All right. Thanks very much. It's my pleasure to be with Ian Mortimer, CEO and President of Xenon, and Sherry Aulin, CFO. I'm sure folks listening in and here in the audience know the company well, but I'll just ask Ian and Sherry to maybe give a quick overview of Xenon, where you are with 1101, the pipeline, your balance sheet, and then we'll do Q&A. So thanks so much.
Perfect. Yeah. And thanks, Paul. Thanks to you. Thanks, Stifel, for hosting us. Often in these kind of intros, I do go a little bit deeper. So I'm going to keep it a bit of a higher level because I know you've probably got lots of Q&A. That's good to go back and forth. But I'll give a quick overview, and Sherry, you'll give milestones, balance sheet, runway, kind of what we think about for 2025. And we were just talking to a few people before this. 2025 is really going to be an important year for Xenon, right? 2024 is being a big year of execution. We've got a large phase 3 epilepsy program ongoing. We're on the cusp of starting a large phase 3 program in major depression. And so lots going on at the company. Big step back.
I think most people know we're an ion channel, CNS ion channel company, deep expertise over kind of decades in drug and ion channels in the brain. Lead program that Paul just referenced to, which we used to call XEN 1101, we're now using the generic name, which is azetukalner. This is in a large phase 3 program in epilepsy. We're running three phase 3 clinical trials in parallel, two in focal onset seizures. We may use FOS as the acronym there throughout this morning. We have a phase 3 clinical trial in a different epilepsy condition called primary generalized tonic-clonic seizures. That's called the X-ACKT study. Epilepsy is a big part of what we're doing. We're expanding the same molecule into depression. First of three phase 3 clinical trials in major depressive disorders going to start between now and year-end.
We're also looking at some other indications as well. Maybe in these opening remarks, I'll really focus on epilepsy. Our excitement in epilepsy came out of our X-TOLE data. This was a large phase 2b study that we unblinded a few years ago, which when we look at the literature, we believe on a placebo-adjusted basis, X-TOLE showed the best clinical data ever seen in this patient population in the most severe and refractory population ever trialed. So that's based on our review of the literature. So I think it can be a really important molecule at the highest level, excellent efficacy both in the double blind, as I just talked about. We're seeing even better seizure reduction in open label extension, number of patients having longer periods of seizure freedom as well. The big medical congress for us is next month.
It's the American Epilepsy Society meeting, and we're going to show our 36-month data from the X-TOLE study. So every patient's been out more than three years. We have patients that are on the drug for more than five years. We have over 600 patient years of exposure. And so you're going to see really nice long-term efficacy data at the AES meeting in Los Angeles next month. But then the overall profile will be an only-in-class mechanism when we launch. We've talked about the efficacy data. I think the safety profile is really good. And we're seeing early onset to efficacy. You don't need to titrate this drug. That's unusual when you look at other CNS drugs. And so we show statistical significance on efficacy at week one. So remember, these are patients that are having breakthrough seizures, and we're able to show stat-sig at week one.
We're able to show really good data over the double blind and really strong data in open label. So there's this real consistency across the data set, which is exciting. So next year, we've guided for our first phase 3 readout, which is our X-TOLE 2 study, and Sherry can go through some more details there. So lots of progress in epilepsy and depression. And then the last part of the business that I know we'll spend some time on is just the pipeline. It's really starting to mature. You're going to see more INDs from us in 2025 and 2026. Really three key targets that we're excited about: additional drugs on the same target as azetukalner. So these are Kv7 drugs.
And then two sodium channels, one called NaV1.1, where we're going to have some data at AES, preclinical data in some genetic models of Dravet Syndrome, which I think is really strong data. And then we're probably getting most attention on our NaV1.7 program, which we've got molecules, we've got candidates in toxicology. And so we're actually not that far away from having some human data on NaV1.7. And I think we have a really differentiated approach in how we're going at that target, which is being an exciting target for 20 years, but a challenging target for sure. Sherry?
Yeah. So as Ian mentioned, 2025 is really going to be a pivotal transformational year for Xenon, right? We're going to have on the epilepsy side our X-TOLE 2 data coming in the second half of the year. And that really sets our ability to be able to file our NDA and to launch this drug commercially in the U.S. for FOS. So we're really excited about that. On the MDD side, we're going to be well underway in our phase 3 MDD program in 2025. So again, we're going to have that first phase 3 trial underway before the end of this year. And then we'll see the other two studies initiate in a staggered fashion thereafter. And then we're also expecting to have data from an investigator-sponsored study in MDD, which will come in the first half of next year.
Lots happening on the depression side and then indication expansion as well. We've been talking about indication expansion with azetukalner for some time. We've been doing a lot of work in the background, and hopefully we'll have more to come on that in 2025. On the pipeline, again, we have lead candidates. They're nominated across a couple of our targets. So we have a lead Kv or 1.7 molecule that is in IND-enabling tox. And we also have multiple Kv7 candidates that are in IND-enabling tox. And we expect to nominate a candidate in our 1.1 program. So as we look in 2025, we're going to see multiple INDs, hopefully, with first-in-human studies initiating shortly thereafter. From a balance sheet perspective, we're in a great financial position. We ended last quarter with north of $800 million in cash.
That fully funds our epilepsy program, our MDD program, as well as the continued maturity of the remainder of our pipeline. So really set well from a financial perspective to execute across our very robust portfolio.
Great. X-TOLE 2, I know I've asked you this in probably every different way possible, but maybe as you plan the study, what were the one to two key risks you were trying to mitigate? And as you look at the data, the population you've enrolled, at least on a blinded basis, how comfortable are you that we're going to see something very similar to the phase 2b?
Yeah. I mean, at the highest level, Paul, I think the benefit that we have is that there's really good translatability in this therapeutic area, right? So as you look across the history of anti-seizure medications, we've seen real consistency in data going from phase 2 to phase 3. And in particular for us, our phase 2 was a large robust study, which we are, of course, positioning as one of our pivotal studies. And we did very much design phase 3 very similarly to our phase 2b. So really the key difference is only the fact that we're moving from an eight-week double blind period to 12 weeks. And the studies are just slightly larger. So we enrolled 325 patients in X-TOLE, moving just slightly north to 360 patients for X-TOLE2 and X-TOLE 3.
And as we look at the data that we saw in the open-label from X-TOLE going from eight weeks to 12 weeks, we saw even continued seizure reduction. And so we're comfortable with the extension of the double-blind period there. So we've designed the studies very similar to phase 2. We've got really great power. We've got over 99% power in the high dose 25 mg group. We have over 90% power in the 15 mg dose. And ultimately, from a technical perspective, we need to be statistically significant. But I wouldn't say there's anything that we're necessarily concerned about or kind of focused on. There are placebo. There's a placebo effect in these studies.
Yeah. Does that usually increase much in phase 3 in epilepsy?
I mean, we've seen it be sort of consistent. I think we did a really nice job managing placebo in phase 2. So usually you see about a 20% placebo rate in these studies. And we were just shy of that. We were in the high teens. One of the things, or a couple of the things I can mention that we look at, there are geographic differences on placebo rates. And so we try to stay outside of geographies where typically you'll see higher placebo rates. There can also be differences from a site selection perspective. We always want to make sure we're selecting high-quality sites that have experience in the therapeutic area as well. We're leveraging a lot of our X-TOLE sites in phase 3, which is important.
Then, of course, we're leveraging, again, the electronic diaries, which we used in phase 2, which we feel is the best way to be capturing the data as you go through these studies from a patient perspective. Overall, we're confident in the design of the phase 3 studies. We're ultimately looking at statistical significance to be successful and to be able to move on to file our NDA.
Great. Okay. And I guess at this point, you'd likely be getting fairly close to full enrollment. No change? Continue to be super confident in data second half next year?
That is our guidance today. We always give the guidance based on our best available information, and we're confident in that guidance today.
Okay. Okay. And then if X-TOLE2 reads out materially before X-TOL E3, what are you guys thinking in terms of filing an NDA and whether you can actually get that in before 3 and not have to wait?
Yeah. Our critical path for us for filing is X-TOLE 2. So based on our end of phase 2 meeting with FDA, we're going to file on X-TOLE and X-TOLE2 . So yeah, we're not concerned about the timing for X-TOLE3. That's going to be important for other jurisdictions. Obviously, we can use safety data from X-TOLE3. All of the patients, the way we've designed phase 3, which is a little bit different than phase 2, is whether you're in X-TOLE2, X-TOLE3, or even the primary generalized study, you go into the, there's one open label study that everyone goes into. So we have both blinded safety data from some of these studies as well as open label safety data. So we'll absolutely take X-TOLE3 into consideration.
It'll be part of the filing package from a safety point of view, but not on the critical path from an efficacy perspective.
Okay. So I guess the next event here is going to be this investigator-sponsored study in depression. So do you want to just talk about the design of that study, its goals, and how important to you is the study as you plan for MDD?
Yeah. So maybe just a few comments there, Paul. So it's an IST, obviously. So it's run out of two academic centers. It's a smaller study. So it's 60 patients total, one-to-one randomization, 20 mg of azetukalner. So it's 30 patients per arm. And so it's not really statistically powered to get to stat-sig for those key clinical trial endpoints of MADRS and SHAPS. The primary endpoint here as well is the fMRI. So this is really about trying to better understand how the mechanism works in depression. And this is based on a history and some work done previously with an ezogabine predecessor potassium channel modulator. And so that is the primary endpoint, which I think is an interesting endpoint from an academic perspective. Obviously, we'll be more focused on looking at the results on MADRS and SHAPS.
But ultimately, we've committed to the phase 3 program in MDD because we feel that the data that we generated from X-NOVA was compelling with a much larger patient population. So remember, X-NOVA was 168 patients, so just north of 50 patients per arm, where we saw really good consistency in those data across all of the endpoints, including MADRS, HAM-D , SHAPS. We also saw rapidity of onset. So the totality of those data really compelled us to move forward in phase 3. And ultimately, this academic study, I think, will be interesting. Probably we don't expect to see statistical significance, or at least it's not designed that way. But we would probably expect to see some kind of a drug effect. But it's not going to impact our phase 3 plans ultimately is the answer there.
Okay. Makes sense. Ian, you and I have talked about MDD trial design and patient selection and overpowering and the importance of all these things. Can you talk a little bit about some of the things we've discussed related to your phase 3 program, enriching for patient severity, all the subtleties that you've considered to try to maximize probability of success?
Yeah. I think it's a really important question. As Sherry mentioned, we ran a small phase 2 proof of concept study called X-NOVA. So we're calling our phase 3 program the X-NOVA program as well. So the first phase 3 is X-NOVA 2. And as we move from phase 2 to phase 3, and when we look at, we just have to fully recognize that in psychiatry, it's just a different risk profile. I mean, you asked about consistency and reproducibility in the X-TOLE program. Obviously, we have really high conviction in epilepsy given the data that we had seen. And we just have to understand that depression's more challenging there. So a number of things that we've done in phase 2 to phase 3. One, the studies in phase 3 are materially larger.
We're going from, as Sherry mentioned, per arm around 50 subjects to the phase 3 study will be over 200 subjects per arm. We're looking at 450 subjects in a one-to-one randomization. We had three drug arms in phase 2. We're going to go to two drug arms. The literature would suggest that that should have an impact on lowering the placebo rate because patients now have a 50/50 chance of being on active rather than a 2/3 chance of being on active. The literature suggests that that has an improvement on your placebo rate. We're also increasing the severity of the disease as part of the inclusion criteria. In our phase 2 program, you needed to have a HAM-D17 score above 20. We now need a HAM-D17 score above 22.
So again, it's well understood in the literature that as you go to a more severe population, that helps to manage your placebo rate as well. Then there's a bunch of things that kind of happen at the site, placebo response, adjudication centralized in terms of getting the right patients in the study using the SAFER criteria through MGH. There's kind of a lot of very site-specific stuff. So some of it is on actual trial design and what we're doing. And some of it's really more at the site level to make sure that you just get as homogeneous a population as we can.
Yeah. Okay. Makes sense. Do you want to talk a little bit about the pipeline?
Yeah. For sure. We're really excited about it. I know it's early when we're thinking about 2025 as phase 3 epilepsy data. And we're starting to think about azetukalner as a commercial product. And we're going to forward integrate. And that's part of our strategic objective. But we're excited about the progress we've made over the last number of years in the portfolio that really doesn't get as much attention. So as I mentioned at the outset, there's three targets we're interested in. I'll go through each of them. The first one is Kv7, which this is the same target of the lead molecule azetukalner. So we're looking for chemical diversity there. There's nothing inherent in the profile of azetukalner that we're trying to change or improve on because the profile is excellent so far. But this is around chemical diversity.
And then chemical diversity will allow us also to potentially have therapeutic diversity as we move forward. So obviously, we would run follow-on molecules in epilepsy and in psychiatry. But we really believe the Kv mechanism could be even broader than psychiatry and seizure disorders.
Migraine, migraine whatever.
Exactly. Yeah. So I think in certain pain conditions, I think it's interesting. There's been some interesting data on motor neuron disease like ALS. And then it's all about kind of both target genetic and pharmacologic validation. And as you start to move down, there are other areas, but probably less validated. So I think the position we're going to be in is we're going to have a richness of molecules. And then we're going to be able to choose over the next couple of years on therapeutic diversity. So that's really exciting. And then NaV1.1. So many people know about Dravet syndrome. There's been some drugs over the last couple of years, drugs like Fintepla and Epidiolex. There's the Stoke approach. And so the children that have Dravet syndrome, the vast majority of them are loss of function in a channel in the brain called NaV1.1.
They're haplo-insufficient. What we've been able to show with an oral small molecule is we can increase current through the wild-type channel. We can get that back to normal. The real breakthrough that we've had, which we're going to have a poster at the American Epilepsy Society meeting next month, is we had shown a lot of data in terms of seizure reduction. What we now have is survival data. Now I think you'll have a better comparison on what we're doing vis-à-vis the Stoke approach. We're looking at something called long-term potentiation, which is really about can you potentially change cognition. Where I think the field is going and will be central to this is especially for these pediatric epilepsies where we actually call them DEEs. They're developmental encephalopathies. Where we're moving is from seizure reduction to disease modification.
I think our approach has an opportunity to be a disease-modifying agent.
You see that 1.1 mechanism as having broader applicability than Dravet?
Potentially. I think Dravet is absolutely where we're going to start because that's where the genetics tell us we should start. Potentially, it's going to be broader than that. But absolutely, that's where I think the best validation is.
Okay, and can I ask you a loaded 1.7 question?
Yeah. Well, so yeah, on Nav1.7, yeah, I'll give a quick update on where we are, and then you ask the loaded question, so yeah, on NaV1.7, this is a target. We were actually the first to clone the gene more than 20 years ago, so we know the target and the genetics very, very well. Just to put this into context, if you have a complete loss of function of NaV1.7, so you have none of the protein in your body, you do not feel pain regardless of noxious stimuli, so it's an absolutely remarkable phenotype. There's also gain of function where you feel spontaneous, non-precipitated pain, and so it's a fascinating target that's been super hard to drug that many companies have tried, and we haven't got there. I think we've had some internal breakthroughs on the chemistry side.
We should have an IND on the NaV1.7 program next year.
Okay. Okay. Great. My loaded question is, there's others in the pain space who think that this target might not be druggable, not because of generating the right chemical matter for selectivity, but because of on-target tox specifically related to 1.7 expression, the autonomic nervous system, syncope, sedation. What do you think about that? And to what degree can you actually study something like this preclinically?
Yeah. A couple of comments on that. So the target has been challenging from a chemistry point of view. So we don't want to sidestep that, right? We often get the question, why NaV1.7 and why not NaV1.8? 1.7 has proven to be a more challenging compound or sorry, a more challenging target from a chemistry point of view. I think we've made some breakthroughs on where the target is expressed, the selectivity profile that you mentioned. So I think we've learned a lot from the field. And I think we have molecules that we're ready to test. Can you get high receptor occupancy? Can you get that selectivity profile? Can you get the right distribution of the molecule to really answer the question? Can we start to see what the genetics teach us in humans? Your question now is about off-target stuff.
So there's a couple of ways that we think about this. One, if you just look at the human genetic data, so for those that are these homozygous loss of function, they do not exhibit any of the tox that you've mentioned. So Paul's been asking about questions around hypotension and syncope and some of the challenges because we know NaV1.7 is expressed in the autonomic nervous system. Some of the tox data that you're referring to that was published was in formulations that were immediate release and got into the bloodstream at extremely high concentrations very, very quickly. And we saw some of those challenges. Those same studies, as you slowed down the absorption through different formulations, completely worked around that. And so it's not something a priori that we think we're going to see with the target and can be managed.
With our current chemistries, we haven't seen any of these effects preclinically. So at least we have our preclinical tox data.
What would you expect to see preclinically?
It's something that we're trying to look for preclinically because we know it. The other thing that I would say is whenever we think about any drug, when we think about this benefit-risk of efficacy and safety, when we think about safety, is it monitorable or not? I mean, at least if we see this type of side effect in a human, it is very easy to monitor. So it's something that we would look at in phase one. We could monitor over time. We could now determine, we believe the Genentech data and the publication has shown an exposure relationship to this, a quick exposure relationship. So we'd be able to tease that apart and elucidate it in early clinical development as well.
So, I don't think it's going to be our perspective currently is that this isn't going to be a big risk for the target class. But it's something that we should keep an eye on.
Okay. Makes sense. Maybe one more question on pain. How do you think about proof of concept? And would you be interested in this cold plunge test as a rapid way to generate it? Why are you laughing?
I don't want to do the cold plunge.
I mean, honestly, I think I would be like the worst responder to this in my head too.
Yeah. Me too.
It sounds terrible. But it does seem like it's an underrated cost-effective way to get rapid POC for an analgesic. Or maybe not.
Yeah. So what you're referring to is the first studies for any molecule are going to, in the spaces that we work in, be healthy volunteer studies. And so in your healthy volunteer, your traditional SAD/MAD studies, could you have some kind of the person isn't currently and doesn't have a painful condition. But you're somehow poking or prodding them with poison ivy.
You put their hand in super, super cold water. It sounds terrible.
And see whether that has an effect. Yeah. So we're evaluating that. I think the challenge with that is usually, as we've looked at the literature, is you get a lot of variability there.
You do. Okay.
I mean, I really think that the best kind of on-target to see if we're having analgesia is a well-designed proof of concept study that would be in something like bunionectomy. So we always hesitate to run an experiment if we don't believe that experiment is either going to kill the drug or really provide information on the development of the drug. And I think regardless of what we saw in a healthy volunteer study, even if we tried to tease apart whether we're having an on-target effect from an analgesic point of view, we'd still want to run the bunionectomy study.
Yep. Okay. Great. Well, I thought this was a good opportunity to talk about some of the pipeline drugs where we haven't as much in this kind of forum. But I know we could have talked a lot about epilepsy in commercial. I think most people have heard a lot about that. But maybe anything you'd add before we wrap up?
No. I think, well, let's wrap up like how we started, which 2024 was a really important year for execution for the company. We head into 2025 with, I think, really an exciting portfolio. And over the next couple of years, you're going to see a huge amount of clinical data on azetukalner, starting with epilepsy, multiple epilepsy studies, and then moving into depression. And as we mentioned, we're even looking at other therapeutic indications outside of MDD for azetukalner. And then we're really excited, as we talked about for the last 10, 15 minutes, on the maturity of the pipeline.