We're gonna 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. Tucker, thanks for joining us. Great, Jason. Wonderful to be here in Vegas with you and the BofA team and appreciate the opportunity. Great, m aybe we'll start with just azetukalner for FOS epilepsy. Recently had your confirmatory pivotal study and the next step's going to be regulatory. Maybe just, you know, at a high level, how would you know, coming out of that data, say the elevator hook is looking for azetukalner in the ASM space. You know, if there's a lot of different ASM alternatives. Maybe if you could just sort of frame the why and then we can go from there. Absolutely. 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. This is the X-TOLE2 study, which had a tremendous result, largest median percentage change in seizure frequency on a placebo-adjusted basis ever seen in a registration study. Helpful as well, it was incredibly confirmatory of the initial X-TOLE2 study, the X-TOLE study we had done in the phase IIb. The efficacy, the safety, all the metrics that you really care about were incredibly consistent with what we've seen before. We do think we've got a really great drug on our hands. As you said, we're gonna be marching toward filing our NDA submission in Q3. We have a really different product. 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. 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. We have a different mechanism of action. We've got a compelling efficacy profile, and an ease of use and tolerability that we think is gonna be really important as we touch on the commercial opportunity and the physician that we intend to go after. Yeah, we're really excited about the data from X-TOLE2. We've got some initial feedback from KOLs and physicians, it's all been incredibly positive. Yep. Okay. The, the plan, as I understand it, will be to file the NDA in 2032. What are sort of the You know, if you can kind of just give us a sense of, you know, regulatory interactions, what are the steps you know, needed to get that NDA through? Sure. We've 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. All the things that we could do beforehand without that data, we really worked on and got done. A lot of the CMC work, the module three components of the NDA submission, were all kind of prepped and ready to go. That still means there's a lot of work left to be done. You know, this would be our first NDA submission as a company, so it's a big lift. You know, not at all worried about the packet, but it is a lot of work. The team's working really hard right now to pull together the integrated safety summary and the other modules with the combined datasets. We'll have our interactions with FDA leading up to the NDA submission later this year, and we're really excited about that. Okay. 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, you know, bump that up to priority review to expedite things? You know, as you say, when you look back at prior approvals in ASMs, they're 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. I think, as you say, the base case really should be standard review, so 12 months from NDA submission. Got it. You mentioned the reductions in 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. The phase III studies in FOS cover usually either an eight or 12-week double-blind period. That's the principal data from the primary endpoint for both the X-TOLE study and the X-TOLE2 study. What we touched on at AAN were two things. One is some additional data from X-TOLE2 talking about seizure freedom, or as we really call it, a 100% seizure reduction in the double-blind period. Typically, seizure freedom from a clinical standpoint is thought of as six or more likely 12 months of no seizures. That's important because for these patients, in most states that you can't drive, if you've had a seizure within either six or 12 months. 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. What we saw was, again, really consistent with what we've seen in X-TOLE, as well as consistent with the OLE data. 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 four years, on therapy for a lot of these patients. What we see is whether it's in the double-blind period or in the OLE period stretching out years, but the efficacy continues to improve. We saw that as well in terms of 100% seizure reduction in the double-blind, where we're up at that level that you mentioned by the last 12 weeks. As you look back from four or six weeks out, it continued to go up. We think that's really important. You know, we bridged that to the OLE data, showing that if you're staying on drug longer, you're getting, you know, much more significant periods of seizure freedom. You know, we had a lot of patients out to four years. For those patients that had been o n for four years, a very high percentage of those were able to get at least 12 months of seizure reduction at some point over those four years. Almost 40%. There was another sort of 10% that were able to get seizure reductions, 100% seizure freedom over that four years. Really compelling long-term efficacy data that we think is gonna be impactful for us clinically as well as commercially. We've also heard just in, you know, 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 one. Biohaven has a later stage one. Not a lot of data that are out there, so it's kind of difficult to know what you're up against. Do you feel like the lead is so far and the bar is so high that you don't really concern yourself? 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? Yeah, that's right. We feel really good about our positions. As you mentioned, you know, we certainly have the pole position. We're furthest out with a really robust and deep data set for azetukalner. We've got the two 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 gonna set up well. 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. We've got a lot of other strong attributes as well. We're gonna try and get four doses on label with two doses that we've studied in the initial phase II-B, 10 mgs and 20 mgs alongside the 15 and 25 mg doses that we studied in X-TOLE2. We think that's really important because not all patients are gonna require or want or need the same dosage formulation. We've got kind of a really strong data set across a variety of doses that will allow physicians to figure out sort of what they're trying to solve for in 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? We think we've got a really broad moat that we built around our franchise with the azetukalner in epilepsy. We think the data, as you talked about before, kind of speaks for itself in terms of the strength of the efficacy data in the class overall. Certainly, you know, we're the only ones that have read out a pivotal study or registration study w ith a Kv7 today in epilepsy. Okay. Can you outline I know price is becoming a little bit more of a discussion point. You mentioned maybe starting some payer discussions now and as you get ready for launch preparations. Some of the unique aspects of being kind of a later line, you know, probably a two L or a three L drug in the FOS epilepsy space. It's a protected category, maybe just think about the proportion of the business is Medicare and how you envision policies. I know in past conversations with Xenon management, I think in epilepsy it's, you know, the payers will typically let one branded agent be included in a multi-drug cocktail. You know, as you think about sort of what the desired outcome would be from a ease of access standpoint, and how the policies will get crafted. Maybe you can talk a little bit about that. Sure. There's lots of impact there. Maybe first to set the stage. What we see in terms of clinical usage today is that patients typically go on like an SV2A inhibitor as a monotherapy to start. Then oftentimes, if they can't get seizure control, and luckily a lot of patients can get seizure control with a frontline agent, they'll often go to a second monotherapy, usually a sodium channel blocker. Then after that it gets more muddy. There's a lot of heterogeneity in terms of the clinical practice. Oftentimes it moves to a polypharmacy approach. You're mixing in SV2A inhibitors, sodium channel blockers, there aren't many mechanisms available. There's really just a handful of kind of general options available to physicians. 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. That leads to some interesting dynamics on the commercial side. 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. As you mentioned, it's a protected class for Medicare purposes. From a commercial standpoint, you know, because it's a highly genericized market, it's not heavily managed. You know, 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. 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 one or two, you know, there certainly are some of the traditional step edits, prior authorizations and formulary restrictions. 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 have been on an SV2A inhibitor or an initial sodium channel blocker. We don't in practice see that branded agents have a particularly challenging time getting reimbursement. Their formulary placements are very manageable and reasonable. We think we actually have a really nice setup from a commercial standpoint a s you mentioned. Th e team's 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. This will be the first FOS launch since XCOPRI launched in 2019. By the time we're on the market, you know, seven, eight, nine years. There's education to be done. It's not a category that the commercial payers have had to pay attention to. 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. I think what's been said, on different calls, I wanna make sure I summarize this right, is that the company's, you know, believes that there could be a price premium relative to say where XCOPRI comes out. That's like the current, you know, most widely used branded agent in the ASM space. Yeah. You know, obviously the team's been doing a lot of work on pricing, with the data from the phase III in hand. You know, 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. You know, it's interesting because the last branded launch of Dimensions was in 2019, it's been a number of years. I think if you look across the landscape of biotech and pharma in general, you know, prices have gone up in that time in terms of launch prices for a lot of new drugs. We think we've got a really strong, compelling, value proposition to provide. You know, we'll continue those conversations. We do think there's potential for, you know, premium pricing to where those agents are today. We think it's justified based on the strong efficacy, safety and overall clinical benefit that we bring with a novel mechanism. Yep. 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. half a million or $500,000 or so, $500,000-$600,000, if I have my numbers right. What I wonder is like of those, you know, what proportion are presenting for a new treatment cocktail in a given year? That's kind of your in-play dynamic market in any given year. I think what a lot of people who followed launches in this space, there's a bit of a slow year one, two, and then a build, right? I do wonder, is it just a dynamic where, you know, 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? Yeah. The FDA would say 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, you know, they're well controlled with an existing medication. I'd say roughly half of those patients don't need and aren't looking for on a regular basis a new therapy. The others do. Only roughly half of those patients are not well controlled. Some of them are not well controlled at all and are really uncontrolled patients. You know, what we're looking at is that the half of those patients is the ones that we think within FOS are going to be the. Half of the one nine. Half of the one nine. Amongst those, there's probably just over half of those are kind of partially controlled. They're getting decent seizure reductions. They're not having those seizures as frequently, but they're certainly not, you know, well controlled to the point where they're not looking for other possibilities. You know, just under half of those are really uncontrolled. I think at the outset, when you look at our commercial launch in FOS, you know, we're likely to be making our first headway into that group of uncontrolled patients. We do think that again, given the novel mechanism, the strong data, you know, that our goal is to rapidly move up, you know, earlier in the treatment paradigm, and be, you know, one of those early add-ons to your initial SV2A or sodium channel blocker. You know, 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. 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. For that uncontrolled group, do you have a sense of, you know, those people will trial a regimen three, six 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, in others it takes a while. Maybe it works early and then stops working. Yeah, I think it's really, you know, patient specific. I think there's a couple of flavors of what you see. You typically see patients who, you know, either are looking for new therapies because they're not getting the efficacy that they desire. They're getting breakthrough seizures and uncontrolled seizures. Again, there they would look to typically add on another ASM. Again, you see stacking. Like in our clinical studies, you know, patients had been on an average of, you know, six prior ASMs. They were on the study in both arms on an average of 2-3 ASMs. Patients kind of have this polypharmacy approach. You know, what we see then is other patients who maybe don't have the ability to tolerate the drug. There's certainly, you know, a lot of adverse events that patients suffer from with a lot of the sodium channel blockers. Oftentimes you'll see patients who'll be looking for new therapies and discontinue their existing ASMs for tolerability concerns. 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, you know, 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. 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, you know, they've been going off the same mechanistic basis. Having a, you know, potassium channel modulator could provide a very different option to them to try and maximize efficacy. Can you talk a little bit just about like the marketplace, and who is the likely prescriber of a drug like azetukalner? If I talk to a neurologist in a tertiary care setting, right? 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 the patient on a clinical trial or a non-therapeutic option. This drug's a lot easier to give than the competitive brand, which is XCOPRI. That makes me think, all right, this could play well more with the community, who may be less inclined to do these non-therapeutic options. Maybe can you just paint a picture of who are the likely, early users or bulk of utilization is going to come from? Yeah. 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, you know, the specialists who treat epilepsy patients day in and day out, and the general neurologist. As you say, you know, XCOPRI is a good drug. It does really well for a lot of patients. Because it has issues in terms of its titration, the need to manage drug-drug interactions, it really is very much relegated to the epileptologist. Most of the scripts for XCOPRI are in that setting, very few are in the general neurology setting. We think with azetukalner, we've got a very different profile. It has sort of 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. Again, the efficacy and safety profile that we think is really favorable. 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. A lot of these patients are still at the general neurologist. 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 a lot of these general neuros. They may hold onto patients until they look at things like non-surgical options, medication options, things like surgery, and then refer out to an epileptologist. 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'll 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. 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. If you look at the kind of prescribing base, there's probably about 2,400 epileptologists in the U.S. There's 18,000 general neurologists. We're going to really target about 7,000, 8,000 physicians at the outset. 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. The goal really is to be a widely used ASM across both parts of the channel. We think we've got the profile to be successful there. 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? Yeah. We're going to start with about 75 reps on the commercial side. Our field force in total, you know, 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 12 MSLs on staff doing scientific communication. They've been great about really getting some initial feedback from KOLs on the data. Yeah, we think that that profile can capture, you know, that strong market share that we're looking for amongst the epileptologists for the personal promotion. We're going to use a lot of non-personal 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. Yeah, we think that's a really good starting point for us. We think it's going to be an effective way to do it. It's similar to what SK has today. I think they started with a little bit higher number of reps. They were probably like 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. We think it's a great starting point, very manageable for us to do, and will allow us to capture the opportunity in both settings. When you think about launch curve and comps that are out there, would you advise investors to say, hey, look at how XCOPRI looked in the first four to eight 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? Yeah. The commercial team's going to be doing a lot of work now to refine their go-to-market strategy and their launch forecast. I think we'll have more color as we get closer to launch itself. What I'd say is that in the past, certainly if you look at prior launches in ASMs that, you know, like XCOPRI, I like the prescribing patterns that a lot of these physicians do. They're kind of low and slow. These are not hockey stick ramps, rare disease launches where you get, you know, a huge number of patients that are warehoused or bolus, and you've got this kind of, you know, revenue number that just is up into the right really quickly. It tends to be a more gradual slope of the curve. You know, our goal is to have the best FOS launch ever. You know, 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. Again, it's a relatively conservative physician base, so we're going to have to do a really strong job to try and help bend that. I think XCOPRI was unfortunately hampered a little bit by the fact that it launched during the pandemic. Yeah. That certainly didn't help them. Again, we think we've got a really good value proposition, a strong story to tell, and a commercial team that's very experienced in doing new drug launches, new drug launches in epilepsy. We think we've got the opportunity to have a fantastic launch. You know, 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. Yeah. 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. 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. You know, 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 service bag. It's not really a viable proposition for us, but we think there's great value there. You know, we'll continue to build value in the, in the data packet, everything from running X-TOLE3, which is another phase III study, that is ongoing now. We've said we'll finish enrollment for the non-Japanese portion of subjects later this year. That is very much a carbon copy of X-TOLE2. The reason we're running that study is principally for ex-U.S. purposes. In Europe, for instance, the regulatory guidance is that you have two 12 -week studies. Our initial X-TOLE trial was an eight-week double-blind period. It was 12 weeks in X-TOLE2. This would give us two 12-week studies. What we announced earlier this year as well is that we had gotten alignment with the PMDA in Japan, based on the results of an ethnobridging study we had done that would allow us to take 60 patients out of the 360 from the X-TOLE3 trial and allocate those to Japanese subjects. That would allow us to not have to run a separate, you know, efficacy study in Japan. 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. One of the issues today for a lot of sponsors and in fact like us is, you know, the potential for Most-Favored-Nation or MFN here in the U.S. You know, the economic value from a pricing standpoint in return heavily favors the U.S. If you look like an XCOPRI, you know, they're doing about $500 million kind of annualized here in the U.S. It's about $100 million in Europe. You know, it's a fraction of what it is. For us, the economic return is still heavily dependent on our ability to capitalize on stronger pricing here in the U.S. At the moment, you know, I think we'll be cautious about how we think about partnering. Certainly at the right time, you know, 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. Yeah. Okay. Maybe just, you know, focus on the next thing, which is I guess, MDD data in the story next year. What are the aggregate learnings here around the profile of azetukalner on mood in the epilepsy population and the extent you see read through to the MDD studies? Yeah. What we know kind of qualitatively from our discussions with physicians and what we see in the adverse event profiles that unlike other ASMs, you know, we don't have any worsening of mood, which is really, really great for epilepsy. And that gives us, you know, a little bit more confidence in MDD, but I'll talk in a second about, you know, 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. You know, 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 know, you could have background medications there. What we saw was that we had a positive benefit for these patients on that PRO, and also the control arm, right? These patients there also saw a similar benefit to what they'd seen in the treatment arm. I think it was helpful for us. It, I think, gave us continued confidence that we've got mood neutrality within the epilepsy framework. On the depression side, you know, we're really pleased from our X-NOVA trial, which was the phase II study that we ran a couple years ago that came out with a positive result on measures of depression. We had clinically significant separation from placebo in those cases on two endpoints, MADRS and HAM-D. We'll be studying HAM-D in the X-NOVA2 trial reading out in the first half of next year. You know, there'd been a prior generation drug with a Kv7 mechanism that also had positive clinical data in depression. We've got kind of clinical evidence that we think gives us confidence to run the study. As you well know, these are really tough trials to run. You know, you get a lot of placebo effect. 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 larger 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, you know, 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 three pivotals going on for MDD. FDA has communicated you only need one pivotal study now. If X-NOVA2 is positive, does that create a potential regulatory path? This whole discussion, I don't know if it's confounded by recent changes at FDA and sort of the catalyst behind that. Yeah. You know, we're going to read out the first of the phase III in MDD in the first half of next year. You know, our hope is that we may know a little bit more about FDA's posture on, you know, one study approvals. And that will, you know, give us a little bit of time. I'm glad we're not kind of having to make that decision today. 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. You know, I think the caution that, you know, we think about with respect to the one study approach is that, you know, 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 to touch on. Yeah, 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, you know, in a year's time. We're also cautious given the indication in general and the fact that, you know, it may be one of the more conservative areas of FDA when it comes to looking at one study, we'll see. All right, great. Well, we're out of time. Tucker, thanks so much for joining us. Great. Thanks so much for having me, Jason. All right. Take care.