All right. Thanks, everybody, for joining us for our next session. I'm Marc Goodman, one of the biotech analysts at Leerink, and we are lucky enough to have Xenon with us. I think everybody knows Ian and Sherry, the CEO and CFO of the company. So I don't know if you want to take a quick one-minute, kind of two minutes, just to level set everybody for a sec about the company, and then we get into it. Thank you.
Yeah, happy to. Good morning, everyone. Marc, thanks for hosting us. Nice to be back in person again.
In Miami.
In Miami, exactly. So I'll give a little bit of an overview of the company, and then we'll get into Q&A. Sherry will also review some of the milestones upcoming for the company. So many of you, as Mark mentioned, do know Xenon. We're a neurology company, late-stage clinical development in epilepsy and depression for our lead asset called XEN 1101. 1101 is a potassium channel modulator, and we've been working in drug and ion channels in the CNS for more than 15 years now. And the reason I mention that is maybe less around XEN1101 because we'll really talk about the therapeutic indications and the data and the development plan. But it's important we're starting to talk a bit more about our drug discovery portfolio. And so you'll see a theme that'll run through the business of all of our assets or neurology assets.
But we really have this deep expertise in drug and ion channels. So in addition to 1101, we've got this backup program targeting Kv7 in the CNS, as well as Nav1.1 and Nav1.7. So maybe we can spend a little bit of time today on some of the pipeline assets, as well as on XEN1101. 1101, the lead program, we're in a broad phase III program in epilepsy right now. We're running three global phase III epilepsy studies in parallel. 2 are in focal epilepsy or focal onset seizures. This is called X-TOLE2 and X-TOLE3. Those are ongoing. Then we have a third clinical trial in an indication called primary generalized tonic-clonic seizures called the EXACT study. We've guided on X-TOLE2 that we expect patient enrollment to be complete later this year or early in 2025.
That's really on the critical path to filing an NDA. Maybe a little bit later, we can go into some of the background data. But we believe 1101 has a really compelling profile in epilepsy. The data that we presented at the end of 2021 in X-TOLE on a placebo-adjusted basis is the most efficacious agent we've seen in focal onset seizures. And then we followed that up with a lot of long-term open-label extension data that we can talk about. And then the real big update over the last couple of quarters for the company was our depression data. Also for XEN1101, we had data from a study that we called the X-NOVA study in major depressive disorder. That was in Q4 of last year. We've guided that we're going to do an end-of-phase II meeting with FDA in April.
And we're going to initiate the first of three phase III clinical trials in major depressive disorder later this year. So I think really a broad development program for XEN1101 overall.
Yeah, thanks, Ian. So I think we're embarking on a really exciting time for Xenon. We're largely in execution mode on our epilepsy program. We're looking forward to getting near patient enrollment completion for X-TOLE2. And I think we've made a lot of progress in the MDD program over the last few months because remember, those data came in in late November of last year. And we now have our end-of-phase II meeting scheduled with FDA in April and starting that phase III program later this year. In our preclinical pipeline, which I'm sure we'll touch on as well, we've got a number of molecules that are progressing across all of those programs. We've made a lot of advancements over the last couple of years, Marc.
And we do expect a number of molecules across, specifically the Kv as well as the Nav1.7 programs that are going to enter IND-enabling studies over the next, call it, 12-18 months. So we're really excited about that. And then we're in a really strong cash position. So we did an additional raise at the end of last year, which really helped to bolster our balance sheet. We ended the year with over $930 million. We've guided that'll give us cash into 2027. And that includes the capital required to fund the entire phase III program for both epilepsy as well as depression.
Excellent. Thank you. So Ian, let's start with just the background of the epilepsy market right now. Has anything changed? What do you see as far as just trends in the marketplace since you've come out with that data, which is already, like you said, like a year and a half, two years old, which looks like it's best-in-class data?
Yeah. I mean, if we look at the EPI data from a high level, there's 3 million Americans that have epilepsy. 60% of them have focal epilepsy, so 1.8 million. And there's up to about half of them that are still not getting good seizure control. We can add some additional patients on the adolescent and children's side. So it's about 1 million patients, give or take, in the U.S. that are not getting good seizure control, and there's a need for new therapies. Overall, there are a lot of drugs available, and there are a number of generic drugs. But as I mentioned, the branded drugs really are used in a polypharmacy setting for these patients that are still having breakthrough seizure or tolerability is not good overall. So I think the attributes of 1101, we've talked about efficacy in terms of best-in-class that we've seen.
We have week 1 efficacy. This is a bit unusual in the epilepsy space. A lot of CNS drugs and epilepsy drugs need to be titrated. So you start on a very low subtherapeutic dose, and over time, for tolerability, you get up to your therapeutic dose. The benefit of 1101, you're on your therapeutic dose on day one, and we see statistically significant efficacy at week one. And so again, we showed that in our phase II study, and it's in the statistical hierarchy in phase III, which means we have the opportunity to have that discussion with the agencies potentially being on label. So now if we look at 1101, strong efficacy, early onset to efficacy, it'll be an only-in-class drug. It'll be the only Kv drug approved.
And so again, as we think about polypharmacy and combining different mechanisms together, it would be something that physicians would look to. Tolerability profile, I think we're learning a ton about the drug. We now have over 600 patient years of exposure of this molecule. We have epilepsy patients that have been dosed more than four years. So we have a really good understanding of the tolerability profile. And maybe the last thing that could differentiate is really the data that we're showing on mood, right? Mood is such an important comorbidity for these epilepsy patients that if you could have a molecule that has the anti-seizure benefits but potentially the mood benefits as well, I think is a clearly differentiating molecule from what's currently available.
We hear that when we speak with physicians at AES, or we're coming up, actually, next month at AAN, we've got two podium presentations.
Yeah, what are we going to see?
Yeah, it's more of the open-label extension data and some of the data that we've shown previously, but an opportunity at a podium at AAN, the largest neurology meeting, to be able to communicate that from our KOLs to the broader audience. What we're seeing, we now have 30-month data. And what we're seeing in open-label extension is the patients are doing even better, meaning their seizure control is coming down. Remember, at the high dose in X-TOLE in the double-blind period, we had more than a 50% reduction in seizures. And if we look at the open-label extension data, we're now getting the population is getting more than a 90% reduction overall in seizures. So the patients that are staying on therapy are doing remarkably well. For background, remember, the median patient was having 13.5 seizures per month, right?
So coming into the study, they were having a seizure every other day. And now we're getting this 90% reduction for the population out 2.5 years. And about a quarter of patients that are out at least two years of dosing have gone 12 months with no seizures at all. So we're also driving an increased seizure-freedom period for these patients. And if you can go 12 months without a seizure, that does bring a huge amount of independence back to these patients because that is often, in most states, an important data point as you think about driving again. And so again, I know I've spoken quite a bit about the overall profile, but we're getting really strong feedback from the physician community.
And just to add, Mark, on the commercial dynamic as well, we're seeing XCOPRI or cenobamate, which is the most recently launched drug in the space, is doing relatively well, I would say. It's got a run rate north of $200 million a few years post-launch. And the company that markets that drug, SK Life Science, has guided that they'll reach $1 billion in sales before the end of the decade. And I think that's notable given the profile of cenobamate, where that drug requires a 12-16-week slow titration in order to manage or mitigate a risk of a severe drug allergy. And so again, we think about the profile of 1101 and now the added incremental potential mood benefit. When 1101 launches, likely the only other branded agent in the space will be XCOPRI.
We think that 1101 can be really well positioned against that drug and hopefully be the first branded agent of choice.
Yeah, good point. There's another study that you're running in a different population for epilepsy at the same time. Talk about that study a little bit and the probability of success there, given the success you've had in focal?
Yeah. So Marc, you're talking about our PGTCS study, which is called EXACT. So that study has initiated. It's running in parallel with our FOS studies. That's a smaller study. It's 160 patients. PGTCS is the largest subset of generalized epilepsy patients, so a little bit less prevalent than FOS. It's about 30% of the adult epilepsy market. And it's this more severe phenotype. So patients have or individuals have these tonic-clonic seizures that can be life-threatening because they can experience falls and injure themselves when they experience their seizures. So we feel like we have good scientific mechanistic rationale to pursue PGTCS. So specifically, when we think about the data that we collected in X-TOLE, we did look at a subset of seizures where patients have a focal that translates or transitions into a bilateral seizure.
That was about 20% of our patients in the X-TOLE study had those types of seizures. We saw really good efficacy in that seizure subtype, so over 80% efficacy in our X-TOLE study. We also have seen there's a model, a photosensitive epilepsy model that is known to be predictive of efficacy in PGTCS. So 1101 specifically was not run within that model, but another potassium channel opener has been and was successful within that model. And then as well, 1101 preclinically is actually very unique in that it is efficacious in every single preclinical model of seizures. So we feel that given the totality of that evidence, we feel strong conviction that 1101 could be successful.
A lot of the ASMs that are approved for FOS are also approved or used in PGTCS, with the exception of the carbamazepine category, which is known to actually exacerbate PGTCS. So we have strong conviction. And then generally, when you think about the type of efficacy you'd see in this patient population, it's about that same kind of 30% active versus placebo rate that you want to see, so an incremental 30% efficacy. The difference here is that these seizures, although less frequent or although more severe, are less frequent. So in order to get into the EXACT study, patients are required to have three seizures in an eight-week period versus in the FOS studies, patients are expected to have at least four seizures per month.
The rates at which we see sort of active and placebo are a little bit higher, but overall, a 30% decrease versus placebo.
How is enrollment going in that study?
Enrollment's continuing. We have not yet guided on the EXACT study. Again, as I mentioned, this is less prevalent than FOS, although we are trying to recruit less patients.
Less patients, but it's tougher to find the.
That's right. Yeah, exactly. And we have not run a PGTCS study before. So at this point, we're not yet ready to provide guidance, but we will be at some point in the future.
You lowered the enrollment criteria to a different age? Is that the?
We did. Yeah, that was based yeah, as we think about the development overall of XEN1101, this isn't for a rare disease. It's for a more common disease. And so we have an obligation to do pediatric development and interact with FDA and EMA on our pediatric plans. And when we had that discussion on the pediatric development for XEN1101 with FDA, they encouraged us to lower the age range for PGTCS. There's really good guidance on FOS to get into younger populations over time. It's called the extrapolation rule. There's specific guidance where you do essentially PK studies and lower cohorts as you move to younger age groups from 18 and above to your adolescence and then into your children.
But specifically for primary generalized tonic-clonic seizures, because that guidance doesn't exist as part of our pediatric discussions with the agency, they encouraged us to do a lower age range in primary generalized. And so we went from 18 down to 12. So that same study, the EXACT study is 12 and above.
Got it. So you mentioned the depression work a little bit. Why don't we talk about how you're thinking about the dosing and the strategy for the depression program just in general?
Sure. So if we take a step back and just look at the X-NOVA studies, that was the phase II data that we released late last year. We looked at two active doses versus placebo. We looked at the 10mg and 20 mg of XEN1101 versus placebo. And we saw a clear dose response. As you went from placebo to 10 to 20, you see an increase in separation between active and placebo. I think it's important, as we think about the phase III program, the preferences to go from two active arms down to one. The more active arms you have in a depression study, the literature teaches us that has an impact on placebo rate because obviously, the patients have a greater or they believe they have a greater probability of being on an active drug, and that impacts your placebo rate.
The rough rule of thumb that the literature will teach us is that as you go, as you drop an active arm, your placebo rate decreases by about a point on the clinical scales of depression. So the thinking for phase III was always about choosing one active dose versus placebo. We've decided to choose, or at least our interaction with FDA will be the 20 mg dose. And the reason we chose the 20 mg dose is obviously, we saw good efficacy. But I think what was really encouraging and almost surprising to us, I think surprising to shareholders as well, is just how good the tolerability was of the 20 mg dose in depression.
We did, with the caveats of this is a cross-trial comparison and cross-therapeutic comparison, but we saw a more benign side effect profile in major depressive disorder when we compare it to our epilepsy drug.
Yeah, no, I was surprised too. Is there a reason for it?
Yeah, we don't know for certain. One hypothesis is, as I mentioned, the epilepsy patients are on background medications. And so more than 50% of our patients in X-TOLE were on three background anti-seizure meds. And so this is the fourth drug that you're adding to three existing drugs, whereas in depression, it's a monotherapy study. And so there may be some effect, kind of some cumulative effect of multiple drugs, CNS drugs being on board. But yeah, we had a very benign tolerability profile. So we think 20 mg is really a very strong decision in depression as we think about that balance of efficacy and tolerability. And when we do our market research in depression, that tolerability profile matters a lot. We have a different side effect profile than you see with the SSRIs or the SNRIs.
I think not having sexual dysfunction and weight gain is a real benefit of XEN1101. We do want to be mindful of the tolerability profile. Our current thinking right now is that it would be a 1:1 randomization in phase III, 20 mg versus placebo, for the future development in depression.
The idea is to do three studies to get two to work?
Yeah, I mean, yes, I think that's one way to think about it. Maybe a different way to reframe the statement that you made is that we're not running three studies for a regulatory requirement, but we just fully appreciate the risk profile and the variability that you can see in depression studies. And so we believe it's prudent for us to run three phase III clinical trials.
We certainly agree with that. I mean, there's a lot of risk to running a study no matter whether the drug works or not. I mean, we've seen that in the past for the past 30 years, actually, it's been like that. HAM-D versus MADRS, you want to talk about that a little bit? Differences and does it matter that much?
Yeah. So the two, as Mark's referring to, there's two clinical scales of depression that are in FDA guidance that you can use. So the MADRS is one or HAM-D17 is the other. And these are clinician-administered clinical scales of depression. And so the patient comes in and is interviewed by the clinician, a number of different questions. There's 10 questions on MADRS, 17 questions on HAM-D17, and they score them. And then you add up those scores and you have a baseline score for these patients. And the higher the score, the more severe the population. So we think about scores of above 20, you're getting into a moderate population in depression. And the higher scores, the more severe the population. I mean, they're both asking questions about depression and about how these patients are feeling. There are some nuances in the different scales.
What we find in the literature is that you get less variability around HAM-D17 versus MADRS. And that was our experience as well. If we look at the standard deviation of MADRS, which is what we had chosen as the primary endpoint in phase II, versus HAM-D17, which was the secondary endpoint, because we had about two points less on standard deviation in Hamilton versus the MADRS scale. So our decision on a go-forward basis is to have HAM-D17 as our primary endpoint.
Yeah, that's interesting. You look at that and it's like half the companies are doing one, a lot of companies doing the other. I don't think it really matters. The FDA certainly doesn't care.
Yeah, from a guidance point of view, it's not really a regulator question. It's more maybe mechanistically or what you're seeing in your data. Doesn't make sense to choose one scale over the other. But again, when these drugs are commercially available, I don't think what scale was chosen matters.
How long do you think these studies will take? Is this as long as epilepsy, or?
Well, what we've generally found with our experience, Marc, is that the depression studies are faster to run. So if we think about just, again, to compare and contrast to epilepsy, we need quite a number of sites for our epilepsy FOS studies to enroll. The number of patients of 360, so 80-100 sites. We typically think about the number of sites in depression being about half as many. So call it 40 to run as many patients. And otherwise as well, there's just the prevalence is with 20+ million Americans that suffer from depression, it's just easier to find those patients, even though you're looking for moderate to severe. So yeah, generally, we'd say faster. Our X-NOVA study took us about 18 months from start to finish.
These will obviously be larger studies that are going to be appropriately powered for phase III, but we wouldn't expect them to take as long as the epilepsy studies.
Good. Thank you. You started to talk about Nav1.1 for seizures, Nav1.7 for pain. But maybe you could just talk about that a little bit more. What should we expect? What are we excited about here? I mean, it's kind of new information.
Yeah, for sure. And I'll add our Kv7 program to that as well, right? So there's three key targets that we're prosecuting preclinically right now: Kv7, Nav1.1, and Nav1.7. So I'll take those in order. Obviously, XEN1101 is a Kv7 drug. There's nothing specific in the profile of 1101 that we're trying to solve for in the next molecule. 1101 has such a great profile. So there's nothing specific that we're solving for other than anytime you have backup molecules, you have chemical diversity. And so we'll see that. So we have a number of Kv7 molecules that we're pretty excited about that would move into clinical development over the next year or two. And we can really think about that in terms of lifecycle management and breadth of opportunity. We truly believe that there is a pipeline and a mechanism here.
We want to be leaders in the Kv7 field and want to continue to build on that leadership position. In terms of Nav1.1, this is primarily a target for a pediatric epilepsy called Dravet syndrome, which I think most people are familiar with, given the work that Zogenix and GW have done historically. If you actually look at the underlying genetics of Dravet, these patients are haploinsufficient in Nav1.1. They have half of the target. They're a loss of function in terms of the protein. What we can do with an oral small molecule, which is pretty unique because there are other companies that are trying to achieve this with an intrathecal oligonucleotide, what we can do with an oral small molecule, what we've shown preclinically, is we can increase current through the wild type channel and we can have an impact on seizures.
So given the underlying genetics, this does have the potential or the opportunity to be disease-modifying. And when you look at a number of these pediatric epilepsies, seizure control is important. But because they have such significant seizure burden, they often don't hit their development milestones. So it's really some of the development endpoints that are critical for these patients. And so to have an opportunity to help support the underlying genetics, obviously, this isn't a genetic medicine, but we would try to achieve the same thing, could potentially be disease-modifying. And then lastly, on Nav1.7, many people know that Nav1.7 is an extremely well-validated target genetically in terms of pain. We see that both on the loss of function and gain of function in the channel. So if you are homozygous loss of function for Nav1.7, you do not feel pain regardless of noxious stimuli.
It's an absolutely remarkable phenotype. We were the first in the world, it's going back almost 20 years, to clone the gene. The gene is called SCN9A. So we've been working on this target for many, many years. There's also gain of function in the channel. If you have a gain of function in Nav1.7, you have a genetic disease called inherited erythromelalgia, which is a very rare but very painful disease. And this pain comes on unprecipitated by stimuli. And so very severe for these patients. So the underlying genetics in 1.7 is very strong. We now have seen some Nav1.8 data clinically from Vertex, which is really interesting. So I think the opportunity to have selective sodium channel inhibition, 1.7 or 1.8, non-opioid or opioid-sparing pain mechanism, given the unbelievable medical need out there, could be really important.
And again, with our Nav1.7 program, we're kind of at the candidate stage right now, meaning we've got molecules that look like drugs that'll go into toxicology studies. And the nice thing about the molecules in pain is we can do early proof of concept studies and get some early read in early human clinical development.
So I'm sure people's questions will, they were successful 1.8, why are you doing a 1.7? Did you choose the 1.7 versus the 1.8, or how is that?
We did. Yeah, we did. We believe that both have good validation. The genetic validation is stronger on Nav1.7 and Nav1.8. I mean, Vertex does have a Nav1.7 program as well. It is preclinical or transitioning into the clinic. There's a number of companies that are targeting Nav1.8, Nav1.7, fewer. It has been a difficult target to inhibit in the past, but we have a huge amount of knowledge that's been built up over the last 20 years on this target. We also had a collaboration with Genentech for a number of years on the target as well. So I think we've learned a huge amount around Nav1.7 that we'd like to leverage and take the opportunity to develop a selective Nav1.7 inhibitor.
Yep. The partnership with Neurocrine is still ongoing, right?
It is, yeah. And maybe just a little bit of background. So the lead asset there that's called 352, Neurocrine has been progressing through two studies. They did mention last year that the FOS study did not meet the endpoints that they were hoping for, and that program has discontinued. But that molecule still is in a program or in a study phase II for a developmental epilepsy called SCN8A. That's the 352 molecule. So we partnered with Neurocrine a number of years ago on a highly selective sodium channel program that they've been continuing to progress. And that collaboration actually included a number of additional molecules in addition to 352. So some of them are selective inhibitors of 1.2, Nav1.2, and 1.6. And those molecules are continuing through development, Marc. So Neurocrine, I think, is interested in continuing to pursue the opportunity with FOS.
Potentially, we could see one of those molecules go into the clinic in the near term. They have not yet guided on enrollment or completion of the KCN or, sorry, the SCN8A study. We'll look to kind of Neurocrine to provide updates there.
Fair enough. Thank you. Just in the last minute or two, anything we haven't talked about, anything that you feel like you just want to make sure this is a little bit confusing or this is underappreciated or this is anything out there? I don't know if you.
I don't think there's anything specific that we believe that there's a confusion or that we need to clarify. But I think maybe just in summary, obviously, we believe XEN1101 has a tremendous profile. If we just think forward over the next couple of years, we're running three phase III clinical trials in epilepsy. We're going to run three phase III clinical trials in depression. Those are all fully funded with the balance sheet. We're also looking at other neurological indications with XEN1101. We've done a huge amount of work on lifecycle management and where else we could potentially go. So we're doing more work there. So that could be an update as we move forward. And then it was really great to spend a little bit more time on the discovery portfolio today.
If we think about Xenon over the next number of years, we're excited about XEN1101, but you're going to see more molecules transition from our own labs into development and really build out the portfolio at Xenon. That's what we're excited about.
The idea is to launch the epilepsy drug yourself, right?
Correct. Yeah. Yeah. Our strategic objective is to forward integrate and have commercial operations in the U.S.
Good. Thank you. Thanks for joining us. Appreciate it. Great update. Yep. Appreciate it.
Thank you, Mark.
Yep. Thank you.