Okay, we're going to get started with our next session. I'm Andrew Tsai, Senior Biotech Analyst here at Jefferies. Thanks for joining. It's my pleasure to have the Xenon team with me today. To my direct left, Ian Mortimer, CEO, and to his left, Tucker Kelly, CFO. Welcome, both of you. Great. Thanks, Andrew, for having us. Thanks for having us. Ian, Tucker, congratulations on showing blowout phase III epilepsy data, I forget when, like two months ago. Anyway, people who are less familiar with the Xenon story, could you give us a brief overview about your lead program, your other pipeline programs, and the milestones over the next 12, 18 months? Sure. Happy to, good morning, everyone, thanks, Andrew, for hosting us today. We appreciate it. For those that are less familiar with the Xenon story, there's really three things that we focus investors on. One is our lead molecule, azetukalner, in epilepsy. The second is the expansion of the program into psychiatry, the third is our earlier stage portfolio focused both on pain as well as a really interesting epilepsy target called NaV1.1. If we start with azetukalner in epilepsy, as you mentioned, Andrew, we had really strong phase III data earlier this year in March. It was called the X-TOLE2 study. Azetukalner is a potassium channel modulator. It targets Kv7.2 in the brain. We've now, in epilepsy, unblinded two large randomized studies, X-TOLE and X-TOLE2, I think when we unblinded the phase III study, we really exceeded our expectations. The placebo-adjusted efficacy is the best that's ever been seen in focal onset seizures in an incredibly refractory population. We're going into the most common form of epilepsy with a novel mechanism. There are no potassium channel modulators on the market to treat epilepsy today. The molecule doesn't need to be titrated. It's one pill once a day. We don't have to make adjustments for drug-drug interactions with other anti-seizure medicines, and the drug works very quickly. You see an immediate separation at week one between active and placebo. You see a clear dose response between the four different doses that we have tested over the two big clinical studies, X-TOLE and X-TOLE2. The efficacy is really strong, both in the near term, but also in the long term. From our phase II study, we have a seven-year open label extension study. Later this year at the American Epilepsy Society, we'll have the five-year data. What we're seeing in those patients that have been on the drug longer, they're doing even better. The four-year cut of the data that we announced about six months ago, for those that have been on the drug for more than four years, up to about 40% of them are getting 12 months of seizure freedom. This is absolutely remarkable when you think about the patient population. These patients, the median patient, has failed six anti-seizure medicines. They're on three background medications, and they're still having a seizure every other day. We're getting the subpopulation that is having long periods of seizure freedom. This is having a significant impact on the patient's quality of life. For that program, we will file our first new drug application later this year in Q3 and then hope to have a commercial launch in the back half of 2027. That's in epilepsy. We are expanding also into another form of epilepsy called primary generalized tonic-clonic seizures, and that phase III study is ongoing. If we expand outside of epilepsy into psychiatry, we have a large phase III psychiatry program. Today, we have two clinical trials in major depressive disorder that we call X-NOVA2 and X-NOVA3. The first of those will read out in the first half of 2027, which is our X-NOVA2 study. We also have a third psychiatry phase III study in bipolar depression. Not only do we have a very active program in epilepsy, which will be the first commercial launch, but we're expanding into psychiatry as well. If we look at the earlier stage portfolio, we transitioned two molecules into phase I human clinical studies last year. These are both going to be developed for pain. These are novel mechanisms. One is a Kv7 drug that we call XEN 1120. The other is a target called NaV1.7, which has really incredible human genetics behind it, which is called XEN 1701. Both of those molecules are in healthy volunteer studies in phase I. Those will wrap up this year, and then we hope to move them into phase II proof-of-concept studies in pain. That portfolio has been maturing really nicely over the last little while. Lastly, as I mentioned, we have an epilepsy target called NaV1.1. This is an oral small molecule that would be developed for patients with Dravet syndrome. We're in toxicology studies in that program. Hopefully we'd have a molecule that would transition into human clinical development next year. Balance sheet is strong. We have $1.3 billion at the end of Q1. Gets us cash runway into 2029 with a huge number of critical milestones over the next few years. Wonderful. Sticking with focal epilepsy to start, you mentioned earlier at AES, we can expect five-year data from the phase IIb open label extension. From the phase III, can we expect additional analyses, actually, at AES? Yeah. As Ian said, we've been really, I think, fortunate to have a really deep database of clinical data over an extended period of time from the phase IIb. We'll obviously, as we talked about, continue to publish on that. The phase III does have an open label extension that's not as obviously mature. We just read out the study in March, so if you do the math and roll back to when the last patients come on study, we really don't have the last patient in have at least a year, which is typically what we'd like to do, have these annual cadences of disclosure around them. We will build additional data there. It's at a different dose as well, right? The initial OLE was at that 20 mg dose. We're at 25 mg there, which is the high dose that we studied in the phase III X-TOLE2 study. I think it's going to be a great complementary data set, and that will continue to evolve over time, and I think speaks to the real depth of what we see in terms of benefit, and the really good safety and tolerability profile, even after patients have been on the study for four or five years. Right. The question then would be when, then? Back in the phase IIb, you did do additional analyses like subtypes, type 4 seizures, or seizure benefit by baseline ASM use. Yeah maybe even mood neutrality. Yeah. When do those data points come? Yeah. We'll see some of those. The abstracts will be submitted shortly for AES. We'll have multiple abstracts. Yes, we'll absolutely be looking at different analyses within the phase III program, X-TOLE2. You mentioned some of them that we've done previously. Those are absolutely on our list, looking at different seizure subtypes or different populations of patients that maybe had less severe or more severe disease. We haven't submitted the abstracts yet. That'll be shortly. We expect to have a big presence at the American Epilepsy Society meeting as we do every year. Okay. Worst case, I'll stay patient. On the mood neutrality part in this phase III, because it could maybe give some people more conviction about your phase III MDD data in the first half of 2027. Did you happen to see signs of mood benefit or neutrality in the patients who happen to have high comorbidity for depression? Yeah, I think it's a good question. Let's take a bit of a step back first. We know that for epilepsy patients that have breakthrough seizure, a lot of them have psychiatric comorbidities. These patients have depression and anxiety, many of them do. The more refractory patients, you see those psychiatric comorbidities at a greater rate. Really to tease apart the antidepressant profile of this drug is in our MDD studies. Those, the first one, as I mentioned, we'll read out in the first half of next year. What Andrew's referring to is in our phase III epilepsy program, we did look at endpoints on depression and anxiety. Couple of comments on that. One, that wasn't an entry criteria into the study. The entry criteria into the study is to have a certain number of seizures on a monthly basis, not whether you had elevated depression or not. We actually didn't find a significantly impaired population from a depression point of view in the study. We also did not use a clinician-administered scale. The scales that we use in depression studies are scales like the MADRS scale or the HAM-D17. Those are administered by a psychiatrist. We did not have a psychiatrist participate in the epilepsy program, so these were patient-reported outcomes, so very quick forms for the patient to fill out on every visit. What we have said, we haven't shown the data publicly, and I would still say we're still analyzing some of it, but what we did say at top-line data in March is we saw all patients get better. Whether they were on the placebo group or on the active group, when we looked at those patients that had elevated depression at baseline, those patients got better regardless of what group they were in. Which is probably to be expected because we didn't control for all of the things that you would control for in a psychiatry study. These patients had lots of visits, and it wasn't a one-to-one randomization. They didn't have elevated depression coming in. What we see is that the patients in both the placebo and the active groups did better in terms of their depression and anxiety when we look at those data. I will say we're still continuing to do more analysis there. Great. In the meantime, like you said, you're planning to file in Q3. That's coming up. Given this kind of data, though, does it make sense to file for breakthrough designation just for bragging rights, for instance? Plus, if you got a breakthrough, maybe a high likelihood or chance to get a priority review from there and expedite the approval and launch. Sure. We feel really good about the package we've got to submit to FDA. The efficacy and safety and tolerability has been really exceptional. We're always going to be strong advocates, certainly, for our product, and we think it's going to help a lot of patients. From a regulatory standpoint in posturing, the breakthrough is a very high bar and not one that you see in focal onset seizures, I wouldn't expect the breakthrough. Therapy designation is something we would expect, and that's similar for even priority review. Prior FOS drugs have not gotten priority review. We've got a novel mechanism. We've got great data and efficacy that can help patients that are having uncontrolled seizures. It's quite a high bar. I think our base case that we've communicated to the market is that we would expect a standard review, and if that certainly changes, we'll let you know. Great. Just thought I'd ask. Let's just say you're approved on a standard review basis in the third quarter of next year. From the time of that approval to launch, I guess there's also DEA scheduling. How long does that take, and what kind of scheduling do you think you'll get, and is that going to hurt or dampen sales in any way? Yeah, that's right. In this class of medications, you've got to do human abuse potential studies, and the ASM class broadly is scheduled by DEA. One that does add onto the timeline for actually getting product to patients. Following the FDA approval, you've got a three-month or 90-day period with time for the DEA to respond and to get to the scheduling. That's just part of the regulatory process we've got to follow till we get on the market, and we would expect to be scheduled like others. We don't expect that to have any impact commercially to the product and its uptake. We feel really good about the overall package we've got. Now let's talk about the launch prospects. Bottom line, it feels like you've got all the attributes of what epilepsy doctors want, and not just epileptologists, but general neurologists as well. Why wouldn't there be a bolus? Once you launch? I think it depends what you mean by bolus. Look, we think there's going to be a lot of patients out there who unfortunately don't have good seizure control today, who are looking for something that's not an SV2A or a sodium channel blocker to help them get that kind of relief. I think in that sense, there'll certainly be a group of patients and physicians who are eagerly awaiting a new approach and a new medicine. We obviously have a great profile for them, as well as for patients who over time may continue to have breakthrough seizures. I think if you think of a bolus in the sense that we're going to have a big spike of patients come on, like you would maybe in a rare disease, we don't think that's likely to be the case. We do think there's going to be a lot of work that we've got to do to help educate a lot of physicians who don't know the mechanism, because this will be the first time that they'll have something in their hands with a potassium channel modulator. Yeah, it's going to be, I think, very much something that physicians are looking forward to. Bolus, in terms of a large number of patients, has a different trajectory and launch curve, I think is not likely to be the case in FOS. Yeah. Maybe just to add to that, you referenced the two prescriber bases of the specialist versus the general neurologist, which I think is maybe worth spending a minute on. There are epileptologists, there's about 2,400 of them in the U.S. that treat these patients. Many of these patients are also treated by their general neurologist. What we find is the epileptologist, obviously it's a specialist, there's a number of drugs that they're comfortable using, that the general neurologist is not comfortable using. The only branded drug that's currently on the market to treat focal onset seizures is XCOPRI, which has quite a challenging titration, and also has a number of DDIs, and so there has to be adjustments made. Not only do you have to titrate up, but you have to adjust the other background medications. That's something that the specialists are very comfortable with, but it is more challenging for those in general neurology. I think the profile of this medicine, we've talked about the mechanism and the efficacy, but the ability that the drug doesn't need to be titrated, you're on your efficacious dose on day one and you don't have to make adjustments for other background anti-seizure medicines, does make the profile of azetukalner really something that the general neurologist feedback is incredibly positive. We will be building the commercial infrastructure and thinking about it not only from an epileptologist point of view, but also from the general neurologist. Great. Speaking of XCOPRI, I think that's expected to do $1 billion in peak sales in the U.S. alone, you just mentioned, I think you have better properties than XCOPRI. Is it your full expectation you gain more traction than XCOPRI full stop? Yeah, look, XCOPRI is a good drug. It provides a lot of benefit for a lot of patients. As Ian said, it really is, given a number of its properties around ease of use and having to manage DDIs and titration, not one that is widely used amongst the general neurologists. We do think we've got a very differentiated profile. We think we're going to be able to penetrate both the epileptologist and help those patients that may be on XCOPRI today, but we think we've got a much broader profile. We saw that in the clinical studies, right? In X-TOLE2, we had a lot of patients that either had seen or been on XCOPRI during the study. It was different from when we ran the phase II study. At that time, XCOPRI hadn't been approved or was just approved toward the very end. We had literally a handful of patients. We think we've got a profile that really is superior to what XCOPRI has in terms of some of its ease of use attributes, and we think that'll help us with uptake. Look, it's been a good drug, it's doing well. We think we've got the opportunity to bend the shape of that curve and have a launch that's a bit better than that, but over time, really importantly, get that broad penetration amongst the two physician prescribing groups and a deeper penetration among the patient population that would make it a larger commercial opportunity than what they have. We're just talking volume, but there's also the pricing side. Talk about how you're thinking about price. Is it going to be a premium to XCOPRI, which I believe costs $15,000 a year? Yeah. XCOPRI, again, was launched back in 2019, 2020, during the pandemic, but they also priced at a different time in terms of what we see today with new drug pricing. Look, we think we've got a great benefit-to-cost story to be told to payers. We've been engaging with them before the X-TOLE2 data, and we'll continue to do that now with the package that we have. We do think that we've got the chance to price above where XCOPRI, which today is the only branded drug in FOS that's still out there. We've got a really compelling value proposition for payers. We'll be doing that work with our commercial team and market access team now between here and launch. We haven't talked about what range of prices they might be. We do think there's an opportunity to have enhanced pricing from what the class historically has seen. Great. The sales force strategy here, how many sales reps do you need to market effectively in both doctor groups? We're fortunate, as Ian said, to have a really strong balance sheet with $1.3 billion today, and that gives us, I think, a lot of confidence going to the launch. We've got a great team that's launched drugs and launched SM drugs before. Our belief is that we can really get good uptake with a very initially modestly sized field force. We think we need about 75 reps in the U.S. to be able to effectively commercialize to the epileptologist and this target group of general neurologists, and the ability to use things like non-personal promotion to really get awareness for the brand and for the company out there. I think over time, the great thing is we're going to also have a distribution model that gives us a lot of access to data and information. We think that'll be key to help us continue on that path, trying to find the best way to get the broad reach into the general neurology population, and expand access and uptake for the drug. I think over time, there's certainly opportunities to continue to deploy capital in really effective ways. At the outset, we think we've got a really modestly sized field force that we think can really do the job. Great. This is more of a check-the-box question on, do you actually have a second phase III, X-TOLE3? What exactly is the timing for that? I know the purpose of that is also to help drive EU approval, but the timing could be helpful here. Yeah. We had two phase III clinical trials running in parallel, X-TOLE2 and X-TOLE3. They're carbon copies of each other, the same inclusion/exclusion criteria. X-TOLE2 was the critical path to filing in the U.S. with our X-TOLE data. That's the interactions we've had with FDA, and that's why we'll be filing the NDA here shortly. X-TOLE3, we've really focused on approval in Europe, and we've had interactions with EMA over the past number of years. Importantly, we also had regulatory interaction with PMDA towards the end of last year. We're amending the X-TOLE3 protocol to include Japanese subjects. We're not going to have to run a separate phase III program in Japan. We can incorporate Japanese subjects into the ongoing phase III and X-TOLE3. I think that's a real advance that we made towards the end of last year, and this was on the backs of doing an ethno-bridging study. What we've said for X-TOLE3 is that the non-Japanese enrollment will complete this year. We've made really good progress. The Japanese sites will be up and running this year, and we'll start to get Japanese enrollment. The study will take a little bit longer to complete overall, but the non-Japanese enrollment will complete this year. Okay. Very good. Shifting to your other programs out there, you said earlier there's PGTCS, MDD, bipolar depression, all for esketamine. You've guided to the one of two MDD studies to read out in the first half of 2027. For the remaining three studies, MDD, BPD, PGTCS, can you give us the cadence, which one might come first, and when that could be? Sure. I'm happy to wrap up epilepsy first, then we can move to psychiatry. We've got an ongoing study in primary generalized tonic-clonic seizures. Patients with PGTCS, it's a less common epilepsy than focal-onset seizures. These patients have fewer seizures as well, but they're more severe. It's the tonic-clonic seizure, what we used to call the old nomenclature was the old grand mal seizure. Unfortunately, these patients have a greater risk of things like fall and injury, but they also have a greater risk of what we call SUDEP, which is sudden unexplained death in epilepsy. A huge medical need. It is a more challenging clinical study to complete, we haven't guided to timing, we would expect that this would be an sNDA that would be after the approval of azetukalner in focal-onset seizures. If we move to psychiatry, we've guided for the first study, that's X-NOVA2. That's an MDD study that'll read out in the first half of next year. The cadence of X-NOVA3 is it started about six months after the start of X-NOVA2. You can think about the cadence of psychiatry readouts, starting with X-NOVA2, then followed by X-NOVA3, and then it would be the bipolar depression study. Great. Thank you. In MDD, because X-NOVA2 is reading out first half 2027. phase II, you showed a three-point placebo-adjusted delta on, give or take, I think MADRS and HAM-D. Now the primary endpoint is HAM-D. Maybe talk about your confidence, why the efficacy separation will not actually degrade in phase III for this X-NOVA2 study. Yeah. Look, I think we have to acknowledge that psychiatry drug development's incredibly challenging. We made a number of changes from the phase II study to the phase III study. For this mechanism, this potassium channel modulation mechanism, there have been four clinical trials that have been run in major depressive disorder, two with a predecessor molecule that was called [esketamine], and two with our molecule, Azetukalner. All four studies had a separation between active and placebo. Our perspective is that this mechanism has an antidepressant effect. The question is how do we execute the best phase III program that we can? The changes that we made from phase II to phase III, we went from 2 to 1 randomization to 1 to 1 randomization. The literature supports that that will have an impact, a positive impact on the placebo rate. We had a significantly increased sample size. We are using HAM-D17 as the endpoint and not MADRS, and that's because we saw less variability. We had a nominal P value of less than 0.05 in the phase II for HAM-D17, and that was because we saw less variability for our mechanism with that endpoint. We've also increased the entry criteria, so it's a more severe population coming in. We have fewer visits. We're using the MGH CTNI SAFER group to be able to provide trial oversight. We have a placebo script. We're doing a number of things to try to manage that study as best we can as we think about moving from the phase II program to the phase III program. Because the sample size has increased materially, that we can power it such that we could have less than a three-point separation and still have statistical significance. Thank you. What's interesting here, based on phase II data, the safety profile in this patient population actually looked quite clean to me. Yeah. I think that's very differentiated. When I think MDD drugs, it's kind of riddled with side effects of other therapies. Would you expect the same kind of AE profile actually in phase III, more or less? Yeah. We had this discussion with you, Andrew, and with investors going into the phase II study, and depression, the safety profile was a concern on what it would show in that patient population, and it was surprising to us. It was actually more benign. This is a cross-trial comparison, I think we have to be a little bit cautious in that. The epilepsy patients are on multiple background medications. The depression study's done as a monotherapy. I think it's difficult to completely answer the question, but we saw the same side effects we see in epilepsy and depression. We just saw them at a lower level. It looked like a more benign safety profile, at least on the surface, in depression. I really think that azetukalner in depression has a number of clear differentiators. Psychiatry, like epilepsy, there's lots of drugs available, but very narrow in terms of different mechanisms. Bringing a novel mechanism into psychiatry is important. The challenge with the SSRIs and the SNRIs, it often takes weeks or months for these drugs to work. What we find in psychiatry, the same thing that we see in epilepsy, that the patients that respond very quickly. We see that separation immediately. If someone's in a major depressive episode, to be able to have early onset to efficacy is important. The other thing is not just the side effect profile, but a different side effect profile. Current standard of care in psychiatry, you see things like weight gain and sexual dysfunction. We don't see either of those adverse events in the profile of azetukalner. Then the last point is on anhedonia. Really, many of these depressed patients, the current standard of care can maybe help them on the depression, but they still don't have the motivation or the enjoyment, so they're still anhedonic. What we found with this mechanism, and there are scales for us to look at this, we looked at it in phase II, it's called the SHAPS scale. We're also going to look at it in phase III, is it looks like there is a separation on anhedonia, that we're also improving a key comorbidity in the depressed population. The other thing, just to double-click on something that Ian said as well, was that what we see in our market research and in talking with physicians is that, yeah, they really value the different safety profile that it brings and a different option, and that efficacy is certainly important, but if you've got a drug that's approved and efficacious, it really does oftentimes comes down to sort of what's the right tolerability profile for my patients here, and I think that's where we can offer something different in addition to mechanism, but a different safety profile. We also decided to use a slightly lower dose as our top dose in MDD. We went with that 20 mg dose very intentionally. The goal was, again, to try and hit that sweet spot of getting good efficacy, that we can get that separation from placebo that we need for an approval. We really try to manage the side effect profile so that we can, at a commercial level, provide an alternative that we think is going to be really attractive for physicians and patients. At the end of the day, if this is approved, where do you think this will be positioned relative to antipsychotics, for instance? Yeah, look, it's a marketplace that's evolving. There are, as Ian said, a lot of options for patients. We're really pleased with our initial research that we've done into the potential positioning for it. We obviously have to get through the studies themselves, but we do think the novel MOA, the different safety profile can provide an alternative along with things like the rapidity of onset and getting that disease benefit in terms of patients feeling less depressed, hopefully dealing with things like anhedonia, while not having things like sexual side effects and weight gain. We think that's a really compelling profile, and there's obviously a lot of people that need different alternatives that maybe haven't responded to SSRIs, or it's not the right fit. We think it could open up a very large market opportunity, certainly for us, outside of focal onset seizures, and provide a really attractive option for patients. Okay. X-NOVA2, first half 2027. X-NOVA3 sounds like six months behind, give or take. This could actually be approved late 2028, give or take? Yeah. I think when Ian outlined the milestones we have before, we don't have specific dates around a number of them, but there's going to be a lot of clinical candidates. We can talk a little bit, if we have time, on our pain programs. Over the next couple of years, we're going to have some really significant readouts, beyond obviously the launch, which will be a key focus for investors. The readouts in psychiatry over the next couple of years, bipolar depression, the PGTCS, and then again, we probably won't have time to touch on our pain portfolio, but we'll have hopefully a couple of POC studies reading out on 2 pain programs with novel mechanisms that could be really impactful. It's an incredibly catalyst-rich year for a company that is also obviously going to be focused heavily on making sure this is an exceptional launch. Okay. Bottom line for pain, in the last minute, you've already made the decision to move forward to phase II based on the single ascending dose data suggesting high receptor occupancy for both the Kv7 and NaV1.7. Now is the MAD phase in phase I? Is that right? It's kind of checking the box, and then you start phase II pain studies, acute pain studies with data in 2027? We need to finish the phase I clinical trials. I don't want to get ahead of ourselves until the phase Is are complete. What we did say earlier this year is we believe both for the Kv7 mechanism and the NaV1.7 mechanism, we're already seeing exposure safely in a human that we would expect to translate into an analgesic effect in a proof of concept study. I think we've already made significant progress in the phase I study, but we're not done yet. Okay We need to complete the phase I studies. Those should wrap up over the next number of months. That would put us in an opportunity to start the phase II proof of concept. These would be phase II proof of concept in acute pain, either a bunionectomy or an abdominoplasty study. Those run actually reasonably quick. To Tucker's point, I think we see this richness of clinical catalysts and data over the next couple of years that would include proof of concept data in pain. Great. Thank you for walking us through your story and congratulations on the progress. I appreciate it. Thanks, Andrew. Thank you. Thanks, everyone.