suggests to us that 15 milligrams may potentially be the best starting dose for most patients in a clinical setting, offering a good balance of both efficacy and safety. This leads us to the safety and tolerability profile of AZK, something that is also very important to the well-being of these patients, especially considering they've already had 1 to 3 antiseizure medications on board before entering the study.

Looking at the most common treatment-emergent adverse events, we were pleased to again see remarkable consistency with X-TOLE. The most common treatment-emergent adverse events across groups were dizziness, somnolence, headache and fatigue. As expected, more AEs occurred in the 25-milligram group than the placebo and 15-milligram groups. But notably, the placebo and 15-milligram groups had roughly the same number of AEs reported with the exception of dizziness, which was a bit higher in 15 milligrams compared to placebo.

With regards to serious adverse events, incidence was low and similar across AZK groups. No severe allergic reactions such as Stevens-Johnson syndrome or DRESS occurred, which is important in this therapeutic area as many ASMs are associated with drug allergies and rarely idiosyncratic adverse reactions that can be life-threatening. There were no signals of retinal pigment epithelial or macular abnormalities and no meaningful weight gain. No deaths occurred in this study. There were 4 nonserious adverse events of urinary retention reported, which is similar to X-TOLE. One case occurred in the placebo group and 2 occurred in the 25-milligram group who did not require a dose reduction. One participant in the 15-milligram group was hospitalized for psychiatric event, resulting in discontinuation of study drug and catheterization with urinary retention reported as a nonserious adverse event.

To summarize the X-TOLE2 safety, the most common AEs across AZK groups were dizziness, somnolence, headache and fatigue, which is similar to standard of care ASMs. Adverse events resulting in treatment discontinuation in 3.2%, 4.8% and 14.5% of participants in the placebo, 15 and 25-milligram groups, respectively. The most common adverse events leading to discontinuation were dizziness, headache, fatigue, gait disturbance, abnormal coordination and speech disorder.

In all, AZK was generally well tolerated in X-TOLE2. The safety and tolerability data are remarkably consistent with X-TOLE in terms of the types of adverse events, the frequency at which they occurred, the number and types of serious adverse events and the events that led to discontinuation. There have been no new concerning safety findings and combined with our OLE data, we're quite comfortable that the safety profile is consistent with other well-tolerated antiseizure medications and with a drug that is potent and active in the central nervous system.

Before I summarize the study results, I'd like to highlight the remarkable consistent dose effects seen across X-TOLE and X-TOLE2. On this slide, we show placebo-adjusted MPC for all AZK doses tested and at both 8- and 12-week time points. As a reminder, X-TOLE evaluated 10, 20 and 25-milligram doses through week 8, while X-TOLE2 evaluated 15 and 25-milligram doses through week 12. We also looked at the week 8 time points in X-TOLE2, and these analyses are marked by the dotted blue and orange bars.

Looking at the data, the placebo-adjusted MPC and monthly focal seizure frequency shows consistent dose-dependent efficacy at all doses tested with better results with more time on drug. Of note, epileptologists want flexibility with dosing as they add AZK into treatment regimens across their different types of patients without having to make changes to concomitant antiseizure medications, and we expect to ultimately make several dose levels available, with strong data supporting each dose to meet this expectation from clinicians.

To summarize, we're absolutely thrilled with this data set. and believe it sets a new bar for the epilepsy field. The study met its primary endpoint in both the 15 and 25-milligram dose groups, including a 53.2% median percent change in monthly seizure frequency in the 25-milligram dose compared to 10.4% for placebo. X-TOLE2 outperformed X-TOLE with a 42.7% placebo-adjusted MPC, which, to our knowledge, is the highest placebo-adjusted MPC ever seen in the pivotal epilepsy study. AZK was generally well tolerated in X-TOLE2 with a safety profile consistent with X-TOLE. We're looking forward to sharing these data with neurologists in the upcoming weeks at the American Academy of Neurology Annual Meeting, where they have been accepted for oral presentation as a late-breaking science abstract. We're also working on a manuscript so that we can publish the complete results in a peer-reviewed journal soon.

I'll close by echoing a statement shared across our team of appreciation and gratitude. It's important to remember that our data is made up of many individual stories of people living with epilepsy who have struggled for a long time with their seizures and loss of independence, quality of life that comes with that. These are the stories we think of when we summarize the data and look ahead to an NDA submission. The urgency we have is for the patients who are achieving seizure control and seizure freedom for the first time in their lives. And we're excited about the potential to deliver a long-awaited new therapeutic approach to the medical community.

Now I'll pass the call over to Darren to discuss how he and his team are preparing for the potential commercial launch of AZK. Darren?

Thanks, Chris. I would also like to extend my sincere appreciation to you, your clinical team and all our Xenon employees who are striving to make a meaningful difference for epilepsy patients. We conducted these studies with a high level of rigor and the strength of the data reflects that. These X-TOLE2 data are the next inflection point in Xenon's evolution to bring us one step closer to becoming a fully integrated biopharmaceutical company. As we look ahead, our commercial vision is to establish Xenon as a leader in epilepsy. We couldn't be more excited about our opportunity to have a meaningful impact on this patient and physician community.

To understand the opportunity in front of us, it's important to remember that epilepsy is the fourth most prevalent neurological disorder, surpassing both Parkinson's disease and multiple sclerosis in frequency. In the United States alone, approximately 3 million adults are affected by epilepsy with 1.8 million experiencing focal seizures. While there are many treatments available for epilepsy, most share a limited and overlapping set of mechanisms of action. With the mechanisms available, about half of patients do not achieve seizure freedom with their first-line treatment, usually a generic SV2A or sodium channel blocker, and about 1/3 are considered to have drug-resistant epilepsy.

Once patients progress to polytherapy, if they have not responded to one mechanism, they are less likely to benefit from other ASMs with overlapping mechanisms. Polytherapy is also less effective when taking multiple ASMs with overlapping mechanisms and can lead to increased adverse events. This underscores the necessity for innovative therapies with particular emphasis on differentiated mechanisms of action such as Kv7 modulation. It's very encouraging to see both epilepsy specialists and general neurologists express excitement for different components of AZK's profile. Through recent blinded market research, we queried both these groups about different aspects of AZK's product profile versus the most recently launched branded ASM. Both groups expressed highly favorable perceptions of the target profile for AZK or product X.

Epilepsy specialists most often called out the novel mechanism of action, which could enable flexibility and allow for rational polytherapy. They also appreciated dose level flexibility to balance safety and efficacy. The general neurologist favorable opinion of product X was driven by its ease of use with no titration and limited drug-drug interactions with other ASMs. They also view the safety profile as manageable and called out the fast onset of action. This qualitative study aligns with other market research we've conducted, which found that general neurologists often hesitate to prescribe branded ASMs due to their complexity. We also believe AZK's novel mechanism and ease-of-use attributes will provide them with confidence in treating a broader number of their epilepsy patients in their practices versus referring to a level 3 or 4 epilepsy center when they feel they have run out of options. We believe that, if approved, AZK could become the preferred branded ASM for general neurologists, leading to broader adoption, improved patient outcomes and greater prescription growth potential.

We are in an excellent position as we prepare for commercialization of AZK. Thinking historically about the most successful ASMs, they offered a good mix of efficacy, tolerability and ease of use. For AZK, we have a robust body of clinical data that demonstrates strong efficacy with a manageable safety profile. Our data strongly supports AZK's ease-of-use attributes, and we continue to believe in its potential antidepressive effects. As many of you know, we are investigating AZK in a large Phase III depression program with top line data from the first study expected in the first half of 2027. Additionally, the clinical profile of AZK in epilepsy continues to support AZK as at least mood neutral.

As we benchmark other successful launches, a common denominator is early commercial investment. We continue to strengthen the commercial and medical team with seasoned epilepsy and launch experienced personnel. We expect to be extremely well positioned at launch, and we've set our sights high with epilepsy specialists as early adopters, followed by neurologists and advanced practice providers and are fully committed to long-term growth in epilepsy.

On a concluding note, I've been fortunate to have been part of and led many very successful product launches in my career, including in epilepsy, and AZK and Xenon have all the same ingredients for success. The commercial team and I are excited for the work ahead as we continue preparations to deliver this promising potential new therapeutic option to the epilepsy community. I look forward to sharing additional updates on commercial planning as we approach launch.

Ian, I'll pass it back to you.

Great. Thanks very much, Darren. I believe I speak for everyone at Xenon when I say that we are thrilled with the X-TOLE2 results and the opportunity in front of us. With these impressive data from our second randomized trial in hand, we are now setting our sights on NDA submission. As a reminder, we expect our NDA to include results from both X-TOLE and X-TOLE2, and we anticipate submitting the NDA application in the third quarter of this year. We are extremely motivated by the thought of contributing a potential new and much-needed innovative medicine to the epilepsy treatment paradigm.

I'll close by again thanking the epilepsy community for their continued support and partnership. We look forward to continuing our collaboration as we bring this important potential new medicine to patients and clinicians. So with that, we can end the prepared remarks, and we can open the call up for questions.

Operator, we'll turn it over to you.

[Operator Instructions] Your first question comes from the line of Paul Matteis of Stifel.

Congratulations, Ian and team on the awesome data. I have two questions, if you don't mind. First, on the commercial side, do these data make you rethink how you might price azetukalner? And just maybe big picture, how do you think about pricing power in the refractory epilepsy space? How do you think about cenobamate as a benchmark, like directionally, where could this go?

And then just second, I appreciate that the seizure data looks great. Not many questions there. Is there anything you think in the full data you can learn as it relates to the mood effects of the drug either for this epilepsy population or the MDD population? Maybe just tell us like anything that you kind of measure there and what we could believe.

Thanks, Paul. I appreciate that. Why don't we take the second question first and then we can end on the commercial side. So I'll start on mood, and then Chris will give his perspective. So just as a reminder, just to take a step back, we did have exploratory endpoints in X-TOLE2 as it related to depression and anxiety. And we use patient-reported outcomes and not a clinical scale of depression or anxiety, but we used what was called the Beck Depression Inventory or BDI. And maybe I'll focus on the depression comments.

Obviously, this was an exploratory endpoint. The study wasn't -- the study was really designed for seizure reduction endpoints, but there was a couple of things that we wanted to look at in the depression data. And I'd say we're still going through it. So we haven't disclosed any of those data yet, but I can give some kind of directional guidance. And part of it was in Darren's comments about mood neutrality. So I think if we look at a lot of other ASMs, they have negative mood symptoms associated with them. And so kind of first, we wanted to make sure that we had data to support through BDI that these patients weren't getting worse. And we're very comfortable with that outcome. And I think that sets us up really well as an antiseizure medicine.

Then we looked at patients that how they did over time. And again, we're still analyzing some of these data but I can give you kind of a few highlights. And then Chris can really talk about the differences between running and looking at depression in an epilepsy study versus looking at it in a psychiatry study. So what we found is that all groups did better on -- or sorry, all treatment groups did better in the study, whether they were on placebo, 15 milligrams or 25 milligrams. So their scores from a BDI perspective got better. Actually, interesting for those that had depression that weren't on an antidepressant, they actually did in the active group did better than placebo. So that was a nice finding in the depression data as well.

I think we need more work to do or we have more work to do, and we can, obviously, as that's done be able to communicate more broadly on that. But maybe this is a good opportunity for Chris to just comment on the differences between an epilepsy study and a psychiatry study because I think the real definitive data that we're looking forward is the X-NOVA2 data in MDD, which will be in the first half of 2027. Chris?

Yes. Thanks a lot, Ian. I mean just to kind of underline the point you made, though, we're not seeing any signals of mood worsening in this population. And we do think that this drug and this mechanism has an antidepressant effect based upon 2 controlled studies, and we're now in Phase III for depression. That said, Ian commented that we saw improvements in all 3 groups as we look at the literature, I think that the placebo effect was on the higher end there. And if you think about everything that we're doing in the depression program to control placebo, I think it's worth kind of repeating in the context of this study.

So on the Phase III depression side, we've chosen a CRO that specializes in depression. We've chosen sites that specialize in depression. We've chosen clinicians to conduct a clinical scale who have experience in depression. We also have training about placebo response in that study, et cetera, et cetera. Lots of things that we're doing in the Phase III depression program to mitigate placebo, also like minimizing touch points throughout the study to -- with the principle of keeping it simple. So we are seeing improvements in all groups. But I think the take-home message here is that we're seeing new neutrality.

Thanks, Chris. Yes. So I think so far, the data on depression and epilepsy is looking interesting and more to come.

So let's move to your question on commercial. Yes, I mean, we couldn't be any more pleased with where we are to get ready for commercialization, and Darren can talk about the attributes and how he's thinking about it because your specific question was around price. But one of the things that we've really done based on the X-TOLE data is we early invested in getting ready for commercialization. And so we -- for quite some time, for those that attend AES, know our presence there. They know that we've been publishing our work in peer-reviewed journals. They know that we have field-based medicine MSLs already out in the field talking to the prescribers. So I think we've done a huge amount of work, and that momentum is just going to build.

So Darren, why don't you give your perspective on that? And then as we think about the work we need to do on price?

Yes. Thanks. Paul, I echo Ian's thoughts. As the commercial team in partnership with medical, we couldn't be more excited about this data set. And really, the -- I think what the opportunity for AZK to really become transformative for these patients and physicians.

Now your specific question on how we think about price. I actually think the view that what you said around kind of historical and cenobamate's pricing is, I think, a good lens to kind of how we think about that price. And I think that if you think about cenobamate, which was priced 6 years ago, I think that based on their data set and the clinical paradigm in which they're used, they have been inappropriately priced. And so I think that when we think about this data set, the novel mechanism, the ease-of-use attributes, I think this data set demands that we optimize the pricing for AZK. And so a lot of work to do there. We'll be doing work with our stakeholders, the payers, the physicians, the patients, but this is -- I think we have a tremendous opportunity here to really maximize the value of AZK.

Darren, just to clarify for people, when you say inappropriately priced, you mean underpriced as it relates to cenobamate?

Yes, that's right, Paul.

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

Congrats, Ian and team, really blow out data. So you talked a little bit about pricing. But given these data and known attributes, are you able to provide an updated view on how you size the market for a drug like azetukalner? And specifically, what do you think is a reasonable framework for peak sales?

And then second, are you able to speak to the overall variability in the data set just in terms of how consistent the results were across the population by number of concomitant ASMs or any other variables?

Thanks, Tess. I think we can probably all jump in on these questions as well. One of the teams that you really, I think you heard from us throughout the remarks is remarkable consistency. And that was, I think, as we've unblinded these data and really compared X-TOLE2 to X-TOLE, that's one of the things that I think we're most proud of is just the consistency across the data sets whether we look at efficacy, whether we look at rapid onset, whether we look at the Clinical and Patient Global Impression scores, whether we look at safety and tolerability, the consistency is absolutely remarkable between these 2 data sets. And maybe this is an opportunity for me just to give my appreciation to Chris and the clinical team that I think just executed unbelievably in terms of this clinical study as well as managing the placebo rate.

But Chris, any specific comments from you on variability?

Yes. And we're not seeing -- I mean I'm going to echo what you said. We're seeing consistency between X-TOLE2 and X-TOLE. I'll just say we have a lot of data that we're working through we focused on making sure that we have top line data to share with the world. But on a high level, I would just say that I'm not seeing any difference whether you think of the broad classes of ASMs, we're seeing benefits for AZK regardless of what it's added to. So lots and lots of consistency from that perspective.

Thanks, Chris. And then Tess, on your commercial question, when we look back at a number of the other ASMs over the last number of decades, right? And you start to look at what are the hallmarks that have made some of these drugs incredibly successful. And obviously, we believe AZK has all of those attributes from a novel mechanism to the safety and tolerability profile to those ease-of-use attributes. But Darren, I know you guys have been thinking a lot about then those successful drugs had to do well both with the epileptologists as well as the general neurologists. So maybe you can provide your perspective there.

Yes, you're spot on, Ian. I think that the opportunity here is the difference maker from the last branded ASM launched are the attributes, the ease-of-use attributes. And also, I think this novel mechanism will be a game changer. So as we think about the market, the epileptologists obviously like the novel mechanism, the dose flexibility, but it's really in the general neuro where I think that we really, really have the opportunity to be like of impact, and that had all the attributes that AZK had.

And again, this novel Kv7 modulator is now a new mechanism that the general neuros can now incorporate. It's just not another SV2A or sodium channel that they typically may stack on each other before referring. This really gives them the opportunity to keep patients in their practice, offer them a new option around what they tell us are daily dosing, no DDIs and no titration. So that's how we're viewing it. And again, we couldn't be more excited to bring this to those physicians and their patients.

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

My congratulations to you, Ian and the team on the data as well. Just given the refractoriness of this population, can you provide some context on what you might hope to see on seizure freedom and maybe comment on any trends that you observed there?

And then just secondly, real quick, how would you foresee a potential label reflecting the different doses studied here? Do you expect a starting dose of 15 mg to be specifically recommended on the label? And how might physicians be instructed to increase dose?

Thanks very much, Brian. We can take -- yes, let's start with your first question just on the refractoriness and maybe other data, including seizure freedom data and then let's talk a little bit. I mean, I think it's premature to talk specifically about label. But I think you've heard from us that I think 15 milligrams is a really interesting dose. So why don't we give a bit of perspective, how we think about that dose, both from an efficacy and safety point of view and how really this may translate into use in the real world.

So initially, just to talk about other endpoints. Obviously, today, we focused on some of the key primary and secondary end points, including the RR50 to come will be the RR75, the RR90 and the RR100. The reason I use that terminology is because when you talk to the epilepsy community, when they think about the word seizure freedom or the term seizure freedom, they really think about it over a longer period of time. So 6 months or 12 months. And that's where I think our open-label data from X-TOLE is incredibly impressive, which we reviewed earlier in the call. And then we're really looking forward to having the Phase III data -- or sorry, the open-label data from this Phase III program, which we'll be presenting in the future as well.

I think a quick look at some of the other endpoints of RR75, 90 and 100. I think we'll again see consistency in the data set, Brian, between X-TOLE and X-TOLE2 as we expect. Obviously, when you have a very refractory population that's having a seizure almost every other day and you don't have to titrate the drug. I think you're asking a lot of the drug in those early days in the study. And interesting, the drugs that titrate, when they look at seizure freedom, they look at over the maintenance period, not over the entire period. So again, I think it's an apples to oranges comparison, but I think we feel very comfortable with the profile and more to come on additional endpoints.

So in terms of maybe label, Chris, anything to add on the RR100 or 90 or 75?

No. I think there's one thing you said that's worth reiterating, which is that the epilepsy community, in terms of definition for seizure, freedom seizure for 12 months. And look at our OLE study that we just presented at AES, we're seeing patients in that study with nearly 40% of patients with more seizure freedom. And I think that's where the time horizon for epileptologists is years, not days or weeks.

Thanks, Chris. And then, Brian, I think your other question is a really fascinating one on -- and we learned a lot from this study. Remember in X-TOLE, we had 10, 20 and 25 milligrams. So this is the first time we've tested 15 milligrams as a dose. And it looks very placebo-like in terms of the adverse event profile. Dizziness a little bit higher. But other than that, it kind of bounces back and forth on the adverse events on which is higher between placebo and 15 milligrams. So we think that's an incredibly well-tolerated dose with really strong efficacy.

Actually, I'll mention when we were talking to investors coming into this announcement and data release on what expectations were, I actually think our low dose met expectations for what investors were looking for -- on a placebo-adjusted basis. And then obviously, the 25 milligram dose really blew through expectations. So I think it's a really interesting one.

But Darren, based on the work that you've done, maybe talk about what you think the community's feedback is.

Yes. I think we were very pleased to see how the 15 milligram performed. And I say this in the context of when we meet with physicians, advisory boards, one-on-ones, -- and if you think about the approach that epileptologists and high-prescribing general neuros take in treating epilepsy, particularly incorporating a new therapy, it's kind of the low and slow approach. So they like to start the lower dose and then escalate appropriately.

When they looked at our X-TOLE 10 milligram, that seemed to be for them a nice starting dose. The side effect profile was benign in their view and with some good efficacy. I'm very excited now to take this 15 milligram data to them and see their response. And to Ian and Chris, echo their point, we believe this could be a very, very nice starting dose for this treatment.

Your next question comes from the line of Andrew Tsai of Jefferies.

Congrats on the superb data. Hopefully, more to come. With these unprecedented results, could it make sense from the outside perception to seek a breakthrough designation? And as we think about the NDA filing in Q3, does it make sense to potentially seek a priority review instead of a standard review? And when exactly could AZK be launched after accounting for the DEA scheduling process?

Thanks, Andrew. Yes, I'm happy to take that. So with a number of antiseizure medicines available in focal onset seizures, if we've looked at the past number of drugs that have been filed and gone through the regulatory approval process, our base case would to expect a standard review. And so that's our base case going in. We've done a huge amount of work on the new drug application. Chris and Matt and the team here has been looking at all of the different sections. A number of them are already written. Obviously, this clinical study, as we told everyone, was kind of -- was on the critical path to getting the filing done. We've done a huge amount of clinical pharmacology and manufacturing work and all of the preclinical work. So we feel really good in terms of the new drug application. It will go in, in Q3 of this year. And so with a standard review and DEA scheduling, which can take a couple of months, that would put us on a time line somewhere towards the end of 2027, early 2028 if you use that math forward.

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

Congrats on the data, really awesome. Maybe just piggybacking off of Abrahams' question on dosing and how you think the 2 doses would be used in practice. I mean 25 milligrams look safer and better than XCOPRI and 15 milligrams looks as safe, maybe safer and better than Vimpat, and they sort of both have had good uptake historically by the community based on safety or efficacy. So I'm not really sure where long-term utilization winds up. But if you wind up with 2 NDCs, how would you anticipate pricing them? Are you thinking equivalent pricing per month, not on a milligram basis?

And just in terms of the scheduling, where are we in terms of your thoughts on whether to get scheduled and where you would anticipate scheduling to occur and how that might impact both sort of commercial in epilepsy as well as down the road of MDD?

Thanks, Brian. You had a few there. So I think I've got them all down, but if we miss one, just jump back in. So Darren, do you want to take -- why don't we hit pricing first?

Yes. So we hope to have the 4 doses on label, the 10, 15, 20 and 25. And the plan currently is to have flat pricing. So regardless of the dose the physician starts and then decides to escalate, those patients will all be equally valued. Regarding scheduling, we've done a lot of work here. And if you look historically at the most recent ASMs and our adverse event profile, we anticipate a schedule 5 like other ASMs. And typically, that review is done in 90 days post approval.

Yes. So I don't think there would be any commercial impact of scheduling as that's kind of -- that's the norm in the field. Brian, going back to your question just on 15 and 25, I mean, obviously, we're thinking about it and very consistent with other ASMs because of the titration of other drugs and there's multiple dosages available that that's the way normally these ASMs and focal seizures are priced. So we would be consistent in our approach there.

I think maybe a few other comments. When a patient starts at probably at 15 milligrams or at a lower dose that's going to be very well tolerated, often, there's a lot of switching and changing in focal onset seizures. I actually think the opportunity here on what we've seen in the data set and because we have a richness throughout this dose range of information is it's really starting -- it's probably starting lower than 20 or 25, but the next switch or the next change is a higher dose of azetukalner. It's not trying to change any of the other medications, which I think is really powerful.

The other thing that we had at AES was those patients that had -- that were on the long-term open-label extension that had a breakthrough seizure is that we showed a really interesting analysis that they had a breakthrough seizure, they could regain seizure freedom on azetukalner. And again, didn't have to switch. So obviously, there's a huge unmet medical need, but I also think we have a profile where patient retention could be really important, and we'll be focused on that.

Your next question comes from the line of Myles Minter of William Blair.

Congrats on the data again, sensational. Question on background cenobamate usage and what you sort of saw in the trial there and if you've had a look to see whether that impacted azetukalner exposure response. That's the first question. And then secondly, intrigued on the week 1 efficacy data. I think we hear from clinicians that seizure freedom is on their cards and a broader quality of life improvement. But what about the rapidity of effect? Is that going to be a key commercial driver of the story here?

Thanks, Myles. So let's start on cenobamate. Chris, do you want to -- maybe we can review both Phase II and Phase III, and then what we saw on the efficacy side? And then let's move to the rapidity of onset commercially.

Yes. I mean before I dive into this, I just kind of want to repeat what I said earlier, which is as we've looked at our data, basically, this drug is appearing to be useful regardless of what people are taking before they start AZK. That said, so going from Phase II, cenobamate usage was quite low in the X-TOLE study, around 3%. And then in this study, it was substantially higher as about 40% of patients were taking cenobamate at baseline, and an additional 20% had failed taking cenobamate. We welcome those patients in the study as we believe they're a surrogate for patients who are being taken care of by epileptologists who are willing to do everything they can to try and control seizure frequency.

Yes. So a pretty interesting difference, Myles, from Phase II to Phase III, right, moving from less than 5% of patients now to 60% of patients that had either failed cenobamate was of it either maybe for tolerability or efficacy reasons or the 40% that had that as one of their background medications and still seeing this type of efficacy in what you would consider now a cenobamate refractory population. So I think we were really pleased for those data and to see that.

Darren, do you want to talk about rapidity of onset?

Yes. Myles, Rapidity of onset is just another component of AZK's ease-of-use attributes that we have with this novel Kv7 mechanism. So yes, I think it's part of the broader story of the rationale, a compelling rationale to incorporate AZK into a patient's treatment.

Maybe just one other thing on rapidity of onset. I mean the question has been coming up a lot about 15 versus 25. I think that one of the questions an epileptologist will ask him or herself before they start is whether they need that rapidity of onset because it does seem as though the rapidity of onset is there for all doses, but maybe demonstrates a higher consistency in the higher dose relative to the lower dose.

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

Congrats on the excellent results. Maybe based on the data today, how early in the treatment paradigm do you think you could get this used and reimbursed, particularly with all the comments on uptake in the general neurology community? And has this kind of changed based on the X-TOLE2 data versus what you had seen previously? And maybe just briefly on the AEs, can you talk a little bit about the proportion of patients that are able to stay on drug but maybe had to dose reduce during the study or when you might have that data?

Thanks, Joe. Yes, why don't we start with the dose reduction question, and then we can move to maybe talking a little bit about the treatment paradigm and maybe where this would fit in.

Chris, on dose reductions?

Yes. So again, this is probably going to annoying at this point, but incredibly consistent with X-TOLE. So very low number of dose reductions in placebo and 15 milligrams, think like low single digits, 3% or 4%, and then a bit higher in the high dose on the order of about 20% of patients who needed a dose reduction. But those are patients that we were able to capture in the study without losing them to a discontinuation. So I think even for those patients that start on a higher dose and run into a bit of tolerability, they're going to, in the real world, be able to just simply lower to a lower dose, bring it down to a lower dose and adjust accordingly.

Yes. And then, Joe, sometimes the pull-through of that question is the discontinuations due to treatment-emergent adverse events, which, again, we were a little bit lower in X-TOLE2 versus X-TOLE at the 25 milligram dose, but again, remarkably consistent. In terms of the TEAEs that led to discontinuation. So again, we feel very comfortable with the profile.

And why don't we move to your commercial question on just where will this show up in the patient's journey?

Yes. So we think about when AZK becomes -- if we're so fortunate, becomes commercially available, there's going to be a tremendous amount of refractory patients that have not responded to anything. And I think with this data set, particularly in the trial population that we've exhibited, we're going to have epileptologists offering it to those pretty refractory patients. But I think over time, you're going to see a natural progression, particularly with the data, the novel mechanism, as we've talked about, this is different. And so we anticipate that this will move up in lines of therapy as an earlier add-on.

And I think in the general neurologists, I go back to now they have an opportunity to offer something to their patients, where typically they may feel they need to refer a heavily refractory patient. Now they have a patient they can treat in their office. So I think if you think about antiseizure medications in the long game, this can be transformative, and we believe will be the branded ASM of choice across both epileptologists and general neurologists.

And actually interesting, Darren, one thing I know we've referred back to some of the open-label data at times, which I do encourage people to look at our AES work. But when we've looked at those patients that had -- you'd consider them less refractory. So on either 1 or 2 background medications instead of 3, those patients had 100% reduction in their seizures in the open-label data. So I think that's really impressive as well and shows just the power and potential of AZK as we get into less refractory patients. Thanks, Joe, for your question.

There are no further questions at this time. And with that, I will now turn the call over to Ian, President and CEO of Xenon Pharmaceuticals. Please go ahead.

Thank you, and thanks, everyone, for joining us today. And a real special thank you to the entire Xenon team for your dedication to our programs and to our mission to advance innovative medicines for patients. If we do not manage to get to your question today during the allotted time, we can reach out directly to connect. And we really look forward to continuing to provide updates as we advance azetukalner towards NDA submission and potential approval. So thanks, everyone. And operator, we can now end the call.

Ladies and gentlemen, this concludes today's call. We thank you for participating. You may now disconnect your lines.

Welcome, everyone, to the 44th Annual J.P. Morgan Healthcare Conference. My name is Tessa Romero, and I'm one of the senior biotech analysts here at J.P. Morgan. Our next presenting company is Xenon Pharmaceuticals. And presenting on behalf of the company, we have President and CEO, Ian Mortimer. Ian, over to you.

Thank you, Tess. Good morning, everyone. Great to be here, kick off the year at J.P. Morgan and a really big update for Xenon. It's been a very important and impressive year over the last 12 months. And now we're right on the doorstep of our first Phase III clinical data. So we'll go through that today. I'm joined by some of my colleagues here. To my immediate left, Chris Kenney, our Chief Medical Officer; and to his left, Darren Cline, our Chief Commercial Officer; and Tucker Kelly, our CFO, is here as well.

Tucker and Darren are newer members of the team who have joined over the last 12 months. Both have significant experience in forward integration into a commercial organization, which is our strategic goal. So really nice to have them as part of the Xenon team here at J.P. Morgan this year. I will be making some forward-looking statements, so I do refer you to all of our risk factors that are filed with the SEC. So let's get started.

Today, we're going to spend time talking about our lead molecule, azetukalner, both in epilepsy and in psychiatry. This is the most advanced potassium channel modulator in late-stage clinical development today and really the only KV program that has unblinded clinical data in over 800 patient years of both efficacy and safety data. So I'll go through a number of those points throughout the presentation. We also have a really nice emerging earlier-stage pipeline that I'm going to spend some time on.

We've got 2 Phase I molecules right now that eventually will be developed in the pain space. So I'm going to actually show a little bit of data and updates on one of those programs this morning. So if we look at our pipeline, there's really 3 key areas of today's presentation. I'm going to talk most of the presentation on our lead molecule, which is azetukalner. We have 6 ongoing double-blind Phase III clinical trials for AZK. That's what we call the shortened version of azetukalner, 3 in epilepsy and 3 in neuropsychiatry.

So today, we'll spend time on the epilepsy program. We'll spend time on the psychiatry program. And then as I mentioned, the third thing is to give an update on some of our earlier-stage molecules that have transitioned now into human-clinical development. So if we start with azetukalner just more broadly before I get into the epilepsy program, the feedback we're getting from physicians, both in the psychiatry space as well as in the epilepsy space is there's high anticipation for a drug with a novel mechanism.

So there are no potassium channel modulators available, either in epilepsy or in psychiatry. The other feedback we get are really the attributes of the drug. This drug is easy to administer. It's a QD drug, so once a day daily dosing and no titration. A lot of neurology drugs and drugs in the CNS, you have to start low and go slow. You're on a therapeutic dose on day 1 for azetukalner. We also have no meaningful DDIs, so we don't have to make adjustments to other background medications.

The drug is backed by a significant amount of clinical data already. As I mentioned, we've been in over -- we have over 800 patient years just in patients with focal onset seizures. We have some patients that have been dosed for more than 5 years now. So I'll go through both the clinical data as well as the safety profile of the drug, both in -- both in epilepsy as well as in neuropsychiatry.

So let's start on the epilepsy side. So if we just take a quick look at the epilepsy market. So epilepsy is actually more common than I think many people recognize. It's the fourth most common neurological condition. You have a 1 in 26 lifetime risk of developing epilepsy. If you look at the right, it's a breakdown of the different epilepsy subtypes. There's about 3 million Americans that have epilepsy. The most common form is focal onset seizures or about 60% of the market.

In terms of the generalized epilepsy market, the most common form of generalized epilepsy are these patients with primary generalized tonic-clonic seizures. And for azetukalner, as you'll see throughout the presentation, we're developing the drug both in FOS as well as in PGTCS, so the most common forms of epilepsy. What we find when we do all of our primary and secondary market research is about half of the patients are not getting good treatment today. So there are many drugs available to treat epilepsy.

We recognize that. This is a novel mechanism and about half of the patients are still requiring better therapy, either because of efficacy or because of side effects. So the total addressable market that we think for a branded ASM in the conditions that we're developing is about 1 million patients in the U.S. Our excitement and our confidence in epilepsy really is off of our Phase IIb trial that we unblinded in 2021, really underpinning our key leadership position in the epilepsy space.

So this was our X-TOLE study. This was a study where we randomized 325 subjects. It was a 4-arm study, 3 active doses and placebo. And now we're following those patients in open-label extension, and I'll go through both the double-blind data as well as the OLE data in today's presentation. So if we first look at the efficacy data that we unblinded, so there's 2 different graphs on this slide.

On the left is what we call the MPC. So this is looking at the percent reduction in seizures. This is the key primary endpoint for FDA. And on the right is a responder analysis. So this is the percent of patients that have at least a 50% reduction in their seizure burden when we compare the double-blind period to the baseline period. And that's the key primary endpoint for European health regulators. I'm just going to focus on the left for a second, but you can see it on both graphs. There's a clear dose response.

So as we move from 10 to 20 to 25 milligrams, you get a deepening of the seizure reduction in the response. You'll also notice that we had p-values of less than 0.05 at all seizure reduction endpoints, all doses and obviously, even more significant p-values as you move up in dose. If we just look at the 25-milligram dose on the left, that was the 52.8% reduction in seizures, and the placebo can adjust that.

So the high dose minus placebo, that placebo-adjusted MPC, this is the greatest reduction in seizures ever seen in an FOS study that's been unblinded in a patient population that has been the most severe or most refractory that's ever been tested based on our review of the literature. And we look at that severity of patients based on 3 different measures. We look at the number of drugs that these patients have failed, the number of background medications they are coming on to study as well as their baseline seizure burden.

And the median patient in our Phase II program had failed 6 drugs. They were on 3 background medications, and they had 13.5 seizures for 28 days, so quite a severe population. Another thing that we looked at in the Phase II program, and we're going to look at in Phase III is also the rapidity of onset. So this is a similar analysis to the last slide. The last slide was on a monthly basis. This is looking at the data on a weekly basis, so what you'll see on the left graph, it's again, we're looking at both the reduction in seizure as well as the responder analysis.

But just focusing on the left graph for a minute, you'll see quite a deep response at week 1. So all doses were statistically significant or less than 0.05 at week 1. So not only do we see a deepening of response over time, but you see a rapidity of onset. And for these patients that are having breakthrough seizure for them to have an immediate seizure reduction within days or within the first week of being on drug is really important for these patients.

As I mentioned, we continue to follow these patients in open-label extension. What started as a 1-year OLE has been extended to a 3, 5 and now a 7-year open-label extension. So we have a huge amount of both efficacy and safety data in the long term. At the American Epilepsy Society meeting every December, we mature these data, and we show these data to the epilepsy community and get feedback. So this is the 48-month data that we presented last month at the AES meeting.

A couple of key messages from this slide. One, overall, we're getting over a 90% reduction in seizure burden for the population. But as I mentioned, this was a very severe and refractory population. So we -- actually, if we look at those patients that were on fewer background medications, either 1 or 2 background ASMs, you have a 100% reduction in seizure burden for these patients. So they're not having any seizures at all. So it's quite remarkable when we look at the overall.

What's also interesting to notice is not only do we get a reduction immediately as we talked about at week 1, but it looks like that response is deepening over time. It looks like there's a deepening of the response a few months into the open label and then again, as we look out about 12 months or so. We've also been looking at seizure freedom. I wouldn't say there's a consensus definition for seizure freedom.

But overall, when we talk to epileptologists and neurologists, patients being seizure-free for 12 months is incredibly important. This provides patients independence because in most jurisdictions, if you have no seizures over a 12-month period, you can drive again. So we're looking at all of the patients in our open label that have been dosed for 48 months. And what you'll see about 2 in 5 patients or just under 40% have had 12 months of seizure freedom.

So if you remember, these patients were having a seizure every other day, and now we're getting these long periods of seizure freedom with the medicine. And what we're hearing back from physicians, their patients are gaining more independence. They're working more, they're having more social interactions. Not shown on this graph, but if you look at our AES data from last month, we also looked at those patients that had a breakthrough seizure. And this was an analysis that we don't believe ever has been done before.

So people can have a breakthrough seizure for a number of different reasons. It could be a mismedication. It could be a change something in their lives. And what we found is that if you have a breakthrough seizure on azetukalner, you can regain seizure freedom for long periods of time, and the majority of patients can regain seizure freedom for 6 or more months. So I think that's really important as we start to think about this drug in the real world.

Patients are not going to necessarily be seizure-free forever. But if they have a breakthrough seizure, they should remain on therapy and they can do well over longer periods of time. So what I've really shown over the last number of slides is a huge amount of efficacy data overall for azetukalner in epilepsy. When we look at safety and tolerability, this drug is very active in the CNS, and it has an adverse event profile that you would expect for a drug that's consistent with other ASMs and consistent with a drug that's active in the central nervous system.

So we do see treatment-emergent adverse events, things like dizziness and somnolence, many of these in a dose-dependent manner. But overall, the safety profile is something that we're very comfortable with, and the feedback we've had from treating physicians as well. Also nice to know is that we're not seeing new adverse events in open-label extension. As we mentioned, we now have patients that have been on the drug for more than 5 years, and we have the safety profile in open-label extension, is consistent with the safety profile that we see in the double-blind period.

All of these data have given us a huge amount of confidence to go into a large Phase III program. This Phase III program was started a few years ago after an end of Phase II meeting with FDA. In focal onset seizures, we're running 2 Phase III clinical trials in parallel. They're exactly the same, X-TOLE2 and X-TOLE3, 2 active doses of the drug versus placebo. Each study was targeted to randomize 360 subjects.

For X-TOLE2, we have completed randomization. We've randomized 380 subjects. Randomizations were complete last fall. The last few patients are just going through their final follow-up visits. We'll be analyzing the data. And as we guided this morning, we'll have our first Phase III clinical readout in March of this year. X-TOLE3 is a little bit behind, but we did have an important announcement this morning as well.

We've completed an ethnobridging bridging study, a Phase I study in Japanese subjects. And we had -- last fall, we had a meeting with the PMDA, the Japanese health regulator. And we're now including Japanese subjects into X-TOLE3. So of the 360 subjects, 60 of them will be Japanese subjects. And what's really important here is we're not going to have to run separate Phase III clinical trials in Japan. We can incorporate that into the global Phase III program, into X-TOLE3.

The non-Japanese subject enrollment will be completed this year. That was another update and milestone we announced this morning, and then we'll incorporate Japanese sites and Japanese subjects into X-TOLE3 as well. As I mentioned, we're continuing to do work outside of FOS, and we have an ongoing Phase III clinical trial in primary generalized tonic-clonic seizures.

What's a little bit different on this approach versus what other companies have done in epilepsy is we're running this study in parallel with our FOS study. Very common, you choose your high dose to randomize versus placebo. This is 25 milligrams versus placebo, a sample size of about 160. These studies do take a little bit longer than the FOS study. So the study continues to recruit and randomize patients. So that's the update on epilepsy, really exciting time to be on the doorstep of unblinding our first Phase III clinical trial with top line data, as I mentioned, in March of this year.

So if we now expand the azetukalner opportunity outside of epilepsy and give an update in neuropsychiatry, we ran a smaller Phase II study. This was really more signal finding what we would call a proof-of-concept study in MDD, so a smaller study that unblinded in the fall of 2023. We were looking at 2 active doses of the drug, 10 and 20 milligrams versus placebo. Key primary endpoint was a clinical scale of depression called the MADRS scale. This drug works in the reward circuitry in the brain.

So one of the -- based on the preclinical data and some other clinical data that was generated, we've also been looking at a scale of anhedonia, and this scale is called the SHAP scale. So I'll walk through the data from the Phase II study, which supports us moving into the large Phase III program in major depressive disorder that we have ongoing. So if we look at the MADRS, this was the primary endpoint. A couple of key points from this slide. One, you see a clear dose response.

So the 10-milligram arm outperformed placebo and the 20-milligram arm outperformed the 10-milligram arm at every time point. What you'll actually see, again, very consistent with epilepsy, you see that rapid response immediately. This is really important in depression. Many of the drugs that are used to treat depression right now take weeks, if not months, to show an effect. So to be able to have early onset of efficacy is important. We were able to show that in this study as well. We had about a 3-point separation on MADRS between the top dose of 20 milligrams versus placebo, a little bit of a high placebo rate in this study and a p-value based on sample size of 0.135.

Interesting, we looked at a different scale of depression, which is called the HAM-D17 scale. And we also had a 3-point separation, but a p-value less than 0.05. And the reason that was based on variability.

So what we saw when we looked at HAM-D17 is we saw less variability in that endpoint compared to the MADRS scale. And so now in Phase III, we're looking at HAM-D17 as the primary endpoint. As I mentioned, we looked at a clinical scale of anhedonia called the SHAP scale. Again, very similar. We saw a clear dose response and separation between the 2 active doses and placebo, about a 2.5-point difference between active and placebo at the high dose and also a p-value of less than 0.05.

When we looked at the safety and tolerability data in depression, this is actually quite surprising to us. It looks like the tolerability profile is a little bit softer in the depression patients versus the epilepsy patients. Obviously, this is a cross-trial comparison. But overall, it was quite a benign adverse event profile in depression. And importantly, when we think about depression, we didn't see any notable weight gain and no notable sexual dysfunction, and we do see that with some of the current standard of care.

So when we think about our approach in psychiatry, a novel mechanism, rapidity of onset and having a different adverse event profile is the feedback that we're receiving from the psychiatry community is really important in the advancement of this new medicine. So we now are in a large Phase III program in major depressive disorder, 2 ongoing Phase III clinical trials currently, X-NOVA2 and X-NOVA3, a significant number of differences that we made between the Phase II program and Phase III.

Obviously, a huge increase in sample size, 1:1 randomization using HAM-D17 as the primary endpoint as well as we're looking at patients that are a little bit more severe coming into study. So that cutoff of patients to get into study is a more severe depressed population. We also announced this morning, execution on these studies have been going really well, and we'll have X-NOVA2 data in the first half of next year.

We've expanded in neuropsychiatry beyond major depressive disorder, also into bipolar depression, really significant unmet medical need in bipolar depression, fewer mechanisms and fewer drugs available for these patients. So we started a study midyear last year called the X-CEED study, where we're looking at patients with both bipolar I and bipolar II. We're looking at scales of clinical depression as measured by MADRS, single dose of 20 milligrams versus placebo.

So as I mentioned, we also wanted to give an update. Obviously, a huge amount of the focus for investors is on azetukalner, both in epilepsy as well in psychiatry, but we made some great progress on the early-stage portfolio, and I wanted to provide an update this morning. So I'm going to focus on our NaV1.7 program. We do have a second program that's targeting a potassium channel, called KV7 that's also in a Phase I clinical trial.

But today, in the interest of time, we're going to focus on our NaV1.7 program. The genetics of NaV1.7 are absolutely remarkable, and Xenon led some of this work about 20, 25 years ago. The history of the company started as a genetics company. These patients in a gene called SCN9A, which encodes for a protein called NaV1.7. If you're complete loss of function for NaV1.7 or even a partial loss of function of about 75% to 85% loss of function, these patients feel no pain. They feel no pain regardless of noxious stimuli.

There's also gain of function in the channel. So if you have too much activity in NaV1.7, you feel non-precipitated severe pain, and there's a genetic condition called inherited erythromelalgia, where these people have extreme pain in their extremities. So it was an absolutely remarkable genetic target when it was identified about 25 years ago. And for years, pharma, almost every of the large pharma companies were trying to drug this target.

It's proven to be very challenging to target from a chemistry point of view. And I think we've really made a breakthrough over the last couple of years. So some of the challenges with the first -- what we would call kind of the first and second-generation molecules against NaV1.7. One, we didn't have the potency and selectivity. So they didn't have isoform sub-selectivity on the sodium channels. So we need to selectively hit NaV1.7 while not hitting the other isoforms.

Many of the drugs also had significant protein binding, so they didn't have enough free fraction to interact with the target. And many of them were restricted to the peripheral nervous system. So they didn't act centrally. And if we want to mimic the human genetics, which what we're trying to do as a novel analgesic, we believe we have to mimic where the target is, which is both in the peripheral nervous system as well in the central nervous system.

So what we've been saying is that our lead molecule, XEN1701, which is now in a Phase I clinical trial, has a profile that addresses all of these limitations and has a profile that's never been tested in a human clinical trial previously. Here's just a little bit of the early preclinical data. What you'll see on the left -- on the left part of the slide, on the graph is that we have molecules and specifically 1701, but other molecules and other chemistries that are order of magnitude is more potent than the previous drugs that were targeting NaV1.7, shown here is both a Pfizer molecule as well as a Genentech molecule, which was actually our drug in collaboration with Genentech.

We had a large collaboration with Genentech, Roche for many years. So we have significant increases in potency and significant increases in selectivity as well. What the right graph shows is that we need to get into the brain. So if you can get into the brain and you can have free drug in the brain, that can drive efficacy. So that's important for the profile overall.

And what we announced this morning, which I think is incredibly exciting, we're partway through the Phase I clinical trial, but we've already reached exposures in the SAD portion of the study that are above concentrations predicted to mimic the human genetics. So we don't believe that something like this has ever been seen in a healthy volunteer study. We will wrap up these Phase I studies later this year, and we're excited to get into a proof-of-concept study, probably something like bunionectomy before the end of 2026.

So in addition to the work on azetukalner, really nice progress on the early-stage pipeline as well. So just to wrap up in milestones before we hit Q&A. As I said, it's been a really important year of execution for Xenon across a number of our clinical trials. We have 6 ongoing Phase III clinical trials for azetukalner in both epilepsy and in psychiatry. The first of those is going to read out in March of this year, which is our X-TOLE2 study in focal onset seizures.

That will be followed by a number of clinical readouts in the coming quarters and coming years, both in epilepsy and in psychiatry. And we have a really nice maturing early-stage portfolio and pipeline as well and some really nice progress on our NaV1.7 program. So thanks very much. An exciting year for Xenon coming up. And Tess, I'll pass it back to you for Q&A.

Okay. Thank you, Ian. So I thought I'd actually start our conversation with a little bit of a bigger picture strategic question for you. Just around how you think about investment and balancing it across azetukalner in epilepsy, but also neuropsychiatry and maximizing the value there, but also expanding some of your pipeline?

Yes. I think it's a great question. A couple of comments. One, we've been really clear on what our strategic objective is. We want to be a fully integrated biopharma company. We want to discover, develop and commercialize our own molecules. We have deep expertise. I didn't mention this at the beginning, in drugging ion channels in the CNS. We've been doing this for many, many years.

I think that expertise is world-class. So obviously, a huge amount of focus is on azetukalner. That's where the vast majority of our effort is, the vast majority of our spend is. And not only are we going to have our FOS X-TOLE3 -- X-TOLE2 readout in March of this year, that will be followed by a new drug application in the second half of this year and put us in a position to get our very first drug approved.

But as you mentioned, we really want to build a world-class company, which means we have to think about the portfolio. That's both the expansion of azetukalner into psychiatry, but also the early-stage portfolio. And as I mentioned, 2 molecules transitioned in the Phase I clinical trials last year, and you'll see more molecules transition from our labs into human clinical development over the coming years.

So we know now that top line results from the Phase III X-TOLE2 trial are expected in March. And quite frankly, I feel like we've been talking about this trial and expectations for a long time. But I'll just ask it to be complete here. What would you consider a win in terms of efficacy and safety here? And how could the longer treatment duration, 12 weeks versus 8 weeks in X-TOLE impact the results?

Sure. I'm happy to start and make a few comments, but I think Chris should provide his perspective, and then I want Darren to weigh in as well as we think about just the overall profile and the importance of that from a commercial perspective. So you've asked a couple of questions in there. One, one of the principles that we had at Xenon given the great success we had in our Phase IIb X-TOLE study is that X-TOLE2 and X-TOLE3 should be very similar studies.

And so if you look at the inclusion and exclusion criteria, the Phase III program is exactly the same as the Phase II program. You did mention one difference. And one difference is that the double-blind period is 12 weeks in Phase III, it was 8 weeks in Phase II. When we look at the open-label data, it actually looks like those patients continue to have a deeper response over time. So I think moving from 8 weeks to 12 weeks, we're very comfortable with the 12-week double-blind period overall.

In terms of just kind of managing expectations going into data, obviously, that's a question we get a lot. I think you did a really nice work, Tess, in your preview for Xenon coming into the conference and coming into our X-TOLE2 data. So I would encourage people to look at the analysis that you've provided. I think at the highest level, obviously, the study needs to be positive. It needs to be statistically significant, which will put us in a position to file a new drug application later this year.

Obviously, every study is a little bit different. We have already commented that the patient population in Phase III looks very similar to Phase II and the open-label extension rollover rate in Phase III is very similar to Phase II. So that gives us a lot of confidence going into it. And I think I also always want to remind people that the X-TOLE study will be on label, right? That study has already been complete with the best placebo-adjusted efficacy ever seen in a focal onset seizure study. And so this is really a study that will add to that and be part of the new drug application. Chris?

I think you covered it.

Okay. Darren, do you want to provide just your perspective on the overall profile?

Yes. I think with -- when you think of the X-TOLE data, it really has set the precedent. And when you think about the prescribing epileptologists, general neurologist, the novel mechanism of AZK is really going to be transformative in there. It's just not another sodium channel blocker. And so commercially, we already know based on our market research, our discussions most recently at AES, there's a tremendous amount of excitement for, as Ian outlined, the attributes of azetukalner and particularly with the general neurologist, they view this as a really easy therapy to incorporate into their practice.

And so I think with the backdrop of the clinical data, the safety and tolerability, we're pretty excited to get this to physicians and their patients.

Okay. And I did get this question this morning. I thought it was kind of a good one. Have there been any protocol amendments to X-TOLE2 or X-TOLE3?

Chris?

Yes, there have been some amendments, but nothing that has -- I mean to Ian's point, basically, the spirit of X-TOLE2 was to maintain consistency with X-TOLE. And so if you look at the major sort of inclusion and exclusion criteria, you look at the baseline characteristics, you look at the geographical spread, specifically percentage of patients from the U.S., we're seeing a great deal of consistency.

So there isn't anything within any of the differences between those protocols that we think are substantive and would drive a difference in efficacy.

With all that in mind, what keeps you up at night on this study?

I can start and then Chris can add. Look, every clinical trial, we're enrolling a large number of patients dispersed throughout a number of clinical sites. But I think what gives us great confidence is we have the most experience of running epilepsy studies over the last decade. And so I think both internally in our team, we have epileptologists and psychiatrists that work at Xenon that have a huge amount of experience.

We've run the largest study ever run in FOS that's been unblinded. So I think we have tremendous confidence. So I wouldn't say that there's anything that we're really concerned about as we think about the epilepsy work. Obviously, with psychiatry, where always these studies in terms of execution is critically important as we spend a lot of time working with the sites and making sure that we're getting the right patients into a psychiatry study.

So that's something that we spend a lot of time thinking about as well. And then as we think about the early-stage portfolio, it's really the excitement of where we could take this. I think if we have a novel analgesic and non-opioid mechanism with the profile of our NaV1.7 program, I mean, the opportunity to have an oral non-opioid chronic pain drug is incredible. And so there's a lot of excitement and thinking internally about how do we develop that in the most efficient way. Chris?

Yes. I mean I think we're in as good a shape as we possibly could be for all the reasons that Ian and I have mentioned so far. So I'm sleeping well.

Okay. And as -- maybe this is a zoom ahead question here, so beg my pardon. But what -- how do you -- how should we think about the marketing message here? And is there any kind of key differences that you expect there could be between epileptologists and general neurologists?

Yes. Traditionally, with antiseizure medications, typically, the epileptologists are the early adopters, which is not surprising, right? Everybody -- every patient they see in their practice every day are patients with seizures and typically refractory seizures, right? So they're getting referred into the epileptologists because of the severity of their disease.

And then the general neurology community, they are typically a more late adopter. And remember, when we are approved and launched, it will be an 8-year gap between the last time a branded ASM was approved. And so there's been this kind of period of really nothing new for the general neurologist. And so from the last branded medication that was approved, the general neurologists are really finding that medication difficult because of the ability to have to titrate both up with the medication and down on other ASMs and other issues.

Again, back to my earlier comment, I think with azetukalner, it's very clear that the ease of use, and then you're talking about kind of what will make a difference here. And I think because of the daily dosing, the novel mechanism, no drug-drug interactions, titrated dose right out of the gate, tremendously excited to bring this to the general neurologist.

So they're able to incorporate this into the patients that they're currently managing, keep getting them to get seizure control, potentially seizure freedom and not have to refer and be able to manage that. And again, all our market research suggests that this is the perfect medication for them to do that. And so I think the messaging for us is going to be around the attributes that we're able to really see in X-TOLE and what we anticipate in X-TOLE2.

And any other learnings on like what the keys to success are for a branded epilepsy launch and what Xenon may be doing differently or similarly to others?

Yes, there are several. I think -- as I think about commercial success, there are a few different areas. One is it's all centers on the data, right? So we feel confident there. And then it's about how do you think about patient identification, the treating physicians and really think about that those epileptologists, the general neurologists and also the advanced practice -- APPs that are in the community that are more and more getting involved in patient management.

So we look at where do we think about taking the AZK message depending on where the patients are. So that's the key. And then those key messages and what have you. But then there's other key stakeholders involved. Obviously, the payer, that landscape is -- can't underestimate how important that is. And again, I think the ability for us, which we'll start executing on post data late this year, is that engagement with payers, right? Again, that kind of gap between the last launch to be able to bring them up to speed on the current practice of treating epilepsy patients, seizure patients and really understanding and letting them understand the still what is a tremendous unmet medical need.

And so making sure that upon launch that it's -- we could have as quick an uptake as possible. The other component is that patient experience, I think, is critical to a successful launch. How do you set up your distribution, your patient support, all those services that really make what I say, you want that patient to have that outstanding experience early on. All those things hinge around the last thing that I think is absolutely critical is the team that you built, right?

And I think that when I think of the commercial team that we're starting to build, really a lot of deep, deep epilepsy experience, both across all facets, sales, marketing and on the payer side. And then I believe one thing about epilepsy, and it's -- a lot of people, if you think about sales representatives, people in the field, MSLs, they commit their careers to epilepsy. And so I think we'll be able to attract the top talent that will want to come with this new medication, with the impressive efficacy, the opportunity to bring something new and novel to their customers. And so I think those are the things that I think about that make this a successful launch.

And maybe I could just add on the talent side. Azetukalner based on the profile so far has the opportunity to be a generational asset, right? The profile is different than we have seen in so long in the epilepsy space. And the team to execute is critically important. Darren joining as Chief Commercial Officer involved in the launch of Epidiolex, the most successful epilepsy launch ever.

Darren has already added to his team in terms of Head of Market Access, Head of Sales and Marketing, who has probably some of the deepest epilepsy experience over the last 2 decades. And Chris, on the medical side, we've had MSLs in the field for the last 18 months. So we have early invested in building relationships in the epilepsy community for Xenon as a trusted partner and azetukalner as a trusted brand. And I think our data disclosure and our relationships and information and scientific sharing with the community has been incredibly well received. We had over 50 employees at the American Epilepsy Society meeting, and there's a real buzz around Xenon in the epilepsy community.

Well said.

Tess, will you indulge me with one thing? So just real quick. Ian talked a lot about how well patients are doing in our open-label extension study in epilepsy. It's really quite impressive. If you take a look at how they're doing compared to the double-blind period, over 90% of them had a 50% reduction in seizures.

A lot of the data we show starts at the baseline of the open label. So if one were to compare the Phase III open-label studies and one comparison you were looking at the beginning of the double-blind and the other you were looking at the beginning of the open label, it would be a comparison that would be tough to make. So I just want to point that out. Thanks.

Thinking through the expansion potential of azetukalner here, how does the next 3 to 5 years look for Xenon if you are successful in both epilepsy and neuropsych versus just epilepsy?

Sure. Darren, do you want to talk about kind of the launch first in epilepsy and then as we'd expand. And actually, maybe even before that, Chris, one of the things that we haven't talked about today that I think is important is maybe talking about the comorbidities in epilepsy as well and that we're looking at endpoints of depression and anxiety in our epilepsy studies. That's probably a nice segue to psychiatry.

Sure. So we haven't shared the baseline characteristics of X-TOLE2 just yet, but we're expecting them to be quite similar to X-TOLE. And depression, anxiety, migraine, headaches are all very common comorbidities. And so we're expecting to be able to gather that data in the ongoing Phase III program.

Yes. I think, obviously, epilepsies, the focal seizure launch is the initial focus. But if we were so fortunate to have great data in MDD, that's a tremendous opportunity, and we would pivot to building out that Psychiatry business. And again, Ian pointed it out today, tremendous unmet need, a lot of patients that suffer with MDD that could be [ helped ] by the novel mechanism, the rapid onset and really, really favorable safety profile. So yes, tremendous that would be a nice outcome.

And just last question for me here is just on formulation. Are you exploring any other formulations of azetukalner?

Are you specifically thinking about intravenous? Yes, yes. So often in epilepsy, we think about kind of 2 parts of life cycle management. One is on the pediatric side and one is on the IV side. So yes, all of that work is ongoing. We have agreed upon pediatric development plans with FDA as well as with EMA.

So over time, we will get into younger and younger patients. Obviously, adolescents can take a pill. But as you get into younger patients, you need a specific pediatric formulation. So a lot of that work has already taken place, and we'll get into younger patients over time. The other thing often that the epilepsy community is asking for is whether you have an IV formulation. So as patients come into the hospital that they may start on an IV formulation and then they leave the hospital with an oral formulation. So that work is ongoing as well.

Great. Thank you.

Thank you.

Thanks, Tess. Thanks.

Good morning, everyone, and thank you for joining us. We're excited to be speaking with you fresh off a highly successful American Epilepsy Society Meeting for Xenon. Before we begin, please note the standard notice that we will make a number of statements today that are forward-looking. I encourage you to review our SEC filings for a more complete discussion of risks facing our business and readers are cautioned not to place undue reliance on such forward-looking statements.

After today's call, a recording of this presentation will be available on the Investors section of our website at xenon-pharma.com. So joining me on today's call are Dr. Chris Kenney, our Chief Medical Officer; Darren Cline, our Chief Commercial Officer; and Tucker Kelly, our Chief Financial Officer. I'm going to start today with some opening remarks, including an overview of our presence at the recent meeting of the American Epilepsy Society. And what we heard from clinicians about the opportunity for azetukalner to meaningfully change the epilepsy treatment paradigm. Chris will then provide an overview of the data we presented at the meeting, including our latest X-TOLE open-label extension study data. Then Darren will provide an initial update on the progress we are making to prepare for our first commercial launch. Tucker will then join us for a short Q&A portion of the call. As a reminder, if you'd like to ask a question, you can type it into the chat box at any time. So let's get started.

We have just gotten back from a great week in Atlanta for the American Epilepsy Society 2025 meeting. As a neuroscience-focused biopharmaceutical company and a leader in ion channel drug discovery and development, AES continues to be an important congress to showcase the data that we have generated with the epilepsy community, including the latest updates on our Phase III azetukalner program. Azetukalner or AZK for short, remains the only KV7 channel opener in development that is backed by long-term efficacy and safety data from clinical studies of patients living with epilepsy.

We have highly compelling placebo-adjusted efficacy data in focal onset seizure patients. This is from our Phase IIb X-TOLE trial, and data supports durable and sustained efficacy over time through our open-label extension study. We now have more than 800 patient years of exposure and safety data. AZK leads our pipeline, and we view its KV7 MOA as a pipeline and a mechanism given its potential to reduce the neuronal hyperexcitability present in multiple neurological disorders.

First, it has broad-spectrum potential in epilepsy. And we are investigating it in focal onset seizures in our X-TOLE2 and X-TOLE3 studies as well as in primary generalized tonic-clonic seizures in our X-ACKT study. As a reminder, our X-TOLE2 study is fully enrolled with 380 patients randomized, and we look forward to our first AZK Phase III top line data readout in early 2026. If approved by the FDA, AZK would be the only KV7 drug available for the treatment of epilepsy.

We are also focused on broadening therapeutic opportunities for AZK beyond epilepsy, where we have strong preclinical, clinical and genetic evidence supporting its development in neuropsychiatric indications. We have, therefore, also advanced AZK into Phase III studies in major depressive disorder and bipolar depression, conditions, which impact millions of patients and where novel treatments are urgently needed. But the pipeline we're building is also much broader than AZK. We are advancing several promising early-stage ion channel programs, including 2 molecules in the Phase I clinical development for potential pain indications. XEN1120 targeting KV7 and XEN1701 targeting the sodium channel, NaV1.7. Additionally, our preclinical Nav1.1 program reflects our expanding commitment in epilepsy, with preclinical data suggesting that targeting Nav1.1 could potentially address the underlying cause and symptoms of Dravet syndrome while providing the convenience of oral dosing.

Overall, our pipeline reflects enormous potential to impact the lives of patients and to grow the overall value of our company. Our progress on AZK and our growing leadership in epilepsy was front and center at AES 2025. We have been to many AES meetings over the years, but this was, by far, our most impactful meeting yet, based on the data we showcased and our interactions and knowledge sharing with the community. We presented 7 posters, including 48-month X-TOLE open-label extension data real-world epilepsy studies on the burden of depression and ASM titration on patient care and an update on our Nav1.1 program in Dravet syndrome.

One of our real-world depression posters was selected by AES as part of their official press program, underscoring the increasing clinical importance of mental health and epilepsy care. Through our on-site activities, focus on HCPs and advocates, we had about 1,500 total engagements, where we presented and discussed our AZK data, including through on-site meetings, our poster presentations and our scientific exhibit.

Another highlight of our symposium was on depression and anxiety and epilepsy. And this was held in partnership with the Epilepsy Foundation of America as well as 3 leading epileptologists. This is with Jackie French, Dr. Jackie French from the NYU Langone Comprehensive Epilepsy Center; Dr. Andy Kanner from the University of Miami, Miller School of Medicine; and Dr. Heidi Marie Munger Clary from the Wake Forest University School of Medicine. But the greatest joy from AES is always the opportunity to speak directly with physicians who have experience with AZK and hear stories of the benefits that some of their patients are having in the study.

Many physicians shared with us that they have patients who are experiencing seizure freedom for the very first time in their lives. And they tell us that the ways that this is impacting their independence and the quality of life. The growing data set for AZK representing more than 800 patient years of efficacy and safety data continues to resonate with clinicians, and we heard this time and again in our discussions throughout the meeting. Out of these discussions, there's really 3 themes that continue to rise to the top.

Number one, they view AZK as highly effective, having achieved the strongest placebo-adjusted efficacy in the X-TOLE double-blind period and this is despite being in the most refractory patient population ever trialed in epilepsy. In the open-label extension, sustained MPC reductions in focal seizures were over 90% at 48 months. With 100% monthly seizure reduction at 48 months for those patients who are on either 1 or 2 anti-seizure medicines at baseline. Additionally, AZK's potential as being mood neutral or mood positive is compelling given the number of ASMs that can negatively impact mood, as well as the growing recognition of depression as a complicating factor in epilepsy care.

Number two, they also appreciate the fast onset of effect. With efficacy demonstrated at week 1 and the ability to start at a therapeutic dose. This is in contrast with other ASMs where clinicians must start low and go slow, taking several weeks or even months to reach therapeutic levels. And third, they view AZK as easy to add into a patient's treatment plan. As a KV7 modulator, it has a novel mechanism, and this can be used in combination with foundational ASM treatment. As per the study protocol, AZK is dosed orally once a day with food and requires no titration. They view AZK's lack of meaningful DDIs and no monitoring requirements to be an additional plus.

Today, you will also hear that this profile resonates strongly with both epileptologists and general neurologists, which is our view, meaningfully supports the potential commercial trajectory of AZK. We expect to launch AZK first in focal seizures as is common with any branded epilepsy launch, and it will likely first be used by epileptologists and initially in more refractory patients. However, we believe the opportunity for growth with general neurologists is significant as is the opportunity for earlier use in less complex patients, and this is being supported through our OLE data.

We would expect that continued growth would occur through label expansion into PGTCS. Then although AZK has significant commercial potential just in the epilepsy category we do believe that there is a great opportunity for use as we explore the differentiated profile of AZK in neuropsychiatry. This could be proven through our Phase III programs in MDD and in bipolar depression with positive data, resulting in future indications with significant market potential. Coming out of ADS, we are energized by the opportunity for AZK to meaningfully impact the lives of people with epilepsy. We heard great enthusiasm about the latest data in AZKs attributes and we are continuing to raise the profile of AZK and Xenon with HCPs and efficacy groups. With the Phase III data on the horizon for early 2026, it is truly an exciting time for Xenon, for patients and for the clinicians who care for them.

So now I'm going to turn the call over to Chris, and Chris can walk us through the latest data from AES. Chris, over to you.

All right. Thanks a lot, Ian, and good morning to everyone. While we advance our Phase III studies in epilepsy, we also remain focused on scientific exchange and education around the profile of AZK seen to date. Ian mentioned AES. At AES, it continued to be gratifying to remind everyone the compelling double-blind efficacy data from our Phase IIb X-TOLE study which we believe demonstrated the best placebo-adjusted results ever seen in a clinical study of focal onset seizures. Specifically, after 8 weeks on treatment, we saw a statistically significant and dose-dependent reductions in focal seizures with the highest dose cohort seeing about a 53% change from baseline compared to an 18% change in the placebo arm. The responder rate was approximately 55% in the same cohort. .

Also in X-TOLE, we observed a rapid onset of efficacy at week 1 in all AZK doses tested. Data, which are very compelling to clinicians who are used to lengthy, complicated titration regimens for almost all of the other antiseizure medications. AZK was generally well tolerated in the double-blind period with adverse events consistent with commonly prescribed antiseizure medications. The most common treatment-emergent adverse events across all groups were dizziness, somnolence, and fatigue, while the most common adverse events leading to discontinuation were dizziness, balance disorder, dysarthria and gait disturbance. Serious adverse events were low and balanced across groups.

Now moving on to data we presented at AES 2025. As Ian mentioned, we presented 7 posters. Two posters pertain to our 48-month X-TOLE open-label extension or OLE data, including an analysis characterizing intervals of seizure freedom which we believe presents a clinically relevant view of seizure freedom with the potential to be practice changing. Additionally, we shared 4 real-world studies highlighting significant challenges in the successful management of epilepsy, depression and ASM titration. We also shared an update on our Nav1.1 program in Dravet, which in Dravet mice, improved motor performance, suppressed spontaneous seizures, prevented SUDEP or sudden death, led to more mature dendritic spine morphology and also increased long-term potentiation, which is a potential correlate for learning and memory.

These data underscore the incredible potential of our Nav1.1 approach to address the underlying cause and symptoms of Dravet syndrome while providing the convenience of oral dosing. We're excited that this program is now progressing through IND-enabling studies and the epilepsy community is also encouraged by its great potential.

First, I'll highlight our latest interim data from the X-TOLE OLE which are now out to 48 months. For the 131 patients who were treated for at least 48 months, median percent change reduction in focal onset seizure frequency from baseline increased to about 91%. As evidence of AZK's impact in less complex patients, those who were taking just 1 or 2 anti-seizure medications at baseline saw 100% median percent change reduction in focal onset seizure frequency at month 48, compared with those receiving 3 antiseizure medications at baseline who saw an approximate 82% median percent change reduction at the same time point.

This strongly supports the potential use for AZK in earlier lines of therapy. All in all, the OLE data demonstrate that efficacy continues to improve the longer patients are on drug, which bodes well for long-term retention in the commercial setting. Our latest responder rate data also continues to support improving efficacy with longer treatment. Among OLE participants treated for at least 48 months, about 83% had at least 12 consecutive months of at least 50% reduction in seizure frequency, and about 44% had at least 12 consecutive months of at least 90% reduction in seizure frequency.

We also continue to see improvements in seizure freedom. Any consecutive 12 months of seizure freedom was attained for about 21% of participants entering the open-label extension and about 38% of participants treated for at least 48 months. Approximately 1 in 10 treated for at least 48 months, had 48-plus months of seizure freedom. These results are quite remarkable and incredibly meaningful when you keep in mind that many of these patients are achieving long periods of seizure freedom for the very first time in their life, and that they had significant baseline seizure burden and had failed numerous ASMs prior to entering the X-TOLE study.

Now our second open-label extension analysis at AES was an exciting and clinically relevant exploration of seizure freedom, which may help guide future clinical decision-making. To our knowledge, this was the first time this type of analysis had been completed for an experimental new medicine in epilepsy and it generated a significant amount of interest on the ground for its real world applicability. As background, seizure freedom is a primary goal of epilepsy treatment, but patients may define expectations for seizure freedom differently based on their circumstances.

It's common for patients to experience a fluctuating clinical course of attaining and regaining periods of seizure control. This may occur due to revote seizures, perhaps due to missing a medication dose, or multiple doses, poor sleep, et cetera, or may also occur due to an unprovoked seizure. Understanding patterns of seizure freedom following a breakthrough seizure can guide patient expectations and help better characterize dynamic patterns of treatment response. This analysis, therefore asked 2 questions. One, can long-term seizure freedom be attained with AZK; and two, if it is lost, can it be regained?

On this slide, we see an analysis from a subset of patients in the OLE who were treated for at least 48 months and who reported at least 12 months of seizure freedom at the time of last study visit. About 1 in 4 patients had 12 months of seizure freedom. And of those patients, 75% had at least 24 months of seizure freedom and about 64% had at least 36 months of seizure freedom. This analysis reinforces the strong seizure freedom results from the broader open-label extension study.

The second part of our analysis looked at those who attained seizure freedom already for at least 6 months. Now 6 months is a highly relevant time point for people living with epilepsy because in many states, if one has been seizure-free for those 6 months, it means they can regain the ability to drive. In this analysis, half about 47% continue to experience seizure freedom, while the other half subsequently experienced a seizure. Among those who experienced the seizure, 70% were able to regain at least 6 months of seizure freedom and 58% were able to regain at least 12 months of seizure freedom. These compelling data make the case for continued treatment with AZK even in the event of a breakthrough seizure, which can be common during the course of an epilepsy patients journey.

Shifting to safety. The OLE has now generated more than 775 patient years of safety data. In total, through 48 months, treatment-emergent adverse events and treatment-related treatment-emergent adverse events occurred in 89.5% and 65.8% of the safety population, respectively. The most common adverse events included dizziness, headache, COVID-19 infection, somnolence, fall, weight increase, memory impairment and gait disturbance. Four participants report urinary retention and no dose changes were made in any case.

Serious treatment emergent adverse events occurring in more than one participant included seizure, deep vein thrombosis, paresthesia, seizure cluster, influenza, pneumonia aspiration, rhabdomyolysis and fall. Overall, the long-term safety profile and the open-label extension remains comparable with that observed in the double-blind period.

In addition to our AZK OLE data, we also presented 3 real-world studies on the impact of depression in epilepsy care, which underscores the need for mood neutral or mood positive antiseizure medications. In the first study, patients with focal seizures reported a considerable mental health burden with more than 80% of patients surveyed reporting depressed mood and anhedonia, and 42% reporting suicide ideation. In the second study surveyed patients with focal seizures and depression symptoms reported worse quality of life and higher health care resource utilization, including 2x as many emergency room visits and 5x as many inpatient hospitalizations as those without depressive symptoms.

In the third study, a retrospective claims analysis among patients newly diagnosed with epilepsy found that depression was associated with shorter duration of initial therapy and an increased risk of initial treatment failure. This last poster was selected by AES as part of their official press program, underscoring increased recognition of the clinical burden and impact on treatment posed by depression. Overall, these studies reflect the importance of considering the whole patient, inclusive of mental health status when making treatment decisions and the importance of tailored treatment strategies for these patients. Secondly, we also know that there are several mainstay ASMs that may exacerbate depression anxiety or other mood disorders. And the data reinforced the importance of developing mood neutral or more positive therapies which we believe may be a potential benefit with AZK.

The final presentation I will highlight is our real-world study on clinical practice and patient burden associated with ASM titration. It is important to note the vast majority of ASMs require some type of titration period, ranging from weeks to months to improve tolerability. This titration phase can delay reaching the therapeutic dosing and seizure control, and it can be challenging and confusing for patients, potentially leading to non-adherence. This poster recaps titration insights from a patient survey and physician roundtable conducted by Xenon.

In the survey, patients reported significant challenges related to titration including time required and increased number of clinic visits, keeping up with dose adjustments and difficulty understanding the whole titration process. They also reported significant concerns while titrating, including being worried about their risk of developing a focal seizure.

The HCP roundtable reinforced schemes from the patient survey. During cross titration, HCP's reported balancing multiple often competing considerations such as medication burden with safety and tolerability. They also reported increased strain on health care resources such as additional follow-up visits and visit time needing additional staff and increased coordination with the pharmacy and communication workload to checking with patients. All in this study identified the significant burden that titration places on both patients and providers. It also reinforces multiple dimensions of value for an antiseizure medication that doesn't require titration, which again, is a rarity in the current treatment paradigm and which could set AZK apart from others.

In conclusion, we're very proud of this multidimensional set of data at AES 2025 that highlighted our leadership in epilepsy as well as the compelling attributes that differentiate AZK and would potentially change the treatment paradigm in a meaningful way. We continue to see strong efficacy in the open-label extension at 48 months including a 91% median percent change reduction in monthly seizure frequency and a 100% reduction among those receiving 1 or 2 anti-seizure medications at baseline. We also are seeing impressive seizure freedom rates and the ability to maintain and regain long periods of seizure freedom with AZK.

Safety and tolerability remain comparable to the double-blind period. Our real-world studies highlight the depression and antiseizure medication titration presents significant challenges in epilepsy care, reinforcing the opportunity for a mood neutral or mood positive anti-seizure medication without a required titration regimen and with a rapid onset of efficacy, which we believe AZK can provide.

I'll close by echoing what Ian said about the joint hearing from clinicians about their experience with AZK at the American Epilepsy Society meeting. It's important to remember that our data is made up of many individual stories of people who struggled for a long time with their seizures and the loss of independence and quality of life that comes with them. We're incredibly inspired by the stories of the patients who are achieving seizure control and seizure freedom for the first time in their lives and we're excited about the potential to deliver a long awaited new therapeutic approach to the community.

Now I'll pass the call over to Darren to discuss how he and his team are preparing for the potential commercialization of AZK. Darren?

Thanks, Chris, and good morning, everyone. It's been an exciting and busy 6 months since I joined Xenon and have continued our work to prepare for top line data and potential commercialization of AZK and focal seizures. Working closely with Chris and the medical team, we are validating our market analysis and identifying unmet needs among patients and providers. These insights are guiding us as we build a comprehensive plan to ensure a successful launch for AZK. Stepping back to consider the broader landscape.

Epilepsy is defined by recurrent seizures, which may be either focal or generalized in nature. It stands as the fourth most prevalent neurological disorder, surpassing both Parkinson's disease and multiple sclerosis and frequency in the United States alone, with approximately 3 million adults affected by epilepsy with 1.8 million experiencing focal seizures. The impact of this condition is significant. Individuals living with epilepsy often face elevated rates of anxiety, cognitive challenges, reduced quality of life and a heightened risk of injury and premature death compared to the general population.

Importantly, the effects of epilepsy extend beyond seizures. Research indicates that up to half of those with epilepsy may develop symptoms of depression, which can further hinder their ability to achieve optimal seizure control. Our own real-world study suggests that the prevalence of depression among epilepsy patients may be even greater, a finding echoed by physicians in clinical discussions.

At the recent AES meeting, multiple studies, including those from Xenon and others, underscored the complex bidirectional relationship and biological link between epilepsy and depression. Additionally, at our symposium with the Epilepsy Foundation of America, we heard incredibly emotional stories from individuals with epilepsy who have also struggled with depression and who share the significant impact that it's had on their lives.

Treatment decisions for epilepsy are inherently complex and tailored to each patient's unique needs. The primary objective is to maximize efficacy while ensuring tolerability. Most patients begin with foundational antiseizure medications, typically a generic sodium channel agent or an SV2A modulator. While some individuals achieve good seizure control with these options, many require additional therapies or adjustments to manage side effects, including those affecting mood. These ongoing adjustments often result in switching medications or adding new ones to the regimen. Comorbid conditions, including depression and anxiety influence prescribing decisions as some ASMs can worsen existing comorbidities.

Despite the availability of more than 20 antiseizure medications, there are only a handful of distinct mechanisms. The lack of new therapeutic mechanisms limits opportunities to improve seizure control by combining distinct approaches. Achieving sustained seizure control becomes increasingly challenging as patients progress through multiple lines of therapy. Ultimately, about half of people with focal epilepsy remain on control, highlighting the urgent need for innovative treatment options with diverse mechanism of action.

Now the landscape of prescribers of branded ASM encompass epileptologists, general neurologists and advanced practice providers or APPs. In the United States, approximately 80% of epileptologists prescribed branded ASMs. These are significantly more general neurologists and about 1/3 prescribe these ASMs. APPs also contribute meaningfully to ASM prescriptions, while branded use among APPs is currently more limited, it is steadily increasing, particularly in offices where they work alongside hyperscreening neurologists and epileptologist.

A key insight as we prepare for commercialization is the substantial opportunity for prescription growth among the general neurologists and the APPs, a perspective consistently reinforced by our expert KOL advisers. Our commercial team's prior experience launching epilepsy brands further supports the importance of targeting this diverse mix of prescribers to drive a successful launch. Our market research has further validated the potential for AZK to appeal to both epileptologists and general neurologists.

On this slide, you will see qualitative market research among these 2 clinician groups where they were presented with a targeted product profile for AZK label product X here, alongside the newest branded ASM. When asked to consider the potential attributes of product X relative to other ASM, both epileptologists and general neurologists perceive product X to be highly favorable. Interestingly, favorability for product X was driven by different components of the target product profile for each group. Epileptologists most often called out the novel mechanism of action, which will enable flexibility and the ability to administer rational polytherapy. They also appreciated dose level flexibility to balance safety and efficacy and they view the efficacy data to be on par with the comparator, ASM.

The neurologists favorable opinion of product X was driven by its ease of use with no titration and limited drug-drug interaction. They also view the safety profile is manageable and called out the fast onset of action. And you'll see in one of the quotes, one of the neurologists noted that the profile support is being used as a second or third line agent, which is aligned with the earlier use supported through our recent open-label extension data. This qualitative research study aligns well with other market research we've conducted which found that general neurologists often hesitate to prescribe some branded ASMs due to the complexity.

However, AZK's differentiated profile may enable them to retain more epilepsy patients in their practice rather than referring them out the care as the care becomes much more complex. Ultimately, our advisers believe AZK could become the preferred branded ASM for general neurologists, supporting broader adoption and improved patient outcomes. It is this differentiated clinical profile that we believe may position AZK for a very successful launch. As we look at attributes that contributed to the most successful ASM brands, they include some mix of strong efficacy and manageable safety and tolerability, novel MOAs, broad spectrum effects, mood neutrality or positivity and ease of administration. In our case, AZK may demonstrate many, if not all, of these attributes.

The other common denominators and successful ASM launches include early commercial investment and experienced launch and life cycle management team, which is guiding our current commercial readiness efforts. Our team is deeply focused on understanding the epilepsy market, the prescribing environment and the factors that influence access to new therapies. We're investing in research and analysis to build on our knowledge from previous product launches and to identify innovative strategies that address the needs of both prescribers and patients at launch and beyond.

For example, we have mapped the patient journey in detail to pinpoint key pressure points and opportunities for early intervention, including positioning AZK as a complementary add-on therapy. We have also conducted extensive research into the challenges associated with titration and are exploring how AZK's lack of titration requirements can be leveraged as a meaningful advantage. As we continue this work, it is clear that AZK's potential ease-of-use attributes will be essential for expanding adoption beyond epileptologists to general neurologists.

Additionally, our market access research is guiding us to innovate and streamline the process of making AZK available, ensuring that payers recognize its strong value proposition. Looking ahead, we plan to harness the power of emerging technologies, including artificial intelligence to support a successful launch. These advanced tools unavailable during previous epilepsy launches will enable us to focus our engagement and communication efforts with unprecedented precision and efficiency.

One area I'd like to further highlight is our commitment to driving innovation in our channel and patient services to support both adoption and long-term retention of AZK. Our approach centers on creating straightforward positive experiences for health care providers, ensuring broad and efficient payer access and streamlining the patient journey from initial prescription through ongoing therapy. By maximizing the success rate at the first fill and building robust resources for compliance and support, we aim to make it easy as possible for patients to start and remain on AZK and continue benefiting from treatment. The latest OLE data showing sustained improvement with extended therapy further reinforce the importance of investing in services and infrastructure that help patients stay on AZK over the long term.

The final cornerstone of our early investment strategy is assembling an outstanding launch and life cycle management team. I'm delighted to share that we recently added a Senior Vice President of Sales and Marketing to our leadership team, with whom I personally have a successful history of collaboration from our time at GW, where he was the first commercial employee in the U.S. and played a pivotal role in building the team. Prior to joining Xenon, he led the epilepsy franchise at Jazz for 5 years following GW's acquisition. He also brings a deep expertise from the successful launches of Keppra, Vimpat and most recently, Epidiolex. The enthusiasm among physicians at AES regarding his addition to our team was truly energizing.

In addition, our customer engagement lead has spent the last 18 months, strengthening relationships with centers of excellence and leading epilepsy key opinion leaders. Our market access team is also expanding and will begin proactive outreach to payers in 2026, to educate on AZK's unique value proposition, well ahead of launch. I also want to recognize the growing leadership within our Medical Affairs Group, with whom we are working closely on all launch planning.

Earlier this year, we also added a Senior Vice President of Medical Affairs to our team, who reports to Chris and previously led the North American medical affairs organization at Biogen. Under his leadership, we are also expanding our team of medical science liaisons in 2026, and these MSLs are engaging daily with epilepsy clinicians across the country. These investments and team expansions are foundational in our ambition for a strong commercial launch of AZK and long tenure as a highly impactful epilepsy brand.

In summary, our vision is to establish Xenon as the next leader in epilepsy. With a robust package of clinical data, including the upcoming X-TOLE2 Phase III results, the unique potential attributes of AZK and our early investments in customer engagement and market readiness, we are extremely well positioned to transform the care and access paradigm for health care providers, patients and payers. We are highly optimistic about our ability to achieve this goal and drive meaningful change in the epilepsy community.

Ian, I'll pass it back to you.

Great. Thanks, Darren. Thanks to both you and Chris for providing your perspectives on both the data as well as AES. So I'm going to just summarize on what we heard on today's call. So our AES data reinforce the key differentiating attributes and potential of AZK and an opportunity to be a disruptor in the landscape. We believe our commercial opportunity is significant with potential for rapid adoption by epileptologists as well as general neurologists and APPs. And we are investing early into the insights, the innovation, infrastructure and integration of transformative leaders into our organization to support a highly successful launch.

It is certainly an exciting time for Xenon and for the broader epilepsy community as we prepare to announce top line Phase III data from our X-TOLE2 study in early 2026. We are optimistic for a positive outcome, and we believe that X-TOLE2, together with the strong results from X-TOLE and our open-label extension will serve as the basis for a new drug application in the U.S. for AZK in focal onset seizures, and we look forward to keeping you updated on our progress as we move into 2026.

So with that, we're now going to open the call up for questions.

So as discussed at the beginning of the call, please submit your questions via the chat function. This is found below the slide window. We've had a huge number of questions that have come in already. So thanks for that and continue to do it. We're going to do our best to get through as many of them as we can, but we'll keep to the time at the top of the hour. So it looks like there's -- I'm going to kind of group these questions by theme. A number of questions have come in, both on the clinical side as well as commercial. So maybe we'll start clinical more at a high level with some of the questions, and then we'll dig a little bit deeper.

So Chris, let's start with you. We've had questions of just really some of our analysts and investors had the opportunity to see us at AES, but not everybody. So maybe it's a good opportunity for you to provide your perspective of really what was the feel on the ground and maybe what your biggest takeaways were from the meeting?

Yes, sure. Happy to do so, Ian. Yes, AES this year was a really big year. I would actually characterize it as sort of a transformational year for us in the sense that for a couple of reasons. I mean, number one, it was really had a strong sense that others were seeking us out and also now presenting the data in a manner that is more kind of focused on what are -- how our prescriber would think assuming the drug is approved. So to be more specific, we had our biggest presence yet. We had more than 50 employees across medical, corporate, commercial, and keeping track of our metrics, we interacted with about 1,500 unique different people across the board. So at our booth, scientific exhibit and other site events.

There were some people health care providers that we met for the first time, but a lot of people were quite aware of Xenon and quite aware of AZK and also asking a lot about the timing of Phase III data and all that and also the potential timing for an approval if we're fortunate enough to end up in that situation.

The biggest thing I think we all heard was the need for a novel mechanism. And there's a lot happening in research. A lot of it is really quite exciting. But as you look at some -- basically all of the other drugs, investigational agents, they're not really going after mechanistic diversity per se. And when you consider that something like half of the patients with epilepsy still live with uncontrolled seizures and these mechanisms are basically already on the market, that leaves avoid. So there's a lot of excitement about KV7 as a unique mechanism that has the potential to address neuronal excitability and be used in combination with the other foundational therapies alongside all the attributes that you've heard about over the past hour or so.

Great. Thanks, Chris. We had a very -- we had a detailed question just that I'm happy to address on the timing for X-TOLE2. So currently, our external guidance is the data for X-TOLE2 will be available in early 2026. And I know we've shared with a number of you, we will narrow that guidance, not quite yet, but we will narrow it shortly. The last patients in X-TOLE2 are just going through the double-blind period right now. And as you heard from us on our last quarterly call, we've kind of talked through the progression of a patient from baseline to the randomization visit to the double blind into open-label extension and how that impacts the time line. So yes, we're happy to narrow that guidance as we get closer to the X-TOLE2 data.

Chris, one of the decisions that we made a number of years ago was to extend the open-label extension from 1 year and then 3 to 5. We now have the 7-year open-label extension for azetukalner, which I think is providing us with a huge amount of information and data. So maybe from your perspective, as you've been at the company a number of years as a neurologist and spending time with the epilepsy community from the double blind into this huge amount of open label data, anything changed from your perspective in terms of the overall profile of the drug?

Well, I would say we're looking at a cutoff every year of the 7-year open-label extension. And for largely, at least in terms of the traditional way we've looked at the data, I would just say that it's remarkably consistent with previous data. We're optimistic that what we saw in the double-blind period, what's happening in the OLE is reflective of the double-blind period. I think that the seizure freedom analysis that we conducted meaningfully added to how we think about using AZK in the clinic. I really think that this idea looking at breakthrough seizures, which do occur at times, that can be taken as a signal that the medication isn't working or a regimen isn't working and perhaps it's time for a change.

What we're seeing in the data is that there is these long periods of seizure freedom that can be regained after a breakthrough seizure, which is really meaningful and supports maintaining patients on AZK. So I was commenting about it being a transformational year. That, I think, is one of the big changes. We want to start looking at the data in a manner that will be helpful for prescribers going on the assumption that AZK ends up being approved.

Great. We've had -- there's been questions maybe going a little deeper into the OLE data. So I'll start on some of the seizure freedom analysis, and then there are some more detailed questions just about retention rates and other things that we're seeing in open label. But maybe as it relates to the seizure freedom data, let's start there. So we presented 2 seizure freedom posters at the meeting. We had the 48-month OLE data cut. And then there was one on kind of a different seizure freedom analysis. Maybe could you just help walk us through the difference between the two? And why we did the second one, which was a new analysis for us?

Yes, absolutely. So I mean the 2 posters, they are separate posters because they're really looking at seizure freedom from 2 different perspectives. So the typical annual update that we do at AES. So we showed the 48-month OLE data cutoff with Dr. Jackie French presenting. And we looked at patients who had at any point in time, 12, 24, 36 or 48 months of seizure freedom. So that means we look to see if they had a period of seizure freedom basically at any point. And that's a traditional way of looking at it. That's how we've done it in the past.

Now the feedback that we've gotten is, Chris, you know as well as we do, that you don't ask somebody how they were doing in 2022. You ask them how they've been doing since the last visit or you asked how they've been doing. Have you been seizure free over the past year. So in the poster was seizure freedom that Dr. Danielle Becker presented, we looked at the patients who are in the study right now. There are 131 of them at a 48-month cutoff, and asked the question, what is seizure freedom look like now?

And in that study at that cutoff date in time, which was earlier just a few months ago, we saw that more than 1/4 had been seizure-free for at least 27 months, which is pretty remarkable. It was like 27.5%. And that's something that has really -- I mean, when you share that data with physicians, they really pay attention. So the seizure freedom analysis also looked at patients who had reached 48 months and then had attained at least 6 months of seizure freedom to see if they continue to be seizure-free or if they had a breakthrough seizure. And if they had a breakthrough seizures, then what happened.

And as it turns out, about half had a breakthrough seizure. However, 75% of the group that had the breakthrough was able to regain a long period of seizure freedom afterwards. As I mentioned, looking at seizure freedom at 6 months, is highly relevant for patients as it may free up the opportunity to be able to drive. So it's a much more clinically relevant way of looking at seizure freedom to help clinicians and patients make informed decisions if a breakthrough seizure occurs, which can happen. It might be unprovoked or it may be provoke because of sleep deprivation or missed doses or what have you. So those are the 2 posters, kind of a traditional approach and then a much more practical approach that hopefully will help out prescribers going on the assumption that AZK is approved.

And then do you want to talk about the retention, Ian?

Well, yes, why don't we go to -- there's kind of 2 more kind of more detailed questions on the open-label extension. One was just on the retention rates. So now that we have the population of 48 months, so maybe you can just kind of make a comment on retention. And then the second one is obviously not everyone staying in the open-label extension. So there's often this question around ascertainment bias. Are you really enriching for the patients that are doing well? And I know we've had that question from our advisers and clinicians, and we've done some work there and have our thoughts there.

Yes, sure. So yes, you're right, they're connected. So on retention rate, just from a qualitative perspective, if you look at the open-label extension data over the long term that's available for other ASMs and you superimpose our retention data. I would say that in general, it's fairly -- our AZK is fairly consistent with other ASMs around the 1-year mark. What we see though is that there's a bit more stickiness. There's a tendency for people to stay on the drug more than other open-label studies. Now there are bunch of caveats there, hard to compare one study to another, but that's the overall pattern.

Now to be more quantitative at a year, we're seeing about 2/3 of patients are still in the open label. And now we're 4 years out, and we're seeing not quite half that are still on the open label. So really quite pleased with the retention. I'm sure that ties into the themes we've been talking about, which is tolerability that was consistent between the OLE and the double blind and then also some of the dramatic decreases that we're seeing in median percent change seizure and also seizure freedom. So that's kind of the retention bit.

Yes, so ascertainment bias comes up, which is -- which makes sense, and just to be clear that we're all talking about the same thing. Basically, the idea is that the people who stay in the open label are staying in the open label because they're doing well and people who haven't done well drop out and therefore, your data has a bias, an ascertainment bias. So we've spent a lot of time on this. Jackie French and others have been bringing this up really for years at this point. So to get to the bottom of it, this is what we did.

We took a look at patients and looked at the seizure reduction, whether they were in the study for a relatively short period of time, say, less than 6 months versus 12 months, 18 months, 24 months. And then we essentially superimposed those lines over the graph that you see all the time with the OLE seizure frequency over time. And what we see is that they're nearly superimposable. Now there is a little bit of a tendency for more improvement in median percent change in seizure frequency for those who've been in the study longer. But it's pretty close. And so our interpretation of that is, sure, I think that to some degree, ascertainment bias explains why they're doing better over time. But it isn't the only thing that explains. It does look as though patients who stay in the study for a prolonged period of time are doing really well.

Great. Thanks, Chris. All right, Darren, why don't we move to you a number of questions that are more commercially focused. So as you mentioned in your prepared remarks, you've been at the company 6 months and now back at an epilepsy company and back at AES. And I know a number of the folks on your team also back at AES supporting Xenon. So maybe just overall at AES, but more specifically, you now have been on board to kind of evaluate what you think are the key differentiators and factors that are going to make AZK a commercial success?

Yes, thanks Ian. Yes, it was just so tremendous to be back at AES and so you see so many familiar faces. And one thing that was really striking to us is the team is the emergence of Xenon and particularly AZK as the next opportunity to treat these patients with focal seizures. And it was just really remarkable, the excitement that physicians have. And I think -- so we're thinking about kind of differentiation at launch. And I think we think about it in a couple of different ways. I think the first is how do we maximize this just exquisite unique profile of AZK.

And as you've heard today, we're starting to think about how we target different mix of clinicians. And if you think about historically the launch trajectory of a Vimpat and XCOPRI, I think you see a much broader uptake of Vimpat with the general neurology community. And I think that what we heard over the weekend with our many engagements was our profile more closely parallels the Vimpat. I mean just the ease of use was predominant over the weekend. And I think from a general neurology perspective, I think they've struggled with the use of XCOPRI in their community settings, just due to the complication of the titration and the risk of drug-drug interactions.

And that came up pretty resoundingly over the weekend. And it puts -- as you're titrating up you're also having to titrate down other medications. And with really no guideline to do that. Every patient is so individualized. And I think that inhibits a lot of community physicians from doing it. And it puts an enormous burden on them and not only them, but most importantly, their patients. So with our -- with AZK and the lack of titration and DDIs, we think that as the research showed that you saw today, we have a real opportunity to leverage the ease of use, the no DDIs and no titration. So that's the first part.

And the second, and then I also alluded to this is really, it's the patient prescriber. It's their experience. And it's so critically important that, that is maximized. And it's -- the prescriptions once it's get written, it's easily to access, they can refill their prescriptions and continue on the therapy. So as I said, we'll be looking at innovate ways to do that to ensure that -- because it takes a lot of work to get that prescription written. And so how do we maximize our access strategy. And we feel pretty good about how we're thinking about that for the future. Do you have a follow-up, Ian?

Sorry, Darren, I was on mute there for a second. Yes, we had the poster on titration. I know you've done with your team some ad board work on it as well. And we know that AZK doesn't need to be titrated. But there's been a question just on we're going to have multiple doses on label. Maybe how do you just think about having what would be on label and then how do you think that's going to be received and then really used in the real world.

Yes. We've spent a lot of time with our advisers this weekend talking about that. So if you look at -- the data from X-TOLE, the doses are 10, 20, 25 and X-TOLE2 will be 15 and 25. And so traditionally, epileptologists and general neurologists because they are -- the patients are on multiple medications, they like to take that kind of lower dose approach. And so I think as we kind of outlined and asked what they'd like to see that is will be a similar approach with AZK.

I think one differentiation though is because we'll potentially have 4 different doses available. We have the fast onset of action. And when we see what we see ultimately what the results are with the 15 and 25, I think that those different dosing options will be very advantageous for an epileptologist and general neurologist to start a dose and then as quickly as they see fit with their patients, be able to really hit the adequate dose to what we all want is to really control seizures and can we get to seizure freedom. So we see it as a benefit and our advisers tell us the same.

Thanks, Darren. So we're sitting here kind of at the end of 2025. We'll have our Phase III data early next year. And obviously, you're doing a huge amount to prepare for launch. So let's fast forward to kind of launch. Maybe you can just walk through what the market looks like at that time from a competitive point of view on the branded side and where you think we'll fit in?

Yes. So when we do launch AZK. It will be 7, 8 years between the last branded medication was approved. There are currently 2 branded on -- currently available. We have one BRIVIACT which will go off LOE next year. And so it will -- it will be just us and XCOPRI. And they'll have quite a bit more commercial experience than us at launch. But I think what we're starting to see in the emerging data, particularly with X-TOLE, which was the strongest placebo-adjusted efficacy in a double-blind period, as Chris pointed out earlier, and our continued OLE data demonstrating that even the LEX complex patient taking 1 or 2 ASMs at baseline had such great seizure reduction, 100%.

I think this really strongly when we are approved, when we launch, we'll really be in a good place. And I also -- I keep anchoring back to what just resonated over the weekend was the attributes. It's daily dosing, fast acting. And I think we can't underappreciate the lack of drug-drug interactions and the lack of titration as really, really being a benefit to prescribers and their patients. So I think along with our things that we continue to focus on around payer access, affordability, those different types of attributes, I think we'll be in really good shape for -- and I think lastly, too, and I'll say that the novel Kv7, the 7 to 8 years of a lack of a new branded medication, but now you have one with a really novel mechanism, will really be, I think -- there'll be a lot of excitement for AZK particularly as they try to incorporate it with the other kind of standard mechanisms that they currently use.

Yes. Thanks, Darren. We -- some of the questions have been also just to try to go a little deeper on the comorbid, both depression and anxiety. So maybe all -- we just have some questions on the protocol, I'm happy to answer those. And then maybe as we're -- sorry, we're getting close to the end here, we'll wrap up. But maybe you can -- I'll start and maybe then you can just provide your perspective because I know your team has been doing a lot on the burden of comorbid depression. And then again, where you think AZK would fit into the treatment paradigm as we just think about the profile of the molecule.

So in our Phase III program in X-TOLE2, so we didn't do this in Phase II, but in Phase III, we are looking -- we have exploratory endpoints, both on depression and anxiety. These are going to be patient-reported outcomes. But every patient, every visit, we will see how they're doing in terms of depression and anxiety, and we are collecting those data. We didn't do it in Phase II, but we will in Phase III.

These are exploratory endpoints. We're not enriching the population for comorbid depression. So there will be probably a subset of patients that may have maybe impaired at baseline, and we'll take a look at how they're doing over time. So we will collect some information and data from the clinical study which I think will be informative. But then, Darren, maybe you can just comment on the commercial side and what you're hearing because I know your team has done a lot on this side as well.

Yes, exactly. And I think every interaction that we have with physicians, the burden of depression anxiety is just overwhelming in this patient population. And we -- when they talk about all the attributes that we've outlined today, to a man and a woman, always also say that, boy, if any benefit to even mood neutral because you have some like levetiracetam that can have a negative impact on mood. But if you could be mood neutral or have a slight any type of improvement would just be tremendous for these patients. So yes, it's something we'll continue to work on. There's no doubt, as I think AES showcased with highlighting one of our publications that this is a significant unmet need in this patient population.

Great. Thanks, Darren. All right. So we've reached time on today's webinar. No surprise, we have a lot more questions than we had time to get to. So thank you for everyone who have submitted questions, and we're happy to connect with you after the call in the coming days and weeks. So feel free to reach out to us at any time. We do want to thank everyone for tuning in today and hearing our updates coming out of AES.

Obviously, the initial commercialization activities led by Darren and his team, and we're all ready and prepared for our top line X-TOLE2 data in early 2026. We look forward to connecting with many of you at JPMorgan in early January. And in the meantime, we wish everyone a very happy holiday season. So operator, we can now end the call. Thank you, everyone, for joining.

Good day, everyone, and thank you for standing by. My name is RJ, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q3 2025 Xenon Pharmaceuticals, Inc. Earnings Conference Call.

[Operator Instructions]

I would now like to turn the call over to [indiscernible] senior -- or Xenon Senior Vice President of Corporate Affairs. Please go ahead.

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 in current and anticipated indications addressable market regulatory success and commercial potential of our and our partners' product candidates; the efficacy of our clinical trial designs, our ability to successfully develop and achieve milestones in our clinical development programs, including the anticipated filing of INDs and NDA, 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 3 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 the 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 for 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-TOLE2 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 relates. 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 FOS 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 [indiscernible] 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 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 2 studies of azetukalner in epilepsy including our Phase III X-TOLE3 study in focal-onset seizures and our exact study in primary generalized tonic chronic 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 4 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 the azetukalner and 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 [indiscernible] 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 7 abstracts accepted for presentation, we're looking forward to showcasing a number of presentations, including the 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, repeating of onset along with a potentially differentiated tolerability profile.

Our clinical development teams have made great progress with X-NOVA2 and X-NOVA3, 2 of our 3 planned Phase III clinical trials evaluating azetukalner, in patients with major depressive disorder, which are underway and enrolling patients. In addition, EXCEED, the first of 2 planned Phase III clinical studies evaluating azetukalner in patients with BPD-1 and BPD-2 depression is also underway. Effective treatments for depression in bipolar disorder of 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 sections differentiated profile.

Beyond support and 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 BPD and Kv7. Evidence of Kv7 down regulation in BPD as well as clinical studies that explore the use of Kv7 potentiators in depression, including results from our own proof-of-concept study in MDD.

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, wrapped into onset of effect and differentiated safety profile are particularly attractive in PPD.

As a reminder, our EXCEED 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-1 or 2 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 modular score at week 6 in patients who received azetukalner as 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 and neuropsychiatric indication such as MDD and BPD, and I look forward to providing updates as we leverage azetukalner's pipeline and a 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 dependence 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 conditions 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 neuron to spinal cord neurons within the central nervous system.

Starting with Nav1.1, we believe it is the best genetically validated pain part with striking genetic data in patients with loss of function mutations who have no ability to feel pain. Gain of function mutations have also identified -- have been identified that drive pain disorders, further underscoring the critical role now Nav1.1 plays in pain signaling. Our lead Nav1.1 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 P 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 of down regulation of Kv7 activity has been observed in altered pain states. And lastly, a clinical compound previously approved for the treatment of pain, flupirine 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 [indiscernible]. Ian?

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 the 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, mbI-921355 and in healthy adult participants to support its development for the potential treatment of certain types of epilepsy. As our diverse pipeline of early-stage truck 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. We built and strengthen 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 [indiscernible] 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 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 look forward to continuing to collaborate with Tucker as on evolved 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, and 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 into 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 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 1 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 time lines, 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 EXCEED 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.

[Operator Instructions]

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

I appreciate it. I was wondering if you could just kind of set the stage for the top line data release. How much should we expect to be disclosed on efficacy and safety. And once you have those data in hand, if possible if positive, what would be rate limiting to filing.

Thanks, Paul. I can start, and then, Chris, please add your perspective as well. So your first question, just on top line data. Yes, there's always this balance as you can appreciate between a Phase III clinical trial, where we generate huge amounts of data and what we can actually just realistically get done in a reasonable period of time to get out of a top line press release and then what would come out of subsequent medical congresses. So if you look back at our X-TOLE data, I think that's a pretty good proxy for what you'll see in X-TOLE2. So obviously, the key efficacy endpoints as well as our overall comments on safety and tolerability. So I think in our previous top line press releases, we've tried to have a fair bit of information in there and good balance between both efficacy as well as safety and tolerability. And I don't think anything would be different for X-TOLE2.

In terms of prepping for the NDA, I can start and then Chris, please add your perspective. So it's really the efficacy results from X-TOLE2 that are on the critical path. As we all know, there's a huge amount of work that goes into filing a new drug application. A lot of that work is ongoing and continues to be -- we even have sections that are [indiscernible] and completed today, and we'll continue to do that over the coming months. And the rest of the package and dossier will come together over the course of 2026, including, obviously, the data from X-TOLE2. But Chris, do you want to provide any more granular comments?

Well, just as you can imagine, I mean, we don't wait to start writing the NDA until the top line next 2 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 summer summary of safety and integrated somewhere on efficacy. So that's it. And we're well on our way already, Paul.

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

And welcome to the team again, Tucker. Are you able to disclose where your screen failure rate ultimately landed for X-TOLE2. And generally, when screenouts 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. Again, I'm happy to start, and then Chris can add his perspective. So when we talk about -- I just want to be clear on some definitions upfront. So we will, at the appropriate time, give the screen and baseline failure rate. We have that as a combined number. So those are patients that may have dropped out during the screening period as well as the baseline period. prior to randomization. So again, we're -- with an ongoing study, we don't go into very specific details across a number of different parts of the study, including this. But I would say that it's kind of trended and tracked as we would have expected in the Phase III program. And [indiscernible] goes through probably some of the reasons that you lose patients due to either baseline seizure burden or BMI or compliance or diarrhea or a variety of things that people drop out during the screen and baseline period before randomization. So Chris, do you want to do that? And then I'm happy to address the second question, which is just 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 [ interstitial ] 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 fall behind that. But it's been consistent with what we would expect from Phase II test.

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 on for Brian. On the commercial side, you talked about overall clinical profile being important. Just wondering how much of that of the efficacy docs are willing to trade off for other positive benefits like tolerability, ease of use and some of the other benefits there? And what are some of the learnings from how [indiscernible] launched and has been performing commercially as of late?

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 Sonova. [indiscernible] is on the higher end of that range from an efficacy point of view, but we do know that Senova made 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.

Yes. Thanks, Ian. It's -- yes, I think it's the -- each focal onset seizure patient is a different one, and we'll respond to different types of therapies. I think with AZK and the attributes we provide that we've outlined on the call today, provide another option for patients. And if you think about physicians and particularly the general neurologists who treat the majority of these epilepsy patients, these attributes translate into a simpler, safer and really more reliable care decision. And on the patient side, AZK has a potential to really meaningfully reduce seizures burden without the trade-off of titration, as we've mentioned, or the cognitive or mood side effects that often limits some of these current therapies. So in my 5 months here at Xenon and having the ability, as Ian said, to interact with physicians, AZK, which will be the first -- the next branded drug in almost 8, 9 years since the launch of Xcopri, there's a lot of excitement around the attributes that AZK is going to bring to patients, their families and caregivers. 0

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.

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

I think he's back. So Charlie, we -- yes, we -- you cut out, so maybe you can start your question from the beginning.

Okay. Apologies for that. Yes. So it was on the EXCEED trial, can you hear me?

Yes.

Okay. So on the EXCEED trial, just thinking about the differences between the 2 types of the bipolar disorder, given the higher predominance of depression in type 2 as well as why you decided to go with the MADRS scale versus HAM-D like you did in the MDD trials.

Chris, do you want to address both of those, just the BP 1, 2 and then also using MADRS versus HAMD-17.

Sorry, the first one was -- what was the question about BP-2, I apologize.

It was just a question around -- I think, Charlie, it was just around the differences between bipolar I and bipolar II and including both of those patients, I think, patient populations in the Xcede trial.

Yes. I mean, so the bipolar.

Difference in depressive dominance in bipolar 2?

The difference in depressive symptoms between BPD-1 and 2?

Yes.

Yes. I mean, the largest difference that we're going to see is just the propensity towards a true manic state versus hypomanic state. And because of the potential for differential treatment response, we don't know that for sure. We've decided to stratify BPD-1 and BPD 2. So to the extent that there could be a different response and depressive symptoms, I guess we'll have to kind of see what the study shows. The decision on MADRS was largely driven just by the -- Ian, was that about depression? That was the MTD or the DPD?

Just changing the -- we have the HAMD-17 endpoint in MDD, Chris, and moving to the MADRS endpoint in bipolar depression.

Yes. I mean this is largely driven by the fact -- so let me just kind of explain what happened in MDD just to accept the stage. So what happened in MDD was there was an ezogabine proof-of-concept study that showed improvements in depressive symptoms they could use MADRS. And that was the precursor to our X-NOVA study. And so we did the same. We use MADRS as the primary end point. Fortunately, we also looked at the data, the depressive symptoms with the HAM-D score. And ultimately, when we looked at that study, even though there was essentially a 3-point improvement in both scales there was much less variability within the HAM-D, and so it was significant. And so FDA guidance allows you to use either and so we decided to switch from MADRS to HAM-D with FDA support. So bipolar -- the reason why I say all that is because bipolar is a different situation where basically there is largely a precedent of focusing on MADRS for the primary endpoint, and this is the first study that we've done. And so we don't have that would suggest 1 or the other. And so we leaned heavily upon the precedents for how things have been done in most bipolar studies up till now. So that's the main margin.

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

Congrats on the quarter. This is -- this is Dina on for Jason. Congrats on the quarter, and thank you so much for taking our questions. First one is just more of a clarification question on X-TOLE2 enrollment. Just wondering what the reason was for enrolling 380 patients instead of at initially planned 360 and do the additional 20 patients randomized that impact your powering assumptions at all?

And then just wanted to touch upon the earlier stage pipeline. Can you provide just any color on data disclosures from the Phase I XEN1120 and XEN1701 [indiscernible] studies to what like an initial update might look like and when we can expect it and if you could also maybe frame what you kind of define as success from 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.

Yes. Sounds good. Yes. So thanks for the question. You have to keep in mind that when you're shutting down a study, you have several factors that are occurring. Sometimes there's an increase in recruitment, sometimes it stays the same. Sometimes, it can even like unusually go down a bit. And then you have a screen failure rate, which you have been seeing for a while, which may remain the same or may go up or may go down. And so there are a certain amount of variables. And so when you decide when to kind of shut down screen, it's an imperfect science. And so when we chose the date on the back end to stop screening, there was a significant bolus of patients on the back end that brought us from 360 to 380 largely driven by the interest in is azetukalner differentiated profile, which we've already gone through.

So you could have ended up being 360, it ended up being 380 because of that increase at the end. And then as far as the power goes and just as a reminder for everybody, the powering for 25 milligrams versus placebo in the Phase III study in X-TOLE2 is quite high, like 99%. And so the study is also powered over 90% for the 15-milligram group versus placebo. And so if you go up in the number of patients, you get an even higher bump in power, I wouldn't really say that I think there's an appreciable impact on power going from 360 to 380, but whatever it is, it's certainly a little bit higher than it would have been at 360. So we're feeling confident as confident as we can, particularly because of the translatability of Phase II data in [indiscernible] Phase III, at least historically.

And then Diana, your second question, just on data disclosure. Yes, just as a reminder, we have the programs in Phase I now, XEN1701. This is the selective Nav1.1 inhibitor, XEN1120, which is our Kv7 modulator that we're also developing, both of them for pain. So they're both in traditional Phase I studies. So these are healthy volunteer what you would expect dose escalating through single ascending dose and MAD cohorts. So those are ongoing. We believe those will wrap up probably in the first part of next year at some point, and then we would be in a position depending on the data to support moving into a Phase II proof-of-concept studies for both molecules.

So in terms of the Phase I data, what we're looking for and what success would look like is that we'll get through the dose escalation, and we can -- based on our preclinical modeling for 1120 and also based on the genetics for 1701 or Nav1.7 is that we want to make sure that we have high enough exposure that we believe we're going to see an analgesic effect in a human proof-of-concept study. So that's based on our preclinical modeling or we're trying to with Nav1.7 really mimic the human genetics, so we can look at things like a modeling of receptor occupancy. Obviously, we want to look at overall safety and tolerability. And so it will be that profile in totality in Phase I that would give us confidence to move into Phase II. We haven't yet decided how that information will be disclosed publicly. But I think needless to say, I think once we have that information in hand, and we're ready to move to Phase II, we'd be happy to give information supporting our decision for future development.

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

This is Adi on for Cory. 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 IIIs are also planned for next year.

Thanks, Adi. I'm happy to take the first 1 and then pass it to Tucker for the second one. So yes, there's been -- I think overall, seeing more innovation in epilepsy is great. That's good for the epilepsy community, it's good for patients. I would actually -- Darren mentioned earlier on one of the questions that there hasn't been a branded launch in quite some time, I would argue there hasn't been a lot of innovation in quite some time. So to see more innovation into focal onset seizures, I think we're a bit of a drive for that and that's good for the epilepsy community. Specifically, always challenging to compare across trials with different programs.

I'll also say that -- the other programs that have really stated this year, we haven't seen any placebo-controlled data definitely kind of as we see in the X-TOLE toll program, either in the X-TOLE or what we're doing in X-TOLE2. So one, I think we set an incredibly high bar with the attributes of the azetukalner; and two, we have these other programs are significantly behind with no -- none of the other programs having run a double-blind, placebo-controlled study as of yet. And we're in this position that we're going to share at the American Epilepsy Society meeting next month where we now have patients have more than 5 years of dosing, we'll show our 48-week data on efficacy and open-label extension.

So we have a huge amount of information on azetukalner and the attributes and feel really comfortable with our position. And I think we set an incredibly high bar as others are coming behind us. [indiscernible] Tucker?

Yes. So on the commercial side, I think we've made some targeted investments already, which we think have been really important for Darren and his team to get prep for even 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 prep for '27.

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

This is Fatima on to Marc. For the first question, could you please remind us again whether you're planning to assess HAMA or MADRS in X-TOLE2 in patients who have comorbid depression. And do we have any idea that's obviously 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 [indiscernible] to 1.7 subunit versus other channels. We only disclose information about the occupancy versus off-target effect. Are you going to have any more information about the selectivity. That's it for us. Great. Thanks for the question.

Chris, do you want to -- I think it would be helpful maybe just to walk through the exploratory endpoints in X-TOLE2 as it relates to the psychiatric comorbidity maybe the endpoints and obviously that it's an exploratory endpoint. Why don't you start there? And then I can add any other comments and then I'll -- I can address the Nav1.7 selectivity question as well.

Okay. Sounds good, and thanks for the question. So in -- not only in X-TOLE2, but in all the Phase III epilepsy studies, we are following a patient-reported outcome both for depression and anxiety, for all patients and all visits in the study. And so yes, so it's being done in X-TOLE2, but actually, there's a really large body of data that we're gathering on this topic throughout the program. That's the first comment. The second is that the scale that we're using are patient-reported outcomes, specifically for depression, it's the beck depression index. And then for anxiety, it's the [indiscernible] 7.

You had asked a question about the percent. I mean so we haven't shared baseline characteristics and so these are sorts of things that you keep an eye on, but we haven't been sharing them. Just suffice it to say that not the entire population is expected to have depression and anxiety because we're not enriching for that, we're enriching for a certain degree of seizures. That said, there are such common comorbidities. We do think that there will be sufficient numbers that we'll be able to look at data and see if there's a readout. Ian?

Yes. Maybe I'll just add to those comments. These are exploratory endpoints. So obviously, not powered. And as Chris said, not sure exactly how impaired the population is going to be. And we're also not stratifying. So this is an epilepsy study. And so we may get some imbalances across the treatment arms in the psychiatric comorbidities as well. So I just want to provide the appropriate caveats there. On Nav1.7, I think you're right, we haven't provided all of our preclinical profile there. I think we can provide more over time. Some of that we do want to keep for competitive reasons. But needless to say, and I think you probably heard this in the pain webinar that we feel that these molecules are very selective from Nav1.7 over the other sodium channel isoforms. So we feel very comfortable with the profile that we're that -- we have moved for 1701 into clinical development, and we have a number of molecules that are coming behind it as well.

So these are highly selective for 1.7. As we said, we think also from a free fraction point of view and a distribution point of view that a profile of a molecule like 1701 has never been tested clinically before. So we're really excited that that's now in a Phase I study and hopefully next year moving into 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 [indiscernible] some 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 -- can you talk a little bit 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.

Chris, why don't I start on the Cenobamate question, and I can share maybe some of our thoughts on preclinical data there as well that may be relevant. And then you can add your perspective as well as answer the question on the interim analysis on MDD.

So Joe, yes, we expect that [indiscernible] usage, so we saw some cenobamate usage in X-TOLE in the Phase II study, but remember around that time, [indiscernible] was just going through kind of getting approvals and then being available commercially. So we do expect Cenobamate usage to be higher in the Phase III study than we saw in Phase II, and we're just going to have to kind of see what those data tell us when we unwind obviously, in our Phase II program, because patients are on 1, 2 or 3 background antiseizure medicines and there's lots of these drugs available, there's actually a huge number of permutations of different kind of combinations of background medications that it becomes quite difficult to tease all that apart. But I think that as we get deeper into the Phase III analysis, I think you've raised an interesting question that we've been thinking about as well.

I mean I can share with you some preclinical data that maybe gets to your question a little bit of a different way, which is we've looked at azetukalner in our preclinical epilepsy models in combination with all of the commonly used mechanisms and medications, including Senovamate. And whether we combine is that azetukalner with SenovaMade or levetiracetam or [indiscernible] lamotrigine, sodium valproate, [indiscernible] was looked at a whole bunch as looking at panel. And we don't see when you add the 2 drugs together, you get a benefit of efficacy and we don't see changes necessarily from the tolerability perspective. So I think we feel we've at least based on our Phase II data is that azetukalner on the novel mechanism and the profile, we think plays really well with others. And I'm not sure that's going to change in Phase III, but we'll know better when we unblind the data. Chris, I don't know if you have anything to add on the Synovate side and then maybe you can address the MDD question.

I would say you covered SONOVA really well. So we'll just have to see what the data shows. We're not expecting a difference, but we'll have to take a look and find out. On the depression -- on the MDD question, so why not have an interim analysis I sort of already, I think, laid the groundwork for the answer from a previous question. The bipolar program really is different than MDD in a few different ways. But in particular, we don't have a precursor study to base the data on. So with depression data, we had the ezogabine proof of concept, we had our own proof-of-concept X-NOVA study. And so we really went into the Phase III study with a pretty good idea of how we thought the drug would behave in a larger study. We don't have that data in BPD. And so we've made some assumptions based upon what happened in MDD and what's happened with other drugs that have been tried in both indications.

But ultimately, there's a little bit more ambiguity in the BPD program than there is in the MDD. And we decided to compensate for that by conducting an interim analysis to allow for the study to be increased in size should we need it. And so yes, we don't see any need to do an interim analysis on the MDD 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 basis that you'd like to see associated with those scenarios? And then maybe just one [ X-TOLE3 ] early through timing in a very unlikely worst-case scenario that it doesn't succeed much further behind is probably at this point in time? Do you need to able to file for an NDA in '26?

I think we got them all. Chris, I can do the X-TOLE3 question, if you want to do the bipolar depression interim analysis and options there. So yes, we -- as we've spoken about previously, we have prioritized X-TOLE2, both in terms of that. It was the first Phase III study that we initiated we did bias more of the toll clinical site [indiscernible] X-TOLE2 and biased more of our U.S. clinical sites in X-TOLE2. So there is some delay between X-TOLE2 and X-TOLE3. I mean I think I share what you said in your question, which is I think it's unlikely given the confidence we have going into X-TOLE2 that we're going to need it. But yes, if for whatever reason, then we would do everything to accelerate the time line as best we could to get to X-TOLE3 data. Chris, do you want to address the bipolar depression in terms of scenarios?

Sure. So I mean, first of all, how did we come up with a study with 400 patients. That's largely based upon the data that we do have in MDD. So more specifically, [indiscernible] powering at greater than 80% to detect a 2-point difference in the MADRS for 20 milligrams versus placebo using information that we got on data variability, specifically the standard deviation from X-NOVA. The scenario -- the way the interim analysis is going to be done is very binary. You do -- you firewall off the data and take a look at the powering of that study and if you need more power to have a favorable outcome, then the number of patients has increased from 400 up to 470. So there are so many different possible ways there's a lot of different ways it could go, but ultimately, it's broken down to a binary question, which is, do you need more power for a successful study? And if so, then there's an increase from 400 to a number north of that between 400 and 470. I hope that's helpful.

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 do 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.

Good morning, everyone. My name is Ian Mortimer, I'm the President and CEO of Xenon Pharmaceuticals, and I will be moderating today's session.

Thank you for joining us on this investor webinar focused on our Kv7 and Nav1.7 programs in the development for the treatment of pain.

Before diving into the speaker introductions and agenda for today, please note the standard notice that we will make a number of statements that are forward-looking. I encourage you to review our SEC filings for a more fulsome discussion of risks facing our business, and readers are cautioned not to place undue reliance on such forward-looking statements.

With that, I'm pleased to introduce my colleagues who are speaking on today's call. Dr. Jim Empfield, Xenon's Executive Vice President, Drug Discovery; Dr. JP Gilbert, Xenon's Senior Director of Biology; and Dr. Chris Kenney, Xenon's Chief Medical Officer.

To kick us off, I'll provide a brief corporate overview, including our current pipeline. Jim will then provide some of Xenon's history and outline the work we've done over the years to position Xenon as a leader in ion channel drug development and how that translates specifically to our work in pain. Having spent almost a decade at Xenon, Jim has been integral to the extensive buildout of our discovery function and has an impressive pedigree previously serving as Vice President, Drug Discovery and Chemistry and co-site Head of Research at Vertex in Boston. And prior to that, leading CNS chemistry and various other positions at AstraZeneca.

Jim will then hand the call over to JP Gilbert, who is going to take us through a brief overview of the pain signaling pathway and the important role that ion channels play, followed by a more detailed discussion of our kv7 and Nav1.7 programs, respectively. JP is one of our senior scientists at Xenon and is actively involved in the discovery and advancement of our promising preclinical drug candidates and early clinical development pain programs, and his extensive knowledge around our programs will be much appreciated throughout this webinar.

I've also asked Chris Kenney to join the call to give us a backdrop of the significant unmet need in the treatment landscape for pain, and as our lead molecules are now in first-in-human studies and in the clinic to provide a summary of our clinical development plans for these programs.

For those of you on the webinar who are new to the Xenon story, we're a neuroscience-focused biopharmaceutical company and a leader in small molecule ion channel drug discovery and development. Our lead molecule is azetukalner is a highly potent Kv7 channel opener in Phase III development in epilepsy and depression and represents the most advanced clinically validated potassium channel modulator in late-stage clinical development across multiple indications and the only Kv7 program with over 700 patient years of efficacy and safety data.

Given the stage of a development of a azetukalner, obviously, much of the focus of the Xenon story is on our late-stage clinical development. However, we are also advancing a robust early-stage pipeline of therapeutic candidates targeting both potassium and sodium channels across various indications, and we're incredibly excited to share this work with you today.

This chart illustrates both the breadth and depth of our pipeline. Looking at our late-stage programs, we are currently developing a azetukalner in 4 distinct indications. These include: focal onset seizures, primary generalized tonic-clonic seizures, major depressive disorder, and most recently, we initiated a Phase III clinical trial in bipolar depression.

Today, we're going to focus on our earlier work in the highlighted section as we talk through our plans for developing our potassium channel Kv7 openers and our sodium channel Nav1.7 inhibitors for pain, both of which have the potential to offer a non-opioid approach for the treatment of pain.

We also continue to generate exciting preclinical data supporting our Nav1.1 program in Dravet syndrome, and we expect to dedicate a stand-alone webinar to walk you through this program's advancements and the progress once it draws closer to clinical development. And we'll also have additional updates at the American Epilepsy Society meeting in December.

Finally, we're extremely proud of our collaboration with Neurocrine that came to fruition as a result of our extensive work and leadership in developing Nav1.6 and dual Nav1.6 and 1.2 inhibitors for the treatment of epilepsy. So I'm now going to hand the call over to Jim, who can speak to our evolution and maturation as a company, leading us to our position today where we have built this impressive proprietary pipeline potentially offering a brighter future for people living with neurological and psychiatric disorders.

I'm incredibly proud of our drug discovery team, who have built world-leading capabilities in drugging ion channels where we have made breakthroughs in novel chemistries and approaches to this challenging target class. We now have a maturing portfolio of early-stage molecules. We have initiated 2 Phase I clinical trials this year and we expect a number of additional molecules to transition into human clinical development over the next few years.

So Jim, I'll hand it over to you.

Thanks, Ian. Xenon has a strong commitment to ion channel R&D and has become a global leader at drugging ion in the central and peripheral nervous system. This expertise is underpinned by our heritage in human genetics, a deep understanding of ion channel biology and our expertise at ion channel drug design that enable our team to invent highly potent, selective and orally active small molecule ion channel modulators, both inhibitors and potentiators.

Many of you are familiar with the upper right-hand side of this time line, which focuses on azetukalner in its late-stage development. Briefly, with our vast experience in ion channel science, we identified a promising asset with attributes that would support clinical success, which has subsequently become our lead clinical candidate azetukalner. It is the most advanced potassium channel modulator in development now in multiple Phase III studies, as Ian had noted and is advancing towards our goal of commercialization.

In parallel with all the azetukalner counter activities, there has been a significant ion channel discovery and early development work at Xenon, which is what we'll focus on today. Our roots in ion channel drug discovery originated by way of genetics. We were founded in 1996 with a platform science capable of discovering new genetic targets to treat human disease. Soon after, we became inspired by the opportunity to translate our genetic insights into life-changing medicine and prompting us to establish our own discovery and clinical capabilities.

Our genetics platform attracted premier biopharmaceutical companies, and we entered into multiple discovery and development collaborations with Genentech, Merck, Teva and others. Several of these collaborations focused on the sodium channel Nav1.7, which launched our decades-long commitment to ion channel drug discovery, particularly those expressed in the central and peripheral nervous system. A particular note is our work with Genentech, some of which will be referenced in today's webinar.

Nav1.7 was one of Xenon's most significant genetic discoveries. Over 20 years ago, we identified loss of function in Nav1.7 as the ideology behind congenital indifference to pain, or CIP, an extremely rare autosomal recessive disorder whose carriers are unable to feel pain, but are otherwise completely healthy. Importantly, these individuals with CIP had no abnormal neuropathy, retain the sensations of touch and vibration and can distinguish hot from cold.

Jeffrey Woods in his group at Cambridge independently and simultaneously discovered the same link and published it in 2006. With these discoveries, Nav1.7 emerged as an exciting target to treat pain.

With the expertise gained through our target discovery work and collaborations, we made a strategic decision to become a fully integrated biotechnology company. After becoming a U.S. publicly traded company in 2014, we focused on building a proprietary pipeline which increasingly leveraged our expertise in sodium and potassium channels. We then sharpened our focus on areas of neuroscience, where we could make a significant impact, including epilepsy and pain.

In the mid-2010s, we initiated a Nav1.6 program for the treatment of epilepsy that ultimately resulted in clinical candidates and a subsequent collaboration agreement with Neurocrine Biosciences, which focus on highly selective voltage-gated sodium channels, Nav1.6 and 1.2 inhibitor. This program continues today with a promising selective dual inhibitor which is currently in Phase I clinical trials. Over the past number of years, we continue to build out our investment in ion channel drug discovery to include independent programs targeting Nav1.7 inhibition, Kv7 potentiation and Nav1.1 potentiation with small molecules.

Today, we are going to provide a more detail on our planned pain programs, specifically our highly selective and potent Kv7 and Nav1.7 small molecules, which are currently progressing in Phase I clinical trials.

Before discussing our specific Kv7 and Nav1.7 programs, I would like to briefly describe our in-house drug discovery capabilities. We have built an organization with all the functional capabilities to conduct leading CNS research and drug discovery, from target identification, ion channel assay development, electrophysiology, in vivo biology, computational medicinal and synthetic chemistry, DMPK to toxicology and CMC. As we build out these capabilities, momentum has grown attracting scientists and experts who are excited to be part of a leading ion channel company here at Xenon.

Importantly, we have expertise in the following areas: genetics, advanced bioinformatics and data analysis, development of cellular ion channel flex assays, investigation of and understanding the biophysics of ion channels, development and utilization of cutting-edge electrophysiology assays, such as measurement of brain slice action potentials, recording currents from exciditorian inhibitory neurons as well as high-throughput electrophysiology assays. Design, validation and utilization of variety of disease-relevant and genetic in vivo models, development of machine learning computation models, design and synthesis of highly potent and selective ion channel inhibitors and potentiators with CNS potential, as well as the development and utilization of generative artificial intelligence to aid in the design of novel small molecules, which we believe will accelerate the next generation of ion channel drugs.

These capabilities have enabled us to be successful in delivering ion channel modulators for clinical development. I'm incredibly excited and proud of the work we are doing at Xenon, and I'm pleased to invite JP Gilbert to present the scientific portion of today's talk, with a brief overview of the role of Nav1.7 and Kv7 within the pain signaling pathway, followed by a presentation of our ion channel pain programs.

JP, over to you.

Thanks, Jim. Yes, I'd like to start by giving a brief overview of the pain signaling pathways. This will queue up some of our discussion around Kv7 and Nav1.7 pain programs.

Pain signals can initiate in tissues, for example, in the skin, that stimulate nerve endings of dorsal root ganglion neurons or DRGs. These are pain-sensing neurons also called nociceptors. In chronic neuropathic pain, pain signals can result from damage or dysfunction of the nerves themselves in conditions like diabetes or from infections or autoimmune disease. These signals travel along the long axons of the DRGs to reach the spinal cord where they synapse on despinal neurons in the dorsal horn of the spinal column.

The DRG terminals release neurotransmitters, which stimulate these spinal neurons and pass the pain signal up into the brain, where the thalamus and cortical regions can then process these pain signals ultimately leading to the perception of pain.

Looking at a simplified version of this pain circuit, we can visualize how analgesics exact along different points of the pathway and interrupt the pain signal on its way to the brain. As I'll discuss in subsequent slides, we're really excited about the potential for Kv7 potentiators and Nav1.7 inhibitors as these channels play important roles at multiple points in the pain signaling pathway.

Transduction is the initial step in the pain process. We're a damaging stimulus for example, on mechanical, chemical or thermal insult or via nerve damage activates the nerve endings of nociceptors via specialized pain receptors localized there. It is here that some known analgesics like local anesthetics or NSAIDs work. It's also here that we believe Kv7 potentiators and Nav1.7 inhibitors could have a significant impact on transduction or the earliest part of the pain signal.

If we zoom into a peripheral sensory neuron terminal where transduction occurs, we can see this in a bit more detail. If a pain stimulus is strong enough, the pain neuron will fire an action potential, which serves as the basic unit of a pain signal. Kv7 channels help regulate the excitability of the pain neuron, while sodium channels like Nav1.7 are important for the initiation of action potentials. Therefore, Kv7 and Nav1.7 modulators could affect the first step in the pain process for nociceptors convert pain stimuli into electrical pain signals.

Transmission is the next step in the process, where pain signals carried from the site of injury along the nerve fibers and into the central nervous system. Agents that affect the neurons ability to fire action potentials can block transmission of these pain signals. Some examples include other sodium channel inhibitors and local anesthetics. Kv7 potentiators and Nav1.7 inhibitors could both have a significant impact on pain transmission because these ion channels are critical for neuronal excitability.

As we see here, in action potential is a rapid transient change in neurons membrane voltage that involves the secret events triggered by voltage-gated ion channels, primarily sodium potassium channels to generate signals in these neurons. At rest, a neuron maintains a negative membrane voltage. However, when a stimulus is strong enough to depolarize the membrane to more positive voltages, a threshold is reached and an action potential can be elicited. Kv7 channels are critical for maintaining the resting membrane voltage and the intrinsic excitability of these neurons. A more negative membrane voltage is less excitable whereas more positive membrane voltage is more excitable.

With enough of an increase in the neurons membrane voltage, sodium threshold channels like Nav1.7, open and initiate an action potential. This is shown at the takeoff voltage in this figure. Other sodium channels, like Nav1.6 and Nav1.8, work in series with Nav1.7 to influx more positive sodium ions and produce the rapid upstroke of the membrane voltage. The sodium channel has been rapidly inactivate and close and additional potassium channels help repolarize the membrane to allow further action potentials to be generated.

A Kv7 potentiator decreases neuronal excitability by holding potassium channels open longer, thus decreasing the membrane voltage. This, in turn, increases the amount of depolarization necessary to trigger an action potential, silencing hyperexcitable neurons involved in pain.

A Nav1.7 inhibitor can make it harder for a neuron to reach its firing threshold and to generate an action potential to propagate the pain signal. Both mechanisms could therefore have a significant impact on the intrinsic excitability of nociceptive neurons and their ability to fire action potentials to send pain signals along the pain pathway.

Continuing along the paint circuit, the nociceptive neurons will synapse on to spinal cord dorsal horn neurons where the pain signals relay from the periphery into the central nervous system. Gabapentinoids and other analgesics can modulate the pain signal here, but so too, could Kv7 and Nav1.7 modulators.

Looking closer at the synaptic connection, we can see that Kv7 and Nav1.7 channels play a significant role in the excitability of and the neurotransmitter release from the sensory neuron onto the postsynaptic spinal cord neuron. Kv7 channels also play an important role in the acceptability of the spinal cord neurons and their ability to propagate the pain signal into the brain.

It's important to note that the nociceptive sensory neuron, as shown here in blue, has processes that extend into peripheral tissue as well as behind the blood-brain barrier, such that channels are expressed in both peripheral and central compartments. We believe this is important in terms of drug sites of action and I'll discuss this further in future slides.

In summary, analgesics can act along multiple different points of the pain pathway, and we believe that Nav1.7 and Kv7 are compelling pain targets because they play significant roles in 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 in the central nervous system.

I'd now like to transition to a more detailed discussion of our Kv7 and Nav1.7 pain programs, respectively. There are multiple lines of evidence that support targeting Kv7 for pain. First, as noted, Kv7 channels are expressed throughout the pain pathway and can suppress repetitive action potential firing. Second, dysfunction or downregulation of Kv7 activity has been shown in altered pain states. And lastly, a clinical compound previously approved for the treated pain has a mechanism of action that involves potassium channel opening. Therefore, we believe that activation of Kv7 channels offers a potential non-opioid approach to treat a range of pain conditions and supports Kv7 as a compelling pain target to modulate neuronal hyperexcitability.

To my first point, Kv7 proteins widely expressed in DRG neurons. Here, we're showing some internal Xenon data collected from rat DRG tissue. These images are cross sections of dorsal root ganglia where we can image the cell bodies of sensory neurons. In green, we have immunostained for the Kv7.2 subtype, while Kv7.3 is depicted in Magenta. DAPI depicts the cell nuclei in blue. In the graph to the right, we've quantified the number of Kv7.2 and Kv7.3-positive cells as well as their distribution across the range of cell-body diameters.

Typically, the CNA delta fibers, which are the pain sensory neurons have smaller cell diameters of less than 40 microns. It is in these cells that we see the greatest number of Kv7.2 and 7.3 expressing cells, suggesting that the Kv7 channel can play a significant role in the excitability of nociceptive neurons.

Moving beyond expression, Kv7 channels have previously been shown to modulate the excitability of nociceptive neurons. In the upper right-hand corner of this slide, we can see multiple points in which Kv7 channels can modulate signaling along the pain pathway. First, Kv7 channels play an important role in controlling neuronal membrane voltage. As denoted by the red star, we can see that a Kv7 opener serves to make the membrane potential more negative or less excitable, while Kv7 blocker would make the membrane voltage more positive or more excitable. This affects the intrinsic neuronal excitability, or the ability of these neurons to fire an action potential along the length of the pathway.

Looking at actual potential firing in the DRG is shown with the yellow star on the pathway and in the bottom center panel, or in the spinal cord as shown with the orange star in the bottom right panel, we can see that a Kv7 opener has the potential to block action potential firing in both DRG and in spinal cord neurons, thus greatly inhibiting or preventing the pain signal from reaching the brain. This data suggests that Kv7 channel openers could have a significant impact on signaling across the pain pathway.

To test the preclinical efficacy of our Kv7 channel openers, we leveraged a mouse formal in acute pain model. Briefly, this is a mouse model in which the irritant formalin is injected into the rodent's [ sign paw ] to create a localized biphasic pain response that can be used to evaluate effectiveness of analgesics.

It's characterized by an initial acute phase that occurs in the first 5 minutes after formal an injection. That's shown here is Phase I and is the result of direct activation of the nociceptive neurons. This is followed by a longer-lasting inflammatory phase or Phase II. We selected this model because it's a relatively high bar since most analgesics only work in Phase II, where as typically only opioids show efficacy in the acute Phase I.

In the 2 bar graphs, we've quantified the fraction of animals and pain as measured by a licking or flinching response across a range of agents. We can see that diclofenac, a nonsteroidal anti-inflammatory drug shown here in light gray, does not reduce the Phase I pain response, but does reduce the Phase II pain response. The opioid buprenorphine, as shown in orange, significantly reduces both the Phase I and the Phase II pain responses.

In green, flupirtine, which as noted previously, is a clinical compound previously approved for the treatment of pain that has a mechanism of action that involves potassium channel opening reduces the Phase I response, as does Xenon's lead Kv7 pain compound, XEN1120 and another exemplary Xenon Kv7 potentiator compound XPCA.

We ship to the right panel, when we plot the free plasma exposures that demonstrate efficacy in the formalin model against Kv7 in vitro potency, we can see a strong correlation that suggests efficacy is driven as a result of Kv7 modulation. We believe this efficacy data is very exciting because it reveals the exemplary Xenon Kv7 channel openers can demonstrate efficacy in both phases of the assay but most importantly, in the Phase I portion of the formalin model, a high bar for most non-opioid drugs are ineffective.

In summary, we believe Kv7 is a compelling pain target to modulate neuronal hyperexcitability at multiple points along the pain pathway. Kv7 channels play important roles in the initial transduction of pain stimuli, transmission along the pain pathway as well as in the spinal cord where they're expressed in dorsal horn neurons that propagate pain signals into the brain. We therefore believe Kv7 potentiators could decrease neuronal hyperexcitability for the potential treatment of a range of pain conditions.

First, 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. Second, 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 the dysfunction or down regulation of Kv7 activity has been observed in altered pain states.

And lastly, flupirtine, a clinical compound previously approved for the treatment of pain has a mechanism of action that involves potassium channel opening. We have ongoing work to develop a robust pipeline of Kv7 potentiators with appropriate profiles for development and pain. And I'm pleased to confirm that our lead Kv7 pain compound, XEN1120 is now in Phase I first-in-human clinical study. Chris will provide some more details on our clinical development plans for this program later in this session.

I'd now like to turn to our Nav1.7 program and walk you through work from our team, some of which goes back 10-plus years, as Jim referred to in his opening comments. Before delving into our product profile, I'll start with some of the Nav1.7 genetics as we believe that Nav1.7 is a compelling target for the treatment of pain with excellent human genetic validation.

Specifically, loss of function mutations in the SCN9A gene, the gene that encodes the Nav1.7 protein have been shown to cause congenital indifference to pain or CIP. These are otherwise healthy individuals whose normal sensory functions are intact. However, they cannot feel any pain regardless of the noxious stimula.

The picture inset shown on the left is of a man named Edward Gibson. In 1932, his case was one of the earliest known reports of CIP, where he was described as a 54-year-old man who reported never having felt pain despite a list of injuries, including a blow in the face with a pick axe, a bullet through a finger, a broken nose, severe laceration of the knee and a burned hand, all without apparent pain.

He later became owned by a stage name, the human pin cushion during his time as a vaudeville performer, where he asked audience members to push large pins into him with up to 50 to 60 pins in just one performance. We then pull them out well on stage in front of the audience. Edward Gibson story is similar to later reports of patients with CIP, who often spent time is street performers that would walk across hot coals or plunge knives into their arms. By studying these cases, researchers, including Xenon scientists, linked loss of function mutations in SCN9A to the inability to feel pain.

Conversely, gain of function mutations have also been identified that lead to extreme pain disorders such as Inherited erythromelalgia, IEM and paroxysmal extreme pain disorder, PEPD demonstrating that excessive Nav1.7 activity can drive pain. However, since the initial discovery and link of Nav1.7 to pain decades ago, there have been many failures and an inability to translate these strong genetic findings into promising pain therapeutics. Over the next couple of slides, I'll walk through what we have learned along the way and what we're doing to overcome previous failures and why we think we've developed a compound with the appropriate and exciting profile, one that's never been tested before in the clinic.

More recent genetic research has better informed the potential level of Nav1.7 inhibition required for efficacy and pain. Individuals have recently been identified in 2 different families by 2 independent research groups with an incomplete loss of Nav1.7 and a complete lack of pain. The subjects in these families have Nav1.7 mutations in both alleles. One mutation in each family is a no variant, meaning it produces no functional channels. The other mutation is a hypomor, meaning it has a reduced amount of current.

Family 1, shown on the left, Harvard mutations that result in about 75% loss of function of Nav1.7. The mutations identified in Family 2, as shown on the right, result in about an 85% loss of function. Mutations from both of these families have been generated in-house at Xenon, and we've independently verified these functional electrophysiology findings in our labs. Importantly, though, this data suggests that 75% to 85% receptor occupancy or inhibition of the Nav1.7 channel is sufficient for a complete loss of pain.

This is in contrast to initial thinking within the field where we thought that close to 100% receptor occupancy would be needed for efficacy in pain. These data can, therefore, guide our therapeutic target exposures and achieving 75% to 85% receptor occupancy is materially less challenging than near 100% inhibition of the channel, thus significantly increasing our probability of success.

This brings me to the target compound profile we aim to achieve for our lead Nav1.7 compounds. Our target profile is based on 3 pillars. The first is that we want CNS exposure to engage Nav1.7 in the spinal cord to better mimic patient genetics with global inhibition of the channel. Second, we need improved free fraction and good tissue distribution to achieve high levels of receptor occupancy. And third, comprehensive selectivity over the other NAV subtypes to avoid any off-target concerns.

This table shows a high-level comparison of prior sodium channel inhibitor profiles with Xenon's lead compounds. First generation molecules, namely nonselective inhibitors that bind to the poor region of Nav1.7 and were significantly dose limited due to a lack of selectivity against the other sodium channel subtypes, which did not allow high levels of Nav1.7 receptor occupancy.

Second-generation molecules were the first to demonstrate some appreciable Nav1.7 selectivity. However, these molecules were hampered by high plasma protein binding and therefore, low-free drug concentrations in poor tissue distribution. Additionally, they are not very CNS penetrant and mostly peripherally restricted.

From these learnings, we've designed our lead compounds to achieve good CNS exposure, good free fraction and tissue distribution as well as excellent selectivity and potency to achieve high levels of Nav1.7 inhibition. Importantly, and why we're so excited about our program is that a Nav1.7 inhibitor with this compound profile has never been tested in the clinic before. We believe this best positions us to test the Nav1.7 mechanism for the treatment of pain and to best mimic the human genetics of Nav1.7.

I'd now like to dig into each of these pillars a bit more, starting with the expression profile of Nav1.7, which is highly expressed in nociceptive neurons, where it's found in processes that extend all the way out into peripheral tissue as well as processes that extend behind the blood-brain barrier into the spinal cord.

As shown in the first figure on the right, Nav1.7 shows the highest expression in human DRGs as compared to other sodium channel isoforms. Additionally, Nav1.7 protein is found in no susceptive neuron terminals in the spinal cord as shown in the figure on the right. Based on this, we believe inhibition in both compartments may better mimic the human genetics.

Turning to the second pillar of our product profile. Free fraction is related to a drug's protein binding and how much free unbound drug is available. If a drug has a low free fraction, it's highly bound to plasma proteins and can be trapped in the blood, keeping it away from its target. A prior Nav1.7 clinical compound, PF771, was highly protein-bound with a very low free fraction. We believe this limited its ability to achieve sufficient Nav1.7 target engagement and contributed to that compound's poor efficacy.

Specifically, in an evoked pain study in IEM patients as well as a dental pain study, PF771 demonstrated some efficacy when dosed up to 1,600 milligrams. However, due to its low free fraction, it likely didn't achieve our projected Nav1.7 receptor occupancies. It's important to note, however, that no patients demonstrated autonomic effects in either study at efficacious exposures.

In peripheral diabetic painful neuropathy, PF771 was given at a much lower dose of 150 milligrams due to dose-limiting increases in LDL cholesterol and it failed to demonstrate efficacy, again, likely due to insufficient Nav1.7 inhibition.

The figure on the right shows the PK profile of a single 1,600 milligram dose of PF771 from the IM pain study. Peak plasma exposures reached 57,000 nanograms per ml or 114 micromolar right around the TMAX of 4 to 6 hours. Based on Xenon's internal assays, this compound is highly potent. However, less than 0.1% is free unbound drug. When we calculate the free fraction of drug, it doesn't achieve our target levels of Nav1.7 receptor occupancy even at these very high total plasma exposures. This, therefore, demonstrates how it can be challenging for a highly protein molecule to sufficiently target the channel. We believe an improved free fraction is an important part of our profile to ensure that we can achieve high levels of Nav1.7 target engagement.

Finally, with a compound profile that's both CNS penetrant and with good free fraction and tissue distribution, high isoform selectivity will be required to safely achieve high levels of Nav1.7 inhibition. Robust selectivity provides an appropriate therapeutic window with a reduced risk of dose-limiting off-target toxicities from the other sodium channel subtypes.

For example, minimizing inhibition at other sodium channels like the CNS isoforms, Nav1.1, Nav1.2 and Nav1.6, as well as the cardiac channel, Nav1.5, is important. As detailed on this slide, with 30-fold selectivity, high levels of Nav1.7 inhibition could be achieved with only minimal off-target activity at other NAV subtypes. This is illustrated in the plot to the right, where a target range shown in green, aims to achieve 75% to 90% block at Nav1.7. Again, this is based off of the patient genetics. With thirtyfold selectivity, this translates to only about 10% to 25% block of an off-target sodium channel.

One key liability we've learned from our years of work in the sodium channel space, is the level of Nav1.6 inhibition that's tolerated in the brain. For reference, our extensive work on selective Nav1.6 inhibitors has shown that there could be tolerability concerns that arise at high levels Nav1.6 inhibition, and that sufficient levels of selectivity could provide more than adequate safety margins to explore our Nav1.7 target therapeutic range.

Our lead Nav1.7 inhibitor, XEN1701, has been developed to address these 3 pillars and demonstrates nanomolar potency against Nav1.7 with excellent selectivity against the other sodium channel subtypes as shown on the left. We believe this profile could allow high levels of Nav1.7 inhibition with a good therapeutic index.

Selective Nav1.7 inhibition can decrease activity in sensory neurons, and this is demonstrated in the right panel, where a selective Nav1.7 inhibitor can block action potentials in iPSC-derived sensory neurons from IEM patients.

To interrogate our compounds in vivo, we assessed Nav1.7 target engagement with an IEM mouse model. Recall that inherited erythromelalgia, or IEM is a severe pain syndrome caused by gain-of-function mutations in Nav1.7. Xenon developed this model by producing transgenic mice that express a human Nav1.7 with a mutation observed in IEM patients.

Upon injection of the sodium channel activator aconitene into the paw these animals, a pain response is elicited in the IEM but not in the wild-type mice. We've also developed novel in-house machine learning-based automated tracking to analyze the lunches as a readout of pain. And on the right, you can see IEM animals have a significant number of nociceptive events after aconitine injection, whereas the wild-type animals have no pain response. This makes this a very useful and proprietary model to study target engagement of the human Nav1.7 channel in vivo.

In our IEM mouse model, exemplary Xenon Nav1.7 inhibitors demonstrate target engagement at relatively low overall total plasma concentrations. As shown on the left-hand side of the slide, we can see XEN1701 demonstrates target engagement at significant lower plasma concentrations as compared to second-generation molecules like GDC-310 and PF771, which support Xenon's target compound profile to achieve the Nav1.7 receptor occupancies needed for efficacy and pain.

On the right, we've plotted efficacy in the IEM model against free brain concentrations normalized to Nav1.7 potency. We can see across an exemplary set of compounds that once we achieve 75% to 90% Nav1.7 receptor occupancy, as highlighted by the gray box. This results in little to no pain, which is in line with the patient genetics and our target therapeutic exposure range. Taken together, CNS penetrants improve free fraction and strong potency and selectivity demonstrate target engagement at low total plasma exposures. And as I've mentioned, to our knowledge, we are the first to test the molecule of this profile in a human clinical trial.

In terms of additional findings, Nav1.7 is not only highly expressed in pain sensory neurons as previously described. but it's also expressed in autonomic neurons that play a role in the regulation of blood pressure and heart rate. Therefore, I wanted to pause here briefly to discuss Nav1.7 in autonomic function. In patients with Nav1.7 gain-of-function mutations, autonomic abnormalities have been reported. However, and importantly, patients that have Nav1.7 loss of function mutations, like in CIP, have reports of normal autonomic function. Prior published reports have demonstrated autonomic effects after pharmacological inhibition of Nav1.7, however, these compounds differ from our target compound profile. The main concern of a Nav1.7 mediated autonomic effect would be a loss of consciousness or orthostatic hypotension, which would be dizziness upon standing from a sitting or line-down position.

Based on our experience and work in the space, we believe that avoiding a rapid onset of Nav1.7 inhibition, thus avoiding a rapid rise in the plasma concentration or a very quick Tmax could potentially mitigate autonomic findings that have been previously reported in the literature with other Nav1.7 inhibitors.

Additionally, avoiding peripheral receptor occupancies at or greater than 99% may be important. Similar to published reports, we've identified compounds that can alter heart rate and blood pressure at these very high levels of Nav1.7 peripheral receptor occupancy. However, as I've previously noted, we believe the patient genetic supports a target therapeutic range significantly below these levels.

And lastly and importantly, XEN1701 does not show autonomic cardiovascular effects at exposures greater than predicted therapeutic levels based on preclinical studies conducted today. As shown in the figures to the right, XEN1701 had no effect on heart rate or mean arterial pressure in cynomolgus monkeys across a range of doses tested.

Furthermore, cardiovascular effects are easily monitorable in the clinic, and we will be assessing these parameters as our clinical study progresses. The key takeaway here is that the target profile for our Nav1.7 compounds is differentiated from other published compounds that demonstrated these autonomic findings, and we anticipate being able to achieve high efficacious exposures in the clinic without autonomic effects.

In summary, we believe Nav1.7 is the best genetically validated pain target with striking genetic data in patients with a loss of function mutations that have no ability to feel pain. Gain of function mutations have also been identified that drive in -- the drive pain disorders further underscoring the critical role Nav1.7 plays and pain signaling. This, combined with our long history with Nav1.7 in our deep ion channel drug discovery expertise, best positions us to deliver a differentiated Nav1.7 compound profile into the clinic, one that has never been tested before.

Specifically, our lead Nav1.7 inhibitors are seeing us penetrant to enable global inhibition of Nav1.7 to better mimic the human genetics. Our lead molecules, including XEN1701 demonstrate good free fraction and tissue distribution to achieve high levels of target engagement; and lastly, we've identified molecules that have excellent potency and selectivity to safely achieve target therapeutic levels of Nav1.7 inhibition. We believe we have solved the critical limitations of prior Nav1.7 compounds to build a strong pipeline of optimized Nav1.7 inhibitors for development and pain.

Our lead Nav1.7 pain compound, XEN1701, is now in a Phase I first-in-human clinical study, and Chris will provide additional details around the clinical development plans for this program shortly.

In summary, Xenon has a clear leadership position in ion channel pain research and development, and we're actively pursuing well-validated ion channel targets like Kv7 and Nav1.7. Both lead Nav1.7 and Kv7 compounds are currently in Phase I clinical studies, and we have a growing early-stage pipeline of multiple additional compounds with distinct chemistries advancing into IND-enabling studies.

At this point, I'd like to turn the call over to Chris, who's going to walk through the clinical pain landscape and development plans for our lead compounds. Chris?

Thanks a lot, JP. Great overview. Okay. To begin, it's important to ground the conversation in just how pain is classified clinically because understanding these distinctions help frame the unmet need and also the rationale behind our clinical development strategy.

Pain is not a single disease, but rather a symptom with many underlying causes. Pain can stem from a clear singular source such as a tissue injury or nerve damage or it may have more complex multifactorial origins. In some cases, the underlying cause isn't even well understood, which presents challenges in both diagnosis and treatment.

We typically categorize pain by its origin nociceptive, which is driven by tissue injury, neuropathic, which results from dysfunction in the nervous system and nociplastic pain, which in some patients fails to present with organic lesions and therefore, cannot be classified as nociceptive or neuropathic such as fibromyalgia.

Duration is another key dimension, acute pain, which is short-lived and often tied to a specific event versus chronic pain, which persists beyond 3 months and often becomes a disease state of its own. Chronic pain, in particular, represents a large and underserved patient population and it's where many of today's treatment challenges but also opportunities lie.

As noted in the examples listed, chronic pain encompasses a wide range of conditions from osteoarthritis and diabetic neuropathy to cancer pain. Each of these conditions may respond differently to treatment depending on the underlying mechanisms involved. Our focus is 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 the chronicity of pain.

We engage directly with clinicians as part of our early expert outreach to gather KOL insights and the message was strikingly consistent. Across the board, we heard a desire for opioid-sparing therapies. Physicians recognize the limited efficacy of current options and remain concerned about the high risk of abuse and dependency tied to opioids. Even when opioids are used appropriately, their long-term safety profile is not ideal, chronic NSAID usage can also be problematic for different safety and tolerability issues that may arise.

What stood out in these conversations was the appetite for alternatives that are both effective and well tolerated over the long haul. Neuromodulators like Lyrica and Cymbalta are often sedating and don't work for everyone, leaving physicians with limited reliable tools. Importantly, there was strong interest in ion channel blockers as a potential transformative class of therapies for pain. These physicians aren't just asking for new medications, they're asking for mechanism-based innovation that can deliver real relief without sacrificing safety or tolerability.

So we believe that our discussions with physician experts presented broader sentiment in the field that there is an unmet urgent need for non-opioid therapies that can meet the everyday realities of pain management without compounding the problem or causing a new one.

Both of our lead molecules in our Kv7 and Nav1.7 programs, XEN1120 and XEN1701, respectively, are now in Phase I first-in-human studies in healthy volunteers. Our goal is to initiate Phase II proof-of-concept studies next year, and we'll provide more details as we get closer to these important milestones. I'm excited that there is ongoing work to maintain a robust pipeline of additional Kv7 and Nav1.7 compounds through the work of Jim, JP and over 80 additional scientists on our ion channel drug discovery team.

These distinct molecules will explore different binding sites and mechanisms as well as tissue distribution profiles. As JP alluded to, within our Nav1.7 program, we'll continue to explore our 3 pillars and strive to develop compounds with differentiated profiles that address levels of CNS exposure, free fraction and tissue distribution as well as optimal selectivity.

Before addressing some of your specific questions, we've summarized some of our key points from today. First of all, current pain treatments rely on NSAIDs, neuromodulators and opioids, which pose risks of poor tolerability and/or addiction. Second, there's a significant unmet need for non-opioids that provide effective analgesia and minimize safety and tolerability issues. And third, we're developing modulators of Kv7 and Nav1.7, with both targets believed to have significant impact in the transduction, transmission and relay of pain signals.

Our aim within Xenon's pain program is to address liabilities of earlier compounds by leveraging our extensive ion channel expertise and ultimately bringing new pain medications to the many patients dealing with acute and chronic pain.

With that, I'd like to turn the call back to Ian, who will moderate a Q&A session. Over to you, Ian.

Great. Thanks very much, Chris, and thanks, Jim and JP. [Operator Instructions]

We've had lots and lots of questions come in throughout the webinar. So we really appreciate those. Because there have been so many questions that have come in, what I think I'm going to try to do is group some of the questions by theme. And a lot of them are generally around just these targets and the specific ion channel targets for pain.

So I'm going to do some kind of thematic questions, which I think will be helpful. If we don't get to your question, we are trying to limit this to 60 minutes. We have a list of all of the questions, and we'll be able to follow up with you individually afterwards. So again, keep submitting your questions, and we'll get to as many as we can.

So we'll start maybe about the current landscape. And as everyone on the call knows, there was recently and Nav1.8 drug approved in acute pain. And so we've had a number of questions just around the theme of why we believe Nav1.7 may be a preferred target over Nav1.8 in the treatment of pain.

Jim, maybe I can get you to start here?

Certainly. We believe Nav1.7 offers the strongest genetic validation of any pain target. As noted in JP's remarks, individuals with loss of function in Nav1.7 do not feel pain and more recent genetic data supports needing only 75% to 85% receptor occupancy to achieve this phenotype.

Nav1.8 does not have this level of genetic validation. So we have always believed that 1.7 is the preferred target based on human genetics. As JP noted, our strategy has been to mimic the genetics through inhibition of Nav1.7 in both the periphery and the CNS. Thus, we expect to dramatically reduce pain with this approach. Furthermore, the expression level of Nav1.7 in human DRGs is significantly greater than that of Nav1.8, suggesting its importance in no receptors.

Finally, it's important to note that we believe the Nav1.8 mechanism has likely reached an efficacy ceiling based on recent acute clinical studies with selected Nav1.8 inhibitors. From our perspective, Nav1.8 clinical molecules that have achieved greater than 90% receptor occupancy have not demonstrated further improvements in pain reduction, suggesting that Nav1.8 mechanism is saturated. We anticipate the Nav1.7 ceiling will be higher. So overall, although Nav1.7 has been a more challenging target to drug, we believe there are multiple lines of evidence as to why it is the preferred target over Nav1.8.

Back to you, Ian.

Great. Thanks, Jim. That was really helpful. So maybe again, with this theme around 1.8 and Kv7, there's a number of questions just around combinations.

So how do we just think about combining different ion channel modulators together? Would we expect synergy with Nav1.8 inhibitors or how do we think about maybe even combining Nav1.7 as well as the Kv7 potentiators?

So Chris, maybe you can just talk about from a clinical perspective, what you think from a synergistic point of view and how you think some of these different targets may be developed together as we move forward?

Sure thing, Ian. So given the involvement along the pain pathway of the different mechanisms that we've discussed, there might be synergy or at least additive potential with our approaches and Nav1.8 inhibitors. There could also be synergy or additive effects between the Nav1.7 and Kv7 mechanisms, given the complementary features of these mechanisms. As noted by JP, our Nav1.7 inhibitors and Kv7 potentiators were able to effectively block the pain signaling at various points along the pathway.

Kv7 potentiator could decrease neuronal excitability and has demonstrated its ability to block the action potentials in both the DRG and the spinal cord. Meanwhile, Nav1.7 inhibitors have the potential to minimize or eliminate the initiation of the action potential firing with the DRG as well as block the transmission of the signal to the spinal cord. Kv7 and Nav1.7 are frequently co-expressed in the same nociceptive neurons, and therefore, while each mechanism has the potential to greatly minimize or eliminate pain on its own, the 2 mechanisms might work well in concert to ameliorate pain.

Our expectation is that these different mechanisms will and should be tested in combination in future clinical pain studies. So it's an exciting time for sure. Back to you, Ian.

Great. Thanks, Chris. So shifting gears a little bit. We've had a number of questions just come in around specifically around Nav1.7 and maybe kind of the adverse event profile in TI.

So obviously, the field has been trying to drug Nav1.7 for quite some time. And we talked a little bit about it in our prepared remarks, but maybe we can go into some more detail as well just around potential adverse events. So JP, maybe you can walk through drugging Nav1.7 without hitting the autonomic effects as have been seen in the literature with some other molecules. And just generally, as you think about therapeutic index of 1.7 over the other NAV isoforms, I think, would be helpful. JP?

Sure. Happy to, Ian. So first, we strongly believe there's a significant window between the therapeutic exposures needed in pain. And as I noted, those that may cause autonomic effects. But I think we've also learned a bit about the therapeutic index and the selectivity required in terms of some of the other NAV isoforms.

So based on our prior work in the space, from the autonomic side of the equation, we believe avoiding a rapid increase in plasma concentrations or that overly fast rapid inhibition in Nav1.7 can potentially avoid some of the autonomic findings that have been previously reported.

And then similar to previously published reports, when we assess compounds that don't meet our target profile, we have seen the autonomic effects that have been shown at very high peripheral receptor occupancies of Nav1.7 around 99%. So those are all on target findings, but maybe to get kind of to the kind of therapeutic index against the other sodium channel isoforms. Because we are seeing us penetrating, it's really at the significantly high central receptor occupancies of channels like Nav1.6, for example, as shown in my figure there, it was kind of 85%, 90% levels of inhibition there might you run into tolerability concerns. We think with the level of selectivity we've built into our molecules, we have a pretty significant therapeutic index to fully test our therapeutic exposure range with our clinical assets.

And then I'd just note you might recall, and I noted in my remarks, the Pfizer compound, PF771, that demonstrated efficacy in both the dental molar extraction in IEM clinical studies without autonomic findings or other findings we might attribute to some of the other sodium channel isoforms.

And then just as a reminder as well, we haven't seen cardiac signals with XEN1701 in any of our preclinical studies to date in cardiac monitoring is pretty straightforward in the clinical setting. So we'll be closely monitoring for these effects in our Phase I development.

Great. Thanks, JP. Good detail. Great. I think we have -- we're kind of bumping up against the bottom of the hour here. Well, let's do one more question, and then we'll wrap.

So there's been questions just around the clinical development strategy, potential indications. So Chris, maybe over to you. Obviously, from a genetic perspective as well as some of the preclinical work that we showed today, both for Kv7 as well as Nav1.7 suggests that the programs really could be broadly applicable across pain.

So how are we thinking about future clinical development, both proof-of-concept studies as well as later stage development?

Yes, sure. I mean it's clear that these investigational compounds may have broad utility across various types of pain.

While we've not yet unveiled our Phase II proof-of-concept study designs, we expect to pursue one of the well-validated acute pay models or more perhaps such as bunionectomy and/or abdominoplasty as the next step within both programs. So both for Kv7 and Nav1.7.

That said, based on our preclinical findings and the human genetics of Nav1.7 and Kv7, these mechanisms have the potential for broad utility in both acute and chronic pain and across both inflammatory pain conditions as well as neuropathic pain. So we're excited to move these molecules into Phase II to better understand the breadth of the 2 mechanisms. So there will be more to come, hopefully, in the near future.

Great. Thank you, Chris. Okay. We've reached time on today's webinar. But as I mentioned earlier, we have gathered all of your questions submitted through the chat function and we'd be happy to connect with you that have outstanding questions in the coming days. If you do have additional questions, please reach out. You can copy the investor e-mail that's shown on this slide.

So I hope today's session help demonstrate Xenon's deep commitment to ion channel development and how our long history in the field has contributed to our proprietary approaches to the challenges of both sodium and potassium channel modulators and specifically new approaches to pain medicines. We are incredibly excited to be one of the leaders in the field, and we intend to rapidly advance these novel therapeutics to patients in need.

So thank you again for everyone who took the time to tune in and to ask questions as well as for your interest in Xenon's pain programs. And with that, operator, we can conclude the session.

Thank you, everyone.

Thank you for standing by. At this time, I would like to welcome everyone to Xenon Pharmaceuticals Second Quarter 2025 Earnings Conference Call. [Operator Instructions].

I will now turn the conference over to Chad Fugere. You may begin

Good afternoon. Thank you for joining us on our call and webcast to discuss Xenon's Second Quarter 2025 Financial and Operating Results. Joining me are Ian Mortimer, Xenon's President and Chief Executive Officer; Dr. Chris Kenney, Xenon's Chief Medical Officer; and Darren Cline, Xenon's Chief Commercial Officer. After completing their prepared remarks today, we will open the call up for your questions. Please be advised that during this call, we will make a number of statements that are forward-looking, including statements regarding the timing of potential results from clinical trials, the potential efficacy, safety profile, future development plans and current and anticipated indications, addressable market, regulatory success and commercial potential of our and our partners' product candidates; 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 the regulators. And our ability to successfully obtain regulatory approvals, anticipated timing of the top line data readout for our clinical trials of uses calmer and our expectation that we will have sufficient cash to fund operations into 2027.

Today's press release summarizing Xenon's second quarter financial results and the accompanying quarterly report on Form 10-Q will be made available under the Investors section of our website at xenon.pharma.com. and when filed with the SEC and on SEDAR+.

Now I would like to turn the call over to Ian.

Thank you, Chad, and good afternoon, everyone, and thanks for joining our call today. We are excited to share a number of advancements across our pipeline as we have made significant progress over the past quarter. As we reflect on the first half of 2025, we continue to advance against our key strategic priorities.

Number one, driving towards Phase III data NDA submission and commercializing Z2calender for the treatment of focal onset seizures in the U.S.; number two, broadening the azetukalner calendar opportunity across additional epilepsy and neuropsychiatric indications and number three, expanding our product portfolio through the advancement of our promising earlier-stage ion channel programs.

Today, we will cover details and milestones relating to these exciting program advancements and momentum we have going into the second half of 2025. And I will begin with a brief review of highlights from this past quarter, starting with our most advanced azetukalner Phase III clinical trial, XOL. As disclosed in today's press release, we have completed patient recruitment in XT22. This is a significant milestone in the development of azetukalner and keeps us tracking to report top line results early in 2026.

And in anticipation for our first approval and commercial product as a company. We plan to refine our guidance for the timing of top line results after last patients are randomized. We remain highly encouraged by the potential of azetukalner to deliver on the promise of a new antiseizure medication with a differentiated product profile to what is available today. And this could benefit people living with the debilitating effects of uncontrolled seizures.

From the outset, we have prioritized working with high-quality experienced sites to maximize study success while diligently monitoring key metrics throughout the study. As discussed on previous calls, we are pleased that these metrics align consistently with our successful X-TOLE study and continue to have confidence in X-TOLE2 and share the epilepsy community's excitement as we progress towards Phase III readout. It's this excitement that drives our scientific leadership and investment in the KV7 landscape.

Azetukalner is the only KV7 channel opener and the only ASM in development that is backed by long-term efficacy and safety data from clinical studies of patients living with epilepsy. Having demonstrated highly compelling placebo-adjusted efficacy in focal onset seizure patients in our Phase IIb trial in durable and sustained efficacy over time through our open-label extension study. And approximately 800 patient years of exposure and safety data.

There remains a substantial need for new, efficacious and well-tolerated epilepsy therapies, especially for those patients who continue to experience the debilitating impact of focal seizures, even while taking multiple antiseizure medications, and we believe that azetukalner key attributes as seen to date, demonstrate its potential to provide an important new option for the epilepsy community.

We consistently hear positive feedback and excitement within the medical community about azetukalner compelling value proposition, which includes a novel mechanism, rapid onset of effect, robust efficacy and multiple ease-of-use attributes, including once-daily dosing, no required titration along with a potential no benefit. Azetukalner has the potential to be a best-in-class antiseizure medication that offers significant and meaningful benefits in the future treatment of epilepsy.

Chris will touch on more detail shortly, adds to our continued work with investigators and anticipation building in the field. In addition, we believe there is significant potential for azetukalner beyond epilepsy with initial focus on depression. Within our Phase III MDD program, we have now initiated X-NOVA3, which is the second of 3 planned studies of the azetukalner in major depressive disorder.

Also during the quarter, we initiated the first of 2 planned Phase III studies in bipolar depression 1 and 2, called the EXCEED study, -- we continue to execute as planned to expand the clinical development of azetukalner into indications and invest in our neuropsychiatric programs.

This is a good time to turn the call over to Chris, who will share more details on our late-stage clinical development programs. I'll then provide an overview of our early-stage pipeline programs as well as conclude with a summary of key milestones ahead. Chris, over to you.

Yes. Thanks, Ian. Starting with our Phase III epilepsy program, which includes our 2 studies in focal onset seizures or FOS, XTO and extol 3 and our exact study in primary generalized toniclonic seizures or PGTCS. I'm incredibly excited to confirm that our Phase III XO2 clinical study of azetukalner in FAS has now completed patient recruitment -- and as guided previously, we expect top line data in early 2026. This milestone reflects tremendous focus and execution by our clinical operations clinical development and field-based medical teams as well as strong commitment from the epilepsy patient community, our investigators and their site staff. As we progress closer to a top line data readout, we continue our ongoing educational and scientific outreach efforts to raise the profile of Zetucalenter amongst health care providers.

Our team will have a strong presence at the upcoming 36th International Epilepsy Congress or IEC, taking place August 30 to September 3 in Lisbon, Portugal. 4 abstracts were accepted including an overview of 36-month data from the ongoing X-TOLE open-label extension study of azetukalner in patients with FOS, which demonstrated sustained monthly reduction in seizure frequency impressive seizure freedom rates and a consistent AE profile, suggesting long-term efficacy and tolerability of azetukalner.

We also intend to highlight data from our X-TOLE study showing the efficacy of azetukalner in certain focal onset seizure subtypes as well as present a targeted literature review outlining the comorbidity burden and focal onset seizures. In addition, our discovery team will present findings from our early-stage NAV1.1 program with data from preclinical models of Dravet syndrome.

Then, of course, we're also looking forward to the American Epilepsy Society later in the year, having already submitted new 4-year long-term data from our X-TOLE open-label extension study with plans to have a strong presence and opportunities for education and interactions with the various event plans. So more to come as we get closer to engaging with the epilepsy community in Atlanta later this year in December.

Turning to Xenon's efforts to expand azetukalner's use into neuropsychiatry, I want to first highlight that X-NOVA3, the second of 3 planned Phase III clinical trials evaluating a azetukalner in patients with major depressive disorder has now been initiated alongside X NOVA 2. As we engage with physicians who treat patients and depression and are involved in the studies, they are eager to explore the differentiated profile of azetukalner versus existing agents. They are specifically interested in azetukalner novel Kv7 mechanism of action and its potential benefit on anhedonia, rapid onset of effect, along with a potentially differentiated tolerability profile.

Echoing in sentiments, I'm also pleased to announce that [ Xcede ] the first of 2 planned Phase III clinical studies evaluating a Z2 counter in patients with bipolar depression on and bipolar depression 2 has been initiated. Bipolar disorder is a psychiatric condition characterized by mania or hypomenia and depressive episodes and can severely impact a person's quality of life. As of 2019, approximately 40 million people worldwide were affected by bipolar disorder and nearly 6 million adults in the U.S.

On average, patients diagnosed with bipolar disorders spend 3x as many days with depressive symptoms than with mania or hypomenia. And the severity of depressive symptoms has been associated with functional impairment reduced quality of life and a higher prevalence of attempted suicide. -- effective treatments for depression and bipolar disorder are limited in many patients are nonadherent due to intolerability and side effects. In short, there remains a significant unmet medical need for safe and effective therapies to treat patients with bipolar depression.

Now expanding into BPD is based on a strong scientific rationale based on preclinical data showing an antidepressant effect of a azetukalner, genetic links between BPD and KV7 evidence of KV7 down regulation in BPD as well as clinical studies that explore the use of KV7 potentiators in depression.

Considering the treatment landscape for BPD, Z2 calendars novel selected Kv7 mechanism of action, potential benefit on anhedonia, rapid onset of effect and differentiated safety profile are particularly attractive in BPD. Further, we believe that azetukalner demonstrated safety profile could represent an improvement over commonly used drugs to treat bipolar depression, such as atypical antipsychotics, lithium, valproic acid and lamotrigine.

Based on results from our Phase II X-NOVA MDD study, where no study subjects experienced notable adverse effects on sexual function or weight gain. Our Phase III BPD program includes 2 multicenter, randomized, double-blind, placebo-controlled clinical trials to evaluate the clinical efficacy, safety and tolerability of 20 milligrams of azetukalner, administered orally with food over the 6-week double-blind period as monotherapy treatment in approximately 400 patients per study with bipolar 1 or 2 depression, with an opportunity to increase the sample size to 470 based on an interim analysis.

The primary efficacy endpoint is the change from baseline in the MADRS score at week 6 in patients who received a Z2 counter 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 feel it's important for us to address the use of MADRS in this study compared with the use of HAM-D17 in the Phase III MDD program.

Scientific literature suggests that symptom presentation differs in unipolar versus bipolar depression. While HAM-D17 places emphasis on melancholic and somatic symptoms, which are more frequent in unipolar depression. It focuses less on atypical features of depression, thereby limiting its utility in bipolar depression. In a study comparing BPD in MDD patient groups, bipolar patients scored lower on the HAM-D17 despite both groups scoring similarly on the Beck Depression inventory and also the global assessment of functioning, thereby concluding that the severity of bipolar depression may be understated or underestimated by the HAM-D17 due to the different presentations of depressive symptoms.

Further, since 2010, all clinical studies that led to approved therapies in BPD have used MADRS as the primary endpoint. With this backdrop, we believe that the design of our [ Xcede ] registrational study supports our ultimate goal of seeking approval for Z2 calendar in bipolar 1 and 2 depression. We're incredibly excited about the potential of Z2calorie and its Kv7 mechanism in neuropsychiatric indications such as MDD and BPD. And I look forward to providing updates as we leverage pipeline and a mechanism potential across multiple streams of late-stage clinical development.

Ian, I'd like to turn the call back to you now so you can provide an update on some of the great work happening in the earlier stages of our development pipeline.

Great. Thanks, Chris. There is significant momentum across our early-stage pipeline with multiple regulatory filings expected this year to support the initiation of first-in-human trials across a number of validated high-end channel targets. This broadening out of our early-stage pipeline is a direct result of the successful leveraging of our extensive knowledge and development expertise in potassium and sodium channel therapeutics.

As our diverse pipeline of early-stage drug candidates continue to mature, I'm incredibly proud of the considerable progress we are making across multiple programs targeting the ion channels that include KV7 NAV 1.7 and NAV 1.1. Today, I'll give you an update on each of these promising programs. Beginning first with our pain programs. I'm excited to confirm that we now have initiated 2 Phase I studies within our KV7 and NAV 1.7 programs. Despite a wide range of therapies, many patients still suffer from inadequate pain control poor tolerability or dependence on opioids.

The need for new non-opioid treatment options remain significant. We believe KV7 and NAV1.7 are highly validated targets in pain as both mechanisms are central to pain signaling through their role in regulating neuronal excitability, Recognizing the potential broad applicability of the Kv7 mechanism of azetukalner, we have identified multiple chemically diverse KV7 development candidates and believe this mechanism may have utility in a broad range of therapeutic indications, including seizures, pain and neuropsychiatric disorders such as MDD and BPD.

Last quarter, we indicated that a clinical trial application, or CTA, was accepted for XEN 11/20. This is a KV7 channel opener that we intend to study as a potential treatment for pain and a Phase I study in healthy adult participants is underway. There is preclinical and clinical evidence supporting the development of novel selective KV7 openers optimized for pain, and we expect to identify a number of other KV7 molecules in chemistries that will follow XEN 11/20.

We also continue to make substantial progress within our NAV 1.7 sodium channel program. where we believe we may have addressed the limitations of earlier investigational drugs targeting NaV1.7. A key part of Xenon's heritage involves our pioneering work that contributed to the strong human genetic validation of NAV 1.7 as a pain target, and we believe NAV1.7 could represent a new class of medicines which address the unmet medical need for effective alternatives to opioids.

We have advanced multiple selective NAV1.7 development candidates to date. And we are pleased to report that a Phase I study has recently been initiated for XEN 1701. This is our lead NAV 1.7 development candidate for pain. In early October, we plan to host an R&D webinar to showcase our early-stage pain programs that will include deeper dives into mechanisms, the underlying human genetics, preclinical results and other supporting data, as well as an overview of disease prevalence and unmet medical needs within certain patient populations.

We plan to share additional details as we get closer to the day, and we look forward to hosting a series of these virtual sessions in the future. Work within our NAV 1.1 program also continues to progress. Our preclinical work to date suggests that 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 or 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.

These preclinical data are incredibly exciting, and we anticipate that a lead NAV 1.1 candidate will enter IND-enabling studies later this year.

Finally, also coming out of the Xenon Labs is a promising selective dual inhibitor of NAV 1.2 and NAV 1.6, and this 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 the safety, tolerability, pharmacokinetics and pharmacodynamics of the investigational compound MBI-921355 in healthy adult participants to support its development for the potential treatment of certain types of epilepsy.

I'll now turn briefly to our financial results. Cash and cash equivalents and marketable securities totaled $624.8 million as of June 30, 2025, and this compares to $754.4 million as of December 31, 2024. Based on our current operating plans, and this includes the completion of the azetukalner Phase III epilepsy studies as well as supporting late-stage clinical development of azetukalner in MDD and BPD, we anticipate having sufficient cash to fund operations into 2027.

Given our proven track record of strong fiscal management, Xenon is in the fortunate position of having a strong balance sheet to support multiple registrational programs for azetukalner and continued maturation of our early-stage pipeline. I would refer you to our news release and our 10-Q report filed today for further details around our financial results.

Before I offer a few concluding remarks, I did want to take a moment to welcome Darren Cline, who joins our senior executive team as Xenon's Chief Commercial Officer and will lead our commercial strategy and operations, with an initial focus on azetukalner and our first potential launch in epilepsy.

Darren is an incredibly experienced commercial leader with an enterprise-level mindset having led commercial organizations and multiple highly successful companies that include GW Pharma and SGEN. He brings significant U.S. and global launch experience and was instrumental in the commercialization of Epidiolex, which is considered one of the most successful launches in the epilepsy space.

Darren, it's great to welcome you at this pivotal time and I know we can benefit from your extensive experience in epilepsy and your strong record -- strong track record of meeting commercial targets of successful product launches that have brought meaningful medicines to patients. Your addition to our leadership team also underscores the great talent that we've been hiring more broadly across the company. So Darren, over to you for a few remarks.

Thank you, Ian, for the warm introduction. I'm thrilled to join Xenon as Chief Commercial Officer at such a transformative moment. My experience in epilepsy has fueled my passion for addressing the unmet need of patients living with seizures. The data from the XTO trial and the open-label extension for azetukalner are truly compelling, showcasing its potential to be paradigm shifting with its novel mechanism of action.

On meter to connect with the epilepsy community at the International Epilepsy Congress in Portugal later this month and to build momentum towards AES in December. At AES, we'll have the opportunity to share long-term azetukalner OLE data. which continues to demonstrate impressive outcomes. Notably, the latest OLE data shows that approximately 1/3 of patients on azetukalner for at least 36 months have achieved seizure freedom for a year or more. This is a meaningful metric as many epileptologists tell us that seizure freedom translates directly into improved quality of life for people living with epilepsy. Joining Xenon at this juncture with the XTOLE-2 database on the horizon and the potential approval of azetukalner in epilepsy is incredibly exciting.

Looking ahead, the prospects for additional future indications in MDD and BPD further underscore the transformative potential for the company. I'm excited to engage with the investor community as we continue to make progress towards our goal of becoming a fully integrated commercial stage neuroscience company. Ian, back to you.

Great. Thanks so much, Darren. The entire Xenon team is galvanized and driven by the strong potential of azetukalner and our broad pipeline of innovative neuroscience programs. We are entering a transformational period for Xenon as we evolve from a clinical to commercial stage company. We believe that positive top line results from our Phase III epilepsy program will enable an NDA submission to the FDA with the goal of advancing asset calendar towards commercialization.

In addition, a number of our other late-stage neuropsychiatric programs are now underway in recruiting patients. And our deep pipeline also contains multiple promising early-stage therapeutic candidates across a number of ion channel targets supporting our goal to be a premier neuroscience-focused company.

On behalf of everyone on the Xenon team, we are incredibly excited by the advancements in both our late- and early-stage programs, expansion of our pipeline as well as how the team is preparing towards commercialization and remain focused on taking important steps forward to bring us closer to delivering azetukalner to people living with epilepsy.

So with that, that concludes our prepared remarks. And operator, we can now open the call up for questions.

[Operator Instructions]. Your first question comes from the line of Paul Matthews with Stifel.

This is Emily on for Paul. Just 2 quick questions from us. Just first, -- can you remind us again how quickly do you think you'll be able to file on the back of that top line FOS data -- and then secondly, on the now 1.7 program in pain, could you talk to us a little bit more about your confidence on why you won't see safety issues like other drugs that have tried this mechanism and target.

Great. Thanks, Emily. I can comment on both of those. So the first question on timing for filing after the X-TOLE 2 data. So although we haven't given guidance on this, I know we've spoken with a number of investors historically, and we will provide more specific guidance as we get closer to top line and between top line and NDA, but we think it's approximately 6 months from top line data to filing the NDA.

And then your second question on NAV 1.7, so I think you're probably referring that we have seen in the literature, some cardiovascular signals with some of the earlier molecules that were in clinical development. So we believe that both the profile of the drug in terms of kind of both central and peripheral exposure as well as the time to TMAX influences that. And we believe we have a good handle on it. We haven't seen any cardiovascular signals in any of the preclinical safety data. So and we'll obviously be monitoring it's something that we can monitor in human clinical development as well. But we're excited. I think the big progress is really getting that molecule into the clinic and showing a real leadership position in the Nav1.7 space.

Congratulations on the quarter.

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

Congrats on the progress here from us. So for XL -- when would you expect all the patients to be randomized here? What was your patient recruitment split U.S. versus ex U.S? And can you comment on how many sites you ultimately enrolled at for X-TOLE-2 2? And how many of them you used in X-TOLE.

Chris, maybe both of us can kind of tag team these. I can give a little bit of perspective and maybe you can add some more details as you're super close to the program. We've recently finished so maybe just take a step back in terms of time lines for X-TOLE2. So we've recently completed patient recruitment, which is what we've communicated today, which is a huge milestone for the company. And now we have a very definitive time line as those patients move through towards top line data. So the last patients will go through a baseline period. As you know, that baseline is 8 weeks. And so then we would see the last patients randomized. So we can provide updates there. the future, but there is that baseline period.

And then there's the 3 months double-blind period after the randomization visit. And then there's a safety follow-up and obviously database lock and data analysis. That gives you a little bit of a the time line on data. So it will be in the near future that we would have those last patients being randomized. A bunch of your other questions, I think wait and see a little bit on this because we haven't randomized the final patients.

We don't have specific breakdowns yet because these data are changing all the time in terms of ex U.S. versus U.S., how many sites of enrolled patients and the comparison with the extol sites. But I don't know, Chris, if you want to provide any maybe directional guidance on what we saw in XTOLE and maybe what you may expect to see in X-TOLE2.

Yes. So I mean I would just say on a high level, the spirit of X-TOLE2 has been to try to stay as consistent with X-TOLE as possible since that study was wildly positive. And as far as the breakdown geographically, U.S. versus ex U.S., I think it's going to end up being quite similar to Ian's point, we won't know that the exact numbers for another 8 weeks or so.

And then on the total sites, there were a fewer -- a little fewer than 100 used for X-TOLE and we're trying to -- we're randomizing more subjects in X-TOLE versus X-TOLE and so we have tapped into a larger number of sites. But we can share all that in detail when the time is right.

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

Do you want me to take that?

Yes, we have -- yes, Chris, go ahead, if you want to address that?

Constantly would be my one word response. Yes, there's interest in this mechanism not just with -- necessarily within the central nervous system, within neurology and psychiatry, but beyond. And so we have -- on a regular basis, we have incoming questions about using is that to calendar in a number of situations.

As you can see on our website, we don't have a compassionate use program going right now. We've had a lot of active discussions about when that approach could change, but more on that later as well.

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

Congrats on all the progress. So I realize for X-TOLE2 you still need to finalize randomization. But I'm curious if we should be sort of thinking about this potentially the study size and the end being larger than the 360 originally planned sort of depending on how things go. With the final screens and randomization.

And then I guess along those lines, some of our analysis has shown that Phase II to Phase III translatability in focal tends to be pretty good with limited diminishment of the delta in seizure reduction. So I guess I'm curious if you could maybe speak to your latest assumptions for what the delta could be and what the dropout rate could be for the study. as we think about powering.

Thanks, Brian. Chris, I'm happy to start and give my perspective and then you can add in, especially as you kind of think about the X-TOLE 2 readout. So Brian, in terms of your end number, so as you as you spoke to, the study was designed for 360 subjects. It's 3 arms, 120 subjects per arm. That's approximate. So we try to get as close to that as possible. But as you know, we have to stop patient screening at these individual sites before the final randomization numbers and that screen and baseline failure rate can move around a little bit.

And so I don't have a final number yet because we don't have it internally, but we'll try to get as close to that $360 as possible. And I think that's important. I don't think we have to kind of over enroll and maybe this is a bit of commentary to your second question. As you've mentioned and we agree with, I think, reproducibility and translatability between different epilepsy studies in Phase II to Phase III are generally very good and very high, definitely in the neuro field. And we have lots of power at that sample size, right?

We've talked about at the high dose of 25 milligrams based on our Phase II data as inputs into the model. We have more than 99% power and at the 15-milligram dose, we have more than 90% power. So very, very comfortable in terms of the statistical analysis, how we've designed the study to sample size and the powering.

My perspective on what we need to see in terms of X-TOLE 2 is this study needs to be adequate for us to file. And we've had a very successful readout in X-TOLE. And so this second study, XT22, we need it to be statistically significant, and we need for that to support an NDA filing because now that X-TOLE is already complete, we have those data in hand. And as we've talked about previously, I think they're remarkably robust. On a placebo-adjusted basis, it's the best efficacy we've ever seen in a focal onset seizure study.

In the most refractory or severe population ever tested at least our review of the literature. So now that that's already completed, I really think that the bar is -- we need statistical significance. We expect to see, obviously, some consistency. We're seeing that in the baseline demographics and the data going into the study, and that would support a filing. But Chris can probably provide his perspective as well.

Yes. Thanks, Ian. I think you largely covered it. When we -- there's a limitation to what we can see in a blinded Phase III study that's ongoing. But when we look at the patients that are coming in to the sites that are being screened and then who is making it through the screen failure and the baseline process or some metrics, we can look at during the double-blind and then looking at rollover into the open-label everything is moving as we would have expected given the limitation that it's still a blinded study.

And when we look at metrics that have historically driven placebo responses like geography, we've been pretty careful on that front as well. So it's hard to imagine that 2 large studies will have the exact same delta. But when we take a look at the major drivers of that delta from our own data and from other studies, we were feeling like as comfortable as we can, considering that it's still a blinded study.

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

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

Thanks, Brian. Lots of questions in there. If I don't get them all, I please jump back in and just remind me If any other ones that I may have missed. So on your first question of PK, I mean we'll be able to answer that question very shortly as we get through the first number of cohorts in humans. Still, we believe one of the challenging parts of drug development is that extrapolation and that prediction of human PK from animal PK.

So we will -- obviously, we're designing drugs that we believe are going to have appropriate half-life -- and -- but we really need some early clinical data in humans to be able to answer that question specifically. So we'll get back to you on that as we start to see some data. I think there is in epilepsy and in pain, I think there's always an opportunity for -- to have an IV formulation as well as an oral formulation. The initially, whether we look at Skorney 1701, these are being developed as oral drugs. Usually, the IV development comes a little bit later, but it's something that we're keeping in mind keeping an eye on.

We're doing that work for azetukalner, and we'll do that work for 1701 and the other Nevan candidates as well because I think I know where you're going with that question. I think there's a good opportunity if you can have in an IV formulation of the same molecule and then also the oral pills that the patient can go home with.

So more to come there, but something we definitely think about internally. And some of these details, we'll address in our webinar that we're going to do in early October, where we're going to highlight both KV7 and Nav1.7 for pain. And then in terms of the proof-of-concept study, so this would be -- so we haven't fully designed out the Phase II proof of concept study for either 1120 the KV drug or for 1701.

But we are looking at the postoperative setting and looking at things like bunionectomy and abdominoplasty and are trying -- are really now now that both of those are in a Phase I study, bringing the team together to best design those proof-of-concept studies and probably thinking a lot of the same things that you're thinking about in terms of number of doses and controls and a number of other things that we would contemplate into those studies.

[Operator Instructions] Next question comes from the line of Jason Gerberry with Bank of America.

Just another expo I question now that enrollment is complete. And in terms of like the line of demographics, I'm just curious to the extent maybe severity, if you've had a chance to assess that to look similar to X-TOLE1. I know a competitor in the space ended up enrolling less severe patients. And we're just kind of wondering if that's perhaps company-specific or maybe an industry trend.

And then with your BPD study, do you anticipate a high degree of site overlap with MDD. I'm just wondering if there's an opportunity for accelerated enrollment of the BPD study. And then just lastly, I think there was comments that with these healthy volunteer pain studies that there'd be some sort of induced challenge to assess efficacy parameters. I know that there's some debate around the utility of those, but I'm just kind of curious if that's something that you'll be assessing in those Phase I pain studies.

Thanks, Jason. Chris, I'm happy to take -- maybe the first one and the third one, if you want to comment anything else you want to add on X-TOLE 2? And then if you want to address the bipolar depression MDD question.

So Jason, when you've asked just about the baseline blinded demographic data as it relates to patient severity for X-TOLE 2. As we mentioned on our last call and we confirmed again today, those -- the patient characteristics are looking very much like X-TOLE. And again, we don't have data there because patients are still getting randomized. We don't have the final sample size to be able to get a final answer there, but it's looking more like the X-TOLE in terms of those main demographics that we look at at baseline.

And I mean my perspective, and I think Chris should provide his as well, is that these studies, the patients are becoming more severe over time, not less severe over time. I know you referred to a recent data set from a competitor that may have had a less severe population. I mean, I think I know the one you're referring to, and I think that was an open-label study, incredibly small sample size, I wouldn't draw too many conclusions from that.

But I think our experience is that the patient demographics and the severity over the last kind of 10 or 20 years when we go back to some of the earlier generation ASMs that I think those were in a much less severe population. Now we're the company that has run the 2 most significant studies in this space over the last 5 years. And so I think we have a really good perspective on that. But I think Chris can add to my comments.

And then your third question just on any kind of pharmacodynamic endpoint in pain studies. Yes, those are highly variable. There's a number of things that you can do. They're highly variable. And then they -- the question is always whether they're powered appropriately or not. I think we're not. So our perspective is really what we're trying to learn about in Phase I in addition to PK and safety is make sure that we have the appropriate amount of exposure that based on our preclinical modeling, we would believe that we should see an analgesic effect.

And then let's get into a patient population and run a proper proof-of-concept study and be able to measure it that way. So that's really been the guiding principle at Xenon. And we believe we can have 2 of those proof of concept studies for 1120 and 1701 next year. Chris, do you want to add to the first 1 and then the question on bipolar and MDD.

Thanks, Ian. Yes, I don't have anything to add to either 1 of those 2 questions that you answered. I think you covered it in its totality. On the BPD and MDD front and site overlap, we've built up a really nice, robust relationship with our epilepsy sites, and we've moved beyond that within the epilepsy community, we are now starting to do that with the psychiatric community as well, to some extent, particularly the sites.

And so I do expect that there will be some degree of overlap with sites between MDD and BPD, and there will be some leveraging of resources there that is sort of analogous to how we've done focal onset seizure and primary generalized tonic-clonic seizures in the epilepsy program, where there's a fair amount of overlap.

To the extent I'm not really sure. I think these sites -- their availability changes over time. And so a site that was available last year for one of the MDD studies may not now be available for the bipolar. So I don't think we're making it a priority necessarily, but there is a huge advantage. And if -- and if the site is available and they look like they're just as good at that study, we are trying to create efficiencies there.

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

Congrats on the enrollment completion, and thanks for the update. So on bipolar depression, it sounded as if there is an interim built into the study. So when could that interim occur in your view? And what kind of efficacy separation over placebo do you want to see at that interim? And ultimately, can this study be counted as a supporting pivotal.

Thanks, Andrew. I'll provide a high-level comment, and then, Chris, if you can get into the details on a little bit around the sizing and the obviously, this is being designed as a registration program. Andrew, I think although we believe we have really good support for going into bipolar depression, and we talked about that mechanistic rationale.

There's some genetic validation that we're really excited to get into bipolar study and get that up and running. We do not have current clinical data in bipolar depression, and that was really the reason behind giving us some flexibility in the trial design. And so an opportunity to be able to increase the size of the study, as we said in the prepared remarks from 400 subjects up to 470. But Chris can walk you through a little bit more detail there.

Yes, thanks. I mean we don't know exactly when that interim analysis will take place because based upon recruitment, and we obviously have projections of recruitment, but it's the early days of the study. I mean, to Ian's point, the interim analysis will be done in a manner so that if the study is found to have insufficient power at 400 patients that could be overcome by increasing to an intermediate number up to 470 then we'll do it. And I think I'm just going to leave it at that for now.

Next question comes from the line of [ Cory Kasimov ] with Evercore.

I guess 2 from me. First, on the competitive front, curious how you see the potential read-through from Biohaven's pending, MDD readout that at some point in the second half over to is that a calendar's X-NOVA MDD program. I guess maybe on that front, it would help if you can just remind us of the key differences between the 2 assets.

And then second question is for Darren. Darren, good to be covering you again, recognizing it's early days, and I know there's a lot of excitement about a new mechanism of action with this kind of overall profile in the medical community. But I'm curious how you're thinking about some of the key headwinds and just general nuances of the epilepsy market that you'll have to deal with upon approval and launch?

Yes, I'll take the first one, and Darren up on the second one. So yes, the next readout, I guess, for this mechanism is going to be Biohaven's MDD study. Obviously, I think we are comfortable with the mechanism in major depressive disorder. We've seen a number of studies, 2 with our molecule, both the XNOVA Phase II study that we ran that proof of concept as well as the investigator lead study that was announced earlier this year.

And then there was some earlier data with ezogabine as well. So I think we feel comfortable in terms of the mechanism as having activity and support in psychiatric disorders. And at the top of that list in terms of validation is definitely MDD based on the clinical data. So I think it will be interesting. We haven't seen any efficacy data yet with the Biohaven molecule from a placebo-controlled study. So I still think there's maybe some molecule specific questions as it relates to that molecule.

But I think in terms of the therapeutic indication, we think, obviously, that makes a lot of sense. And so we'll be looking to see what those data show and can provide our perspective at that time. I'm not sure there's too much we can say in advance of that. But I know Darren is really excited to be on the call and to start preparing. I think, Darren, your 6 weeks in. So starting to think about propane, -- is that your calendar for the epilepsy market.

Yes. Thanks, Ian. Corey, good to hear from you again. I saw your name and I was very pleased. Yes, I'm super excited to be at Xenon. I think when you look at this epilepsy space, specifically focal seizures, with the azetukalner being the first or the latest branded launch in -- at the time, it's going to be 7, 8 years, a tremendous amount of opportunity.

And I think you hit on a couple of those. I think the the novel mechanism of action, the robust efficacy we've seen, the rapid onset of effect A lot of -- and what we hear also the ease of attributes, 1 daily dosing and no titration. I think it's a perfect opportunity for us to really make a difference. I think when you think about headwinds it will be. I think we look at these epileptologists and general neurologists. They're somewhat set in their ways, and I think we'll have to overcome some inertia that has been built in there. with some therapies that still don't meet the needs of a lot of patients and a lot of physicians. So very excited.

Again, early days, a lot of work to do, but I think we have an asset here and at 2 calendar can really make a difference in this epilepsy community.

Next question comes from the line of Marc Goodman with Leering Partners.

This is Basma on for Mark. Could you please provide some color on the difference between the Type 1 and Type 2 by further depression and whether would you expect that as to corner will be more effective in one patient population versus the other? And also, can you please let us know if you're assessing mania as a secondary endpoint of the trial or not? That's it for us.

Right. Thanks for the question. Chris, over to you for these 2.

Yes, sure. So just to be clear, the bipolar depression studies will include a mixture of type 1 in type 2 BPD. The type 1 are the patients that have frank manic episodes and the type 2 patients are those who have hypomania. And what we're doing is we're stratifying so that in each treatment group, there won't end up being an imbalance between BPD 1 and 2, depending on whether they receive active or placebo. And that's being driven by the fact that we don't really know what the effect will be in one versus the other. We're going into it with the belief that it should work just as well in BPD 1 and 2, but we don't know that until we run the experiment.

Your question about Mania, we are following it. I would view it more as a safety outcome because you -- medications that are used sometimes for depression, particularly SSRIs have historically been thought to potentially precipitate mania. And so it's something that you want to keep an eye on and make sure that you're not exacerbating any other aspect of the disease. Biohaven has shared very high-level information on their Mania study that it was basically negative. I mean, assuming that they had sufficient exposures and that the drug actually gets into the brain, then that -- and assuming that, that meant that placebo was the same as drug, which is a whole litany of assumptions.

Then at least it provides some sort of comfort that this mechanism doesn't exacerbate Mania. We don't think it will, but we'll kind of keep a close eye on it.

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

Maybe on the KV7 for pain, obviously, liberty showed some antipant activity, but ended up seeing some some liver top signals. So I guess, how confident are you that you can derisk potential liver toxicity preclinically through avoiding any sort of toxic metabolite generation and kind of what have you seen there? And then have any of the quality of life measures that you've collected for azetukalner related to pain at all? And last just kind of keep question, let me see the top line release, what level of detail will we see? Will we also see seizure freedom rates in addition to reduction in the futures?

Bunch of questions there. If I missed one, just circle back. So I'll -- Chris, I'm happy to take the first 1 and the last one and maybe you can talk about or at least us looking at migraine and the X-TOLE program as one of the exploratory end points. So Joe, as it relates to 1120 and KV, as you mentioned in pain, there was this molecule that was developed previously that actually had some really interesting activity in a number of different pain indications, which is the molecule protein. It was commercially available. and then it was removed from the market, as you said, for liver tox issues.

Obviously, nothing in that we believe, is to suggest that there's anything that's on target there. So that's always a risk in small molecule drug development and so something that we monitor closely, and we think about in terms of all of the criteria in terms of a molecule. So we have early days, but no concerns right now in terms of XEN 11/20, but obviously, we need a lot more exposure to make any definitive statements there. But we feel good where we are right now.

And then in terms of the X-TOLE 2 details, at least historically, and I'm thinking back to both the X-TOLE results we had a few years ago as well as our results in NOVA. I think we have a good amount of information in our top line press releases and a nice balance kind of across the board of patient demographics, efficacy endpoint, safety end points to really give you and investors a good handle on the overall profile of the molecule.

So I think you can use those as a bit of a template. And we haven't come up with the final CFL and everything that will ask the stats group to do a top line. Obviously, we can't get to everything. But I think you'll see a good amount of information in there. And then always more information will come out at subsequent medical congresses and meetings as well. Chris, maybe you can contact or talk about the quality of life measures question that Joe had and maybe the Phase III epilepsy program as it relates to that.

Yes. So quality of life on a high level, we have shared quality of life data, which shows compelling improvements in quality of life, particularly in the extol open label that poster is actually on our website, if you care to look at the details. And then as far as pain goes Yes, you're absolutely right. Flupirtine has been -- was used for years and it appears to have been useful for pain. I would just -- a little bit of caution that the mechanism of flupirtine it's not a totally clean KV7 compound.

And so I think that there's somewhat of a readout there, but I wouldn't bank everything on that. I think it's really the preclinical experiments and kind of a vast literature that I think supports that. But we have -- as Ian said in his remarks, like nearly 800 patient years of exposure, and we have no evidence of hepatic toxicity. So there's nothing to say that, that couldn't happen tomorrow, but we're seeing nothing in the safety data, which is getting pretty large at this point that we have that liability. And it's -- typically, those are thought to be more based upon the chemical structure than the mechanism of the drug. So -- and then just one last thing.

In terms of the Phase III epilepsy program, we are capturing data on mood in that study. We're looking at depression and anxiety in every patient and every study at every visit, but we're also capturing data on migraine headache since that's a fairly common common comorbidity and epilepsy. And so yes, I mean, it's not the most important thing about that study, but we will get somewhat of a readout in terms of pain from the Phase III epilepsy study.

The caveat there is we're not enriching for migraine headache in the manner that we are for seizures, but -- so it will be limited, but there will be some sort of a read out there down the road.

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

Maybe for either Ian or Chris to start. Now that you've completed enrollment in the Phase III. Could you maybe give us your latest thoughts on just how you're thinking about the potential difference in dose response for the 15 and 25 mg doses versus the dose response we saw in the Phase II. And as part of your filing strategy, is the plan to definitely go with both doses or just maybe the minimally efficacious dose? And maybe that is the first question.

And then second, on the the NAV 1.7 program. Once you establish proof of concept, would you contemplate exploring combinations with the 1.8. I think one of your competitors in the space is examining that, just your thoughts on potentially looking at dual targeted therapies here.

Thanks, Paul. Maybe I'll take the 17 question first, and then Chris, I can provide some perspective and -- but definitely, give your comments on the dose response and kind of what we're thinking about, not only from the Phase III program, but in terms of regulatory filing. So yes, I mean, Paul, I think we're excited. I think we're in a leadership position in 17 to get a molecule now into the clinic and get first to proof of concept. I mean, that's really what's driving us there. Your question is a little bit of a broader one, which is ultimately, what are maybe different combinations that we could think about with different mechanisms whether it be NAV 1.7, NAV 1.8 as you mentioned, but also our KV mechanism that we're incredibly excited about.

I think long term, yes, maybe different combinations of these different non-opioid mechanisms may be the best to combine together. We're not going to see that in one chemistry would be our perspective. And so this would be combining different molecules that may have the best analgesic effect kind of long term, but pretty early to start kind of thinking about that. But I think longer term, you're thinking about, I think, some really interesting questions from a development perspective.

Getting back to epilepsy, which I think is a nice way to finish in terms of the recruitment being complete now. So 15 milligrams was not a dose in Phase II. We saw a clear dose response between 10, 20 and 25 milligrams in the XTOLE study, we would expect, all else being equal, that we'd see a dose response between 15 milligrams and '25 in the Phase III program. And our perspective is really in our discussions with FDA so far is to have more doses on label rather than less. And that's really driven by -- we know that there's going to be a different exposure relationship depending on the individual patients and some of the background medications. And so providing as much flexibility as we can to the epilepsy community and the epileptologists and neurologists we think, is incredibly important here.

I know Chris will give you more detail in his perspective as a neurologist, but I think having multiple doses available has been consistent with our discussions with FDA to date and consistent with what we would think about in terms of filing the NDA. Chris?

Yes. Just a couple of quick things to add. Our PK/PD analysis of the X-TOLE study suggests that we should have an intermediate response between the that we saw in the 10-milligram and the 20-milligram in XTOLE, we'll find that out soon. I think Ian's point about having multiple doses approved is extremely important.

And then just I'll end with a powering comment, which is that you only need about 40, maybe 50 patients per arm to be -- to have a 90% power if you're just assessing 25 milligrams that you counter versus placebo in a focal onset seizure study. So the study is really powered at 90% or maybe even a little bit more for the 15 milligrams and then overpowered pretty significantly for '25. So we think we're in as good a shape as we can be.

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

Great. Thanks, operator. And I really want to say thanks for everyone joining us today. And I do want to pass my credit to the entire Xenon team. This is an incredibly productive quarter. For the first time, we've completed enrollment and recruitment in our Phase III epilepsy program in XO2, and we're excited that we're getting close to top line data but we also initiated 2 Phase III clinical trials within the quarter, both in the psychiatric program. with bipolar being up and running in our second MDD study and getting our NAV 1.7 and real leadership position there into the clinic as well. So an incredibly productive quarter on the Xenon side.

I know we didn't get to all the questions today. I'm happy to follow up with people one-on-one after the call. But thank you for all of your support. And operator, we can now end the call.

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

Okay. We'll continue with the next session, which is Xenon Pharmaceuticals. I'm Paul Choi, and I cover the mid-cap biotechnology sector here at the firm. It's my pleasure to have Ian Mortimer to my immediate left here, CEO of Xenon. What we'll do is what we've been doing in other sessions, which is let Ian kick it off with maybe a high-level overview of Xenon, sort of where the company is, its key programs and the overall strategy, and then we'll get into Q&A.

That sounds great. And thanks, Paul, for hosting us. Always good to be here. So yes, I'll give a bit of an overview. I know we have lots of things that we can cover over the next half hour or so. But for many folks that know the Xenon story, obviously, we're a neurology company. Kind of a couple of big focuses for us, and I know we'll get through this in Q&A. So our lead molecule azetukalner is in a broad Phase III epilepsy program. So we'll talk about that.

We've also moved into neuropsychiatry, both in major depression as well as bipolar depression. And that late-stage clinical program is starting and kind of getting up and ramped up over the remainder of this year. And then I would say we're starting to talk a little bit more about our early-stage pipeline as well, which has been maturing nicely. We'll be in the clinic with 2 molecules this year. One is a potassium channel modulator that just started in clinical development recently. And then over the next few months, we'll get our first Nav1.7 inhibitor into the clinic as well. And I know we're starting to get some attention there.

But if we focus first on azetukalner in epilepsy, obviously, we have a Phase III program ongoing. That's our next big clinical readout, X-TOLE2, which is a Phase III clinical trial in focal onset seizures that we've guided to data in early 2026 and we can spend more time going into the details, but we really think the profile of azetukalner based on the Phase II data, I think, is really impressive, and we're excited to get to that Phase III data because that's on the critical path to moving towards filing an NDA and becoming a commercial organization.

And then as we've moved into psychiatry, our first azetukalner Phase III MDD study is up and running. We'll have our second Phase III up and running here shortly around midyear and then our first bipolar depression study as well. So a busy year for us in terms of clinical execution. And then obviously, over the next couple of years, it's going to be a really data-rich period with a lot of clinical data coming in 2026, 2027 and for the years to come.

Okay. Great. Maybe just one more point of overview for people who are newer to the Xenon story or maybe listening on the webcast. Can you maybe just remind us in terms of like what mechanistic validation you have here? Obviously, you can reference a prior market drug like Potiga and so forth. But sort of what at least at a clinical level, your initial X-TOLE study as well as the X-NOVA study have shown in terms of efficacy and safety for those 2 indications?

Yes. I mean maybe this is a good opportunity for me actually to take a little bit of a step back and talk a little bit about what I think we're building at Xenon. So we've been a company that's been around for some time, but we've really built these core capabilities of drugging ion channels in the CNS. So we work on validated targets, either they have genetic validation or pharmacologic validation. We're an ion channel company, and we're very focused in neurology.

So I think those are the things where we believe we can have a competitive advantage. And you'll see those themes run throughout the pipeline. But to your question on azetukalner, so this is a potassium channel modulator. So it opens or potentiates a potassium channel in the brain, and that can have an impact on reducing hyperexcitability and have the opportunity to treat epilepsy. And as you mentioned, I think the Phase II data were very robust. This was our X-TOLE study we read out a few years ago, although we're still continuing to treat patients in the open-label extension part of that study and...

It's been several years now.

Yes, it's been several years. And actually, there's an annual medical meeting that's really important in our space, which is the American Epilepsy Society meeting, which takes place every December, and we've been able to, every December, show another year of mature data. So this past year, we had our 3-year data on the open-label extension. And what we found for azetukalner in epilepsy and really what the value proposition or what we differentiate and how we speak with the physicians and the epilepsy community is this is a novel mechanism. There are no potassium channel modulators that are currently available.

On a placebo-adjusted basis, we believe that this is the best efficacy seen in a clinical trial for patients with focal onset seizures. The drug doesn't need to be titrated. And so the patients are treated with 1 pill once a day, and we see early onset because you're on a therapeutic dose on day 1, we actually see really strong efficacy. It was statistically significant at week 1 in the Phase II program, and we're continuing to monitor that also in Phase III. And then if you look at the long-term efficacy and safety data, it's really strong as well. So we're seeing patients have longer periods of seizure freedom. That's very important in terms of the quality of life of these patients. And then in terms of safety, we now have amassed over 700 patient years of exposure. We have our first patients that have been dosed more than 5 years. So we have a really good handle on the safety profile of the drug as well.

Okay. Great. Maybe turning to your Phase IIIs. Can you maybe just update us on how trial execution and trial operations are going in terms of enrollment with X-TOLE2? And then when would you potentially be in a position to announce sort of last patient in?

Sure. So X-TOLE2 is our first Phase III clinical trial in focal onset seizures. And we started this program a couple of years ago. We're getting close to the end. So we were able to announce in our Q1 financial results in May that we believe we're a few months away from the completion of patient screening. Patients do have to go through a screening in a baseline period before randomization and then it's a 12-week double-blind period. And so that puts us on track for data in early 2026.

The real approach to X-TOLE2 was to have consistency with our X-TOLE study. So the inclusion/exclusion criteria in the Phase III program is exactly the same. Because we had a really nice outcome in Phase II, we've gone to a lot of the same investigators, a lot of the same clinical sites. And so we have a relationship with them. We're using a lot of the same sites and geographies that we've used in Phase II. So a lot of consistency between the Phase II program and the Phase III program.

Okay. Great. I think at least based on my investor discussions, investors have a lot of confidence on the efficacy side. And so a lot of the conversations often shift to the commercial side and just post data, post filing and so forth, sort of what sort of commercial considerations and modeling factors can go into the thinking. And so maybe just starting with pricing here. And how are you thinking about I guess, pricing given the state of the market? And are you thinking about -- as you think about life cycle management, you are also looking at multiple indications. And so are you thinking about indication-specific pricing? Does one pricing model sort of work for multiple indications? Maybe just can you help us frame that analysis?

Sure. And before we get into some of the more detailed pricing questions, I think it would be helpful even just to talk about the epidemiology and what we think the opportunity is, at least let's start with epilepsy. So there's about 3 million Americans that have epilepsy, about 60% have focal onset seizures, the most common form of epilepsy. And we know it depends on the which literature you look at, but somewhere between 30% and 50% of patients are not getting to good seizure control. So if we look at that and then we look at -- there are patients, adolescent patients and pediatric patients that also have focal onset seizures. We believe it's about 1 million patients roughly in the U.S. that are still looking for better medicines where we think a profile like azetukalner could fit in.

In terms of pricing, so again, not that we have given any guidance on pricing, but the nice thing about epilepsy, these are specialty neurology priced drugs. So it's in a pretty narrow band, and we feel very comfortable with that. And actually interesting, if you look at the most recent branded drugs in both epilepsy and the recent branded drugs in depression, those price points are very similar.

Okay. Great. Potentially at the time of launch, maybe late '26, '27 or thereabouts, you and XCOPRI will be only sort of branded antiseizure medications on the market at that time. So there's a comp out there, but can you maybe speak to the value proposition that you think azetukalner will bring to the market versus those currently available therapies and how much you try to position your product?

Yes. So there's a number of drugs to treat focal onset seizures. Many, many of those are obviously generic drugs now. So we know a newly diagnosed patient is going to get a generic drug often they get exposure to drugs like levetiracetam or lamotrigine. We're seeing a little bit more lacosamide usage now that Vimpat has lost exclusivity as well. And so those patients are going on to a monotherapy generic drug. And for the patients that are doing well on that generic monotherapy, they'll continue.

For those that are either having tolerability issues or having still breakthrough seizures, that's when polypharmacy is introduced and physicians are looking at combining different drugs with different mechanisms of action. That's where we start to see the introduction of the branded medicines, and that's where we believe a azetukalner would be appropriate. As you mentioned, there is a drug, a branded drug that's currently on the market called XCOPRI or cenobamate launched a few years ago.

And you're right, based on our we will be the only 2 branded drugs when we're ready to commercialize azetukalner. I think XCOPRI is a good drug. There's some really good data there, and they've had some good commercial success. What I think we're really proud of in terms of the profile of azetukalner is it will be a novel mechanism. And because the drug doesn't need to titrate, as I mentioned earlier, I think those are some key differentiating features between us and XCOPRI. And obviously, we still have the Phase III data to -- the Phase III study to complete and the Phase III data to unblind. But so far, based on the profile of azetukalner, we'll have really good discussions with the prescribing community and the opportunity for this to be an important new medicine.

Great. Maybe just touching on the filing strategy briefly. You obviously had a very strong result with X-TOLE. You'll be in a position to unblind X-TOLE2 in the early part of next year. Assuming that study is positive, which I think is probably most people's base case, can you maybe just remind us, can you file on those 2 data sets? And then what happens with X-TOLE3 if X-TOLE2 is positive?

Yes. Yes. And I think it's actually useful to just talk about some of the other components of a new drug application as well, right? Obviously, there's a lot of focus on the clinical data, but we can't lose sight of the importance in having the nonclinical package ready and the CMC package and clinical pharmacology as well. So from our perspective, X-TOLE2 is on the critical path to filing an NDA. So we've had that regulatory interaction. And so as you're right, we plan to file with X-TOLE and X-TOLE2. And then everything else, and there's still a huge amount of work that's being completed, but none of that other work, either from a CMC perspective or a clinical pharmacology perspective is on the critical path. So that work is well in hand, and we feel very comfortable in terms of bringing all that together.

We have 2 other Phase III clinical trials outside of X-TOLE2. One is X-TOLE3, as you've mentioned. X-TOLE3 is a carbon copy of the X-TOLE2 study. So the same inclusion/exclusion criteria. We're running that at different medical centers, but the protocol is exactly the same. We believe that study is going to be required for filing in other jurisdictions outside of the U.S. The other thing is we can use the safety data from that from X-TOLE3 in terms of the number of exposures. And whether you're in X-TOLE2, X-TOLE3 or a third study, which I'll come to in a minute called X-ACKT, all of those patients go into open-label extension, that continues to add to the overall safety database, not only in terms of us being able to communicate to the epilepsy community, but also for using in our filings with regulators as well. And then the third clinical trial, as I mentioned, is called X-ACKT. That's in a different epilepsy indication called primary generalized tonic-clonic seizures. That study will take a little bit longer. It's -- the condition is not as prevalent as focal epilepsy. So these patients have fewer seizures, often more severe but those studies take a little bit longer to run.

Classically, we call them Grand Mall.

Yes, that's exactly right. The old nomenclature was the Grand Mall seizure, and now we call it a generalized tonic-clonic seizure. But yes, it's the same indication.

I want to follow a little bit up on your X-TOLE3 study, which is still enrolling, as you mentioned here, but in different study centers and geographies versus X-TOLE2. Just in terms of the U.S. filing requirement versus other geographies, is there a different focus, let's say, in Europe and other geographies in terms of freedom from seizures, seizure intervals, severity? Just sort of what is sort of the clinical regulatory focus in other major markets versus the U.S.?

All of the data that we generated in X-TOLE and X-TOLE2 and X-TOLE3, but if you're talking about jurisdictions outside of the U.S., we'll still use the X-TOLE and the X-TOLE2 data in those jurisdictions as well. So if we look at the 2 big jurisdictions of the U.S. and in Europe, the primary endpoint for approval, we capture those data in all of our studies, but the statistical analysis plan is a little bit different. So in the U.S., we focus on what's called the MPC as the primary endpoint, where in Europe, it's a responder analysis. So it's the percentage of patients that have at least a 50% reduction in their seizures from baseline to the double-blind period. So we run the exact same protocol, whether it be X-TOLE2, X-TOLE3. We have clinical centers, both in the U.S. and in Europe in both studies. And then when we get to the SAP level, we just changed the statistical hierarchy to meet the requirements of the individual jurisdiction.

Okay. Great. I want to continue maybe a little bit on the ex-U.S. strategy as well as plans. And just what can you say, I guess, at this point on commercialization and/or partnering for ex U.S. markets? I know you've previously identified the U.S. as your primary focus. But just, I guess, just what is the state of things and potentially partnering? And then my other question is, if you have an ex U.S. approval, just what does that mean for your U.S. pricing strategy, just given some of this Washington discussion on MFN and so forth. Maybe just help us put that picture together.

Yes, absolutely, happy to. So yes, I'll talk about kind of what our strategy is overall and how we're thinking about partnering. Today, I think it's important to know that we own 100% of this asset globally with no partners and no trailing economics. So the benefit in the position we're in right now is we have total flexibility. So we've been really clear in terms of our strategy. We only want to build the commercial infrastructure here in the U.S. And we can do that if we look at the type of sales force and the commercial infrastructure that we need to build, we're very comfortable in doing that in the U.S.

Actually, because we haven't commercialized previously, we've already done some of that work. We have people in our commercial organization already. Even last year, we invested in MSL. So we have medical science liaisons that are out interacting with the community. And we're starting to build not only the profile of azetukalner, but the profile of Xenon as a trusted partner in the epilepsy community. So we've been on that path for many, many years, and we're continuing to do that. Just as one small data point and aside is at the American Epilepsy Society meeting in December, we had 50 Xenon employees there, representing clinical development, clinical science as well as our commercial organization and medical organization. So we're already building the profile of Xenon.

We've made a corporate and strategic decision not to build commercial infrastructure outside of the U.S. So you're absolutely right. At some point, we will need partners for market access. Just to your last question, in the last discussion we had a few minutes ago, we believe we're doing the clinical development to access those markets, but we're not going to build the commercial infrastructure. As it relates to your specific question around timing and around potentially some policy changes, obviously, right now, we're not rushing out to do any partnering. We're continuing to do the clinical development and generating the data, and we can make those decisions in the future.

Okay. Great. I want to shift gears maybe a little bit to the MDD side and talk about X-NOVA. And maybe what did you learn as -- now that you're operationalizing your Phase III programs in MDD, what did you learn from X-NOVA that you're applying now in X-NOVA and anything you'd want to highlight in terms of specific changes with your go-forward clinical plan?

So we're -- this is the same molecule as azetukalner that we're running in depression. We ran our Phase II, which is the X-NOVA study that you're referencing was a bit of a smaller study, and we did that purposely because we really wanted to understand -- we felt that there was some good mechanistic rationale for a potassium channel modulator in depression, but we didn't have that experience yet. So we wanted to go out and gain that experience. So in X-NOVA, we ran a 3-arm study, 2 active doses in placebo, 10 milligrams, 20 milligrams versus placebo. And I think we saw some really interesting data. We saw a clear separation between active and placebo. we saw that there was a dose response that we saw an impact on 10 milligrams and then more of a drug effect of 20 milligrams.

So that was really positive. We saw separation on both clinical scale depression and anhedonia as well. But it was a smaller study. It was just over 160 subjects for the 3 arms, so just above 50 subjects per arm. So I would say we've actually made quite a few changes in going from that X-NOVA readout, which was at the end of 2023 to where we are today up and running in our first Phase III clinical trial. So I'll highlight some of them now. So we moved in terms of the primary endpoint from MADRS to HAM-D17. So both are well-validated clinical scales of depression. And from a regulatory point of view, you can use either endpoint. What we saw with HAM-D17, which is consistent with the literature, we looked at both of those endpoints in Phase II is that we saw less variability in the data. And so that's the endpoint that we're taking forward. So the primary endpoint in Phase III is HAM-D17 at week 6. We also have changed the sample size materially. So as I said, there was just over 50 subjects per arm in Phase II. We're going to be 225 subjects per arm in Phase III, and it's going to be a 1:1 randomization.

So we're looking at 20 milligrams versus placebo. We also know as you add additional active arms in a depression study, that can have an impact on your placebo rate. So the 1:1 randomization, I think, is an important decision as we move into Phase III as well. We've also increased the entry criteria from a disease severity perspective. And so we'll have a more severe depressed population in Phase III when we compare that to Phase II. We have entry criteria both on clinical scales of depression as well as anhedonia. So we'll be looking at both a depressed population as well as an anhedonic population in Phase III. And in Phase III, like in Phase II, one of the key secondary endpoints is looking at anhedonia. We look at a scale called SHAPS. And then there's a number of other criteria that we look at in terms of how the study is conducted. So that comes down to the CRO selection to the site selection, the investigators we're working with as well as using a third party through Mass Gen that they provide some of that third-party oversight and adjudication. So there was a number of things that we learned in Phase II that we're taking into the Phase III program.

Great. Maybe this is a bit of a Wall Street artifact, but it seems to be a bit of a recurring theme, which is just placebo responses in these types of studies. And so maybe what else can you say in terms of trial design or trial execution that you've implemented to sort of minimize placebo effects? And how is that sort of factored into your statistical assumptions here?

Yes. Look, I think in all of the psychiatry studies, trying to get the right types of patients and trying to manage placebo rate is absolutely critical to success. And so a lot of the things I talked about moving from a 2:1 randomization to 1:1, increasing the entry criteria. It's actually often those milder patients that you see more variability in the data and you often -- they often have a very good response on the placebo arm as well. So going to a more severe entry criteria, a more depressed population is another one that was important to us as well as all of the things that we have in terms of the oversight of the study, how you actually identify these patients and the types of patients that we enroll that eventually get through screening and are randomized and we have a lot of oversight there, both internally at Xenon as well as through the CRO as well as through a third party. So a number of different ways that we, like everybody on the sponsor side are trying to run an incredibly high-quality study with the right patients being enrolled.

Great. Now that we've had a few weeks of perspective on this, I just want to maybe get your latest thoughts or updated thoughts on the IST trial that was run on MDD here. And just single center studies are always fraught with risks and so forth. And so just can you maybe help us contextualize that study result, which unfortunately missed, but just contextualize that versus maybe what was different versus X-NOVA?

Yes. And I think we've been really consistent with our with our messages around this, whether we're talking today or we were talking 6 months ago or 12 months ago, we had always said that what was decision-critical for us was the X-NOVA result. Quite frankly, we're already in a Phase III program before this IST read out. As you say, a small academic center, I think, is difficult to interpret. And so we have been very consistent whether the data were good or bad. It really didn't -- wasn't going to have an impact.

But I think overall, the data are really consistent. The primary endpoint was actually not a clinical endpoint of either depression or anhedonia. Yes, it was an imaging endpoint. And that was really the purpose. This was NIH-funded work, and they wanted to look at neuroimaging. It was a functional MRI endpoint, and that's the way the study was designed. It was on the smaller side, it was about 30 subjects per arm, 1 dose, 20 milligrams of azetukalner versus placebo. And actually, at week 6, they had quite a good separation on MADRS. It was over 4 points and again, if we look at this study and we look at our X-NOVA study, what I really like is we saw consistency. We saw separation between active and placebo at every single time point between active and placebo, the active drug, 20 milligrams outperformed placebo at every endpoint on both MADRS and on SHAPS. And we absolutely saw some variability in the data, and we can see that when you have a small academic center with the sample size that they had. But I think it was really positive to see consistency in what we expected in terms of the azetukalner performance versus placebo.

Great. Maybe turning to your Phase III program and the X-NOVA2 study. Can you maybe just update us on how the cadence of study centers and IRB approvals is proceeding? How many -- sort of what the cadence and potential time line for enrollment is or just sort of what the latest thinking is there?

Sure. So X-NOVA2, that's our first Phase III clinical trial in MDD is up and running. That got started just at the end of last year. So I'd say we're like a quarter, 1.5 quarters into this. So we haven't yet provided formal guidance on top line data. So far, everything is going fine. This is going to be a U.S.-only study. It's going to be at approximately 50 medical centers in the U.S. Most of those are up and running now, and we're well into the early part of the study in terms of screening. So, so far, everything we've seen is kind of what we would expect. And I think probably within the next quarter or 2, we'll have enough information to provide that guidance to top line data.

Coming behind that, we're going to have what we call X-NOVA3, which is the second Phase III clinical trial. That should start. We've already -- it's going to be the same clinical trial design, obviously, at different medical centers. And I think we're going to have some ex-U.S. centers in that trial as well. That will be up and running in the next couple of months. And then kind of the new information that we provided a few months ago is that we're going to run a Phase III program in bipolar depression as well. And that first bipolar depression study will be up and running around midyear also. So yes, a fair bit of work on the psychiatry side. And then if we look at the phase -- maybe to answer your question a little bit more directly, if we looked at the Phase II X-NOVA, the number of centers and the length of time, these studies should take about 2 years to enroll.

Okay. Maybe just one related note on that is how competitive is it to find these patients versus other sponsors who may be running MDD trials. Just curious, these patients hard to find? Are the just sort of what's going on there? And then I had a question on bipolar.

Sure. Yes. We -- specifically in depression, again, for us, our experience is comparing this to epilepsy and the depression studies, I think, a little bit different. So finding these patients is not hard. It's quite a prevalent indication. I think finding the right patient and making sure that they meet all of the screening criteria is really important here, as we talked about earlier. So -- but yes, I don't think that we're going to be concerned about finding the MDD patients. Obviously, on the epilepsy side, it does take a little bit longer just based on the prevalence of that disease. But so far, no concerns in terms of finding the patients on the depression side.

Great. You not too long ago made the announcement that you're also going to explore bipolar. And so can you maybe help us understand -- obviously, we've seen very good evidence to date in FOS as well as MDD, but just sort of how are you able to make the leap into bipolar and then proceed with sort of a mid- to late-stage program in that indication and population?

Yes. I mean the benefit of azetukalner into any other indication is we know a huge amount about the safety profile of the drug, right? So that's very helpful. So if you look at -- and we've seen this both preclinically and now we've seen it in the clinic, both in epilepsy and in depression is that we know what the pharmacologic range is, right? So we know at what range in terms of what dose are we seeing activity, and we're seeing the same overlapping pharmacology in terms of that dose and exposure from both depression and in epilepsy, and we don't expect anything different in terms of bipolar depression.

So all of that information allowed us to make a clinical development, we didn't need to do dose range finding. So we haven't yet given all of the details on bipolar depression, but soon, over the next couple of months as that study gets up and running, we'll go through the sizing and powering assumptions and endpoints and everything. So stay tuned for that. But given that we believe this mechanism and this molecule has an impact -- a positive impact and antidepressant impact, we think that should translate both from MDD into bipolar depression. And remember, we're only looking at those bipolar patients that are in a depressive episode, not that are in a manic episode. So we're looking at the depression side of bipolar. There's other some -- actually some interesting genetics and some other literature out there that also supports Kv7 modulation in bipolar depression as well. I don't think we have time today to go into those details, but there's some literature out there that supports us moving into bipolar depression.

Okay. Great. You're running a fairly fulsome Phase III program or late-stage clinical program there are some sizable trials. And the question, I think, with regard to time lines and your balance sheet has come up periodically. And so can you maybe just remind us your -- what is your current cash runway assumption here? And how do you think about funding what is a very large-scale sort of impressive, I guess, as well, clinical development plan here?

Yes. So we ended Q1 with just under $700 million on the balance sheet. We're guiding that has cash runway into 2027. So obviously, yes, we have an ambitious clinical program for azetukalner in epilepsy and psychiatry. And now we're starting to see some of our preclinical molecules mature into clinical development as well. But everything we've talked about today in terms of the azetukalner clinical program as well as both our drug discovery efforts and our early clinical development efforts on the pipeline is all included in that runway. I think we're -- we have a good balance sheet. We've been well supported by our investors. And as I mentioned at the outset, maybe this is a nice transition to say we're going to have a huge number of clinical milestones during that cash runway starting with the Phase III epilepsy data early next year.

Okay. Great. We're coming up on time. So I also do want to touch on your early-stage pipeline as well. You talked about a couple of different assets earlier on. And I guess, in terms of the cadence of advancing these drugs in the clinics and potential initial readouts from Phase I or Phase II studies. Just can you maybe remind us how you're thinking about development time lines for these assets?

Sure. There's really 3 targets that we have been a focused priority for us over the last couple of years. And we're doing some other earlier-stage drug discovery, but the 3 targets that we've really emphasized publicly is additional molecules on Kv7. So these are follow-on molecules to azetukalner, molecules on a target called NaV1.7, which is a well-validated genetic pain target and molecules that potentiate a channel called Nav1.1.

Maybe I'll go kind of in reverse order. On Nav1.1, we've identified molecules that I think are looking really interesting preclinically. We highlighted -- I won't go through today in the interest of time, but we highlighted all of the work we're doing on Nav1.1 at the AES meeting at the end of last year. So there's some really nice posters that people can go and look at. But we should get into toxicology studies for the Nav1.1 program this year, which would put us in a position to transition into clinical development next year. The other 2 targets are a little bit more advanced.

So on Kv7, our next molecule, which is called XEN1120, that's now in a Phase I human clinical trial. What we'd like to do as we get through our safety studies that's in healthy volunteers is we'd like to move into a pain proof-of-concept study. So that will likely initiate next year. And then on NaV1.7, which is probably where we're getting a little bit more interest and questions on Nav1.7. Obviously, this is a highly validated target. It has been a challenging target for sure. But I think we have some very interesting chemistries that are now through the toxicology studies, and we're just actually in the next couple of months, we'll file a CTA and get that into a human clinical trial as well. So both our KV7 1120 and our Nav1.7, and we call our lead molecule there, XEN1701, those should both be in pain proof-of-concept studies next year.

Great. And maybe just quickly, do you think about focusing on in terms of clinical development, the acute population since that's sort of easier, shorter trials? Or how are you thinking about the chronic strategy there?

Yes. So the first proof-of-concept studies will be on the acute side. So the 2 proof-of-concept studies that I think most companies focus on is either a bunionectomy study or an abdominoplasty study. So those are the 2 ones that most companies focus on. We will as well. So the first proof of concept will be in acute pain. I think then longer term, as we think about the development strategy after those proof-of-concept studies, that's when you start to make the decision on additional work in acute pain and also starting to think about chronic pain.

Okay. We're out of time now. So we'll end it there. My thanks to Ian and Xenon for joining us.

Great. Thank you.